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On the Story

Waiting for Sentence to Be Handed to SPC Charles Graner

Aired January 15, 2005 - 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.


(NEWSBREAK)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Welcome to CNN's ON THE STORY where our journalists have the inside word on the stories we've covered this week.

I'm Jeanne Meserve on the story of let's try it again for secretary of homeland security.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash on the story of what to expect in President Bush's inauguration address on Thursday and what not to expect when Iraqis vote in two weeks.

SUSAN CANDIOTTI: I'm Susan Candiotti on the story in Fort Hood, Texas where the now convicted prison guard, called the ringleader of the Abu Ghraib scandal, gets ready to take the stand before he is sentenced.

KATHLEEN HAYES, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hayes in New York on the story of let the spin begin on Social Security with dire warnings from all sides.

Also coming up going to Indonesia where CNN's Atika Shubert has the latest on the struggle to survive and the effectiveness of international aid.

And we'll end up in Hollywood with CNN's Sibila Vargas as she sets the scene for the latest round of movie awards.

E-mail us at onthestory@cnn.com.

Now straight to Susan Candiotti and the prisoner abuse case.

(BEGIN VIDEO CLIP)

CANDIOTTI (voice-over): Specialist Graner, what did you think when the detainee was calling you a torturer? I saw you laugh at one point.

SPC CHARLES GRANER: Well, I saw him threaten to kill me the last time I saw him.

(END VIDEO CLIP)

CANDIOTTI: Specialist Charles Graner walking out of his court martial challenging the testimony of one of the prisoners at Abu Ghraib. At this hour, a jury of combat veterans who served in Iraq and Afghanistan is getting ready to resume the sentencing phase.

Graner himself says he will take the stand. He's getting ready to do so at this hour. We just learned that it will be an unsworn statement, which means he cannot be cross-examined by prosecutors.

BASH: Susan, set the stage for us. This seems incredibly dramatic. You finally have Graner taking the stand after he decided not to while his trial was actually being deliberated. What do you expect to hear from him based on what you've seen from him and his family during the trial?

CANDIOTTI: Well, I know that he has said consistently, he describes himself as a nice guy with a ready smile and that he was only trying to follow orders when he abused prisoners, never backed away from that.

The question is whether he will say he's sorry. Will he beg for mercy? It's unclear at this time. He wants to say something he didn't get a chance to during the guilt phase, so how far will he go? Will he blame others, can't wait to hear it?

MESERVE: Susan, why didn't he testify during the guilt and innocence phase and was that a big mistake?

CANDIOTTI: Well, his lawyer said ultimately it was his decision. It is rare, he said in all the cases he has handled as a defense attorney that he would ever allow the accused to take the stand and testify because, of course, it opens you up to very tough cross- examination by prosecutors.

And the defense attorney said he felt as though he had made his case by putting out the evidence that he did. But we've never really heard any hard evidence that he had orders, was acting under orders.

The defense attorney said in his closing arguments, he told the jury "Don't hold this against him, if you plan to, because you're not supposed to but I'll take the blame for him not taking the stand." Does Graner now regret it? We don't know but at least he will have a chance now to say something before this jury.

HAYES: Susan, you say there was never any hard evidence presented that he was just following orders; however, there was testimony that, in fact, there were superiors condoning this, egging them on, that the superiors knew what was happening and, if anything, implicitly giving their OK.

CANDIOTTI: Well, in terms of superiors who knew about it, in a vague sense we heard about that only in that he was praised generally speaking for his work. But Charles Graner wanted to call people who really were of rank there and military intelligence who would have been the ones to say yes indeed there were orders out there.

The problem is they refused to be deposed before the trial unless they had a grant of immunity saying that they too were under investigation and his defense attorney told the jury, sure military intelligence can now claim that they didn't know anything about what's going on now but according to him and his words he said that would be a lie.

BASH: Susan, one thing that struck me just in reading what you've been experiencing there at the trial was these e-mails that Graner apparently sent home to his friends, to his family essentially crowing about what he was doing. Describe some of that.

CANDIOTTI: Well, again, I guess you have to get a sense of that from Charles Graner himself. This is the kind of guy who comes across as being very light hearted and upbeat about everything. Would it be gallows humor? I don't know.

But he would send back e-mails to his friends showing some of this abuse and saying things like "Just another day at the office," I guess in so many words paraphrasing here I guess he wasn't able to answer questions and so now this and the photograph would be of someone who was very bloodied up or a prisoner who appears to be wreaking or racked with pain after being abused in some fashion. You know it appeared as though it was a big joke to him. These are the kinds of e-mails that he was sending to his friends back home.

MESERVE: Susan, only five hours of deliberations on the guilt and innocence phase, did that surprise you?

CANDIOTTI: Well, I'll tell you the length of this trial has been very impressive. It has moved along at quite a quick pace, so quite frankly the idea that this jury of combat veterans didn't take a very long time wasn't all that surprising when all things were considered.

Evidently they didn't think much, also, about the videotape testimony from two detainees because the testimony from one of them they discounted. They threw out some of the charges that that detainee made, for example that he was beating them, that he saw certain other acts performed, that he beat him with a stick on his wounded legs. That part they did discount, so apparently they didn't give it much weight.

BASH: Susan, thank you so much. We know you have to get back on the story and to covering the sentencing phase right now. What again exactly are you going to be watching and listening for as you go in there?

CANDIOTTI: Well, I want to see his demeanor before this jury. I want to know whether he is going to say he's sorry for what he did or is he going to stick to his guns to say I'm being made the scapegoat here? That's the kind of thing that I would like to hear.

BASH: Susan, thank you very much.

And Iraq, of course, remains issue number one for the Bush administration in the final days before the elections. I'm back on that story right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is an extraordinary year when you think about it. Within the first month of the new year there will be an election in the Palestinian territory and there will be an election in Iraq.

(END VIDEO CLIP)

BASH: President Bush Monday. The Iraqi election, of course, 15 days away, it is the latest milestone in a road the administration hopes will lead to an independent democratic Iraq, an example to other countries in the region and justification for the war that still grinds on.

HAYES: But, Dana, it is interesting the administration is suddenly trying to tell us don't focus too much on all the problems around the election and how it turns out. They're saying it's an enormous achievement just to hold the election but are they back peddling a little bit?

BASH: Kathleen, you know, this -- it's no secret that this is an administration that is notoriously -- they're known for singing from the same song sheet, for being absolutely on message. But this week it was actually stunning to watch and listen to briefings from the White House, from the State Department, from the Defense Department, phone conversations with sources.

They were all not only saying the same things, which are, you know, the Iraqi elections aren't going to be pretty. They're not going to be perfect but they're still going to be on time and we should prepare for Iraqis not necessarily to all vote lowering expectations.

They were all saying that but they were actually really trying to aggressively push it. Why? Because for so long we've all been focused primarily because of the White House, they've been focused on these elections.

They suddenly realized it seems that the expectations were pretty high and if they don't go off that well, then the president could suffer politically for it, no question about that but also they realize that perhaps people weren't educated enough on exactly what the process is.

MESERVE: Well, it is going to be a very complicated process, complicated election, hard for them to interpret the results perhaps.

BASH: Absolutely and that's -- I talked to a senior official this week who said, look, it's hard. It is so hard to -- not only is the election hard but in terms of just the communication strategy to explain that this is just the first of three elections this year that they're essentially electing an assembly, which will elect a government.

That's something that people don't understand because we just hear the shorthand, which is the Iraqi elections are on January 30th. So, that is essentially what they've been trying to do and they're ratcheting it up in a way that is pretty unbelievable to watch.

HAYES: Dana, I want to ask you about another story this week, no WMDs. Now, granted that finding had already been made back in October but now we're closing our tents. We're closing the book on this they say. How does that play into this whole (UNINTELLIGIBLE) of what's going on in Iraq, public support for the war, understanding the elections, et cetera?

BASH: I'll tell you, Kathleen, the interesting thing about the no WMD was we found out this week that they stopped looking and they stopped looking at the end of the year essentially. There are no weapons of mass destruction. OK. That's not a big news headline. We've known that, right?

But the way that they did it, meaning they didn't announce it. It sort of just happened very quietly and then once it got out there, the White House said, "Oh, yes, you're right. We confirm that there is no longer a search." But it's old news and the reality is it is old news.

There was what seemed to be, what was called the interim report but was essentially a final report in October and politically what's most interesting to me is that the voters, the president has been politically tested on this essentially because the voters knew that there were no weapons of mass destruction in Iraq before they went to the polls and the president won.

Now, having said that, this is all as Kathleen you pointed out, all now wrapped up in the Iraqi elections and people have perhaps said, OK fine no weapons of mass destruction because they hear from the president that this is about a bigger thing. This is about democracy and the question is what will happen with these elections.

MESERVE: And meanwhile there are some poll numbers out there which can't be very comforting to the White House.

BASH: You know, Jeanne, when we look at some of the things that have happened since the election, the Bernie Kerik nomination going down, some of the calls sort of right after the election about Donald Rumsfeld perhaps that he should resign and, of course, the increasing violence in Iraq, the president hasn't had the kind of honeymoon that most have.

We have some poll numbers that came out from a CNN/USA Today Gallup poll this week. The president's approval rating is at 52 percent, not bad but when you look at it compared to where other presidents have been going into their second terms, you see Clinton and Reagan most recently they were at 62 percent, both of them at this time going into their second term. That's ten points higher.

He's about where Richard Nixon was just one point higher, so it just shows you that this is a White House that understands that they have to get on the better side of public approval, not only because of Iraq and not only will Iraq play into that but because he has, as you well know Kathleen, a humongous domestic agenda that he is trying to push and he needs public support for it and it's an agenda like Social Security that Americans aren't necessarily that keen on right now.

HAYES: But, Dana, I wonder then is this $40 billion inauguration being criticized because there are tsunami victims who could use the money, you know, some people saying couldn't you scale it back? Is that going to help George Bush? Also the fact that like many inaugurations if you've got $250,000 and you're a big corporate contributor, you have a front row seat at the parade where a lot of us are going to be watching on TV because we won't get seats along Pennsylvania Avenue.

BASH: Well, some of us will but I guess we'll have press passes, right Jeanne. But in all seriousness, look, I mean there has been a lot of talk. Not only has there been talk about the cost and about the $40 million that they've raised but also about whether or not this is really appropriate right now, whether or not the scale of this kind of big parade, this big event is appropriate when you've got what happened in Southeast Asia, when you've got what's going on in Iraq.

And the White House most recently, the first lady herself last night said, look, this is appropriate. This is about celebrating America and they're not backing down even though people are looking back in history and saying that other presidents chose to do it differently.

MESERVE: Dana thanks.

We're going to move from Washington to Southern Asia and to CNN's Atika Shubert. She's on the story in Banda Aceh, Indonesia where people are still struggling. Stay with us.

(COMMERCIAL BREAK)

MESERVE: A rescue worker trying to brighten one tiny corner of the area of Indonesia devastated by the earthquake and tsunami in his words hoping to make the sadness disappear for a moment.

Welcome back. We're ON THE STORY.

And joining us now via videophone from Banda Aceh CNN's Atika Shubert, Atika, this is, of course, an evolving situation. How would you describe it right now?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, certainly things are improving, particularly in the city of Banda Aceh where I'm at now. The immediate relief concerns have already been fulfilled, food, clean water, clothing is getting out and now a lot of aid workers are looking to the medium term how to clear the debris, how to get people's home reconstructed, literally how to move on with their lives.

That's only in the city of Banda Aceh. In the west coast of Aceh, which was closest to the epicenter there's still a lot of immediate relief that needs to get out. As recently as two days ago, we were hearing stories of survivors that had been surviving for more than two weeks without any help at all, with open wounds, fractures, all kinds of very serious injuries that need to be taken care of immediately.

BASH: And, Atika, you were obviously there right after this happened, almost three weeks ago and then you left for just a little while and now you're back and given that I wonder if you have a good perspective on how the people's psyches have changed and how the people feel now three weeks later as opposed to, of course, just right after it happened when you were there.

SHUBERT: You know things have changed really tremendously since the beginning, at the beginning right after the disaster and now. The city that we're at here is just changing day by day.

When we first arrived here it was a city of complete death and destruction, bodies and debris everywhere. Now roads are being cleared. A lot of those displaced people are chipping in, pitching in, trying to help clear the debris and after the first few days of the disaster people were traumatized, crying and really had this sort of zombie look in their eyes there.

Now, trying to pick up the pieces and move on. They're saying it's far better for them to be active in any way they can whether it's clearing the debris, building houses or helping others, as long as they don't think about that disaster so that they can move on with their own lives.

HAYES: Atika, are people worried about this latest development from the Indonesian government saying that military forces have to leave by March, saying that they're going to have aid workers request permission to move around this area presumably because they say they want to protect them from rebel militants. Some critics say it's because they do not want too much interference in their domestic affairs and what people say in some cases has been repressive human rights abuses.

SHUBERT: There is a little bit of concern here, particularly from international aid groups. There is a history here in Aceh of cutting it off from the rest of the world, the rest of the country and very closely monitoring human rights groups and other aid groups that are here because of that insurgency that has continued on here for decades.

So, there's a little bit of concern that there could be some of that control creeping back in. On the other hand, giving sort of a loose deadline of March for international military that's here it seems to be an accepted deadline by many of the governments.

The American government, for one, has said that it finds that to be a reasonable deadline that it will abide by. And certainly when you come out to the streets of Aceh here and considering that this used to be an area completely closed off from the world and then to suddenly see Australian soldiers distributing water, American soldiers flying in the skies with their helicopters, not to mention the hundreds of international aid workers here, it's sort of understandable how the government might want to get a little bit more control over what's happening in this province.

MESERVE: Atika, are there some obvious successes and failures in the aid effort?

SHUBERT: Oh, certainly. I mean the successes are certainly increasing every day. On the other hand, I think the biggest failure was simply that getting aid into Aceh was much slower than the other regions that were affected and now aid agencies and governments have to play catch-up and they're trying the best they can but the infrastructure, the logistics and coordination are simply overwhelmed by the amount of relief that's needed for this area.

Things are improving but, again, for many of those survivors they can't improve fast enough. So the effort here is just to really pump it out as fast as they possibly can.

BASH: Atika, I want to ask you about the children immediately after this happened. Apparently there were a lot of children who survived taken away, apparently for safety but it created massive confusion among parents who didn't know if their children were alive or dead, problems with not having documentation to help find each other. What's the latest with that?

SHUBERT: That's right. The latest is that the government has put a ban on all Acehnese children may not leave the province unless they are accompanied and proven to be accompanied by their parents and the reason for that is, one, they want to stop any attempts at child trafficking.

Unfortunately, the city of Madon (ph), which is quite close to Aceh, is known as a child trafficking center and, two, they want to make sure that even people who perhaps have the best of intentions wanting to adopt some of these orphans aren't mistakenly taking this children, who may very well have families that are still alive, whether it's their parents or extended families.

And that's why the government is working with UNICEF, the United Nations Children's Fund, to try and register and identify all of those children who have been displaced and perhaps are missing their parents.

The hope is that perhaps these children can be reunited, if not with their parents then possibly with extended family members or at least with perhaps neighbors or members of their community that are probably closer culturally to these children than to simply take them away and put them into an institution.

HAYES: Atika, before we let you go, tell us about the story you're working on today about people rebuilding their lives, making a living.

SHUBERT: Well, this is actually a classic case of seeing the relief effort evolve. In the first few days after the disaster, a lot of the focus was on getting food, clean water, those essentials that people needed to survive.

In the city of Banda Aceh, those essentials have now been met and they're looking to the medium term, how to get people back on their lives, how to get them back on their feet, working, rebuilding their homes.

And one of the ways is this United Nations program in which they actually pay those people that have been displaced by the tsunami to help clear the debris, so we followed one particular team today, a team of people that were displaced, as they tried to clear away the debris in one hospital.

And they're getting paid about $3 a day plus meals, which is the wage before the disaster and it's not much but it helps them get back on their feet to work a little bit more and carry on their lives and perhaps even save a little bit of money so that in the end with some extra help they will be able to rebuild their homes.

HAYES: A reason to live and some hope. Thank you, Atika, and good luck on the story in coming days.

From rescue and recovery in Southern Asia to trillion dollar talk at home about Social Security.

Jeanne Meserve will talk about the administration's second choice for homeland security secretary.

And also coming up, Sibila Vargas on winners and losers in Hollywood.

We're back on those stories and to check on what's making headlines right now after this.

(COMMERCIAL BREAK)

(NEWSBREAK)

(BEGIN VIDEO CLIP)

BUSH: You're 20-years-old, in your mid-20s and you're beginning to work. I want you to think about a Social Security system that will be flat bust, bankrupt unless the United States Congress has got the willingness to act now.

(END VIDEO CLIP)

HAYES: President Bush this week painting the flat busted picture he wants people to see about Social Security decades from now, a picture that may make them more receptive to the changes he's proposing.

Welcome back. We're ON THE STORY.

BASH: And, Kathleen, the White House is planning, you just saw the beginning of it, a massive campaign using the same tactics strategically communications wise that they're using, that they used during the campaign essentially to try to first of all just convince people that there is, as he says, a crisis but there's more to it than that obviously.

HAYES: Well, Dick Cheney on the stump as well this week sending the message the system is flat busted and broke. Now, I think it's interesting that there are -- there is spin on both sides because there are some things that are true about the Social Security system.

Is the system actually busted and broke and bankrupt if we know that when push comes to shove the Congress can and many people say will do whatever it takes, raising taxes, scaling back benefits, raising the retirement age to raise the money that is needed?

So, in that sense, the president's critics say, hey, this is fear mongering. On the other hand, when people from the side who are against personal accounts, the president says must be part of his plan to allow younger workers to invest some of their money in the markets when they say well there's a trust fund that has plenty of money until 2018 and then maybe runs into problems by 2040, people say, yes, but that trust fund is full of IOUs.

And in order for the government and for the Social Security Administration to redeem those IOUs, the treasury will have to go out and borrow money. So, both sides have points to make and I think it's so important for citizens to keep reading whatever they can about this because the spin is furious on both sides.

MESERVE: Well, this is no surprise that Social Security has some financial problems. People have been talking about this for years. Is something going to happen now? Does something have to happen now in terms of reform or do we still have some time to figure out the right formula?

HAYES: Well, again, in 2018, there will be so many people retired relative to the people working that the amount of money being paid out through taxes is going to just equal the benefits and then it's going to fall down.

That's when we start running low on money. So, I think many people look at that as a year that is just really around the corner. We'll be there before we know it and I think people credit the president for saying let's do something now.

Will he get a bill out to Congress this year? We shall see. The White House seems to have already backed away from the idea that was floated a couple of weeks ago that in order to pay for the personal accounts benefits will have to scale back.

But let's be honest here. The people who propose these personal accounts, Libertarian groups like the Cato Institute are a big proponents, they feel that the returns in the stock market will be so great for young people that they'll be able to start pulling back some of the benefits that are guaranteed by the government.

Again, what people are going to have to figure out do they view Social Security as a kind of an insurance program that you pay into your whole life and then you get an entitlement, something that's guaranteed when you retire? Or, do they want to view it as an investment vehicle that they own part of the government's ownership society, which is different from an entitlement? Something will happen. It will be interesting to see what the president gets of his three principles, again, personal accounts, don't cut benefits for current retirees. I think everyone will agree on that and no hike in payroll taxes. It's going to be contentious.

BASH: Kathleen, different subject on your beat. Wal-Mart has a new PR campaign. Tell us about that.

HAYES: Full page ads in 100 newspapers across the country. Wal- Mart feels that it's been the victim of negative publicity. That's certainly Wal-Mart's view. They have been accused of many things. There's a class-action lawsuit with hundreds of women employees from Wal-Mart saying that they weren't promoted fairly. They weren't paid the same as their male counterparts.

There are communities in New York City where they are trying to put -- bring a Wal-Mart in and there's a movement to keep Wal-Mart out because they feel that it will displace too many of the smaller merchants in the area.

Right now in California there is a move afoot to perhaps say that Wal-Mart doesn't shoulder its fair care of healthcare costs. Wal-Mart pointing out that it has an average wage that is twice the minimum wage trying to show that we are a fair, good employer.

Again, I think it's interesting that they called this negative publicity. I think their critics say that they have at least allegedly committed some transgressions and whatever negative publicity that has resulted that they're trying to calm that is well deserved.

MESERVE: Now a lot of those products on Wal-Mart shelves, products from China, new indications this week that China is really cleaning the U.S.' clock, right?

HAYES: Well, our trade deficit in the month of November, $60 billion. The trade deficit with China up to over $16 billion from just $10 billion a year ago. Don Evans, the Commerce Secretary, in China once again saying you're being unfair on intellectual property rights. You're unfair with your currency. You make it too tough for the U.S. to sell goods to you.

The Chinese have not budged yet. A study this week commissioned by Congress basically from a liberal think tank, the Economic Policy Institute, finding that a million and a half jobs were lost from '89 to 2003.

Year by year it's not that many jobs; however, what they point out is that more and more jobs are being lost in high tech industries that many people feel are really the key to U.S. competitiveness in the years ahead.

So, China, again a competitive challenge, a menace depending on how you look at it. Some people think it's a great investment opportunity but clearly also in the news this week.

MESERVE: Kathleen, thanks.

President Bush hopes one easy win will be approval of his latest choice to lead the Department of Homeland Security. Bernie Kerik crashed and burned. Michael Chertoff is a lot more buttoned up.

Stay tuned to CNN day and night for the most reliable news about your security.

I'm back on that story after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF: If confirmed, I pledge to devote all my energy to promoting our homeland security and as important to preserving our fundamental liberties.

(END VIDEO CLIP)

MESERVE: Michael Chertoff on Tuesday accepting the nomination to run the sprawling Department of Homeland Security. You heard the preemptive strike against his critics that pledge to preserve fundamental liberties. And in demeanor and experience he is very much the anti-Bernie Kerik, the man tapped first to fill the top slot.

Welcome back. We're ON THE STORY.

HAYES: Jeanne, we know he's one tough prosecutor. He prosecuted Mafia dons in New York City as a young man, the Republican Council on the Whitewater investigation. In the business world, we know him as the man who said that Arthur Andersen, the accounting giant, should be prosecuted as an entire firm in the Enron missteps, which brought the firm down. Is he the right guy though to run Homeland Security?

MESERVE: Well that's the million dollar question. Nobody knows the answer to that one. There are some things on his resume that people like, the fact that he was involved after 9/11 in shaping the Justice Department response.

Some people say he understands the legal side of the war on terror. Other people concerned, of course, about some of the civil liberties implications in what was done after 9/11.

What he doesn't have on his resume is management experience. This is, as I mentioned, a sprawling department, 180,000 employees, 22 different agencies brought together under one umbrella. It hasn't worked the way everyone had hoped it would. We haven't gotten those expected synergies.

Is he the guy who can deliver? Nobody knows the answer to that question. The thing is you probably weren't going to find anybody that has a perfect resume for this particular job.

BASH: But this was a huge surprise.

MESERVE: It was.

BASH: At the White House, to you who covers the beat.

MESERVE: Out of the blue. Out of the blue. I mean we've been talking to people ever since the Kerik burnout. We've been collecting names and we had a pretty long list and there were top contenders. There were people in the second tier, the third tier.

This is a name that never came up. When his name leaked out that morning and I called a couple of people in the Homeland Security sphere to talk about this, they were absolutely flabbergasted and one person who is really very intensely involved in homeland security planning said "Michael who?" He didn't have any idea who he was.

BASH: Well, Jeanne, I heard an interview with the Democratic opposing counsel on Whitewater who said if he goes after the terrorists the way he went after us Democrats, we're in pretty good shape. So, is that part of the strategy do you think here to be more aggressive in that respect, as opposed to Ridge's style which seemed to be much more about outreach to governors and to local officials?

MESERVE: Well, people don't really know exactly what the strategy is. There's been a lot of fear within homeland security circles that the administration might want to downplay this issue in the second term that, in fact, the Department of Homeland Security might be -- get considerably less notice and attention than it has in the first term.

So, it's unclear exactly what this means in terms of profile and so forth. Chertoff does have very strong relationships with Alberto Gonzales who is going to be the attorney general. He also went to law school with Christopher Cox (ph) up on Capitol Hill who heads the Homeland Security Committee in the House.

He has certain ties which make it look as if he could be a pretty effective operator in Washington in some of those interagency struggles that have beset the Department of Homeland Security but we'll wait. We'll see. I mean he's such a largely unknown player. We don't know.

HAYES: Jeanne, in terms of Washington this week what about security for the inauguration and who's paying the bills?

MESERVE: Yes, well, you know, they won't even put a price tag on how much it's going to cost ultimately. Dana's got exactly the right answer, all of us, all of us taxpayers.

And I did talk to one homeland security expert this week who said, very upset by the way that the District of Columbia is going to take a big hit out of its homeland security funds to pay for this saying, hey listen, this is one of the top targets of al Qaeda. There's no question about it.

This city and this region should not have to divert money from other homeland security projects to provide security for this particular event. If they're raising money from the private sector for the parties, why not be raising money from the private sector to pay for the security as well?

BASH: And tell use a little bit about the security. It's going to be (UNINTELLIGIBLE).

MESERVE: Oh, it's going to be vast. I mean as compared to the inauguration four years ago, just an incredible change. There are going to be about 6,000 law enforcement officers around this city in addition, supplemented by military personnel.

But it will bear a pretty strong resemblance to what we saw at the party conventions. A lot of technology is being deployed. You're going to have big restrictions on the airspace over the city, the sorts of things you've seen before.

The city is not particularly happy about a lot of what's going to be taking place. Downtown is going to be largely shut down, a huge, I think it's 100 square blocks of downtown will be off limits.

BASH: But there's no specific threat right now?

MESERVE: No, very important point to stress. They say they have no credible specific information that the inauguration or any of the surrounding events are going to be targeted, in any way have been targeted by the terrorists but, of course, because this is the top target city, because this is a symbolic event, all precautions are being taken.

BASH: Well you can stay tuned to CNN day and night for the most reliable news about your security.

From homeland to Hollywood, Sibila Vargas is on that story right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Jamie Foxx "Collateral," Jamie Foxx "Ray."

UNIDENTIFIED MALE: Jamie Foxx "Redemption."

(END VIDEO CLIP)

SABILA VARGAS, CNN CORRESPONDENT: What a dream it must be for actor Jamie Foxx nominated for three Golden Globes. That's just one of the headlines coming out of tomorrow's event as the Hollywood award season roars along.

Welcome back. I'm Sibila Vargas in Los Angeles and we're ON THE STORY.

MESERVE: Sibila, the other big phenomenon from these awards "Sideways."

VARGAS: Yes, absolutely. I mean the critics absolutely love it. It is being hailed a critic's gem. It got recently four SAG nominations but the big story out of the Golden Globes is that this was the movie that got the most nominations, seven in all.

Now a lot of it has to do with these two actors on the screen right now, Thomas Hayden Church, who is a supporting actor and Paul Giamatti, who is absolutely amazing in this film.

It's a story about two friends who set along in a wine tasting adventure and one of them is going through a divorce. Well actually it happened two years ago but he just can't get over it. And his friend is just getting married but he can't seem to get his sexual angst under control.

So, it's a really wonderful story. The writing is superb. Alexander Payne (ph) is the director. He brought you the film "About Schmitt" which got a screenplay award at the Golden Globes, so he's a favorite and this is a phenomenal film.

Not too many people have seen it because it is an independent but the critics absolutely love it. Paul Giamatti got a nomination for best actor in the comedy category, as well as Thomas Hayden Church, the best supporting actor...

HAYES: Sibila.

VARGAS: ...and also Virginia Madsen (ph).

HAYES: My friends have been -- I must confess I haven't seen it yet but I've seen clips. My friends have been telling me about it for a while. What's interesting to me about this is it's an independent movie. It doesn't have special effects. It was based on a story that people thought was a great story, good writing.

Does this signal the beginning of a trend perhaps in the movies back to something we almost think are more like French movies and away from some of these big blockbusters?

VARGAS: Absolutely. I mean and "Hotel Rwanda" is another one even though it deals with an extreme subject it was an independent film. But you know what, it's really about the story. I mean that's what I think really interests us and intrigues us.

And, you know, we could have all the glitz, the glamour. You got the lighting and the special effects but really when you come down to it, people just want to get back to basic storytelling and I think that's what this has and it's really wonderful. The writing is very crisp and it's really ingenious. It's just a cute movie and you have to go see it because I guarantee you will be laughing out loud.

BASH: Sibila, I'm probably one of the millions who are absolutely addicted to "Desperate Housewives." Given the number of nominations that show got, does that tell you anything just as someone who covers Hollywood about a trend in Hollywood, reality shows to perhaps more of a focus on drama and script writing and acting?

VARGAS: Absolutely. Before this -- before this show everyone thought that the scripted drama was dead that reality show was king but I mean when "Desperate Housewives" came along, when they came along, when these ladies came along, that was the end. I mean that kind of like, if you really think about it, Dana, we haven't been hearing that much about reality television.

It's been about the "Desperate Housewives." It's been about (UNINTELLIGIBLE) and it's been about what other shows are going to be coming down the pike as a result. It has done incredibly well.

All of the girls were nominated with the exception of Eva Longoria and it got five nominations at the Golden Globes, which is tremendous for a freshman show and I think a lot of it had to do with the fact that "Sex and the City" was gone.

I don't know if you got to see "Sex in the City," Dana, something is telling me that you might have been a fan of that show. And I think it just came at a really great time and I think they (UNINTELLIGIBLE) people just were kind of curious to see what this was all about.

And when they got -- when they got to see it, they really realized that the writing was really good and that, you know what, let's go back to scripted shows. Let's see what they have in store for us. Let's see what this is about.

I think for a while we were just not looking at that. We were just looking at the reality shows because we were, you know, we were in this reality trend and we were just taken by this wave but I think we're kind of out of it and we're back onshore and we're seeing that scripted dramas, you know, let's give it another try and I think they're doing a good job.

MESERVE: Jamie Foxx, three nominations, does this mean he's a shoe-in for an Oscar?

VARGAS: Oh, that's what they say absolutely. I mean before he got the Golden Globe nominations, a lot of people were thinking that he would but it wasn't certain. I mean you never know if you're going to get nominated.

But they said if he does get the Golden Globe nomination he will definitely move on to the Oscars. And the big story is that they say that not only is he a shoe-in but he is the one to beat.

Another big story, another big thing would be if Jamie Foxx were to get the award at the Oscars it would make him the third African American actor to get a best actor -- best actor award, so it would be extremely significant, not only for him but for African Americans in general.

HAYES: Sibila, we got to ask about clothes, come on. Any advance notice on gowns?

BASH: That's what we're all interested in.

HAYES: what are you wearing, come on? Yes.

VARGAS: Exactly. Let's face it. I mean we want to know who the winners are but what are we really going to be talking about the next day? What were the "Desperate Housewives" wearing? What was Nicole wearing? What was Renee wearing?

I got to speak to Philip Block (ph) recently. He's one of the stylists that dresses the stars and, you know, when it comes to the Golden Globes anything goes. It's just -- it's a time to just enjoy yourselves. It's kind of like a more relaxes atmosphere.

Of course they're going to want to, you know, dress to the nines, you know. This is their opportunity. You don't want to get on the worst dressed list but it's just going to be fabulous. Just expect a lot of colors. Expect a lot of (UNINTELLIGIBLE). That's for sure.

BASH: Sibila, we were just looking at pictures of the red carpet. You're going to be on that story. You're going to be on the red carpet at the Golden Globes.

VARGAS: Yes.

BASH: For those of us who just watch it in a word describe it?

VARGAS: Fantastic, fabulous, two words.

BASH: All right, well Sibila thank you. We will be watching you.

And we will be back ON THE STORY right after this.

(BEGIN VIDEO CLIP)

ANNOUNCER: The new governor of Washington State is making headlines this week. What's her story? More when we return.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ANNOUNCER: Christine Gregoire, what's her story? Gregoire was sworn in as governor of Washington Wednesday after a too-close-to-call election in November.

GOV. CHRISTINE GREGOIRE, WASHINGTON STATE: Many have asked how I can govern without a clear mandate from our voters? I believe the voters have given all of us a mandate, a mandate to overcome our differences and to solve the problems facing the state of Washington.

ANNOUNCER: The razor thin election results prompted an ugly two- month recount battle. Gregoire won the hand recount by 129 votes but her opponent is still challenging the results in court.

As the state's first woman attorney general, Gregoire negotiated a landmark tobacco settlement and fought for nuclear waste clean up.

(END VIDEO CLIP)

HAYES: Thanks so much to all my colleagues today. And thank you for watching ON THE STORY. We'll be back next week with another great show. We expect to see you then.

Coming up, "PEOPLE IN THE NEWS," focusing this week on Nicole Kidman and Kevin Spacey.

Straight ahead a check on what's making news right now.

(NEWSBREAK)


Aired January 15, 2005 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(NEWSBREAK)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Welcome to CNN's ON THE STORY where our journalists have the inside word on the stories we've covered this week.

I'm Jeanne Meserve on the story of let's try it again for secretary of homeland security.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: I'm Dana Bash on the story of what to expect in President Bush's inauguration address on Thursday and what not to expect when Iraqis vote in two weeks.

SUSAN CANDIOTTI: I'm Susan Candiotti on the story in Fort Hood, Texas where the now convicted prison guard, called the ringleader of the Abu Ghraib scandal, gets ready to take the stand before he is sentenced.

KATHLEEN HAYES, CNN FINANCIAL CORRESPONDENT: And I'm Kathleen Hayes in New York on the story of let the spin begin on Social Security with dire warnings from all sides.

Also coming up going to Indonesia where CNN's Atika Shubert has the latest on the struggle to survive and the effectiveness of international aid.

And we'll end up in Hollywood with CNN's Sibila Vargas as she sets the scene for the latest round of movie awards.

E-mail us at onthestory@cnn.com.

Now straight to Susan Candiotti and the prisoner abuse case.

(BEGIN VIDEO CLIP)

CANDIOTTI (voice-over): Specialist Graner, what did you think when the detainee was calling you a torturer? I saw you laugh at one point.

SPC CHARLES GRANER: Well, I saw him threaten to kill me the last time I saw him.

(END VIDEO CLIP)

CANDIOTTI: Specialist Charles Graner walking out of his court martial challenging the testimony of one of the prisoners at Abu Ghraib. At this hour, a jury of combat veterans who served in Iraq and Afghanistan is getting ready to resume the sentencing phase.

Graner himself says he will take the stand. He's getting ready to do so at this hour. We just learned that it will be an unsworn statement, which means he cannot be cross-examined by prosecutors.

BASH: Susan, set the stage for us. This seems incredibly dramatic. You finally have Graner taking the stand after he decided not to while his trial was actually being deliberated. What do you expect to hear from him based on what you've seen from him and his family during the trial?

CANDIOTTI: Well, I know that he has said consistently, he describes himself as a nice guy with a ready smile and that he was only trying to follow orders when he abused prisoners, never backed away from that.

The question is whether he will say he's sorry. Will he beg for mercy? It's unclear at this time. He wants to say something he didn't get a chance to during the guilt phase, so how far will he go? Will he blame others, can't wait to hear it?

MESERVE: Susan, why didn't he testify during the guilt and innocence phase and was that a big mistake?

CANDIOTTI: Well, his lawyer said ultimately it was his decision. It is rare, he said in all the cases he has handled as a defense attorney that he would ever allow the accused to take the stand and testify because, of course, it opens you up to very tough cross- examination by prosecutors.

And the defense attorney said he felt as though he had made his case by putting out the evidence that he did. But we've never really heard any hard evidence that he had orders, was acting under orders.

The defense attorney said in his closing arguments, he told the jury "Don't hold this against him, if you plan to, because you're not supposed to but I'll take the blame for him not taking the stand." Does Graner now regret it? We don't know but at least he will have a chance now to say something before this jury.

HAYES: Susan, you say there was never any hard evidence presented that he was just following orders; however, there was testimony that, in fact, there were superiors condoning this, egging them on, that the superiors knew what was happening and, if anything, implicitly giving their OK.

CANDIOTTI: Well, in terms of superiors who knew about it, in a vague sense we heard about that only in that he was praised generally speaking for his work. But Charles Graner wanted to call people who really were of rank there and military intelligence who would have been the ones to say yes indeed there were orders out there.

The problem is they refused to be deposed before the trial unless they had a grant of immunity saying that they too were under investigation and his defense attorney told the jury, sure military intelligence can now claim that they didn't know anything about what's going on now but according to him and his words he said that would be a lie.

BASH: Susan, one thing that struck me just in reading what you've been experiencing there at the trial was these e-mails that Graner apparently sent home to his friends, to his family essentially crowing about what he was doing. Describe some of that.

CANDIOTTI: Well, again, I guess you have to get a sense of that from Charles Graner himself. This is the kind of guy who comes across as being very light hearted and upbeat about everything. Would it be gallows humor? I don't know.

But he would send back e-mails to his friends showing some of this abuse and saying things like "Just another day at the office," I guess in so many words paraphrasing here I guess he wasn't able to answer questions and so now this and the photograph would be of someone who was very bloodied up or a prisoner who appears to be wreaking or racked with pain after being abused in some fashion. You know it appeared as though it was a big joke to him. These are the kinds of e-mails that he was sending to his friends back home.

MESERVE: Susan, only five hours of deliberations on the guilt and innocence phase, did that surprise you?

CANDIOTTI: Well, I'll tell you the length of this trial has been very impressive. It has moved along at quite a quick pace, so quite frankly the idea that this jury of combat veterans didn't take a very long time wasn't all that surprising when all things were considered.

Evidently they didn't think much, also, about the videotape testimony from two detainees because the testimony from one of them they discounted. They threw out some of the charges that that detainee made, for example that he was beating them, that he saw certain other acts performed, that he beat him with a stick on his wounded legs. That part they did discount, so apparently they didn't give it much weight.

BASH: Susan, thank you so much. We know you have to get back on the story and to covering the sentencing phase right now. What again exactly are you going to be watching and listening for as you go in there?

CANDIOTTI: Well, I want to see his demeanor before this jury. I want to know whether he is going to say he's sorry for what he did or is he going to stick to his guns to say I'm being made the scapegoat here? That's the kind of thing that I would like to hear.

BASH: Susan, thank you very much.

And Iraq, of course, remains issue number one for the Bush administration in the final days before the elections. I'm back on that story right after this.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is an extraordinary year when you think about it. Within the first month of the new year there will be an election in the Palestinian territory and there will be an election in Iraq.

(END VIDEO CLIP)

BASH: President Bush Monday. The Iraqi election, of course, 15 days away, it is the latest milestone in a road the administration hopes will lead to an independent democratic Iraq, an example to other countries in the region and justification for the war that still grinds on.

HAYES: But, Dana, it is interesting the administration is suddenly trying to tell us don't focus too much on all the problems around the election and how it turns out. They're saying it's an enormous achievement just to hold the election but are they back peddling a little bit?

BASH: Kathleen, you know, this -- it's no secret that this is an administration that is notoriously -- they're known for singing from the same song sheet, for being absolutely on message. But this week it was actually stunning to watch and listen to briefings from the White House, from the State Department, from the Defense Department, phone conversations with sources.

They were all not only saying the same things, which are, you know, the Iraqi elections aren't going to be pretty. They're not going to be perfect but they're still going to be on time and we should prepare for Iraqis not necessarily to all vote lowering expectations.

They were all saying that but they were actually really trying to aggressively push it. Why? Because for so long we've all been focused primarily because of the White House, they've been focused on these elections.

They suddenly realized it seems that the expectations were pretty high and if they don't go off that well, then the president could suffer politically for it, no question about that but also they realize that perhaps people weren't educated enough on exactly what the process is.

MESERVE: Well, it is going to be a very complicated process, complicated election, hard for them to interpret the results perhaps.

BASH: Absolutely and that's -- I talked to a senior official this week who said, look, it's hard. It is so hard to -- not only is the election hard but in terms of just the communication strategy to explain that this is just the first of three elections this year that they're essentially electing an assembly, which will elect a government.

That's something that people don't understand because we just hear the shorthand, which is the Iraqi elections are on January 30th. So, that is essentially what they've been trying to do and they're ratcheting it up in a way that is pretty unbelievable to watch.

HAYES: Dana, I want to ask you about another story this week, no WMDs. Now, granted that finding had already been made back in October but now we're closing our tents. We're closing the book on this they say. How does that play into this whole (UNINTELLIGIBLE) of what's going on in Iraq, public support for the war, understanding the elections, et cetera?

BASH: I'll tell you, Kathleen, the interesting thing about the no WMD was we found out this week that they stopped looking and they stopped looking at the end of the year essentially. There are no weapons of mass destruction. OK. That's not a big news headline. We've known that, right?

But the way that they did it, meaning they didn't announce it. It sort of just happened very quietly and then once it got out there, the White House said, "Oh, yes, you're right. We confirm that there is no longer a search." But it's old news and the reality is it is old news.

There was what seemed to be, what was called the interim report but was essentially a final report in October and politically what's most interesting to me is that the voters, the president has been politically tested on this essentially because the voters knew that there were no weapons of mass destruction in Iraq before they went to the polls and the president won.

Now, having said that, this is all as Kathleen you pointed out, all now wrapped up in the Iraqi elections and people have perhaps said, OK fine no weapons of mass destruction because they hear from the president that this is about a bigger thing. This is about democracy and the question is what will happen with these elections.

MESERVE: And meanwhile there are some poll numbers out there which can't be very comforting to the White House.

BASH: You know, Jeanne, when we look at some of the things that have happened since the election, the Bernie Kerik nomination going down, some of the calls sort of right after the election about Donald Rumsfeld perhaps that he should resign and, of course, the increasing violence in Iraq, the president hasn't had the kind of honeymoon that most have.

We have some poll numbers that came out from a CNN/USA Today Gallup poll this week. The president's approval rating is at 52 percent, not bad but when you look at it compared to where other presidents have been going into their second terms, you see Clinton and Reagan most recently they were at 62 percent, both of them at this time going into their second term. That's ten points higher.

He's about where Richard Nixon was just one point higher, so it just shows you that this is a White House that understands that they have to get on the better side of public approval, not only because of Iraq and not only will Iraq play into that but because he has, as you well know Kathleen, a humongous domestic agenda that he is trying to push and he needs public support for it and it's an agenda like Social Security that Americans aren't necessarily that keen on right now.

HAYES: But, Dana, I wonder then is this $40 billion inauguration being criticized because there are tsunami victims who could use the money, you know, some people saying couldn't you scale it back? Is that going to help George Bush? Also the fact that like many inaugurations if you've got $250,000 and you're a big corporate contributor, you have a front row seat at the parade where a lot of us are going to be watching on TV because we won't get seats along Pennsylvania Avenue.

BASH: Well, some of us will but I guess we'll have press passes, right Jeanne. But in all seriousness, look, I mean there has been a lot of talk. Not only has there been talk about the cost and about the $40 million that they've raised but also about whether or not this is really appropriate right now, whether or not the scale of this kind of big parade, this big event is appropriate when you've got what happened in Southeast Asia, when you've got what's going on in Iraq.

And the White House most recently, the first lady herself last night said, look, this is appropriate. This is about celebrating America and they're not backing down even though people are looking back in history and saying that other presidents chose to do it differently.

MESERVE: Dana thanks.

We're going to move from Washington to Southern Asia and to CNN's Atika Shubert. She's on the story in Banda Aceh, Indonesia where people are still struggling. Stay with us.

(COMMERCIAL BREAK)

MESERVE: A rescue worker trying to brighten one tiny corner of the area of Indonesia devastated by the earthquake and tsunami in his words hoping to make the sadness disappear for a moment.

Welcome back. We're ON THE STORY.

And joining us now via videophone from Banda Aceh CNN's Atika Shubert, Atika, this is, of course, an evolving situation. How would you describe it right now?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, certainly things are improving, particularly in the city of Banda Aceh where I'm at now. The immediate relief concerns have already been fulfilled, food, clean water, clothing is getting out and now a lot of aid workers are looking to the medium term how to clear the debris, how to get people's home reconstructed, literally how to move on with their lives.

That's only in the city of Banda Aceh. In the west coast of Aceh, which was closest to the epicenter there's still a lot of immediate relief that needs to get out. As recently as two days ago, we were hearing stories of survivors that had been surviving for more than two weeks without any help at all, with open wounds, fractures, all kinds of very serious injuries that need to be taken care of immediately.

BASH: And, Atika, you were obviously there right after this happened, almost three weeks ago and then you left for just a little while and now you're back and given that I wonder if you have a good perspective on how the people's psyches have changed and how the people feel now three weeks later as opposed to, of course, just right after it happened when you were there.

SHUBERT: You know things have changed really tremendously since the beginning, at the beginning right after the disaster and now. The city that we're at here is just changing day by day.

When we first arrived here it was a city of complete death and destruction, bodies and debris everywhere. Now roads are being cleared. A lot of those displaced people are chipping in, pitching in, trying to help clear the debris and after the first few days of the disaster people were traumatized, crying and really had this sort of zombie look in their eyes there.

Now, trying to pick up the pieces and move on. They're saying it's far better for them to be active in any way they can whether it's clearing the debris, building houses or helping others, as long as they don't think about that disaster so that they can move on with their own lives.

HAYES: Atika, are people worried about this latest development from the Indonesian government saying that military forces have to leave by March, saying that they're going to have aid workers request permission to move around this area presumably because they say they want to protect them from rebel militants. Some critics say it's because they do not want too much interference in their domestic affairs and what people say in some cases has been repressive human rights abuses.

SHUBERT: There is a little bit of concern here, particularly from international aid groups. There is a history here in Aceh of cutting it off from the rest of the world, the rest of the country and very closely monitoring human rights groups and other aid groups that are here because of that insurgency that has continued on here for decades.

So, there's a little bit of concern that there could be some of that control creeping back in. On the other hand, giving sort of a loose deadline of March for international military that's here it seems to be an accepted deadline by many of the governments.

The American government, for one, has said that it finds that to be a reasonable deadline that it will abide by. And certainly when you come out to the streets of Aceh here and considering that this used to be an area completely closed off from the world and then to suddenly see Australian soldiers distributing water, American soldiers flying in the skies with their helicopters, not to mention the hundreds of international aid workers here, it's sort of understandable how the government might want to get a little bit more control over what's happening in this province.

MESERVE: Atika, are there some obvious successes and failures in the aid effort?

SHUBERT: Oh, certainly. I mean the successes are certainly increasing every day. On the other hand, I think the biggest failure was simply that getting aid into Aceh was much slower than the other regions that were affected and now aid agencies and governments have to play catch-up and they're trying the best they can but the infrastructure, the logistics and coordination are simply overwhelmed by the amount of relief that's needed for this area.

Things are improving but, again, for many of those survivors they can't improve fast enough. So the effort here is just to really pump it out as fast as they possibly can.

BASH: Atika, I want to ask you about the children immediately after this happened. Apparently there were a lot of children who survived taken away, apparently for safety but it created massive confusion among parents who didn't know if their children were alive or dead, problems with not having documentation to help find each other. What's the latest with that?

SHUBERT: That's right. The latest is that the government has put a ban on all Acehnese children may not leave the province unless they are accompanied and proven to be accompanied by their parents and the reason for that is, one, they want to stop any attempts at child trafficking.

Unfortunately, the city of Madon (ph), which is quite close to Aceh, is known as a child trafficking center and, two, they want to make sure that even people who perhaps have the best of intentions wanting to adopt some of these orphans aren't mistakenly taking this children, who may very well have families that are still alive, whether it's their parents or extended families.

And that's why the government is working with UNICEF, the United Nations Children's Fund, to try and register and identify all of those children who have been displaced and perhaps are missing their parents.

The hope is that perhaps these children can be reunited, if not with their parents then possibly with extended family members or at least with perhaps neighbors or members of their community that are probably closer culturally to these children than to simply take them away and put them into an institution.

HAYES: Atika, before we let you go, tell us about the story you're working on today about people rebuilding their lives, making a living.

SHUBERT: Well, this is actually a classic case of seeing the relief effort evolve. In the first few days after the disaster, a lot of the focus was on getting food, clean water, those essentials that people needed to survive.

In the city of Banda Aceh, those essentials have now been met and they're looking to the medium term, how to get people back on their lives, how to get them back on their feet, working, rebuilding their homes.

And one of the ways is this United Nations program in which they actually pay those people that have been displaced by the tsunami to help clear the debris, so we followed one particular team today, a team of people that were displaced, as they tried to clear away the debris in one hospital.

And they're getting paid about $3 a day plus meals, which is the wage before the disaster and it's not much but it helps them get back on their feet to work a little bit more and carry on their lives and perhaps even save a little bit of money so that in the end with some extra help they will be able to rebuild their homes.

HAYES: A reason to live and some hope. Thank you, Atika, and good luck on the story in coming days.

From rescue and recovery in Southern Asia to trillion dollar talk at home about Social Security.

Jeanne Meserve will talk about the administration's second choice for homeland security secretary.

And also coming up, Sibila Vargas on winners and losers in Hollywood.

We're back on those stories and to check on what's making headlines right now after this.

(COMMERCIAL BREAK)

(NEWSBREAK)

(BEGIN VIDEO CLIP)

BUSH: You're 20-years-old, in your mid-20s and you're beginning to work. I want you to think about a Social Security system that will be flat bust, bankrupt unless the United States Congress has got the willingness to act now.

(END VIDEO CLIP)

HAYES: President Bush this week painting the flat busted picture he wants people to see about Social Security decades from now, a picture that may make them more receptive to the changes he's proposing.

Welcome back. We're ON THE STORY.

BASH: And, Kathleen, the White House is planning, you just saw the beginning of it, a massive campaign using the same tactics strategically communications wise that they're using, that they used during the campaign essentially to try to first of all just convince people that there is, as he says, a crisis but there's more to it than that obviously.

HAYES: Well, Dick Cheney on the stump as well this week sending the message the system is flat busted and broke. Now, I think it's interesting that there are -- there is spin on both sides because there are some things that are true about the Social Security system.

Is the system actually busted and broke and bankrupt if we know that when push comes to shove the Congress can and many people say will do whatever it takes, raising taxes, scaling back benefits, raising the retirement age to raise the money that is needed?

So, in that sense, the president's critics say, hey, this is fear mongering. On the other hand, when people from the side who are against personal accounts, the president says must be part of his plan to allow younger workers to invest some of their money in the markets when they say well there's a trust fund that has plenty of money until 2018 and then maybe runs into problems by 2040, people say, yes, but that trust fund is full of IOUs.

And in order for the government and for the Social Security Administration to redeem those IOUs, the treasury will have to go out and borrow money. So, both sides have points to make and I think it's so important for citizens to keep reading whatever they can about this because the spin is furious on both sides.

MESERVE: Well, this is no surprise that Social Security has some financial problems. People have been talking about this for years. Is something going to happen now? Does something have to happen now in terms of reform or do we still have some time to figure out the right formula?

HAYES: Well, again, in 2018, there will be so many people retired relative to the people working that the amount of money being paid out through taxes is going to just equal the benefits and then it's going to fall down.

That's when we start running low on money. So, I think many people look at that as a year that is just really around the corner. We'll be there before we know it and I think people credit the president for saying let's do something now.

Will he get a bill out to Congress this year? We shall see. The White House seems to have already backed away from the idea that was floated a couple of weeks ago that in order to pay for the personal accounts benefits will have to scale back.

But let's be honest here. The people who propose these personal accounts, Libertarian groups like the Cato Institute are a big proponents, they feel that the returns in the stock market will be so great for young people that they'll be able to start pulling back some of the benefits that are guaranteed by the government.

Again, what people are going to have to figure out do they view Social Security as a kind of an insurance program that you pay into your whole life and then you get an entitlement, something that's guaranteed when you retire? Or, do they want to view it as an investment vehicle that they own part of the government's ownership society, which is different from an entitlement? Something will happen. It will be interesting to see what the president gets of his three principles, again, personal accounts, don't cut benefits for current retirees. I think everyone will agree on that and no hike in payroll taxes. It's going to be contentious.

BASH: Kathleen, different subject on your beat. Wal-Mart has a new PR campaign. Tell us about that.

HAYES: Full page ads in 100 newspapers across the country. Wal- Mart feels that it's been the victim of negative publicity. That's certainly Wal-Mart's view. They have been accused of many things. There's a class-action lawsuit with hundreds of women employees from Wal-Mart saying that they weren't promoted fairly. They weren't paid the same as their male counterparts.

There are communities in New York City where they are trying to put -- bring a Wal-Mart in and there's a movement to keep Wal-Mart out because they feel that it will displace too many of the smaller merchants in the area.

Right now in California there is a move afoot to perhaps say that Wal-Mart doesn't shoulder its fair care of healthcare costs. Wal-Mart pointing out that it has an average wage that is twice the minimum wage trying to show that we are a fair, good employer.

Again, I think it's interesting that they called this negative publicity. I think their critics say that they have at least allegedly committed some transgressions and whatever negative publicity that has resulted that they're trying to calm that is well deserved.

MESERVE: Now a lot of those products on Wal-Mart shelves, products from China, new indications this week that China is really cleaning the U.S.' clock, right?

HAYES: Well, our trade deficit in the month of November, $60 billion. The trade deficit with China up to over $16 billion from just $10 billion a year ago. Don Evans, the Commerce Secretary, in China once again saying you're being unfair on intellectual property rights. You're unfair with your currency. You make it too tough for the U.S. to sell goods to you.

The Chinese have not budged yet. A study this week commissioned by Congress basically from a liberal think tank, the Economic Policy Institute, finding that a million and a half jobs were lost from '89 to 2003.

Year by year it's not that many jobs; however, what they point out is that more and more jobs are being lost in high tech industries that many people feel are really the key to U.S. competitiveness in the years ahead.

So, China, again a competitive challenge, a menace depending on how you look at it. Some people think it's a great investment opportunity but clearly also in the news this week.

MESERVE: Kathleen, thanks.

President Bush hopes one easy win will be approval of his latest choice to lead the Department of Homeland Security. Bernie Kerik crashed and burned. Michael Chertoff is a lot more buttoned up.

Stay tuned to CNN day and night for the most reliable news about your security.

I'm back on that story after this.

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MICHAEL CHERTOFF: If confirmed, I pledge to devote all my energy to promoting our homeland security and as important to preserving our fundamental liberties.

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MESERVE: Michael Chertoff on Tuesday accepting the nomination to run the sprawling Department of Homeland Security. You heard the preemptive strike against his critics that pledge to preserve fundamental liberties. And in demeanor and experience he is very much the anti-Bernie Kerik, the man tapped first to fill the top slot.

Welcome back. We're ON THE STORY.

HAYES: Jeanne, we know he's one tough prosecutor. He prosecuted Mafia dons in New York City as a young man, the Republican Council on the Whitewater investigation. In the business world, we know him as the man who said that Arthur Andersen, the accounting giant, should be prosecuted as an entire firm in the Enron missteps, which brought the firm down. Is he the right guy though to run Homeland Security?

MESERVE: Well that's the million dollar question. Nobody knows the answer to that one. There are some things on his resume that people like, the fact that he was involved after 9/11 in shaping the Justice Department response.

Some people say he understands the legal side of the war on terror. Other people concerned, of course, about some of the civil liberties implications in what was done after 9/11.

What he doesn't have on his resume is management experience. This is, as I mentioned, a sprawling department, 180,000 employees, 22 different agencies brought together under one umbrella. It hasn't worked the way everyone had hoped it would. We haven't gotten those expected synergies.

Is he the guy who can deliver? Nobody knows the answer to that question. The thing is you probably weren't going to find anybody that has a perfect resume for this particular job.

BASH: But this was a huge surprise.

MESERVE: It was.

BASH: At the White House, to you who covers the beat.

MESERVE: Out of the blue. Out of the blue. I mean we've been talking to people ever since the Kerik burnout. We've been collecting names and we had a pretty long list and there were top contenders. There were people in the second tier, the third tier.

This is a name that never came up. When his name leaked out that morning and I called a couple of people in the Homeland Security sphere to talk about this, they were absolutely flabbergasted and one person who is really very intensely involved in homeland security planning said "Michael who?" He didn't have any idea who he was.

BASH: Well, Jeanne, I heard an interview with the Democratic opposing counsel on Whitewater who said if he goes after the terrorists the way he went after us Democrats, we're in pretty good shape. So, is that part of the strategy do you think here to be more aggressive in that respect, as opposed to Ridge's style which seemed to be much more about outreach to governors and to local officials?

MESERVE: Well, people don't really know exactly what the strategy is. There's been a lot of fear within homeland security circles that the administration might want to downplay this issue in the second term that, in fact, the Department of Homeland Security might be -- get considerably less notice and attention than it has in the first term.

So, it's unclear exactly what this means in terms of profile and so forth. Chertoff does have very strong relationships with Alberto Gonzales who is going to be the attorney general. He also went to law school with Christopher Cox (ph) up on Capitol Hill who heads the Homeland Security Committee in the House.

He has certain ties which make it look as if he could be a pretty effective operator in Washington in some of those interagency struggles that have beset the Department of Homeland Security but we'll wait. We'll see. I mean he's such a largely unknown player. We don't know.

HAYES: Jeanne, in terms of Washington this week what about security for the inauguration and who's paying the bills?

MESERVE: Yes, well, you know, they won't even put a price tag on how much it's going to cost ultimately. Dana's got exactly the right answer, all of us, all of us taxpayers.

And I did talk to one homeland security expert this week who said, very upset by the way that the District of Columbia is going to take a big hit out of its homeland security funds to pay for this saying, hey listen, this is one of the top targets of al Qaeda. There's no question about it.

This city and this region should not have to divert money from other homeland security projects to provide security for this particular event. If they're raising money from the private sector for the parties, why not be raising money from the private sector to pay for the security as well?

BASH: And tell use a little bit about the security. It's going to be (UNINTELLIGIBLE).

MESERVE: Oh, it's going to be vast. I mean as compared to the inauguration four years ago, just an incredible change. There are going to be about 6,000 law enforcement officers around this city in addition, supplemented by military personnel.

But it will bear a pretty strong resemblance to what we saw at the party conventions. A lot of technology is being deployed. You're going to have big restrictions on the airspace over the city, the sorts of things you've seen before.

The city is not particularly happy about a lot of what's going to be taking place. Downtown is going to be largely shut down, a huge, I think it's 100 square blocks of downtown will be off limits.

BASH: But there's no specific threat right now?

MESERVE: No, very important point to stress. They say they have no credible specific information that the inauguration or any of the surrounding events are going to be targeted, in any way have been targeted by the terrorists but, of course, because this is the top target city, because this is a symbolic event, all precautions are being taken.

BASH: Well you can stay tuned to CNN day and night for the most reliable news about your security.

From homeland to Hollywood, Sibila Vargas is on that story right after this.

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UNIDENTIFIED FEMALE: Jamie Foxx "Collateral," Jamie Foxx "Ray."

UNIDENTIFIED MALE: Jamie Foxx "Redemption."

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SABILA VARGAS, CNN CORRESPONDENT: What a dream it must be for actor Jamie Foxx nominated for three Golden Globes. That's just one of the headlines coming out of tomorrow's event as the Hollywood award season roars along.

Welcome back. I'm Sibila Vargas in Los Angeles and we're ON THE STORY.

MESERVE: Sibila, the other big phenomenon from these awards "Sideways."

VARGAS: Yes, absolutely. I mean the critics absolutely love it. It is being hailed a critic's gem. It got recently four SAG nominations but the big story out of the Golden Globes is that this was the movie that got the most nominations, seven in all.

Now a lot of it has to do with these two actors on the screen right now, Thomas Hayden Church, who is a supporting actor and Paul Giamatti, who is absolutely amazing in this film.

It's a story about two friends who set along in a wine tasting adventure and one of them is going through a divorce. Well actually it happened two years ago but he just can't get over it. And his friend is just getting married but he can't seem to get his sexual angst under control.

So, it's a really wonderful story. The writing is superb. Alexander Payne (ph) is the director. He brought you the film "About Schmitt" which got a screenplay award at the Golden Globes, so he's a favorite and this is a phenomenal film.

Not too many people have seen it because it is an independent but the critics absolutely love it. Paul Giamatti got a nomination for best actor in the comedy category, as well as Thomas Hayden Church, the best supporting actor...

HAYES: Sibila.

VARGAS: ...and also Virginia Madsen (ph).

HAYES: My friends have been -- I must confess I haven't seen it yet but I've seen clips. My friends have been telling me about it for a while. What's interesting to me about this is it's an independent movie. It doesn't have special effects. It was based on a story that people thought was a great story, good writing.

Does this signal the beginning of a trend perhaps in the movies back to something we almost think are more like French movies and away from some of these big blockbusters?

VARGAS: Absolutely. I mean and "Hotel Rwanda" is another one even though it deals with an extreme subject it was an independent film. But you know what, it's really about the story. I mean that's what I think really interests us and intrigues us.

And, you know, we could have all the glitz, the glamour. You got the lighting and the special effects but really when you come down to it, people just want to get back to basic storytelling and I think that's what this has and it's really wonderful. The writing is very crisp and it's really ingenious. It's just a cute movie and you have to go see it because I guarantee you will be laughing out loud.

BASH: Sibila, I'm probably one of the millions who are absolutely addicted to "Desperate Housewives." Given the number of nominations that show got, does that tell you anything just as someone who covers Hollywood about a trend in Hollywood, reality shows to perhaps more of a focus on drama and script writing and acting?

VARGAS: Absolutely. Before this -- before this show everyone thought that the scripted drama was dead that reality show was king but I mean when "Desperate Housewives" came along, when they came along, when these ladies came along, that was the end. I mean that kind of like, if you really think about it, Dana, we haven't been hearing that much about reality television.

It's been about the "Desperate Housewives." It's been about (UNINTELLIGIBLE) and it's been about what other shows are going to be coming down the pike as a result. It has done incredibly well.

All of the girls were nominated with the exception of Eva Longoria and it got five nominations at the Golden Globes, which is tremendous for a freshman show and I think a lot of it had to do with the fact that "Sex and the City" was gone.

I don't know if you got to see "Sex in the City," Dana, something is telling me that you might have been a fan of that show. And I think it just came at a really great time and I think they (UNINTELLIGIBLE) people just were kind of curious to see what this was all about.

And when they got -- when they got to see it, they really realized that the writing was really good and that, you know what, let's go back to scripted shows. Let's see what they have in store for us. Let's see what this is about.

I think for a while we were just not looking at that. We were just looking at the reality shows because we were, you know, we were in this reality trend and we were just taken by this wave but I think we're kind of out of it and we're back onshore and we're seeing that scripted dramas, you know, let's give it another try and I think they're doing a good job.

MESERVE: Jamie Foxx, three nominations, does this mean he's a shoe-in for an Oscar?

VARGAS: Oh, that's what they say absolutely. I mean before he got the Golden Globe nominations, a lot of people were thinking that he would but it wasn't certain. I mean you never know if you're going to get nominated.

But they said if he does get the Golden Globe nomination he will definitely move on to the Oscars. And the big story is that they say that not only is he a shoe-in but he is the one to beat.

Another big story, another big thing would be if Jamie Foxx were to get the award at the Oscars it would make him the third African American actor to get a best actor -- best actor award, so it would be extremely significant, not only for him but for African Americans in general.

HAYES: Sibila, we got to ask about clothes, come on. Any advance notice on gowns?

BASH: That's what we're all interested in.

HAYES: what are you wearing, come on? Yes.

VARGAS: Exactly. Let's face it. I mean we want to know who the winners are but what are we really going to be talking about the next day? What were the "Desperate Housewives" wearing? What was Nicole wearing? What was Renee wearing?

I got to speak to Philip Block (ph) recently. He's one of the stylists that dresses the stars and, you know, when it comes to the Golden Globes anything goes. It's just -- it's a time to just enjoy yourselves. It's kind of like a more relaxes atmosphere.

Of course they're going to want to, you know, dress to the nines, you know. This is their opportunity. You don't want to get on the worst dressed list but it's just going to be fabulous. Just expect a lot of colors. Expect a lot of (UNINTELLIGIBLE). That's for sure.

BASH: Sibila, we were just looking at pictures of the red carpet. You're going to be on that story. You're going to be on the red carpet at the Golden Globes.

VARGAS: Yes.

BASH: For those of us who just watch it in a word describe it?

VARGAS: Fantastic, fabulous, two words.

BASH: All right, well Sibila thank you. We will be watching you.

And we will be back ON THE STORY right after this.

(BEGIN VIDEO CLIP)

ANNOUNCER: The new governor of Washington State is making headlines this week. What's her story? More when we return.

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(BEGIN VIDEO CLIP)

ANNOUNCER: Christine Gregoire, what's her story? Gregoire was sworn in as governor of Washington Wednesday after a too-close-to-call election in November.

GOV. CHRISTINE GREGOIRE, WASHINGTON STATE: Many have asked how I can govern without a clear mandate from our voters? I believe the voters have given all of us a mandate, a mandate to overcome our differences and to solve the problems facing the state of Washington.

ANNOUNCER: The razor thin election results prompted an ugly two- month recount battle. Gregoire won the hand recount by 129 votes but her opponent is still challenging the results in court.

As the state's first woman attorney general, Gregoire negotiated a landmark tobacco settlement and fought for nuclear waste clean up.

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HAYES: Thanks so much to all my colleagues today. And thank you for watching ON THE STORY. We'll be back next week with another great show. We expect to see you then.

Coming up, "PEOPLE IN THE NEWS," focusing this week on Nicole Kidman and Kevin Spacey.

Straight ahead a check on what's making news right now.

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