Return to Transcripts main page

On the Story

Bush Meets with Allies While Shaking Up Cabinet; Job Outlook Lackluster; Annan Under Fire at U.N.; Female Sex Patch & Medical Marijuana Top Health News Stories

Aired December 04, 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.


TONY HARRIS, CNN ANCHOR: And updating a story just into CNN that we mentioned just a moment ago. Former Panamanian leader Manuel Noriega has suffered a mild stroke in prison in Miami. We have no additional word on his condition. We are working to get more information on the story, and we will update it as soon as we can.
Another bloody day in Baghdad. Sixteen people, five of them police officers, were killed when two car bombs exploded at an entrance to the so-called Green Zone. Thirty-eight other people were wounded in the blast. The Green Zone is a heavily-fortified area of the capital controlled by the coalition.

President Bush is meeting at the White House with President Pervez Musharraf of Pakistan, one of his closest allies in the war on terror. Among other things, the two presidents are believed to be discussing the search for Osama bin Laden and the search for peace between Israelis and Palestinians.

Keeping you informed, CNN, the most trusted name in news. I'm Tony Harris at the CNN global headquarters in Atlanta.

ON THE STORY starts right now.

SUZANNE MALVEAUX, 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 Suzanne Malveaux on the story of President Bush meeting with critical international allies, while at the same time dealing with a cabinet shake-up at home.

KATHLEEN Hays, CNN CORRESPONDENT: I'm Kathleen Hays in New York on the story of fewer than expected new jobs and new concern about how much money you and I will spend over the holidays.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss in New York on the story of uproar caused by one U.S. senator demanding Kofi Annan step down as secretary-general of the United Nations.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: And I'm Elizabeth Cohen on the story of fresh arguments this week over medical marijuana and new attention on a sex patch for women.

Also on the show, Jill Dougherty is on the story in the Ukraine with the latest on the peaceful revolution.

And, Rusty Dornin is on the story in California on the final phase of the Scott Peterson trial.

E-mail us at onthestory@cnn.com.

Now, straight to Suzanne Malveaux and President Bush on the world stage.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to thank the Canadian people who came out to wave with all five fingers for their hospitality.

(END VIDEO CLIP)

MALVEAUX: Well, it was really quite an interesting trip for President Bush and Canada. He was making a joke about it trying to make light of the single finger salute that he got from many Canadians. There were thousands of protesters that gathered there but the president trying to put a good face on it and good relations with Canada. He met with Paul Martin, the leader of Canada, but of course he also admitted there were quite some strains between the two countries.

COHEN: Suzanne, were you surprised by this sometimes frosty reception that the president received in Canada?

MALVEAUX: You know, actually we weren't surprised at all. We saw those demonstrations unfold right before us and, at times, they got rather tense but really this is a country where people have expressed themselves from the highest level where you had members of parliament who were stomping on dolls of the president in the past couple of years or so, calling this the Iraq coalition, a coalition of the idiots.

I mean these are people who have expressed their opinions against the war, against the U.S. ban on Canadian beef, a number of concerns they've had. But what's really interesting about this is that the two leaders themselves, Martin and Bush, actually have a good relationship. They get along well. It is much warmer than the relationship that President Bush had with the previous leader John Chretien but there is a lot of work that needs to be done here.

The big issue, of course, between our two countries is trade. We're the largest trade partners in the world, more than $1 billion actually exchanges hands in one day, so they're both trying to put all of those differences aside and say, hey look, we disagreed over the Iraq war but let's move on.

Hays: It's interesting that you're pointing out that this -- this seems to be about mending fences, about warming up those relationships. One observer described this with a Texas term all hat and no cattle, meaning there was a lot of talk but no real agreements reached on the ban on Canadian beef.

President Bush brought up his -- one of his pet projects ballistic missile defense shield that apparently surprised the Canadian prime minister, any substance here?

MALVEAUX: Well, actually you bring up a very good point. They weren't expecting to get very much in terms of announcements or anything that was actually concrete but they do expect or rather at least they hope that there's going to be some progress on this, perhaps that that ban would be lifted. That is something that is working through Congress.

I do want to bring up, however, what's happening here at the White House. What we're watching, of course, is this is Pakistan's President Pervez Musharraf. He has just wrapped up his meeting with President Bush in the Oval Office. This is, again, one of those efforts that the president is making at fence mending.

It's one of those efforts, of course, that he is trying to build on the alliances that he's built on previously. As you know, Pakistan was a critical ally in the war on terror but there are a lot of concerns. Let's take a listen.

PERVEZ MUSHARRAF, PAKISTANI PRESIDENT: It's not mathematical what we've got, what I've got. We discussed the issue as the president said. It was a wonderful meeting. First of all, the very fact that we have met on a Saturday, I feel privileged especially to have been allowed this meeting on a Saturday.

I come here to congratulate the president on his election and congratulate his party for winning the election. Other than that, I took this opportunity to discuss all issues, international, regional from Pakistan's point of view and our own bilateral relations.

On the whole, I think it was a very wholesome meeting. I think it was an extremely positive meeting and there is total (UNINTELLIGIBLE) views on all issues. That is what I would like to say.

UNIDENTIFIED MALE: Mr. President, (UNINTELLIGIBLE) bin Laden and the hunt for bin Laden (UNINTELLIGIBLE)?

MUSHARRAF: Yes, of course, we discussed terrorism in its entire complexity and within that hunting every terrorist was discussed, of course. The operations against terrorists in Pakistan on our borders was discussed.

UNIDENTIFIED MALE: Why haven't you found bin Laden yet? What's the problem?

MUSHARRAF: No, we didn't go into it. In half an hour or 40 minutes you can't get into the details of what are the tactical issues, problems that confront what we haven't achieved. Of course, we discussed the issue of, as I said, fighting terrorism in all its complexities.

UNIDENTIFIED MALE: Mr. President, (UNINTELLIGIBLE).

MUSHARRAF: Thank you.

UNIDENTIFIED MALE: I have great respect for you. MUSHARRAF: Thank you very much. Ask your question.

UNIDENTIFIED MALE: As for India and Pakistan's relations are critical especially now you have put everything on the table (UNINTELLIGIBLE). We will do everything possible to (UNINTELLIGIBLE) to defeat Pakistan (UNINTELLIGIBLE).

MUSHARRAF: Thank you.

UNIDENTIFIED MALE: So, where do we stand now, Mr. President?

MUSHARRAF: I think we are moving well on the issue of confidence building measures and also the dialogue process towards resolution of disputes. We hope that we will move forward in resolution of all disputes and the core dispute that happens to be Kashmir, therefore moving on that. We are very hopeful and I'm very optimistic of the future.

UNIDENTIFIED MALE: Did you talk about the enlightened moderation with the president and especially with the focus on Palestine issues?

MUSHARRAF: Yes, I did. I think the president himself said that, that this is the core issue, the core at fighting terrorism is resolution of the Palestinian dispute, so I think this is very -- I'm very glad that the president is absolutely aware of it and he's aware of his own role to bring world peace through resolution of the Palestinian dispute, creation of a Palestinian state and we are, as far as Pakistan is concerned, we are very clear that we believe in the right of Palestinians and the Israelis to have their own state.

Within that, whatever Pakistan or whatever I can do I will contribute. At the present time I'm very glad to say that President Bush is absolutely concerned and he thinks that it's a priority with him to resolve the Palestinian dispute and create a Palestinian state.

UNIDENTIFIED MALE: What about the (UNINTELLIGIBLE)?

MUSHARRAF: OK, thank you very much. I mean we discussed (UNINTELLIGIBLE) issue. That is all that I would like to say. Thank you. Thank you. Thank you.

UNIDENTIFIED MALE: Mr. President, I hope I'll get my visa to visit Pakistan.

MUSHARRAF: Yes, whenever you want, yes. That is no problem.

UNIDENTIFIED MALE: Thank you very much. (UNINTELLIGIBLE). Yes, sir. Thank you, sir.

MALVEAUX: And what you were watching just moments ago that was Pakistani President Pervez Musharraf. That's at the stake out position now, statements made from the Oval Office just moments ago.

BUSH: We discussed international politics. I assured President Musharraf that there is an opportunity at hand to work toward the development of a Palestinian state and peace in the Middle East. I told him that this will be a priority of my administration. The goal is two states living side by side in peace and security.

We spent time talking about our bilateral relations. We reviewed the relationship between India and Pakistan. He has showed great courage in that relationship leading toward what we hope will be a peaceful solution of what has been a historically difficult problem.

We talked about our own bilateral relations. The president and I are absolutely committed to fighting off the terrorists who would destroy life in Pakistan or the United States or anywhere else.

And I appreciate very much your clear vision of the need for people of good will and hope to prevail over those who are willing to inflict death in order to achieve an ideology that is -- the predominance of an ideology that is just backward and dark in its view.

We talked about commerce between our countries. The president is very concerned about whether or not Pakistan goods are being treated equally and fairly as other goods coming into the United States. I listened very carefully to what he had to say. He had some constructive ideas as to how to deal with that situation.

Having brought up his economy, however, I reminded him that he's doing quite a good job of making sure that the economy grows in Pakistan so that people have got a chance to realize their dreams and I congratulate you on good stewardship of the Pakistan economy.

All in all our relationships are good. They're strong and they will remain that way and I'm honored you're here.

MUSHARRAF: Thank you. Thank you very much, Mr. President. I don't have much to add to whatever the president has already said. We had a very wholesome interaction. All that I would to say is that I've come here basically to congratulate the president very sincerely with all my sincerity for having won the election and he does me an honor by receiving me on a Saturday.

And, therefore, the other issues that we discussed were incidental and all the important issues, the most important issue resolution of the Palestinian dispute in the interest of peace in the whole world.

And I wouldn't repeat whatever the president has already said enhancement of our bilateral relations, enhancement of our commercial ties with the United States. I'm grateful for the extreme understanding that the president has shown towards the concerns of Pakistan. Thank you.

BUSH: You're welcome. You're welcome. We'll answer a question from the American side and the Pakistani side and American side and Pakistani side and that will be it in the spirit of Saturday morning meetings. And so, the first person that will be asking the question will be Mr. Mark Knoller (ph).

UNIDENTIFIED MALE: Thank you. Mr. President, what do you make of the warning sounded yesterday by Tommy Thompson that the American food supply may be at risk to terrorist attack?

BUSH: Tommy was commenting on the fact that we're a large country with all kinds of avenues where somebody could inflict harm and we're doing everything we can to protect the American people. I picked a good man to head the Homeland Security Department in Bernie Kerik. I hope the Senate confirms him quickly so he can get to work.

There's a lot of work to be done. We've made a lot of progress in protecting our country and there's more work to be done and this administration is committed to doing it.

MALVEAUX: Both leaders, of course, really kind of dancing around the subject about Osama bin Laden. That is really one of the critical issues here, both of them saying in general terms that they are committed for fighting in the war on terror.

But this is something that's somewhat sensitive here because Pakistan, of course, has its own force and its own side looking for Osama bin Laden and al Qaeda. The U.S. has its own force on the Afghan side.

Pakistan has recently said they are pulling away. They're pulling back on that effort. That is a concern for the Bush administration but both of them today trying to put on a good face here saying we're working together in fighting on the war on terror.

NEISLOSS: Suzanne, one other story the White House has obviously been keeping a watch on, the political drama playing out in the streets of Kiev, capital of Ukraine in recent days. We're back on that story with Jill Dougherty after this.

(COMMERCIAL BREAK)

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: Sounds of that peaceful revolution that brought this city to a standstill over the past two weeks and overturned the results of a disputed presidential election. Now, Ukraine moves to a new vote but those demonstrators who have been on the streets all this time they say they're not going home until it's over.

Welcome back. I'm Jill Dougherty on the story in Kiev, Ukraine.

MALVEAUX: Jill, there has been so much talk about interference from other countries. I know the Bush administration has been very frustrated with Russia's role, Putin actually getting involved with all of this.

To what extent do you think that that has really had an impact on the direction of these elections the fact that they're actually going to re-conduct these elections? Do you think that kind of influence really made a difference or do you think it was the demonstrators on the streets, the mood that you're actually seeing?

DOUGHERTY: Actually, you know, I think it blew up in Vladimir Putin's face quite honestly because he came here twice and definitely campaigned, not officially but unofficially he was campaigning for Mr. Yanukovych, the government candidate and then right before, just about two days ago, he was in a very demeaning fashion saying "What, do you want to replay this election again? You must be kidding. Are you going to do it 25 times?"

So, he was very much involved in all of this and it turned out completely the opposite of what he wanted, so it's going to be difficult politically. I think he's in a difficult situation. It hurt him.

Hays: Jill, I think the world's been holding its breath as they see the protesters and hope that this stays peaceful. It has stayed peaceful. You have to tell us a little bit about orange, how that became the official color of this peaceful uprising.

DOUGHERTY: You know, in fact, I asked exactly that question. We did a little story on it. It was one of his political advisers, his I mean the opposition candidate Viktor Yushchenko and they said what they wanted was a color that's not like red or blue that's kind of a fighting color.

They decided on something that's almost funny, you know, orange really is kind of a funny color. It's very bright and they said it symbolized positive energy. So, everywhere you go people have any variety of orange you can imagine. I mean they've woven it into their hats. They have it in banners. They have it, you know, ski glasses orange, you name it.

And I think all of these things that kind of humorous approach and music and dancing and all of that has been very important in keeping this peaceful and they've also been extremely disciplined. There's amazingly no drinking on the streets that I have been seeing, which is truly astounding in this part of the world and that hasn't happened so it's been very, very peaceful.

NEISLOSS: Jill, you do get the sense that there is kind of a peace and love, everything is going to be OK kind of feeling. There's a push now for a new election, so what's going to change? What is going to prevent a repeat fraud election?

DOUGHERTY: Boy that's really the clincher of a question because what they have to do right now is try to bring together the reform of the electoral law that will try to avoid some of that fraud and just a few minutes ago the parliament was over there voting that they didn't do it. In fact, they recessed for ten days without taking a vote on that election reform.

So, these are the difficult things that they have to do right now, plus they have to bring in thousands and thousands of observers because there were areas where there were not observers and that's where a lot of the fraud took place.

COHEN: Jill, given this fraud and given the tensions that exist between and the disagreements between the two sides how have they managed to keep it so peaceful?

DOUGHERTY: I think it was really two things. On the part of the demonstrators and the opposition in general they really sent down the word to everybody that they wanted nothing, no fights with the police, nothing like that and you can see on the streets where they had, the opposition actually had their own security people who would hold hands like this keeping the crowd away from the police. And then they also had kind of a Woodstock approach putting flowers on the shields of the police, et cetera.

Then from the government side they -- there was a pledge that they would not use violence and they stuck to that pledge which is very, very important and I think that's actually how it happened.

COHEN: Jill, thank you.

Now tell us what do you anticipate on this story in the coming days?

DOUGHERTY: Well, I think you're going to have the kids and the demonstrators still in the streets trying to keep warm and trying to keep clean. You're going to have a lot of political maneuvering behind the scenes and then eventually, the day after Christmas, western Christmas, December 26th you're going to have another vote.

COHEN: Well, from international affairs to a legal dispute back home, legalization of medical marijuana. I'm back on that story after this.

ANNOUNCER: Elizabeth Cohen is a CNN medical correspondent. She joined CNN in 1991. Earlier, she worked as a newspaper reporter in Washington and Albany. She has a Master's degree in public health.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If it wasn't for Canada's, I really would not be here today talking to you and fighting for my rights.

(END VIDEO CLIP)

COHEN: Angel Reich (ph) medical marijuana user was at the center of the arguments before the U.S. Supreme Court this week. Her state, California, allows it. Most states and the federal government do not.

Welcome back. We're ON THE STORY.

NEISLOSS: So, Elizabeth, I get the feeling that the medical opinion there does seem to be a lot of support for the idea of medical marijuana. Are there any ideas about how it would be regulated coming from the doctors and the medical community?

COHEN: That would be the really tough thing, Liz. I mean scientists will tell you, look, there are certain people who really can be helped by marijuana. For example, AIDS patients who are wasting away because they have no appetite that smoking the marijuana affects cannabinoid receptors in the brain and really helps increase their appetite. But for every one person who could legitimately be using it there are probably, gosh, I don't even want to say a number, hundreds, thousands of people who would want to use it for not very good medical reasons or for no medical reason at all, very difficult to regulate that.

Hays: You know, Liz, it seems like some of the doctors who are against it who are allied with organizations like the Partnership for a Drug Free America, say this is a Trojan horse for legalizing drug use overall.

But isn't it possible that their opposition as a Trojan horse for just not wanting to allow anything that would go against their political agenda, which is making sure no kind of drug like this ever gets legal in the United States regardless of the purpose?

COHEN: Right. They're afraid that if you say, OK, if you have X, Y, Z medical diagnoses you can legally smoke marijuana that you're just opening the floodgates and it becomes difficult to say, yes, to some people and no to others.

So, often the arguments are not scientific. They're really sort of political in a way. They're policy arguments. They're not so much saying they can't help people. You don't hear that argument as much as you hear, look, maybe they do help a couple people but obviously marijuana has some terrible effects.

It affects memory. It affects fertility. It affects all sorts of different things in the body. How do you stop it from harming people when really what you're just trying to do is help a relatively small number of people?

MALVEAUX: Elizabeth, I know it's probably a little early to talk about sex on a Saturday morning but you've got a story about a sex patch for women.

COHEN: That's right. This week an advisory committee to the Food and Drug Administration said that more research needed to be done on a female testosterone patch that's intended to up a woman's, to increase a woman's sexual desire.

They said there just wasn't enough safety information to make it OK and they're asking the company, Procter & Gamble, to go back to the drawing board and try it on thousands more women. This is obviously going to make it very difficult to get approval for this drug.

NEISLOSS: So, what's the problem with this drug? I mean we saw very quick approval I think of Viagra. What's going on with the sex patch?

COHEN: Well, what's going on with the sex patch is, is that it's meant for post menopausal women and if you remember when post menopausal women were given other types of hormone, namely estrogen and progestin they were seen later on years later it was seen that that increased rates of heart disease and cancer. So, these experts, these advisers to the FDA said, look, before we unleash and get another hormone for post menopausal women we want to make sure that it really is safe and they said the safety data just isn't there, especially when you compare it to the benefit.

The benefit was sort of worded in this funny way. They said when women use this patch they have one more satisfying sexual event in the course of four weeks. So, they're saying is it really worth taking a risk for one more satisfying sexual event every four weeks?

Hays: On the other hand, if even that one more satisfying event lowers your stress level that could be very important for women too, right Liz?

COHEN: That's true. There was actually news this week about stress and what it can do to you. We all say sort of casually, oh man I had this horrible thing happen and I feel like I aged ten years in ten minutes. Well now there's science that may back that up.

Researchers at the University of California San Francisco, they looked on the cellular level at what happens to immune cells when people are under stress and they found that those cells actually really did age ten years.

Those cells look ten years older compared to people who weren't under so much stress. So, yes, I suppose you could make that argument more sex, less stress, increase your life span. I suppose there is an argument there somewhere.

Hays: And I'm sure if there is you're going to find it.

From the doctor's office we're going to check in at the bank, the broker and the shopping mall. I'm back ON THE STORY of the economy in just a moment.

And, also coming up did a U.S. Senator calling for the resignation of Kofi Annan make that U.N. leader even stronger?

And, from California, Rusty Dornin is on the story of Scott Peterson close to learning whether he lives or dies for the murder of his wife.

Plus, a check on what's making news right now, all coming up, all ON THE STORY.

(COMMERCIAL BREAK)

Hays: ...lives or dies for the murder of his wife.

Plus, a check on what's making news right now, all coming up, all ON THE STORY.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) ELAINE CHAO, LABOR SECRETARY: From January to November of this year average employment growth has been about 185,000, which again is a very respectful number.

(END VIDEO CLIP)

Hays: Labor Secretary Elaine Chao talking up the latest jobs report in November, just 112,000 jobs created, a number Wall Street found disappointing.

Welcome back. We're ON THE STORY.

COHEN: Kathleen, let's talk about shopping. Last week was, right, the day after Thanksgiving was Friday, how did retail sales go?

Hays: Well, you know, that's a -- they were mixed actually because on Black Friday, as they call it, sales looked pretty strong but then on Saturday it looks like people pulled back.

I think there's an interesting connection when you look at the latest jobs report, which really was a shocker for Wall Street. They were expecting a number about twice that big.

Interesting that, you can see the numbers of the screen, 112,000. The month before the gain was 300,000, so there's a big question about where is the momentum in this economy?

This is important to the stock market as we come into the end of the year and it's also important to shopping. If people are worried about their jobs, they might not be quite as robust buyers as they might have been otherwise.

NEISLOSS: Kathleen, this week President Bush he's continuing to shape his economic team, there was a lot of flurry of attention over his appointment of a commerce secretary because this individual has a particularly American dream type story. What is significant, though, about the job that the guy is taking? What does the commerce secretary do these days?

Hays: You know, I think what's going to be interesting to see what Carlos Gutierrez, who is definitely an American success story, the son of a wealthy plantation owner in Cuba, the family shut out of Cuba when Carlos was six with the takeover by Fidel Castro.

He ends up going to work for Kellogg's in Mexico City when he's a young man selling frosted flakes out of the back of the van. That's his story. He ends up being the head of Kellogg's, increasing its product line, its sales. He's an American success story from start to finish.

Now what's interesting about commerce though it's not one of the key positions on the economic team in charge of measuring the economy, the GDP, in charge of the census. But it will be interesting to see because he is a recognized corporate leader because he's involved in manufacturing around the world, I think a lot of business leaders are hoping maybe he will represent their interests better. And, of course, our relationship with China very, very important now. It will be interesting to see which part of the bull he grabs by the horn, by the tails whatever and pulls it ahead because, again, it's generally not one of the key positions, the Treasury Department probably more important on some big things like taxation. But Carlos Gutierrez is a man with a very interesting track record and I think people are waiting to see what he does.

MALVEAUX: And, Kathleen, I'm wondering too there is some talk, you talked about treasury secretary about Snow whether or not he's going to stay or go, a lot of speculation around that and now you have Gutierrez in that position of commerce. To what extent do you really think that these new players will actually change economic policy and perhaps enhance President Bush's policy? Or, do you think it shows that we are taking a different direction perhaps?

Hays: Well, you know, there's been a lot of criticism I think. Certainly there was criticism of the treasury secretary for a while. He's got his fans. I think other people feel that he has not really initiated any new policies.

But in fairness to John Snow the president now is really shifting gears, Social Security reform, this partial privatization is very, very important. They want to simplify the tax code and it sounds like they want to bring in a new team that can help them sell that plan.

It's not so much a question of formulating the policy, although there's lot of details left and we all know that the devil's in the details but it seems that the president really does want to clear the decks.

Getting this Social Security reform through Congress is going to be huge if it can be done. There's already a lot of opposition, a lot of fears about what this is going to do to benefits down the road.

There's so much chatter right now in the press, in the financial markets about John Snow being on the way out though. It does seem that this is a foregone conclusion and it's just a matter now of who's going to replace him but we shall see. The White House calls it a big game of speculation and obviously we're playing right along.

COHEN: Kathleen, there's an interesting number about sales at Wal-Mart recently. Can you tell us about that?

Hays: Wal-Mart sales were very disappointing in the month of November, up just seven-tenths of a percent. Let me put that in perspective for you. When the economy is booming and consumers are really shopping that Wal-Mart sales number should be up around nine or ten percent. Those are the kind of numbers we saw in the late '90s.

In a decent month let's say four or five percent, so this was very, very disappointing. Now they didn't discount. They admit that. They've launched a big ad campaign but I think you got to bring it back quickly to the jobs.

This slow down in jobs is a big worry for the stock market. You combine that with the lack of sales at Wal-Mart, falling consumer confidence last week, it's a really open question now if the economy has enough momentum moving it ahead. The holiday shopping will be a key part of that puzzle.

NEISLOSS: Well, Kathleen, from the financial world to the diplomatic world, Iraq continues to rattle the United Nations this week, the Oil for Food scandal, you guessed it, and now a call for Kofi Annan, the U.N. leader, to resign. I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. NORM COLEMAN (R), MINNESOTA: We're not going to get to the bottom of this with any kind of credibility unless the guy that was in charge steps back and then let us figure out what happened and bottom line is what happened to the billions that are out there and are those billions being used to fund an insurgency that's taking American and coalition lives today?

(END VIDEO CLIP)

NEISLOSS: U.S. Senator Norm Coleman, Republican of Minnesota. This week the guy in charge he wants out is United Nations Secretary- General Kofi Annan. This was the big turn in the Oil for Food scandal just this week as that scandal continues to boil.

The main question really is how much of Saddam Hussein's money was siphoned or how much money was Saddam Hussein able to siphon off billions of dollars of oil money that was supposed to be buying food and medicine for his people while Iraq was under international sanctions and not supposed to be selling oil freely on the world market?

Welcome back. We're ON THE STORY.

Hays: Liz, we see this Senator, many stories now focusing on Kofi Annan, not that he was corrupt necessary but a failure of leadership is it seems what many people are charging him with but what's the feeling inside the U.N.? Are they rallying around behind him or are they saying, see, we knew this was a mess all along?

NEISLOSS: Well, let me maybe start a little bit here with this is kind of like the conversational equivalent of starting with dessert first. But last night, there was a dinner at the United Nations. This was a dinner at the U.N. Correspondents Association. Kofi Annan was there and very importantly he did get up to speak.

It's a very raucous crowd, a lot of people not listening to a lot of the speeches but they did stop talking when Kofi Annan got up and he got up and said "Tonight, I am resigning myself to having a good time," which took a collective sort of gasp from the audience but showed that, you know, he is going to have a little bit of a sense of humor about this. His son is in a lot of hot water, particularly with the investigations, with the media. There are accusations about what he may have done, what links he may have. Kofi Annan in his speech also said "Where will this all go? Who will be speaking to you next year? Which family member of mine are you going to have speak to you next year?"

MALVEAUX: Liz, I thought it was interesting too because President Bush got that question this week about whether or not Annan should step down and it was very interesting because really the silence was deafening.

I mean the fact that he did not endorse Annan but rather said that, look, we need a full accounting when it comes to this investigation and the Oil for Food Program really making it contingent, the U.S. support of the United Nations on what that outcome of that investigation is. Do you get a sense that the United States' relationship with the United Nations is changing?

NEISLOSS: It is changing but to get back a little bit to what Kathleen said international support is very much there for Kofi Annan. You heard support from the Europeans, support from the Africans. This is not an issue overseas but domestically it is interesting, as you say Suzanne, the reaction that Bush gave it wasn't a warm embrace and that spoke volumes.

This could be seen as a little bit of payback time by the U.S. to the U.N. because Annan managed to call the war illegal, to remind everyone that he thought that the Iraq War was illegal and this was just in the days leading up to the U.S. elections.

He also sent a letter at a very difficult moment to the U.S., to Bush and to Blair saying don't attack Falluja. This was just before the U.S. went into Falluja, saying it's going to damage election prospects. So, the U.S. has not looked at Kofi Annan as someone who has exactly been supportive, so what we're seeing here is no rush to embrace him.

COHEN: Liz, we heard a lot this week from Senator Coleman asking for Annan's resignation. Was anyone else also asking for Annan's resignation?

NEISLOSS: Well, I think domestically in the U.S. there are -- possibly there's another Senator. There are a handful of representatives. I'm also seeing that there's kind of a counter argument being made.

But, you know, what's interesting here is that it will not be something likely to happen for Annan to resign. He has until the end of 2006. He does have this overwhelming support at the United Nations.

It does remain to be seen what happens with his son but the United States can do one thing they have done before. They can withhold U.N. dues and there are some calls for that to possibly happen again.

Hays: Well, it will be interesting to see what kind of jokes he can make out of that.

From the meeting halls of the United Nations to a California courtroom, as a jury hears whether convicted murderer Scott Peterson should go to prison or be put to death for killing his wife, Laci Peterson.

We're back on that story with Rusty Dornin in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SHARON ROCHA, LACI PETERSON'S MOTHER: I can only hope that the sound of Laci's voice begging for her life and begging for the life of her unborn child is heard over and over and over again in the mind of that person every day for the rest of his life.

(END VIDEO CLIP)

RUSTY DORNIN, CNN CORRESPONDENT: That was the heart-wrenching speech by Sharon Rocha the day that her daughter Laci Peterson's body was discovered, identified and the day that Scott Peterson was arrested. We heard those same anguished cries from her in the court this week as she confronted her killer during the penalty phase of the trial.

Welcome back. I'm Rusty Dornin in San Francisco and we're ON THE STORY.

Hays: Rusty, tell us more about that moment when Laci's mom said her piece, obviously doing her part I think to make sure that Scott Peterson gets the most severe punishment possible. What did she say? What was it like?

DORNIN: It built really, the emotion built in the courtroom and also on her part she started out very calm, answering questions, talking just about Laci as a child and how she was very close to her daughter and that she went to a lot of school activities with her and that sort of thing.

And then it built towards the time that she disappeared and she would begin shrieking at Scott Peterson in court and when she would do that and when she would cry, members of the Rocha family also would cry out in court.

I mean they were just sobbing as she was weeping on the stand and she was addressing Scott Peterson directly saying, you know, things like "Divorce was always an option, not murder. You shouldn't have taken her away from me. She didn't deserve to die," things like that. It was just, it was very emotional in the courtroom.

COHEN: All of that -- all of that emotion, Rusty, that you just described that has to have an effect on the jury's decision about what to do.

DORNIN: And they were, several of the jurors were crying, dabbing their eyes and that sort of thing throughout her speech, some openly. Some of the men that you've never seen express any emotion at all in court were also crying openly when Sharon Rocha was giving her speech. So, yes, it was very, very emotional.

MALVEAUX: And Laci's family are they still in the courtroom? Are they -- do they continue to come back and make these appeals?

DORNIN: Well, no. The interesting thing is now we're in the defense part where the Peterson family is talking about really what a great guy Scott Peterson was and is and during the speech of his sister-in-law, Janey Peterson, Sharon Rocha got up during the middle of her testimony and left the court.

Now, that afternoon, Laci Peterson's brother was in court but not her mother Sharon Rocha and yesterday not one member of the Rocha family. It was very obvious that the two first rows of the victim's side of the court were empty.

NEISLOSS: What if the jury cannot agree at this point?

DORNIN: If the jury is hung on this, and remember it has to be unanimous verdict, excuse me, in a death penalty case. Now, if one person does not vote for the death penalty or, you know, or for life or whatever then it is a hung jury and they must pick a new penalty phase jury.

The conviction still stands but they must pick a new penalty phase jury and that's a real problem because that new jury would have to hear the evidence all over again. The other option would be if there was a hung jury that the prosecution would decide to drop the demand for the death penalty and then Scott Peterson would automatically be sentenced to life in prison without parole.

Hays: So, Rusty, what is the makeup of this jury now? How are the -- who are the two sides betting? The defense seems to be taking a fair amount of time presenting its picture of Scott Peterson, obviously trying to get some mercy here. How are people handicapping this?

DORNIN: Well, it's really difficult because none of us thought that first degree murder was going to be the verdict in the first place and I think many of us misread some of these jurors. It's very difficult. They are very grim-faced in court. They did not cry at all during the defense -- any of the defense members of the family while they've been giving their testimony.

They have chuckled a little bit while Peterson's brothers have recited some of their childhood stories and that sort of thing. But you are getting a very big picture of Peterson's family and friends and people who loved him and cared about him that he was a great guy, that he was kind and caring and altruistic.

He would visit the old folks, friend of his -- his friends' parents when the friends weren't even there. He would go to Mexico and work in an orphanage. And they're getting this picture of this very loving family. The problem with that is there could be some problem in saying, look, he didn't seem to have any problems. Why did he do this? If he was so caring and kind how could he have been calling his girlfriend during his wife's vigil? How could he have shown such little emotion during his wife's vigil?

On the other hand, they could be seeing him just as a very sweet person and perhaps just something went wrong in his life and perhaps they will show some mercy.

COHEN: Thanks, Rusty. We'll be continuing to watch this.

And we're back ON THE STORY after this.

ANNOUNCER: A popular singer is speaking out about AIDS. What's her story? More when we return.

(COMMERCIAL BREAK)

ANNOUNCER: Alicia Keys, what's her story? The Grammy-winning singer and songwriter is raising her voice about AIDS in Africa. On World AIDS Day, keys headlined a fundraising concert to spread the alarm about the millions of people suffering from the disease in Africa.

ALICIA KEYS, SINGER/SONGWRITER: We're really trying to be a part of making a change for the people that do have AIDS to help them receive the medication that will keep them alive.

ANNOUNCER: Keys has said the AIDS fight should be as important as the war on terrorism.

Hays: Thanks so much to my colleagues for all their great insights. Thank you for watching ON THE STORY. And a very special happy birthday to Suzanne Malveaux, who loves her job so much, because she's spending her birthday celebrating it, the job and the birthday I guess.

MALVEAUX: Yes. I usually celebrate it with my twin sister but I'm going to miss it this time. We'll see her a little bit later.

Hays: We know she's watching ON THE STORY, of course.

MALVEAUX: Yes, that's true.

Hays: We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Britney Spears and Paris Hilton.

Straight ahead a check on 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 December 4, 2004 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And updating a story just into CNN that we mentioned just a moment ago. Former Panamanian leader Manuel Noriega has suffered a mild stroke in prison in Miami. We have no additional word on his condition. We are working to get more information on the story, and we will update it as soon as we can.
Another bloody day in Baghdad. Sixteen people, five of them police officers, were killed when two car bombs exploded at an entrance to the so-called Green Zone. Thirty-eight other people were wounded in the blast. The Green Zone is a heavily-fortified area of the capital controlled by the coalition.

President Bush is meeting at the White House with President Pervez Musharraf of Pakistan, one of his closest allies in the war on terror. Among other things, the two presidents are believed to be discussing the search for Osama bin Laden and the search for peace between Israelis and Palestinians.

Keeping you informed, CNN, the most trusted name in news. I'm Tony Harris at the CNN global headquarters in Atlanta.

ON THE STORY starts right now.

SUZANNE MALVEAUX, 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 Suzanne Malveaux on the story of President Bush meeting with critical international allies, while at the same time dealing with a cabinet shake-up at home.

KATHLEEN Hays, CNN CORRESPONDENT: I'm Kathleen Hays in New York on the story of fewer than expected new jobs and new concern about how much money you and I will spend over the holidays.

LIZ NEISLOSS, CNN CORRESPONDENT: I'm Liz Neisloss in New York on the story of uproar caused by one U.S. senator demanding Kofi Annan step down as secretary-general of the United Nations.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: And I'm Elizabeth Cohen on the story of fresh arguments this week over medical marijuana and new attention on a sex patch for women.

Also on the show, Jill Dougherty is on the story in the Ukraine with the latest on the peaceful revolution.

And, Rusty Dornin is on the story in California on the final phase of the Scott Peterson trial.

E-mail us at onthestory@cnn.com.

Now, straight to Suzanne Malveaux and President Bush on the world stage.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I want to thank the Canadian people who came out to wave with all five fingers for their hospitality.

(END VIDEO CLIP)

MALVEAUX: Well, it was really quite an interesting trip for President Bush and Canada. He was making a joke about it trying to make light of the single finger salute that he got from many Canadians. There were thousands of protesters that gathered there but the president trying to put a good face on it and good relations with Canada. He met with Paul Martin, the leader of Canada, but of course he also admitted there were quite some strains between the two countries.

COHEN: Suzanne, were you surprised by this sometimes frosty reception that the president received in Canada?

MALVEAUX: You know, actually we weren't surprised at all. We saw those demonstrations unfold right before us and, at times, they got rather tense but really this is a country where people have expressed themselves from the highest level where you had members of parliament who were stomping on dolls of the president in the past couple of years or so, calling this the Iraq coalition, a coalition of the idiots.

I mean these are people who have expressed their opinions against the war, against the U.S. ban on Canadian beef, a number of concerns they've had. But what's really interesting about this is that the two leaders themselves, Martin and Bush, actually have a good relationship. They get along well. It is much warmer than the relationship that President Bush had with the previous leader John Chretien but there is a lot of work that needs to be done here.

The big issue, of course, between our two countries is trade. We're the largest trade partners in the world, more than $1 billion actually exchanges hands in one day, so they're both trying to put all of those differences aside and say, hey look, we disagreed over the Iraq war but let's move on.

Hays: It's interesting that you're pointing out that this -- this seems to be about mending fences, about warming up those relationships. One observer described this with a Texas term all hat and no cattle, meaning there was a lot of talk but no real agreements reached on the ban on Canadian beef.

President Bush brought up his -- one of his pet projects ballistic missile defense shield that apparently surprised the Canadian prime minister, any substance here?

MALVEAUX: Well, actually you bring up a very good point. They weren't expecting to get very much in terms of announcements or anything that was actually concrete but they do expect or rather at least they hope that there's going to be some progress on this, perhaps that that ban would be lifted. That is something that is working through Congress.

I do want to bring up, however, what's happening here at the White House. What we're watching, of course, is this is Pakistan's President Pervez Musharraf. He has just wrapped up his meeting with President Bush in the Oval Office. This is, again, one of those efforts that the president is making at fence mending.

It's one of those efforts, of course, that he is trying to build on the alliances that he's built on previously. As you know, Pakistan was a critical ally in the war on terror but there are a lot of concerns. Let's take a listen.

PERVEZ MUSHARRAF, PAKISTANI PRESIDENT: It's not mathematical what we've got, what I've got. We discussed the issue as the president said. It was a wonderful meeting. First of all, the very fact that we have met on a Saturday, I feel privileged especially to have been allowed this meeting on a Saturday.

I come here to congratulate the president on his election and congratulate his party for winning the election. Other than that, I took this opportunity to discuss all issues, international, regional from Pakistan's point of view and our own bilateral relations.

On the whole, I think it was a very wholesome meeting. I think it was an extremely positive meeting and there is total (UNINTELLIGIBLE) views on all issues. That is what I would like to say.

UNIDENTIFIED MALE: Mr. President, (UNINTELLIGIBLE) bin Laden and the hunt for bin Laden (UNINTELLIGIBLE)?

MUSHARRAF: Yes, of course, we discussed terrorism in its entire complexity and within that hunting every terrorist was discussed, of course. The operations against terrorists in Pakistan on our borders was discussed.

UNIDENTIFIED MALE: Why haven't you found bin Laden yet? What's the problem?

MUSHARRAF: No, we didn't go into it. In half an hour or 40 minutes you can't get into the details of what are the tactical issues, problems that confront what we haven't achieved. Of course, we discussed the issue of, as I said, fighting terrorism in all its complexities.

UNIDENTIFIED MALE: Mr. President, (UNINTELLIGIBLE).

MUSHARRAF: Thank you.

UNIDENTIFIED MALE: I have great respect for you. MUSHARRAF: Thank you very much. Ask your question.

UNIDENTIFIED MALE: As for India and Pakistan's relations are critical especially now you have put everything on the table (UNINTELLIGIBLE). We will do everything possible to (UNINTELLIGIBLE) to defeat Pakistan (UNINTELLIGIBLE).

MUSHARRAF: Thank you.

UNIDENTIFIED MALE: So, where do we stand now, Mr. President?

MUSHARRAF: I think we are moving well on the issue of confidence building measures and also the dialogue process towards resolution of disputes. We hope that we will move forward in resolution of all disputes and the core dispute that happens to be Kashmir, therefore moving on that. We are very hopeful and I'm very optimistic of the future.

UNIDENTIFIED MALE: Did you talk about the enlightened moderation with the president and especially with the focus on Palestine issues?

MUSHARRAF: Yes, I did. I think the president himself said that, that this is the core issue, the core at fighting terrorism is resolution of the Palestinian dispute, so I think this is very -- I'm very glad that the president is absolutely aware of it and he's aware of his own role to bring world peace through resolution of the Palestinian dispute, creation of a Palestinian state and we are, as far as Pakistan is concerned, we are very clear that we believe in the right of Palestinians and the Israelis to have their own state.

Within that, whatever Pakistan or whatever I can do I will contribute. At the present time I'm very glad to say that President Bush is absolutely concerned and he thinks that it's a priority with him to resolve the Palestinian dispute and create a Palestinian state.

UNIDENTIFIED MALE: What about the (UNINTELLIGIBLE)?

MUSHARRAF: OK, thank you very much. I mean we discussed (UNINTELLIGIBLE) issue. That is all that I would like to say. Thank you. Thank you. Thank you.

UNIDENTIFIED MALE: Mr. President, I hope I'll get my visa to visit Pakistan.

MUSHARRAF: Yes, whenever you want, yes. That is no problem.

UNIDENTIFIED MALE: Thank you very much. (UNINTELLIGIBLE). Yes, sir. Thank you, sir.

MALVEAUX: And what you were watching just moments ago that was Pakistani President Pervez Musharraf. That's at the stake out position now, statements made from the Oval Office just moments ago.

BUSH: We discussed international politics. I assured President Musharraf that there is an opportunity at hand to work toward the development of a Palestinian state and peace in the Middle East. I told him that this will be a priority of my administration. The goal is two states living side by side in peace and security.

We spent time talking about our bilateral relations. We reviewed the relationship between India and Pakistan. He has showed great courage in that relationship leading toward what we hope will be a peaceful solution of what has been a historically difficult problem.

We talked about our own bilateral relations. The president and I are absolutely committed to fighting off the terrorists who would destroy life in Pakistan or the United States or anywhere else.

And I appreciate very much your clear vision of the need for people of good will and hope to prevail over those who are willing to inflict death in order to achieve an ideology that is -- the predominance of an ideology that is just backward and dark in its view.

We talked about commerce between our countries. The president is very concerned about whether or not Pakistan goods are being treated equally and fairly as other goods coming into the United States. I listened very carefully to what he had to say. He had some constructive ideas as to how to deal with that situation.

Having brought up his economy, however, I reminded him that he's doing quite a good job of making sure that the economy grows in Pakistan so that people have got a chance to realize their dreams and I congratulate you on good stewardship of the Pakistan economy.

All in all our relationships are good. They're strong and they will remain that way and I'm honored you're here.

MUSHARRAF: Thank you. Thank you very much, Mr. President. I don't have much to add to whatever the president has already said. We had a very wholesome interaction. All that I would to say is that I've come here basically to congratulate the president very sincerely with all my sincerity for having won the election and he does me an honor by receiving me on a Saturday.

And, therefore, the other issues that we discussed were incidental and all the important issues, the most important issue resolution of the Palestinian dispute in the interest of peace in the whole world.

And I wouldn't repeat whatever the president has already said enhancement of our bilateral relations, enhancement of our commercial ties with the United States. I'm grateful for the extreme understanding that the president has shown towards the concerns of Pakistan. Thank you.

BUSH: You're welcome. You're welcome. We'll answer a question from the American side and the Pakistani side and American side and Pakistani side and that will be it in the spirit of Saturday morning meetings. And so, the first person that will be asking the question will be Mr. Mark Knoller (ph).

UNIDENTIFIED MALE: Thank you. Mr. President, what do you make of the warning sounded yesterday by Tommy Thompson that the American food supply may be at risk to terrorist attack?

BUSH: Tommy was commenting on the fact that we're a large country with all kinds of avenues where somebody could inflict harm and we're doing everything we can to protect the American people. I picked a good man to head the Homeland Security Department in Bernie Kerik. I hope the Senate confirms him quickly so he can get to work.

There's a lot of work to be done. We've made a lot of progress in protecting our country and there's more work to be done and this administration is committed to doing it.

MALVEAUX: Both leaders, of course, really kind of dancing around the subject about Osama bin Laden. That is really one of the critical issues here, both of them saying in general terms that they are committed for fighting in the war on terror.

But this is something that's somewhat sensitive here because Pakistan, of course, has its own force and its own side looking for Osama bin Laden and al Qaeda. The U.S. has its own force on the Afghan side.

Pakistan has recently said they are pulling away. They're pulling back on that effort. That is a concern for the Bush administration but both of them today trying to put on a good face here saying we're working together in fighting on the war on terror.

NEISLOSS: Suzanne, one other story the White House has obviously been keeping a watch on, the political drama playing out in the streets of Kiev, capital of Ukraine in recent days. We're back on that story with Jill Dougherty after this.

(COMMERCIAL BREAK)

JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: Sounds of that peaceful revolution that brought this city to a standstill over the past two weeks and overturned the results of a disputed presidential election. Now, Ukraine moves to a new vote but those demonstrators who have been on the streets all this time they say they're not going home until it's over.

Welcome back. I'm Jill Dougherty on the story in Kiev, Ukraine.

MALVEAUX: Jill, there has been so much talk about interference from other countries. I know the Bush administration has been very frustrated with Russia's role, Putin actually getting involved with all of this.

To what extent do you think that that has really had an impact on the direction of these elections the fact that they're actually going to re-conduct these elections? Do you think that kind of influence really made a difference or do you think it was the demonstrators on the streets, the mood that you're actually seeing?

DOUGHERTY: Actually, you know, I think it blew up in Vladimir Putin's face quite honestly because he came here twice and definitely campaigned, not officially but unofficially he was campaigning for Mr. Yanukovych, the government candidate and then right before, just about two days ago, he was in a very demeaning fashion saying "What, do you want to replay this election again? You must be kidding. Are you going to do it 25 times?"

So, he was very much involved in all of this and it turned out completely the opposite of what he wanted, so it's going to be difficult politically. I think he's in a difficult situation. It hurt him.

Hays: Jill, I think the world's been holding its breath as they see the protesters and hope that this stays peaceful. It has stayed peaceful. You have to tell us a little bit about orange, how that became the official color of this peaceful uprising.

DOUGHERTY: You know, in fact, I asked exactly that question. We did a little story on it. It was one of his political advisers, his I mean the opposition candidate Viktor Yushchenko and they said what they wanted was a color that's not like red or blue that's kind of a fighting color.

They decided on something that's almost funny, you know, orange really is kind of a funny color. It's very bright and they said it symbolized positive energy. So, everywhere you go people have any variety of orange you can imagine. I mean they've woven it into their hats. They have it in banners. They have it, you know, ski glasses orange, you name it.

And I think all of these things that kind of humorous approach and music and dancing and all of that has been very important in keeping this peaceful and they've also been extremely disciplined. There's amazingly no drinking on the streets that I have been seeing, which is truly astounding in this part of the world and that hasn't happened so it's been very, very peaceful.

NEISLOSS: Jill, you do get the sense that there is kind of a peace and love, everything is going to be OK kind of feeling. There's a push now for a new election, so what's going to change? What is going to prevent a repeat fraud election?

DOUGHERTY: Boy that's really the clincher of a question because what they have to do right now is try to bring together the reform of the electoral law that will try to avoid some of that fraud and just a few minutes ago the parliament was over there voting that they didn't do it. In fact, they recessed for ten days without taking a vote on that election reform.

So, these are the difficult things that they have to do right now, plus they have to bring in thousands and thousands of observers because there were areas where there were not observers and that's where a lot of the fraud took place.

COHEN: Jill, given this fraud and given the tensions that exist between and the disagreements between the two sides how have they managed to keep it so peaceful?

DOUGHERTY: I think it was really two things. On the part of the demonstrators and the opposition in general they really sent down the word to everybody that they wanted nothing, no fights with the police, nothing like that and you can see on the streets where they had, the opposition actually had their own security people who would hold hands like this keeping the crowd away from the police. And then they also had kind of a Woodstock approach putting flowers on the shields of the police, et cetera.

Then from the government side they -- there was a pledge that they would not use violence and they stuck to that pledge which is very, very important and I think that's actually how it happened.

COHEN: Jill, thank you.

Now tell us what do you anticipate on this story in the coming days?

DOUGHERTY: Well, I think you're going to have the kids and the demonstrators still in the streets trying to keep warm and trying to keep clean. You're going to have a lot of political maneuvering behind the scenes and then eventually, the day after Christmas, western Christmas, December 26th you're going to have another vote.

COHEN: Well, from international affairs to a legal dispute back home, legalization of medical marijuana. I'm back on that story after this.

ANNOUNCER: Elizabeth Cohen is a CNN medical correspondent. She joined CNN in 1991. Earlier, she worked as a newspaper reporter in Washington and Albany. She has a Master's degree in public health.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If it wasn't for Canada's, I really would not be here today talking to you and fighting for my rights.

(END VIDEO CLIP)

COHEN: Angel Reich (ph) medical marijuana user was at the center of the arguments before the U.S. Supreme Court this week. Her state, California, allows it. Most states and the federal government do not.

Welcome back. We're ON THE STORY.

NEISLOSS: So, Elizabeth, I get the feeling that the medical opinion there does seem to be a lot of support for the idea of medical marijuana. Are there any ideas about how it would be regulated coming from the doctors and the medical community?

COHEN: That would be the really tough thing, Liz. I mean scientists will tell you, look, there are certain people who really can be helped by marijuana. For example, AIDS patients who are wasting away because they have no appetite that smoking the marijuana affects cannabinoid receptors in the brain and really helps increase their appetite. But for every one person who could legitimately be using it there are probably, gosh, I don't even want to say a number, hundreds, thousands of people who would want to use it for not very good medical reasons or for no medical reason at all, very difficult to regulate that.

Hays: You know, Liz, it seems like some of the doctors who are against it who are allied with organizations like the Partnership for a Drug Free America, say this is a Trojan horse for legalizing drug use overall.

But isn't it possible that their opposition as a Trojan horse for just not wanting to allow anything that would go against their political agenda, which is making sure no kind of drug like this ever gets legal in the United States regardless of the purpose?

COHEN: Right. They're afraid that if you say, OK, if you have X, Y, Z medical diagnoses you can legally smoke marijuana that you're just opening the floodgates and it becomes difficult to say, yes, to some people and no to others.

So, often the arguments are not scientific. They're really sort of political in a way. They're policy arguments. They're not so much saying they can't help people. You don't hear that argument as much as you hear, look, maybe they do help a couple people but obviously marijuana has some terrible effects.

It affects memory. It affects fertility. It affects all sorts of different things in the body. How do you stop it from harming people when really what you're just trying to do is help a relatively small number of people?

MALVEAUX: Elizabeth, I know it's probably a little early to talk about sex on a Saturday morning but you've got a story about a sex patch for women.

COHEN: That's right. This week an advisory committee to the Food and Drug Administration said that more research needed to be done on a female testosterone patch that's intended to up a woman's, to increase a woman's sexual desire.

They said there just wasn't enough safety information to make it OK and they're asking the company, Procter & Gamble, to go back to the drawing board and try it on thousands more women. This is obviously going to make it very difficult to get approval for this drug.

NEISLOSS: So, what's the problem with this drug? I mean we saw very quick approval I think of Viagra. What's going on with the sex patch?

COHEN: Well, what's going on with the sex patch is, is that it's meant for post menopausal women and if you remember when post menopausal women were given other types of hormone, namely estrogen and progestin they were seen later on years later it was seen that that increased rates of heart disease and cancer. So, these experts, these advisers to the FDA said, look, before we unleash and get another hormone for post menopausal women we want to make sure that it really is safe and they said the safety data just isn't there, especially when you compare it to the benefit.

The benefit was sort of worded in this funny way. They said when women use this patch they have one more satisfying sexual event in the course of four weeks. So, they're saying is it really worth taking a risk for one more satisfying sexual event every four weeks?

Hays: On the other hand, if even that one more satisfying event lowers your stress level that could be very important for women too, right Liz?

COHEN: That's true. There was actually news this week about stress and what it can do to you. We all say sort of casually, oh man I had this horrible thing happen and I feel like I aged ten years in ten minutes. Well now there's science that may back that up.

Researchers at the University of California San Francisco, they looked on the cellular level at what happens to immune cells when people are under stress and they found that those cells actually really did age ten years.

Those cells look ten years older compared to people who weren't under so much stress. So, yes, I suppose you could make that argument more sex, less stress, increase your life span. I suppose there is an argument there somewhere.

Hays: And I'm sure if there is you're going to find it.

From the doctor's office we're going to check in at the bank, the broker and the shopping mall. I'm back ON THE STORY of the economy in just a moment.

And, also coming up did a U.S. Senator calling for the resignation of Kofi Annan make that U.N. leader even stronger?

And, from California, Rusty Dornin is on the story of Scott Peterson close to learning whether he lives or dies for the murder of his wife.

Plus, a check on what's making news right now, all coming up, all ON THE STORY.

(COMMERCIAL BREAK)

Hays: ...lives or dies for the murder of his wife.

Plus, a check on what's making news right now, all coming up, all ON THE STORY.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) ELAINE CHAO, LABOR SECRETARY: From January to November of this year average employment growth has been about 185,000, which again is a very respectful number.

(END VIDEO CLIP)

Hays: Labor Secretary Elaine Chao talking up the latest jobs report in November, just 112,000 jobs created, a number Wall Street found disappointing.

Welcome back. We're ON THE STORY.

COHEN: Kathleen, let's talk about shopping. Last week was, right, the day after Thanksgiving was Friday, how did retail sales go?

Hays: Well, you know, that's a -- they were mixed actually because on Black Friday, as they call it, sales looked pretty strong but then on Saturday it looks like people pulled back.

I think there's an interesting connection when you look at the latest jobs report, which really was a shocker for Wall Street. They were expecting a number about twice that big.

Interesting that, you can see the numbers of the screen, 112,000. The month before the gain was 300,000, so there's a big question about where is the momentum in this economy?

This is important to the stock market as we come into the end of the year and it's also important to shopping. If people are worried about their jobs, they might not be quite as robust buyers as they might have been otherwise.

NEISLOSS: Kathleen, this week President Bush he's continuing to shape his economic team, there was a lot of flurry of attention over his appointment of a commerce secretary because this individual has a particularly American dream type story. What is significant, though, about the job that the guy is taking? What does the commerce secretary do these days?

Hays: You know, I think what's going to be interesting to see what Carlos Gutierrez, who is definitely an American success story, the son of a wealthy plantation owner in Cuba, the family shut out of Cuba when Carlos was six with the takeover by Fidel Castro.

He ends up going to work for Kellogg's in Mexico City when he's a young man selling frosted flakes out of the back of the van. That's his story. He ends up being the head of Kellogg's, increasing its product line, its sales. He's an American success story from start to finish.

Now what's interesting about commerce though it's not one of the key positions on the economic team in charge of measuring the economy, the GDP, in charge of the census. But it will be interesting to see because he is a recognized corporate leader because he's involved in manufacturing around the world, I think a lot of business leaders are hoping maybe he will represent their interests better. And, of course, our relationship with China very, very important now. It will be interesting to see which part of the bull he grabs by the horn, by the tails whatever and pulls it ahead because, again, it's generally not one of the key positions, the Treasury Department probably more important on some big things like taxation. But Carlos Gutierrez is a man with a very interesting track record and I think people are waiting to see what he does.

MALVEAUX: And, Kathleen, I'm wondering too there is some talk, you talked about treasury secretary about Snow whether or not he's going to stay or go, a lot of speculation around that and now you have Gutierrez in that position of commerce. To what extent do you really think that these new players will actually change economic policy and perhaps enhance President Bush's policy? Or, do you think it shows that we are taking a different direction perhaps?

Hays: Well, you know, there's been a lot of criticism I think. Certainly there was criticism of the treasury secretary for a while. He's got his fans. I think other people feel that he has not really initiated any new policies.

But in fairness to John Snow the president now is really shifting gears, Social Security reform, this partial privatization is very, very important. They want to simplify the tax code and it sounds like they want to bring in a new team that can help them sell that plan.

It's not so much a question of formulating the policy, although there's lot of details left and we all know that the devil's in the details but it seems that the president really does want to clear the decks.

Getting this Social Security reform through Congress is going to be huge if it can be done. There's already a lot of opposition, a lot of fears about what this is going to do to benefits down the road.

There's so much chatter right now in the press, in the financial markets about John Snow being on the way out though. It does seem that this is a foregone conclusion and it's just a matter now of who's going to replace him but we shall see. The White House calls it a big game of speculation and obviously we're playing right along.

COHEN: Kathleen, there's an interesting number about sales at Wal-Mart recently. Can you tell us about that?

Hays: Wal-Mart sales were very disappointing in the month of November, up just seven-tenths of a percent. Let me put that in perspective for you. When the economy is booming and consumers are really shopping that Wal-Mart sales number should be up around nine or ten percent. Those are the kind of numbers we saw in the late '90s.

In a decent month let's say four or five percent, so this was very, very disappointing. Now they didn't discount. They admit that. They've launched a big ad campaign but I think you got to bring it back quickly to the jobs.

This slow down in jobs is a big worry for the stock market. You combine that with the lack of sales at Wal-Mart, falling consumer confidence last week, it's a really open question now if the economy has enough momentum moving it ahead. The holiday shopping will be a key part of that puzzle.

NEISLOSS: Well, Kathleen, from the financial world to the diplomatic world, Iraq continues to rattle the United Nations this week, the Oil for Food scandal, you guessed it, and now a call for Kofi Annan, the U.N. leader, to resign. I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. NORM COLEMAN (R), MINNESOTA: We're not going to get to the bottom of this with any kind of credibility unless the guy that was in charge steps back and then let us figure out what happened and bottom line is what happened to the billions that are out there and are those billions being used to fund an insurgency that's taking American and coalition lives today?

(END VIDEO CLIP)

NEISLOSS: U.S. Senator Norm Coleman, Republican of Minnesota. This week the guy in charge he wants out is United Nations Secretary- General Kofi Annan. This was the big turn in the Oil for Food scandal just this week as that scandal continues to boil.

The main question really is how much of Saddam Hussein's money was siphoned or how much money was Saddam Hussein able to siphon off billions of dollars of oil money that was supposed to be buying food and medicine for his people while Iraq was under international sanctions and not supposed to be selling oil freely on the world market?

Welcome back. We're ON THE STORY.

Hays: Liz, we see this Senator, many stories now focusing on Kofi Annan, not that he was corrupt necessary but a failure of leadership is it seems what many people are charging him with but what's the feeling inside the U.N.? Are they rallying around behind him or are they saying, see, we knew this was a mess all along?

NEISLOSS: Well, let me maybe start a little bit here with this is kind of like the conversational equivalent of starting with dessert first. But last night, there was a dinner at the United Nations. This was a dinner at the U.N. Correspondents Association. Kofi Annan was there and very importantly he did get up to speak.

It's a very raucous crowd, a lot of people not listening to a lot of the speeches but they did stop talking when Kofi Annan got up and he got up and said "Tonight, I am resigning myself to having a good time," which took a collective sort of gasp from the audience but showed that, you know, he is going to have a little bit of a sense of humor about this. His son is in a lot of hot water, particularly with the investigations, with the media. There are accusations about what he may have done, what links he may have. Kofi Annan in his speech also said "Where will this all go? Who will be speaking to you next year? Which family member of mine are you going to have speak to you next year?"

MALVEAUX: Liz, I thought it was interesting too because President Bush got that question this week about whether or not Annan should step down and it was very interesting because really the silence was deafening.

I mean the fact that he did not endorse Annan but rather said that, look, we need a full accounting when it comes to this investigation and the Oil for Food Program really making it contingent, the U.S. support of the United Nations on what that outcome of that investigation is. Do you get a sense that the United States' relationship with the United Nations is changing?

NEISLOSS: It is changing but to get back a little bit to what Kathleen said international support is very much there for Kofi Annan. You heard support from the Europeans, support from the Africans. This is not an issue overseas but domestically it is interesting, as you say Suzanne, the reaction that Bush gave it wasn't a warm embrace and that spoke volumes.

This could be seen as a little bit of payback time by the U.S. to the U.N. because Annan managed to call the war illegal, to remind everyone that he thought that the Iraq War was illegal and this was just in the days leading up to the U.S. elections.

He also sent a letter at a very difficult moment to the U.S., to Bush and to Blair saying don't attack Falluja. This was just before the U.S. went into Falluja, saying it's going to damage election prospects. So, the U.S. has not looked at Kofi Annan as someone who has exactly been supportive, so what we're seeing here is no rush to embrace him.

COHEN: Liz, we heard a lot this week from Senator Coleman asking for Annan's resignation. Was anyone else also asking for Annan's resignation?

NEISLOSS: Well, I think domestically in the U.S. there are -- possibly there's another Senator. There are a handful of representatives. I'm also seeing that there's kind of a counter argument being made.

But, you know, what's interesting here is that it will not be something likely to happen for Annan to resign. He has until the end of 2006. He does have this overwhelming support at the United Nations.

It does remain to be seen what happens with his son but the United States can do one thing they have done before. They can withhold U.N. dues and there are some calls for that to possibly happen again.

Hays: Well, it will be interesting to see what kind of jokes he can make out of that.

From the meeting halls of the United Nations to a California courtroom, as a jury hears whether convicted murderer Scott Peterson should go to prison or be put to death for killing his wife, Laci Peterson.

We're back on that story with Rusty Dornin in just a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SHARON ROCHA, LACI PETERSON'S MOTHER: I can only hope that the sound of Laci's voice begging for her life and begging for the life of her unborn child is heard over and over and over again in the mind of that person every day for the rest of his life.

(END VIDEO CLIP)

RUSTY DORNIN, CNN CORRESPONDENT: That was the heart-wrenching speech by Sharon Rocha the day that her daughter Laci Peterson's body was discovered, identified and the day that Scott Peterson was arrested. We heard those same anguished cries from her in the court this week as she confronted her killer during the penalty phase of the trial.

Welcome back. I'm Rusty Dornin in San Francisco and we're ON THE STORY.

Hays: Rusty, tell us more about that moment when Laci's mom said her piece, obviously doing her part I think to make sure that Scott Peterson gets the most severe punishment possible. What did she say? What was it like?

DORNIN: It built really, the emotion built in the courtroom and also on her part she started out very calm, answering questions, talking just about Laci as a child and how she was very close to her daughter and that she went to a lot of school activities with her and that sort of thing.

And then it built towards the time that she disappeared and she would begin shrieking at Scott Peterson in court and when she would do that and when she would cry, members of the Rocha family also would cry out in court.

I mean they were just sobbing as she was weeping on the stand and she was addressing Scott Peterson directly saying, you know, things like "Divorce was always an option, not murder. You shouldn't have taken her away from me. She didn't deserve to die," things like that. It was just, it was very emotional in the courtroom.

COHEN: All of that -- all of that emotion, Rusty, that you just described that has to have an effect on the jury's decision about what to do.

DORNIN: And they were, several of the jurors were crying, dabbing their eyes and that sort of thing throughout her speech, some openly. Some of the men that you've never seen express any emotion at all in court were also crying openly when Sharon Rocha was giving her speech. So, yes, it was very, very emotional.

MALVEAUX: And Laci's family are they still in the courtroom? Are they -- do they continue to come back and make these appeals?

DORNIN: Well, no. The interesting thing is now we're in the defense part where the Peterson family is talking about really what a great guy Scott Peterson was and is and during the speech of his sister-in-law, Janey Peterson, Sharon Rocha got up during the middle of her testimony and left the court.

Now, that afternoon, Laci Peterson's brother was in court but not her mother Sharon Rocha and yesterday not one member of the Rocha family. It was very obvious that the two first rows of the victim's side of the court were empty.

NEISLOSS: What if the jury cannot agree at this point?

DORNIN: If the jury is hung on this, and remember it has to be unanimous verdict, excuse me, in a death penalty case. Now, if one person does not vote for the death penalty or, you know, or for life or whatever then it is a hung jury and they must pick a new penalty phase jury.

The conviction still stands but they must pick a new penalty phase jury and that's a real problem because that new jury would have to hear the evidence all over again. The other option would be if there was a hung jury that the prosecution would decide to drop the demand for the death penalty and then Scott Peterson would automatically be sentenced to life in prison without parole.

Hays: So, Rusty, what is the makeup of this jury now? How are the -- who are the two sides betting? The defense seems to be taking a fair amount of time presenting its picture of Scott Peterson, obviously trying to get some mercy here. How are people handicapping this?

DORNIN: Well, it's really difficult because none of us thought that first degree murder was going to be the verdict in the first place and I think many of us misread some of these jurors. It's very difficult. They are very grim-faced in court. They did not cry at all during the defense -- any of the defense members of the family while they've been giving their testimony.

They have chuckled a little bit while Peterson's brothers have recited some of their childhood stories and that sort of thing. But you are getting a very big picture of Peterson's family and friends and people who loved him and cared about him that he was a great guy, that he was kind and caring and altruistic.

He would visit the old folks, friend of his -- his friends' parents when the friends weren't even there. He would go to Mexico and work in an orphanage. And they're getting this picture of this very loving family. The problem with that is there could be some problem in saying, look, he didn't seem to have any problems. Why did he do this? If he was so caring and kind how could he have been calling his girlfriend during his wife's vigil? How could he have shown such little emotion during his wife's vigil?

On the other hand, they could be seeing him just as a very sweet person and perhaps just something went wrong in his life and perhaps they will show some mercy.

COHEN: Thanks, Rusty. We'll be continuing to watch this.

And we're back ON THE STORY after this.

ANNOUNCER: A popular singer is speaking out about AIDS. What's her story? More when we return.

(COMMERCIAL BREAK)

ANNOUNCER: Alicia Keys, what's her story? The Grammy-winning singer and songwriter is raising her voice about AIDS in Africa. On World AIDS Day, keys headlined a fundraising concert to spread the alarm about the millions of people suffering from the disease in Africa.

ALICIA KEYS, SINGER/SONGWRITER: We're really trying to be a part of making a change for the people that do have AIDS to help them receive the medication that will keep them alive.

ANNOUNCER: Keys has said the AIDS fight should be as important as the war on terrorism.

Hays: Thanks so much to my colleagues for all their great insights. Thank you for watching ON THE STORY. And a very special happy birthday to Suzanne Malveaux, who loves her job so much, because she's spending her birthday celebrating it, the job and the birthday I guess.

MALVEAUX: Yes. I usually celebrate it with my twin sister but I'm going to miss it this time. We'll see her a little bit later.

Hays: We know she's watching ON THE STORY, of course.

MALVEAUX: Yes, that's true.

Hays: We'll be back next week.

Still ahead, "PEOPLE IN THE NEWS" focusing this week on Britney Spears and Paris Hilton.

Straight ahead a check on 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