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CNN Wolf Blitzer Reports

One Winner For Record Powerball Winnings

Aired December 26, 2002 - 17:00   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.


WOLF BLITZER, ANCHOR, HOST: WOLF BLITZER REPORTS starts right now. Targeted for terror; after devastating bombings of U.S. bases an exclusive look at efforts to keep American forces safe. Wanted for questioning Iraqi scientists.
UNIDENTIFIED MALE: It's up to the individual really. We can't force people to conduct interviews if they don't want to.

BLITZER: What will happen to scientists who tell what they know. We'll hear from Saddam Hussein's former bomb maker. Fuel rod fears, are North Korea scientists out to make nuclear weapons. Another CNN exclusive turning back the clock, is Israel taking over again in the West Bank.

RA'ANAN GISSIN, PM SHARON'S SPOKESMAN: Try and provide for the Palestinian people for living conditions, healthcare, medicine, and so forth.

UNIDENTIFIED MALE: I think the end game of this government is very obvious, destroy the Palestinian Authority.

BLITZER: The day after, digging out and digging for bargains. And hitting the jackpot, a Powerball winner has no more need for bargains.

UNIDENTIFIED MALE: I looked at that ticket and sure enough we had the winner. It's Thursday, December 26, 2002. I'm Wolf Blitzer in Washington. There's word of new preparations for possible war with Iraq. The "New York Times" is reporting a high tech radar system has been deployed at a U.S. base in Qatar to warn of Iraqi missile launches but protecting troops from incoming Scuds is only part of the challenge.

Terrorist attacks have killed hundreds of U.S. forces in the Middle East teaching the Pentagon hard lessons about security. I recently saw them in action when I was granted exclusive access to the Prince Sultan Air ase in Saudi Arabia. We went inside for a look at things few civilians have ever seen before.

(BEGIN VIDEOTAPE)

BLITZER (voice over): We're on our way to the middle of nowhere and for American troops based in Saudi Arabia the middle of nowhere may be the safest place. As we drive through the Saudi Desert a half hour from the nearest village, the sprawling air base slowly comes into view. It's location is not a secret. Neither is the desire of al Qaeda and its supporters to attack a place like this. So, what keeps these 5,000 American men and women safe?

BLITZER (on camera): Security for U.S. military personnel here at the Prince Sultan Air Base is incredibly tight. That's in part because of what happened on June 25, 1996 at Khobar Towers elsewhere in Saudi Arabia.

BRIG. GEN. DALE WATERS, U.S. AIR FORCE: We moved the wing out here as you can see after the Khobar attack.

BLITZER (voice over): That's when the U.S. military suffered a devastating loss at what was then the main U.S. air base in Saudi Arabia. At the Khobar Towers near Dahran in the eastern part of the Kingdom, 19 American troops were killed and another 500 were wounded, many while they slept, when terrorists parked a huge tanker truck near the fence of the apartment complex before running to a waiting car.

Six minutes later, the truck exploded destroying the towers and killing the troops in the process. Investigators later determined that security procedures had been lax. It was too easy for outsiders to get close to the U.S. troops. That, of course, was also the case some 13 years earlier when a truck bomber drove up to the then U.S. Marine Headquarters outside Beirut, Lebanon and killed 241 U.S. Marines, sailors, and soldiers.

Brigadier General Dale Waters is commander of the 363rd Air Expeditionary Wing at the Prince Sultan Air Base, which is commonly called PSAB. He insists the U.S. military has learned lifesaving lessons since then.

WATERS: The big thing we did was with the help of the kingdom of Saudi Arabia is we moved our forces into a more secure location here at their air base at PSAB.

BLITZER: The base, he says, has grown quickly from a modest tent city to a huge, sprawling, and permanent complex where there are layers and layers of security. Unlike the Khobar Towers, no one can get close to the U.S. troops without going through multiple checkpoints and having lots of the right paperwork.

WATERS: The Royal Saudi Air Force provides security for our SAF base here, PSAB Air Base, and inside that we have our living and working areas. We provide American security within those compounds.

BLITZER: To the outside visitor the security arrangements are impressive.

MAJ. GEN. DONALD SHEPPERD, U.S. AIR FORCE (RET): The base itself is an unbelievable facility out in the middle of nowhere where it's easy to see people approaching from the standpoint of security. Security is never easy but it's easier because of where it is.

BLITZER: And U.S. troops at the base say they're planning on staying there for quite a while. (END VIDEOTAPE)

BLITZER: A lot of young men and women on the line in Saudi Arabia right now, security uppermost on everyone's mind right now. Iraq, meanwhile, said today it will soon comply with the United Nations' request for a list of hundreds of scientists who've worked in its weapons programs. The U.N. wants that list to decide whom to interview under the latest U.N. resolution that says scientists and their families can be taken out of Iraq for interviews.

U.S. officials say such interviews are crucial but can they really happen? CNN National Security Correspondent David Ensor has more.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Iraqi nuclear scientist Khadhir Hamza, brought secrets about Saddam Hussein's weapons with him when he defected to the west in the '90s and he says only by interviewing Iraqi scientists outside Iraq will the United Nations inspectors find out what weapons still exist.

KHADHIR HAMZA, FORMER IRAQI SCIENTIST: This could be the Achilles heel of Saddam and his weapons of mass destruction programs.

ENSOR: An Iraqi scientist's entire extended family, one former inspector says, might need to be brought out of Iraq before he or she could take freely.

RAY ZILINSKAS, FMR. WEAPONS INSPECTOR: I would certainly say grandmothers, grandfathers, well even maybe first cousins. It's hard to tell how brutal they would be because after all they're trying to make a lesson.

ENSOR: The U.N. has already started conducting some interviews inside Iraq and says it will ask scientists if they want to be moved out of the country. But General Amin, Iraqi scientist and spokesman, predicted that many will refuse including him.

GEN. HOSSAM MOHAMMED AMIN, IRAQI MONITORING DIRECTORATE: Because I don't like to leave my country and be interviewed there abroad. If there is any question (UNINTELLIGIBLE) to me, let them address it to me here in Iraq.

ENSOR: U.N. officials, like Chief Inspector Hans Blix, also say taking scientists secretly out of the country to talk would be extremely difficult.

HANS BLIX, CHIEF U.N. WEAPONS INSPECTOR: And I don't think that's what the inspectors are for, nor do I think that we are an abduction agency.

HAMZA: Even before I helped western government, once they found I was out, three attempts were made on my son's life.

ENSOR: Eventually, Hamza's immediate family did get out of Iraq and warnings were give to Baghdad not to touch his other relatives. He argues the interviews that have already started inside Iraq are a big mistake.

HAMZA: Nobody will show readiness inside Iraq to talk because this could alert the Iraqi government and end up in his death and his family members' deaths also.

(END VIDEOTAPE)

ENSOR: U.N. officials say they are currently negotiating with the U.S. and others on this tricky question. What if an Iraqi scientists and his family are brought out and then refuse to talk after all? Will they still be promised U.S. visas and resettlement? This is not, as one official said to me, an easy issue - Wolf.

BLITZER: So, I take it David there's no firm decision yet in Washington about giving asylum to anyone who says they may have vital information?

ENSOR: U.N. officials tell me that they have not got a clear statement yet from the United States that any scientist and their family can come here, and as I mentioned in the report part of the problem is what if there's a flood of scientists who decide to come out and say nothing? How do you deal with that?

BLITZER: But the bottom line is this that in the past probably the single most important source of vital information about Iraq's weapons of mass destruction have come from defectors, is that fair?

ENSOR: That's absolutely fair starting off with, of course, Saddam Hussein's son-in-law who came out and then went back and was murdered, but there have been several others and they have been the key, according to officials that I've spoken to.

BLITZER: David Ensor with important information as usual, thanks very much David for that report. North Korea, meanwhile, is moving more fuel rods to a nuclear reactor which U.N. watchdogs say they believe could be up and running within a month. The head of the International Atomic Energy Agency calls that very worrisome.

(BEGIN VIDEO CLIP)

DR. MOHAMMED EL-BARADEI, DIRECTOR GENERAL IAEA (via telephone): I think they are trying to use their nuclear capability, which is supposed to be for peaceful ends, to achieve a strategic and political objective which is totally unacceptable. It's basically a policy of (UNINTELLIGIBLE).

(END VIDEO CLIP)

BLITZER: U.S. officials say they believe the north may already have a couple of nuclear warheads and could soon make more. Let's turn to an expert on these matters. Joe Circincione is of the Carnegie Endowment for International Peace. He's joining us now live from Miami. Joe thanks very much. Let's go through a little bit of nuclear power, nuclear reactors, fuel rods 101, if we can call it that. Explain to our viewers why the movement of these fuel rods may be significant. JOE CIRINCIONE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Well, the fuel rods are spent fuel rods. They've already gone through the nuclear reactor and in the process some of the uranium in them has turned into plutonium so we estimate that they have enough plutonium in them for at least six additional nuclear weapons, and if the North Koreans process this in a reprocessing facility, which they have, they could in about a year or so have enough material for six new nuclear bombs.

BLITZER: Well, in simple terms for our viewers out there and for me in particular, explain how you go from the process of moving fuel rods to building a bomb.

CIRINCIONE: Sure. Fuel rods are inserted into the reactor. The North Koreans have, and this is what they've started to open up again, a small five megawatt nuclear reactor. Each of the rods is made up of uranium and clad in a magnesium alloy. What happens is after they're taken out of the reactor, you can move them into a secure, what's called a hot cell, where you can bathe them in various chemicals basically and separate out the plutonium and the plutonium will sift out to a certain area. You can pull it together, extract it, and then use the plutonium for your nuclear device.

BLITZER: What do you see as North Korea's goal right now is escalating this crisis?

CIRINCIONE: Well, there's two views. One is that they're determined to get a nuclear weapon and there's nothing we can do to stop them so there's no point in negotiating. That seems to be the administration's point of view. The other as we just heard the president of South Korea explain is that they are trying to force the United States back to the negotiating table. I think it's that latter case.

In their own strange way they think that by reopening their nuclear weapons production facility that will encourage the United States to come to the bargaining table and conclude a comprehensive deal that will exchange the North Korean nuclear and missile programs for humanitarian and economic aid and full diplomatic recognition.

BLITZER: This is such an enormously complicated yet explosive, forgive the pun, issue. Is there a solution out there that can turn the clock back, if you will?

CIRINCIONE: Well, unlike Iraq, the North Koreans actually want to negotiate with us, and unlike Iraq, there isn't actually a good military option here. If worse comes to worse in Iraq you can see a military solution possible there. In North Korea, there really isn't one. Any conflict might escalate quickly into a second Korean War that could cause hundreds of thousands of South Korean casualties.

Fortunately, I think there is a chance to negotiate a deal with North Korea. This is what they want. They basically feel they've been ignored by the United States. What we have to do now is find a face-saving way for the administration to back off from their policy and engage the North Koreans in talks. It may be time for the administration to look for an honest (UNINTELLIGIBLE) who could open up a back channel, someone for example like Ambassador Howard Baker, our Ambassador to Japan. He might be perfect to open up a quiet channel with the North Koreans and see if there's a way of brokering a deal.

BLITZER: All right, let's see if that happens. Joe Ciricione of the Carnegie Endowment thanks for your useful information, your expertise on this most important subject.

CIRINCIONE: My pleasure, Wolf.

BLITZER: Thank you very much and Happy New Year to you as well. Here's your chance to weigh in on this story. Our web question of the day is this. Do you think North Korea would launch a first strike nuclear attack? We'll have the results later in this broadcast. Vote at cnn.com/wolf. While you're there, I'd love to hear from you. Send me your comments. I'll try to read some of them on the air each day at the end of this program. That's also, of course, where you can read my daily online column, cnn.com/wolf.

The big winner comes forward, $315 million. Find out what this man plans to do with the payout. And, Santa left retailers in the lurch but that means good news for bargain hunters, the fallout and markdowns from Christmas shopping mania. And, do you want to outsmart the IRS before it comes calling? Some end of the year tax tips to save dollars for you during tax time. You have a few more days to make some important decisions. We'll tell you what you should be doing now to save money in April. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Residents of upstate New York have spent much of the day digging out from a Nor'easter that dumped almost three feet of snow in some areas. CNN's Whitney Casey is live with us tonight in Albany, which is buried under get this, 21 inches of snow. Is that right, Whitney?

WHITNEY CASEY, CNN CORRESPONDENT: That's right, Wolf. I believe last night I was a bit delirious in the midst of that blizzard but I believe you said that this is your old stomping grounds but it was stomped all over yesterday because I guess when they dreamt of a white Christmas, they dreamt big here.

I'm just going to show you how much snow. You said 21 inches but the whole region got 18 to 32 inches and I'm six feet tall, and look how deep this gets sometimes about three feet right here. This is just sort of the accumulation. We're at a park just right across the street from where we've been all day.

Now, in addition to this, they've had snow plowers out on the street, people out shoveling, kids out shoveling, trying to earn extra money. It's been an incredible day here because it actually got up to about 32 degrees. It was pretty windy all day but it was a beautiful day and a lot of what that sun did was melt some of this gorgeous snow. Well, that has created quite a perilous commute for the night because, as you know, well when that snow melts and when it gets cold again like it is now about 18 degrees out here, that snow turns to ice and then that is ice all over the roads and it turns black and it's called black ice, so drivers beware.

But another thing that they caution about is something that this wind is creating and you can't quite see it right now but when the wind sweeps through here about 40 miles an hour as it's done at times, what it does is create a ground blizzard, and I've learned now what that is.

I'm not a meteorologist but a ground blizzard then what happens, all of this nice loose powder that looks so beautiful during the day starts swirling up out of the ground and it creates low visibility for drivers, so you've got two problems black ice and ground blizzards. I'm learning every day on the job here being from Florida, back to you Wolf.

BLITZER: You weren't that delirious yesterday when we spoke 24 hours ago. It was a mess there. The snow was coming down. I am from upstate New York but Buffalo, which is on the other side of New York State. Albany is a lovely town, the capital of New York State. How are the people coping on a random basis? You've been speaking with a lot of these people. They're sort of used to this, aren't they?

CASEY: Oh, they're very used to this but actually this was exceptional because they haven't had a white Christmas like this since 1985 and they haven't had a huge dumping like this in about ten years. This was the ninth largest snow storm that Albany has ever seen.

But, to tell you the truth, the kids were out playing today. They actually told me they couldn't sled because there's too much snow and they would just sink down to the bottom like I did on that hill. They were throwing snowballs, creating angels. They were having a great time. It really wasn't too serious because they're all out of school right now so they didn't get a snow day. That's the only thing they were bummed out about.

BLITZER: CNN's newest addition, Whitney Casey joining us from Albany today. Whitney thanks very much for the good reporting. And, as they do every year, shoppers are out in force today snatching up post Christmas bargains but there's little they can do to reverse what's being called the weakest holiday retail season in get this, 30 years. CNN's Mary Snow is live now at Macy's flagship store in New York's Herald Square with more. Mary, how bad is it?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, in terms of the bottom line, the numbers have been disappointing and retailers like Macy's here in New York have been slashing prices and continue to do so this day after Christmas in hopes of bringing in customers. You can probably tell the crowds have been growing throughout the day but the question remains will it help the bottom line for retailers?

(BEGIN VIDEOTAPE) SNOW (voice over): Crowds streamed in hoping to cash in. In New York, there wasn't much elbow room in Bloomingdale's where discounts brought in the shoppers. Over at Macy's prices were slashed by up to 75 percent. Retailers are hoping to make up for weak holiday sales. Some shoppers were ready to bargain hunt at 7:00 a.m.

UNIDENTIFIED FEMALE: Christopher (UNINTELLIGIBLE) ornaments, garland, glass ornaments, Santas, especially some of the Santas that are just so gorgeous, too expensive before Christmas, perfect now so it was great.

UNIDENTIFIED MALE: There really weren't any great sales, anything really to speak of and everything we ended up buying wasn't on sale, so it's just like any other day, you know, business as usual.

UNIDENTIFIED FEMALE: I expect prices to be very low because they seemed lower this year to begin with.

SNOW: Judging by the crowds sales appear healthy but looks can be deceiving. Federated, which owns Macy's and Bloomingdale's said earlier this week that sales were below plan for December and the world's largest retailer, Wal-Mart says while demand picked up in the four days before Christmas, it was too little, too late, and it now expects its growth target to fall short of expectations. Analysts say overall it's been a disappointing season and there's only so much stores can recoup in the last days of December.

DANA TELSEY, RETAIL ANALYST, BEAR STEARNS: This last week after Christmas will be busy. It certainly won't add as much to retailers' sales or profits given the heavy markdowns that they're incurring.

SNOW: One bright spot, gift certificates, all tolled some expect those certificates to bring in $38 billion in sales this year but the boost from retailers is seen as limited.

DARRELL HIGBY, RETAIL ANALYST: It could be a gain but I doubt that it's going to be enough to put them up to the growth level that they're looking for.

(END VIDEOTAPE)

SNOW: And the latest data came out this afternoon from shopper track, which is now saying that it expects overall this holiday season that sales will be about 11 percent lower than they were last year. It does point out though that this holiday shopping season is shorter than last year because Thanksgiving was later. And then, you know, the next hurdle facing these retailers is January. Analysts are saying that they expect a tough month for many stores -- Wolf.

BLITZER: That's not encouraging. CNN's Mary Snow at Macy's in New York City. Mary thanks very much. When we come back the growing dilemma in Israel, how to handle the Palestinian problem. In a CNN exclusive, new tactics being utilized by the Israelis designed to bypass the Palestinian Authority. Also, meet America's newest mega millionaire. Find out the Powerball winner plans to spend his windfall of wealth, but first a look at other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice over): Russian ahead, Russia and Iran have agreed to speed up work at an $800 million nuclear reactor in Iran. Russia's atomic energy minister brushed off U.S. complaints. He says there's no evidence to back up U.S. claims Iran is developing weapons of mass destruction.

Pakistani authorities are questioning several suspects in connection with yesterday's attack on a small Protestant Church. Three girls attending a Christmas service were killed. Those being questioned include an Islamic cleric, who allegedly told his congregation to kill Christians.

Reunion rally, thousands of ethnic Turks marched in favor of a plan to reunite Cyprus. Reunification would allow the entire island to join the European Union. The Mediterranean island has been divided into Greek and Turkish sectors since 1974.

They're off, Australia's annual Sydney-to-Hobart yacht race is underway. There was heavy rain as the 57 entries left Sydney harbor and a pair of collisions plagued the early competition.

Merry Christmas, and that's an order, the holiday spirit is mandatory in Moscow. The mayor ordered every business to put up Christmas decorations or face a fine.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Shortly we'll hear from the Powerball winner and find out how he's reacting to winning more than $300 million, but first we turn to an exclusive report out of the Middle East. Following waves of violence, Israeli troops have recently retaken broad areas of Palestinian territory in the West Bank. Nine years after the Oslo Accords, is Israel now turning back the clock and making its occupation official?

CNN's Jerrold Kessel has the story.

(BEGIN VIDEOTAPE)

JERROLD KESSEL, CNN CORRESPONDENT (voice over): Tanks in Ramallah, for several months Israel's reoccupation of Palestinian towns and Palestinian controlled areas of the West Bank a fact of life. Temporary, Israel says, but necessary to stop the movement of Palestinian suicide bombers.

But at the same time, Israeli official working papers obtained by CNN indicate that in some of these areas, Israel intends to put into place new measures for handling the daily lives of ordinary Palestinians, the provision of better services in education, health, social welfare, and the granting of travel and building permits. Prime Minister Ariel Sharon's spokesman acknowledging changes are being made says the measures amount to a contingency plan in the absence, he says, of peace moves.

GISSIN: With the, I would say temporary and partial collapse, I would say, of some of the services that the Palestinian Authority was providing to the citizens, it necessitates for us, particularly in areas where we are to try and provide for the Palestinian people for living conditions, healthcare, medicine, and so forth, and we're trying to do it without really reintroducing the civil administration.

KESSEL: Pressure from the U.S. has prompted discussions at the highest political and military level in recent months that focused on Israel's growing dilemma, how to tackle the contrasting needs of security and the problems of ordinary Palestinians without reverting to a full-scale civil administration.

But the ad hoc measures being introduced now are similar to the system Israel used to run the occupied Palestinian areas before they were handed over to the Palestinian Authority under the 1993 Oslo Peace Accords. A first tangible sign a few days ago, Israeli allows bus services to begin operating again between the West Bank towns, which its army now controls.

Significantly, the move was put into practice without consultation with officials of Yasser Arafat's Palestinian Authority. Palestinian leaders acknowledge that despite what the Oslo Accords say, the reality is different.

SAEB ERAKAT, PALESTINIAN CABINET MEMBER: Look, I'm an elected Palestinian representative from Jericho. I sit in my office. If a Palestinian from Jericho wants to take his fruits or horticultural products to anywhere in the West Bank, he goes to the Israeli civil administration. If a Palestinian sick person wants to leave to a hospital, he goes through the Israeli civil administration. If a Palestinian student wants to go to school or university, nobody can leave or enter my constituency without Israeli permission, so they have resumed full control and full occupation.

KESSEL: Among other things, Israeli military checkpoints, an enormous everyday hassle for Palestinians will soon have special roadside telephones for people to alert Israeli officers to problems. Dial the special number 109 and your problem will be addressed, Palestinians will be advised. The new measures will initially affect areas to the immediate north and to the south of Jerusalem around the flash point town of Tulcarum (ph), further north on the West Bank and in Southern Gaza.

All together it could have a direct impact on the lives of some 700,000 of the 3.3 million Palestinians in the West Bank and Gaza.

According to the documents obtained by CNN, the headline reads the objective is this. To encourage Palestinians and international organizations to work through the Israeli administration rather than through the Palestinian Authority. That could be viewed by some as genuinely providing help where it's really needed. Others might say it's a violation of the Oslo Accords, serving further to undermine the Palestinian Authority, challenging perhaps its very future. SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: I think the end game with this government is very obvious. Destroy the Palestinian Authority. Resume occupation and resume the old means.

KESSEL: But Prime Minister Sharon's spokesman cautions not to read too much into this.

GISSIN: In those places where we are functioning, we are working through them. Other places we try to work through the international organizations that provide relief aid. Because the most important thing is the Palestinian population. They can't wait until the Palestinian Authority will reconstitute itself.

KESSEL: Israel intentions are open to debate. The prime minister's spokesman insists the measures are but temporary. Documents obtained by CNN do not relate to this, but one fact. When Israel first introduced an Ad Hoc (ph) Civilization Administration for the Palestinians in areas it occupied after 1967, it lasted for 26 years.

(on camera): Jerrold Kessel, CNN, on Jerusalem's outskirts.

(END VIDEOTAPE)

BLITZER: I spoke with one Bush administration official, and he told me he and his colleagues were now trying to figure out precisely what the Israelis had in mind in the long run. He said Jerrold Kessel's report raises all sorts of serious questions for U.S. policy in the region. In the mean time, the Bush administration says it will with hold official comment.

A check of today's top stories right after a break. Also the big payoff. The biggest single lotto jack pot prize winner comes forward to claim his millions. We'll hear what he has to say.

And later, how to avoid some of the hassles of online gift returns.

And tax tips you need to know. What you can do between now and New Year's to potentially save you big money on taxes. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to CNN. I'm Wolf Blitzer. Coming up, hear from the man who won $315 million, the big winner in his own words. But first let's look at some other stories making news right now in this CNN news alert.

(NEWS BREAK)

BLITZER: West Virginia man has won the biggest single lottery jack pot in history and he's taking the cash in one lump sum. Andrew Jack Whittaker won $314.9 million in the powerful drawing Christmas night. Most of us can only imagine what it would be like to win a multimillion dollar lottery jackpot. We thought you'd like to hear some of what Whittaker had so say in his news conference earlier today in Charlton, West Virginia.

(BEGIN VIDEOTAPE)

ANDREW WHITTAKER, POWERBALL LOTTERY WINNER: I just want to thank god for letting me pick the right numbers or letting the machine pick the right numbers for me, and I want to say thanks to all my family that believes in me and everything. And, you know, as for your question of what I'm going to do with the money, I'm going to pay tides on it, the very first thing I do, and after that I'm going to take care of my family and then I going to expand my business.

QUESTION: What went through your mind when you first found out that you won?

WHITTAKER: Actually, I thought I had won -- I thought I had only gotten four numbers and a Powerball last night, because the numbers came up wrong on the TV screen. And I didn't know until this morning. I usually get up about 5:00. At 5:00, I got up and turned the TV on. I seen it, the ticket had been won from my gas station that I buy gas from and get a biscuit from every morning.

I told my wife that I'm selling me a Powerball of four numbers and selling somebody else the Powerball in five numbers is astronomical. I said, let me see that ticket. And I looked at that ticket and sure enough we had the winner and we were very excited. We called our daughter and then we started calling our family a and everything.

QUESTION: What are your immediate plans? What are you planning to do in the next few days?

WHITTAKER: We're going to -- I don't know. We're going to do some publicity for the lottery, for the West Virginia Lottery. We want to represent them and just do some things that they want us to do, and we want to advertise the West Virginia Lottery.

QUESTION: What's going to be the first thing you want to buy for yourself?

WHITTAKER: I'm not going to buy anything for myself. The very first thing I'm going to do is I going to go home and make out three checks to three pastors for 10 percent of this check. That's the very first thing I'm going to do. I play the lottery, every time once it reaches $100 million. I don't play if it's under $100 million. That's the truth.

QUESTION: Have you won before? Is this the first time you have won anything.

WHITTAKER: This is the first time I won anything. I have won $15, $20 out of $100.

QUESTION: How long have you been playing the (UNINTELLIGIBLE)

WHITTAKER: Every time it reaches 100 -- ever since it started. Ever since the lottery started I play. Say I win $15, the next drawing I invest another 100 and play the $15 I have won so I have got $115 worth of tickets. That's what I had for this drawing.

QUESTION: Are you going to keep playing?

WHITTAKER: Yes. I may play now when it's $10 million.

QUESTION: How do you think your life is going to change?

WHITTAKER: It's not, if I can help it, it's not going to change. I'm content with my life.

First thing I did was call my lawyer, Norm Dangles (ph), at 6:00 this morning and he's been working steady since then. And he told me stay at home until 8:00, until he notified the Lottery people and then right after 8:00, because I normally go to the office about 5:30 or 6:00 in the morning. And I just decided to get my gas and my wife was hungry. She was real nervous, and she was hungry.

So I went to get our biscuits. And we just kind of walked in and -- or I walked in. I got my gas, filled my Navigator up with gas and I walked in and paid for everything. I had to wait in line. There was -- must have been 30 people in the store or more. I had to wait in line.

I told the little girl that sold me the ticket. I told her -- I asked her, how do you feel today? Do you feel any different? She said, you won the Lottery, didn't you? I said, yes, I did. She said, no, you didn't. You're not excited enough to have won the Lottery. And just kind of pushed me on out the door.

And then the Associated Press guy, he's interviewing me because I gave the girl that makes my biscuits, I gave her $100 for Christmas and he -- I guess I caught his eye. And he just followed me all through the store interviewing me. When I got him out to the car I told him I'd be back at 11:00. He said, you didn't win nothing. You're pulling my leg.

QUESTION: You weren't excited enough.

WHITTAKER: I tell you, every morning I wake up, I feel like I have won the Lottery.

(END VIDEOTAPE)

BLITZER: Congratulations to Jack Whittaker. He loves those biscuits. He's a good man. He also says he's going to give a tenth, a tithe of that money to his church. He's a good person. Congratulations.

By the way, if you want to know the numbers look at these winning numbers that won. Five, 14, 16, 29, 53, the Powerball number was 7. Those are lucky numbers, at least they were yesterday for Jack.

It's the last minute rush to save on your 2002 taxes. What can you do before the end of this year and the next few days that can save you potentially big money on your tax bill? Also, help to avoid the headaches of trying to return gifts that were bought online. We'll have some practical advice for all of you. Stay with us.

(COMMERCIAL BREAK)

BLITZER: The day after Christmas is always a busy year (sic) for retailers as shoppers return unwanted gifts and search for after Christmas bargains. But not all of the activity on this day at the stores any more.

With more and more people shopping by computer, December 26 is a busy day online as well. Regina Lewis is an online adviser with our sister company AOL. She's in our New York bureau to help us better understand what we can do to save some money.

I guess, everyone's looking for some bargains. A lot of people were waiting for this day. What's the best deal out there right now?

REGINA LEWIS, AOL ONLINE ADVISER: There are some unbelievable deals. Keeping in mind lot of retailers are trying to unload excess inventory.

And there's another phenomenon that drives the deals online. They want to get you shopping year round. They cannot just afford for you to just shop on their site during Christmas.

So they want to give you a good deal so that you bookmark come the site and come back again and again. We're talking, Wolf, about 60, 70, 80 percent off, in some cases, online. Not a measly 30, 40 percent.

BLITZER: So where do you go? Are there any specific sites all of us should be bookmarking right now?

LEWIS: Well, when you go to a site, almost every site has a clearance or deals area. Sometimes it's a little bit hidden. It's a tab at the top. Always check that out. It's worth going to.

Also, lot of people don't realize there are the equivalent of outlet centers online, sites like Overstock.com and SmartBargains.com which guarantees the lowest prices. They aggregate lots of great deals and put them in one place. It's sort of the online equivalent of a T.J. Maxx or Marshalls or Ross.

BLITZER: What about the whole issue of shipping fees when we're looking for these bargains?

LEWIS: Here's what's happening with shipping. The offers are coming back. Free shipping was enormously popular early on in the holiday season.

Now a lot of major e-tailers are saying, hey, we've got it again on select items maybe for a limited time. Some are only promising free shipping through January 1. So you have to read the fine print. And I think it sometimes throws people to say, what do you mean they're offering it intermittently? Because the online medium is so dynamic, retailers can switch it up. So you want to be decisive.

If you see a deal online, you don't have the luxury of being able to size it up. Well there's a lot on the shelf, I'll see a lot of these sweaters. I'll come back later.

So many people say to me, wait a second. I saw it. I logged on a few hours later and it was gone. So be decisive. Grab the deal when you can and take advantage of the free shipping when it's being offered.

BLITZER: The flip side of the shipping fees, of course, is returning gifts, the gift that you got online. What's the best way to handle that?

LEWIS: There's a lot of progress on that front. Keeping in mind, a lot of the major e-tailers are the major retailers, Gap, Banana Republic, Target, Circuit City. In large part you can return items purchased online at their off-line stores, usually in a 30 day period. So that's a real great convenience for a lot of people.

Also, you might be economically incented to exchange instead of return. OldNavy.com is a good example. They give you a prepaid return package. If you return something, they'll deduct $5 from the refund. If you exchange, they won't deduct anything so essentially it's a free return.

BLITZER: I have always felt the best online gift is an online gift certificate, which is easy to just cash in and use at your favorite store. I guess those are pretty popular?

LEWIS: They were really popular this year. Another secret. Lot of people don't understand that if you have an online gift certificate, take the Gap, for example. It has a number on it. You can use that gift certificate online. And of course the deals are so terrific right now, you might want to do that.

So if someone gave you a gift certificate, even if they didn't buy it online, you can redeem it online.

BLITZER: I'd rather pick out my own tie than let someone else pick it out for me. Regina Lewis, always giving us some practical, important advice, especially around this time of year. Thank you very much for all that information.

And there's still time to save on your 2002 taxes. A look at what you need to do right now in the next few days. What you can do to save on your tax dollars. We'll have some practical advice when we come back.

(COMMERCIAL BREAK)

BLITZER: Now that the Christmas deliveries have been completed, the Postal Service is getting ready for its next big task: delivering income tax forms.

CNN's Sean Callebs reports that if you want to save money on taxes, the time to start thinking about it is right now.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): One year-ending tip: charitable donations. You can write off a certain percentage of items or cash you donate.

However, if you, say, give a car to charity, or something that is worth several thousands of dollars, the IRS mandates that you must have it appraised and mail in that appraisal with your tax form.

Another way to save a few bucks, you can pay your January mortgage in December. That will give you a slight reduction in the tax rate for next year.

In the past, stockholders have focused on capital gains. Well, let's face it. Not many people made money on stocks the past couple of years. Did you know you can write off stock losses, up to $3,000?

STAN BERGER, TAX ACCOUNTANT: Any additional capital losses over the $3,000 will be carried forward into subsequent years until used up.

CALLEBS (on camera): That's right. If you lost more than $3, 000 in stocks this year, let's say $5,000, you cannot only claim $3,000 this year, but you can claim $2,000 in the next tax year.

(voice-over): Many people get refunds, but if you get socked with a huge IRS bill, and realize that you don't have enough money to pay the bill by April 15, it is important to mail in your return on time.

BERGER: If you're going to owe a lot of money, there are penalties for not filing tax returns as well as for not paying the tax when due.

CALLEBS: And the penalty for not filing on time is greater.

Also, tax accountants say the IRS will work with you and help work out an installment plan to pay off the bill.

Sean Callebs, CNN, Atlanta.

(END VIDEOTAPE)

BLITZER: Time's running out for your turn to weigh in on our "Web Question of the Day." Do you think North Korea would actually launch a first strike nuclear attack? Log on to cnn.com/wolf.

That's where you can vote and we'll have the results immediately when we come back.

(COMMERCIAL BREAK) (INTERRUPTED BY CNN COVERAGE OF BREAKING NEWS)

BLITZER: Here's how you're weighing in on our "Web Question of the Day." Remember, we've been asking you this: "Do you think North Korea would launch a first strike nuclear attack?"

Fifty-nine percent of you said yes; 41 percent of you said no. You can find the exact total -- tally, by the way, and continue to vote. Just go to my Web site, cnn.com/wolf. This is not a scientific poll.

Let's get to your e-mail. Time to hear from you.

Pam is writing us this: "Wolf, I just wanted to say thank you for your report on PSAB." That's the Prince Sultan Air Base. "My husband has been there since August and it isn't his first time there. But finally we," his family, "have more of an understanding as to where he is and how he is living."

Art writes: "The Christmas season is being judged by retail sales being down and Powerball sales being up. The Christmas message itself seems to be lost in the equation."

Finally, Robert took exception took exception to our poll question. At least of them. He writes this: "Dear Wolf, I know your mother taught you better than to stick your nose into other people's business, such as your 'Question of the Day' re: my holiday spending. Please tell your producer it's none of his damn business. Other than that, happy holidays to you and yours."

Very nice. Thanks very much, Robert. And it's a female producer in any case. Never mind.

That's all the time we have today. Please join me tomorrow, 5:00 p.m. Eastern. Don't forget "SHOWDOWN: IRAQ," Weekdays, noon Eastern.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washintgon.

"LOU DOBBS MONEYLINE" is up next. Jan Hopkins tonight sitting in for Lou. Jan is here to tell us what she has -- Jan.

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 26, 2002 - 17:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, ANCHOR, HOST: WOLF BLITZER REPORTS starts right now. Targeted for terror; after devastating bombings of U.S. bases an exclusive look at efforts to keep American forces safe. Wanted for questioning Iraqi scientists.
UNIDENTIFIED MALE: It's up to the individual really. We can't force people to conduct interviews if they don't want to.

BLITZER: What will happen to scientists who tell what they know. We'll hear from Saddam Hussein's former bomb maker. Fuel rod fears, are North Korea scientists out to make nuclear weapons. Another CNN exclusive turning back the clock, is Israel taking over again in the West Bank.

RA'ANAN GISSIN, PM SHARON'S SPOKESMAN: Try and provide for the Palestinian people for living conditions, healthcare, medicine, and so forth.

UNIDENTIFIED MALE: I think the end game of this government is very obvious, destroy the Palestinian Authority.

BLITZER: The day after, digging out and digging for bargains. And hitting the jackpot, a Powerball winner has no more need for bargains.

UNIDENTIFIED MALE: I looked at that ticket and sure enough we had the winner. It's Thursday, December 26, 2002. I'm Wolf Blitzer in Washington. There's word of new preparations for possible war with Iraq. The "New York Times" is reporting a high tech radar system has been deployed at a U.S. base in Qatar to warn of Iraqi missile launches but protecting troops from incoming Scuds is only part of the challenge.

Terrorist attacks have killed hundreds of U.S. forces in the Middle East teaching the Pentagon hard lessons about security. I recently saw them in action when I was granted exclusive access to the Prince Sultan Air ase in Saudi Arabia. We went inside for a look at things few civilians have ever seen before.

(BEGIN VIDEOTAPE)

BLITZER (voice over): We're on our way to the middle of nowhere and for American troops based in Saudi Arabia the middle of nowhere may be the safest place. As we drive through the Saudi Desert a half hour from the nearest village, the sprawling air base slowly comes into view. It's location is not a secret. Neither is the desire of al Qaeda and its supporters to attack a place like this. So, what keeps these 5,000 American men and women safe?

BLITZER (on camera): Security for U.S. military personnel here at the Prince Sultan Air Base is incredibly tight. That's in part because of what happened on June 25, 1996 at Khobar Towers elsewhere in Saudi Arabia.

BRIG. GEN. DALE WATERS, U.S. AIR FORCE: We moved the wing out here as you can see after the Khobar attack.

BLITZER (voice over): That's when the U.S. military suffered a devastating loss at what was then the main U.S. air base in Saudi Arabia. At the Khobar Towers near Dahran in the eastern part of the Kingdom, 19 American troops were killed and another 500 were wounded, many while they slept, when terrorists parked a huge tanker truck near the fence of the apartment complex before running to a waiting car.

Six minutes later, the truck exploded destroying the towers and killing the troops in the process. Investigators later determined that security procedures had been lax. It was too easy for outsiders to get close to the U.S. troops. That, of course, was also the case some 13 years earlier when a truck bomber drove up to the then U.S. Marine Headquarters outside Beirut, Lebanon and killed 241 U.S. Marines, sailors, and soldiers.

Brigadier General Dale Waters is commander of the 363rd Air Expeditionary Wing at the Prince Sultan Air Base, which is commonly called PSAB. He insists the U.S. military has learned lifesaving lessons since then.

WATERS: The big thing we did was with the help of the kingdom of Saudi Arabia is we moved our forces into a more secure location here at their air base at PSAB.

BLITZER: The base, he says, has grown quickly from a modest tent city to a huge, sprawling, and permanent complex where there are layers and layers of security. Unlike the Khobar Towers, no one can get close to the U.S. troops without going through multiple checkpoints and having lots of the right paperwork.

WATERS: The Royal Saudi Air Force provides security for our SAF base here, PSAB Air Base, and inside that we have our living and working areas. We provide American security within those compounds.

BLITZER: To the outside visitor the security arrangements are impressive.

MAJ. GEN. DONALD SHEPPERD, U.S. AIR FORCE (RET): The base itself is an unbelievable facility out in the middle of nowhere where it's easy to see people approaching from the standpoint of security. Security is never easy but it's easier because of where it is.

BLITZER: And U.S. troops at the base say they're planning on staying there for quite a while. (END VIDEOTAPE)

BLITZER: A lot of young men and women on the line in Saudi Arabia right now, security uppermost on everyone's mind right now. Iraq, meanwhile, said today it will soon comply with the United Nations' request for a list of hundreds of scientists who've worked in its weapons programs. The U.N. wants that list to decide whom to interview under the latest U.N. resolution that says scientists and their families can be taken out of Iraq for interviews.

U.S. officials say such interviews are crucial but can they really happen? CNN National Security Correspondent David Ensor has more.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Iraqi nuclear scientist Khadhir Hamza, brought secrets about Saddam Hussein's weapons with him when he defected to the west in the '90s and he says only by interviewing Iraqi scientists outside Iraq will the United Nations inspectors find out what weapons still exist.

KHADHIR HAMZA, FORMER IRAQI SCIENTIST: This could be the Achilles heel of Saddam and his weapons of mass destruction programs.

ENSOR: An Iraqi scientist's entire extended family, one former inspector says, might need to be brought out of Iraq before he or she could take freely.

RAY ZILINSKAS, FMR. WEAPONS INSPECTOR: I would certainly say grandmothers, grandfathers, well even maybe first cousins. It's hard to tell how brutal they would be because after all they're trying to make a lesson.

ENSOR: The U.N. has already started conducting some interviews inside Iraq and says it will ask scientists if they want to be moved out of the country. But General Amin, Iraqi scientist and spokesman, predicted that many will refuse including him.

GEN. HOSSAM MOHAMMED AMIN, IRAQI MONITORING DIRECTORATE: Because I don't like to leave my country and be interviewed there abroad. If there is any question (UNINTELLIGIBLE) to me, let them address it to me here in Iraq.

ENSOR: U.N. officials, like Chief Inspector Hans Blix, also say taking scientists secretly out of the country to talk would be extremely difficult.

HANS BLIX, CHIEF U.N. WEAPONS INSPECTOR: And I don't think that's what the inspectors are for, nor do I think that we are an abduction agency.

HAMZA: Even before I helped western government, once they found I was out, three attempts were made on my son's life.

ENSOR: Eventually, Hamza's immediate family did get out of Iraq and warnings were give to Baghdad not to touch his other relatives. He argues the interviews that have already started inside Iraq are a big mistake.

HAMZA: Nobody will show readiness inside Iraq to talk because this could alert the Iraqi government and end up in his death and his family members' deaths also.

(END VIDEOTAPE)

ENSOR: U.N. officials say they are currently negotiating with the U.S. and others on this tricky question. What if an Iraqi scientists and his family are brought out and then refuse to talk after all? Will they still be promised U.S. visas and resettlement? This is not, as one official said to me, an easy issue - Wolf.

BLITZER: So, I take it David there's no firm decision yet in Washington about giving asylum to anyone who says they may have vital information?

ENSOR: U.N. officials tell me that they have not got a clear statement yet from the United States that any scientist and their family can come here, and as I mentioned in the report part of the problem is what if there's a flood of scientists who decide to come out and say nothing? How do you deal with that?

BLITZER: But the bottom line is this that in the past probably the single most important source of vital information about Iraq's weapons of mass destruction have come from defectors, is that fair?

ENSOR: That's absolutely fair starting off with, of course, Saddam Hussein's son-in-law who came out and then went back and was murdered, but there have been several others and they have been the key, according to officials that I've spoken to.

BLITZER: David Ensor with important information as usual, thanks very much David for that report. North Korea, meanwhile, is moving more fuel rods to a nuclear reactor which U.N. watchdogs say they believe could be up and running within a month. The head of the International Atomic Energy Agency calls that very worrisome.

(BEGIN VIDEO CLIP)

DR. MOHAMMED EL-BARADEI, DIRECTOR GENERAL IAEA (via telephone): I think they are trying to use their nuclear capability, which is supposed to be for peaceful ends, to achieve a strategic and political objective which is totally unacceptable. It's basically a policy of (UNINTELLIGIBLE).

(END VIDEO CLIP)

BLITZER: U.S. officials say they believe the north may already have a couple of nuclear warheads and could soon make more. Let's turn to an expert on these matters. Joe Circincione is of the Carnegie Endowment for International Peace. He's joining us now live from Miami. Joe thanks very much. Let's go through a little bit of nuclear power, nuclear reactors, fuel rods 101, if we can call it that. Explain to our viewers why the movement of these fuel rods may be significant. JOE CIRINCIONE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Well, the fuel rods are spent fuel rods. They've already gone through the nuclear reactor and in the process some of the uranium in them has turned into plutonium so we estimate that they have enough plutonium in them for at least six additional nuclear weapons, and if the North Koreans process this in a reprocessing facility, which they have, they could in about a year or so have enough material for six new nuclear bombs.

BLITZER: Well, in simple terms for our viewers out there and for me in particular, explain how you go from the process of moving fuel rods to building a bomb.

CIRINCIONE: Sure. Fuel rods are inserted into the reactor. The North Koreans have, and this is what they've started to open up again, a small five megawatt nuclear reactor. Each of the rods is made up of uranium and clad in a magnesium alloy. What happens is after they're taken out of the reactor, you can move them into a secure, what's called a hot cell, where you can bathe them in various chemicals basically and separate out the plutonium and the plutonium will sift out to a certain area. You can pull it together, extract it, and then use the plutonium for your nuclear device.

BLITZER: What do you see as North Korea's goal right now is escalating this crisis?

CIRINCIONE: Well, there's two views. One is that they're determined to get a nuclear weapon and there's nothing we can do to stop them so there's no point in negotiating. That seems to be the administration's point of view. The other as we just heard the president of South Korea explain is that they are trying to force the United States back to the negotiating table. I think it's that latter case.

In their own strange way they think that by reopening their nuclear weapons production facility that will encourage the United States to come to the bargaining table and conclude a comprehensive deal that will exchange the North Korean nuclear and missile programs for humanitarian and economic aid and full diplomatic recognition.

BLITZER: This is such an enormously complicated yet explosive, forgive the pun, issue. Is there a solution out there that can turn the clock back, if you will?

CIRINCIONE: Well, unlike Iraq, the North Koreans actually want to negotiate with us, and unlike Iraq, there isn't actually a good military option here. If worse comes to worse in Iraq you can see a military solution possible there. In North Korea, there really isn't one. Any conflict might escalate quickly into a second Korean War that could cause hundreds of thousands of South Korean casualties.

Fortunately, I think there is a chance to negotiate a deal with North Korea. This is what they want. They basically feel they've been ignored by the United States. What we have to do now is find a face-saving way for the administration to back off from their policy and engage the North Koreans in talks. It may be time for the administration to look for an honest (UNINTELLIGIBLE) who could open up a back channel, someone for example like Ambassador Howard Baker, our Ambassador to Japan. He might be perfect to open up a quiet channel with the North Koreans and see if there's a way of brokering a deal.

BLITZER: All right, let's see if that happens. Joe Ciricione of the Carnegie Endowment thanks for your useful information, your expertise on this most important subject.

CIRINCIONE: My pleasure, Wolf.

BLITZER: Thank you very much and Happy New Year to you as well. Here's your chance to weigh in on this story. Our web question of the day is this. Do you think North Korea would launch a first strike nuclear attack? We'll have the results later in this broadcast. Vote at cnn.com/wolf. While you're there, I'd love to hear from you. Send me your comments. I'll try to read some of them on the air each day at the end of this program. That's also, of course, where you can read my daily online column, cnn.com/wolf.

The big winner comes forward, $315 million. Find out what this man plans to do with the payout. And, Santa left retailers in the lurch but that means good news for bargain hunters, the fallout and markdowns from Christmas shopping mania. And, do you want to outsmart the IRS before it comes calling? Some end of the year tax tips to save dollars for you during tax time. You have a few more days to make some important decisions. We'll tell you what you should be doing now to save money in April. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Residents of upstate New York have spent much of the day digging out from a Nor'easter that dumped almost three feet of snow in some areas. CNN's Whitney Casey is live with us tonight in Albany, which is buried under get this, 21 inches of snow. Is that right, Whitney?

WHITNEY CASEY, CNN CORRESPONDENT: That's right, Wolf. I believe last night I was a bit delirious in the midst of that blizzard but I believe you said that this is your old stomping grounds but it was stomped all over yesterday because I guess when they dreamt of a white Christmas, they dreamt big here.

I'm just going to show you how much snow. You said 21 inches but the whole region got 18 to 32 inches and I'm six feet tall, and look how deep this gets sometimes about three feet right here. This is just sort of the accumulation. We're at a park just right across the street from where we've been all day.

Now, in addition to this, they've had snow plowers out on the street, people out shoveling, kids out shoveling, trying to earn extra money. It's been an incredible day here because it actually got up to about 32 degrees. It was pretty windy all day but it was a beautiful day and a lot of what that sun did was melt some of this gorgeous snow. Well, that has created quite a perilous commute for the night because, as you know, well when that snow melts and when it gets cold again like it is now about 18 degrees out here, that snow turns to ice and then that is ice all over the roads and it turns black and it's called black ice, so drivers beware.

But another thing that they caution about is something that this wind is creating and you can't quite see it right now but when the wind sweeps through here about 40 miles an hour as it's done at times, what it does is create a ground blizzard, and I've learned now what that is.

I'm not a meteorologist but a ground blizzard then what happens, all of this nice loose powder that looks so beautiful during the day starts swirling up out of the ground and it creates low visibility for drivers, so you've got two problems black ice and ground blizzards. I'm learning every day on the job here being from Florida, back to you Wolf.

BLITZER: You weren't that delirious yesterday when we spoke 24 hours ago. It was a mess there. The snow was coming down. I am from upstate New York but Buffalo, which is on the other side of New York State. Albany is a lovely town, the capital of New York State. How are the people coping on a random basis? You've been speaking with a lot of these people. They're sort of used to this, aren't they?

CASEY: Oh, they're very used to this but actually this was exceptional because they haven't had a white Christmas like this since 1985 and they haven't had a huge dumping like this in about ten years. This was the ninth largest snow storm that Albany has ever seen.

But, to tell you the truth, the kids were out playing today. They actually told me they couldn't sled because there's too much snow and they would just sink down to the bottom like I did on that hill. They were throwing snowballs, creating angels. They were having a great time. It really wasn't too serious because they're all out of school right now so they didn't get a snow day. That's the only thing they were bummed out about.

BLITZER: CNN's newest addition, Whitney Casey joining us from Albany today. Whitney thanks very much for the good reporting. And, as they do every year, shoppers are out in force today snatching up post Christmas bargains but there's little they can do to reverse what's being called the weakest holiday retail season in get this, 30 years. CNN's Mary Snow is live now at Macy's flagship store in New York's Herald Square with more. Mary, how bad is it?

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, in terms of the bottom line, the numbers have been disappointing and retailers like Macy's here in New York have been slashing prices and continue to do so this day after Christmas in hopes of bringing in customers. You can probably tell the crowds have been growing throughout the day but the question remains will it help the bottom line for retailers?

(BEGIN VIDEOTAPE) SNOW (voice over): Crowds streamed in hoping to cash in. In New York, there wasn't much elbow room in Bloomingdale's where discounts brought in the shoppers. Over at Macy's prices were slashed by up to 75 percent. Retailers are hoping to make up for weak holiday sales. Some shoppers were ready to bargain hunt at 7:00 a.m.

UNIDENTIFIED FEMALE: Christopher (UNINTELLIGIBLE) ornaments, garland, glass ornaments, Santas, especially some of the Santas that are just so gorgeous, too expensive before Christmas, perfect now so it was great.

UNIDENTIFIED MALE: There really weren't any great sales, anything really to speak of and everything we ended up buying wasn't on sale, so it's just like any other day, you know, business as usual.

UNIDENTIFIED FEMALE: I expect prices to be very low because they seemed lower this year to begin with.

SNOW: Judging by the crowds sales appear healthy but looks can be deceiving. Federated, which owns Macy's and Bloomingdale's said earlier this week that sales were below plan for December and the world's largest retailer, Wal-Mart says while demand picked up in the four days before Christmas, it was too little, too late, and it now expects its growth target to fall short of expectations. Analysts say overall it's been a disappointing season and there's only so much stores can recoup in the last days of December.

DANA TELSEY, RETAIL ANALYST, BEAR STEARNS: This last week after Christmas will be busy. It certainly won't add as much to retailers' sales or profits given the heavy markdowns that they're incurring.

SNOW: One bright spot, gift certificates, all tolled some expect those certificates to bring in $38 billion in sales this year but the boost from retailers is seen as limited.

DARRELL HIGBY, RETAIL ANALYST: It could be a gain but I doubt that it's going to be enough to put them up to the growth level that they're looking for.

(END VIDEOTAPE)

SNOW: And the latest data came out this afternoon from shopper track, which is now saying that it expects overall this holiday season that sales will be about 11 percent lower than they were last year. It does point out though that this holiday shopping season is shorter than last year because Thanksgiving was later. And then, you know, the next hurdle facing these retailers is January. Analysts are saying that they expect a tough month for many stores -- Wolf.

BLITZER: That's not encouraging. CNN's Mary Snow at Macy's in New York City. Mary thanks very much. When we come back the growing dilemma in Israel, how to handle the Palestinian problem. In a CNN exclusive, new tactics being utilized by the Israelis designed to bypass the Palestinian Authority. Also, meet America's newest mega millionaire. Find out the Powerball winner plans to spend his windfall of wealth, but first a look at other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice over): Russian ahead, Russia and Iran have agreed to speed up work at an $800 million nuclear reactor in Iran. Russia's atomic energy minister brushed off U.S. complaints. He says there's no evidence to back up U.S. claims Iran is developing weapons of mass destruction.

Pakistani authorities are questioning several suspects in connection with yesterday's attack on a small Protestant Church. Three girls attending a Christmas service were killed. Those being questioned include an Islamic cleric, who allegedly told his congregation to kill Christians.

Reunion rally, thousands of ethnic Turks marched in favor of a plan to reunite Cyprus. Reunification would allow the entire island to join the European Union. The Mediterranean island has been divided into Greek and Turkish sectors since 1974.

They're off, Australia's annual Sydney-to-Hobart yacht race is underway. There was heavy rain as the 57 entries left Sydney harbor and a pair of collisions plagued the early competition.

Merry Christmas, and that's an order, the holiday spirit is mandatory in Moscow. The mayor ordered every business to put up Christmas decorations or face a fine.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Shortly we'll hear from the Powerball winner and find out how he's reacting to winning more than $300 million, but first we turn to an exclusive report out of the Middle East. Following waves of violence, Israeli troops have recently retaken broad areas of Palestinian territory in the West Bank. Nine years after the Oslo Accords, is Israel now turning back the clock and making its occupation official?

CNN's Jerrold Kessel has the story.

(BEGIN VIDEOTAPE)

JERROLD KESSEL, CNN CORRESPONDENT (voice over): Tanks in Ramallah, for several months Israel's reoccupation of Palestinian towns and Palestinian controlled areas of the West Bank a fact of life. Temporary, Israel says, but necessary to stop the movement of Palestinian suicide bombers.

But at the same time, Israeli official working papers obtained by CNN indicate that in some of these areas, Israel intends to put into place new measures for handling the daily lives of ordinary Palestinians, the provision of better services in education, health, social welfare, and the granting of travel and building permits. Prime Minister Ariel Sharon's spokesman acknowledging changes are being made says the measures amount to a contingency plan in the absence, he says, of peace moves.

GISSIN: With the, I would say temporary and partial collapse, I would say, of some of the services that the Palestinian Authority was providing to the citizens, it necessitates for us, particularly in areas where we are to try and provide for the Palestinian people for living conditions, healthcare, medicine, and so forth, and we're trying to do it without really reintroducing the civil administration.

KESSEL: Pressure from the U.S. has prompted discussions at the highest political and military level in recent months that focused on Israel's growing dilemma, how to tackle the contrasting needs of security and the problems of ordinary Palestinians without reverting to a full-scale civil administration.

But the ad hoc measures being introduced now are similar to the system Israel used to run the occupied Palestinian areas before they were handed over to the Palestinian Authority under the 1993 Oslo Peace Accords. A first tangible sign a few days ago, Israeli allows bus services to begin operating again between the West Bank towns, which its army now controls.

Significantly, the move was put into practice without consultation with officials of Yasser Arafat's Palestinian Authority. Palestinian leaders acknowledge that despite what the Oslo Accords say, the reality is different.

SAEB ERAKAT, PALESTINIAN CABINET MEMBER: Look, I'm an elected Palestinian representative from Jericho. I sit in my office. If a Palestinian from Jericho wants to take his fruits or horticultural products to anywhere in the West Bank, he goes to the Israeli civil administration. If a Palestinian sick person wants to leave to a hospital, he goes through the Israeli civil administration. If a Palestinian student wants to go to school or university, nobody can leave or enter my constituency without Israeli permission, so they have resumed full control and full occupation.

KESSEL: Among other things, Israeli military checkpoints, an enormous everyday hassle for Palestinians will soon have special roadside telephones for people to alert Israeli officers to problems. Dial the special number 109 and your problem will be addressed, Palestinians will be advised. The new measures will initially affect areas to the immediate north and to the south of Jerusalem around the flash point town of Tulcarum (ph), further north on the West Bank and in Southern Gaza.

All together it could have a direct impact on the lives of some 700,000 of the 3.3 million Palestinians in the West Bank and Gaza.

According to the documents obtained by CNN, the headline reads the objective is this. To encourage Palestinians and international organizations to work through the Israeli administration rather than through the Palestinian Authority. That could be viewed by some as genuinely providing help where it's really needed. Others might say it's a violation of the Oslo Accords, serving further to undermine the Palestinian Authority, challenging perhaps its very future. SAEB ERAKAT, CHIEF PALESTINIAN NEGOTIATOR: I think the end game with this government is very obvious. Destroy the Palestinian Authority. Resume occupation and resume the old means.

KESSEL: But Prime Minister Sharon's spokesman cautions not to read too much into this.

GISSIN: In those places where we are functioning, we are working through them. Other places we try to work through the international organizations that provide relief aid. Because the most important thing is the Palestinian population. They can't wait until the Palestinian Authority will reconstitute itself.

KESSEL: Israel intentions are open to debate. The prime minister's spokesman insists the measures are but temporary. Documents obtained by CNN do not relate to this, but one fact. When Israel first introduced an Ad Hoc (ph) Civilization Administration for the Palestinians in areas it occupied after 1967, it lasted for 26 years.

(on camera): Jerrold Kessel, CNN, on Jerusalem's outskirts.

(END VIDEOTAPE)

BLITZER: I spoke with one Bush administration official, and he told me he and his colleagues were now trying to figure out precisely what the Israelis had in mind in the long run. He said Jerrold Kessel's report raises all sorts of serious questions for U.S. policy in the region. In the mean time, the Bush administration says it will with hold official comment.

A check of today's top stories right after a break. Also the big payoff. The biggest single lotto jack pot prize winner comes forward to claim his millions. We'll hear what he has to say.

And later, how to avoid some of the hassles of online gift returns.

And tax tips you need to know. What you can do between now and New Year's to potentially save you big money on taxes. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to CNN. I'm Wolf Blitzer. Coming up, hear from the man who won $315 million, the big winner in his own words. But first let's look at some other stories making news right now in this CNN news alert.

(NEWS BREAK)

BLITZER: West Virginia man has won the biggest single lottery jack pot in history and he's taking the cash in one lump sum. Andrew Jack Whittaker won $314.9 million in the powerful drawing Christmas night. Most of us can only imagine what it would be like to win a multimillion dollar lottery jackpot. We thought you'd like to hear some of what Whittaker had so say in his news conference earlier today in Charlton, West Virginia.

(BEGIN VIDEOTAPE)

ANDREW WHITTAKER, POWERBALL LOTTERY WINNER: I just want to thank god for letting me pick the right numbers or letting the machine pick the right numbers for me, and I want to say thanks to all my family that believes in me and everything. And, you know, as for your question of what I'm going to do with the money, I'm going to pay tides on it, the very first thing I do, and after that I'm going to take care of my family and then I going to expand my business.

QUESTION: What went through your mind when you first found out that you won?

WHITTAKER: Actually, I thought I had won -- I thought I had only gotten four numbers and a Powerball last night, because the numbers came up wrong on the TV screen. And I didn't know until this morning. I usually get up about 5:00. At 5:00, I got up and turned the TV on. I seen it, the ticket had been won from my gas station that I buy gas from and get a biscuit from every morning.

I told my wife that I'm selling me a Powerball of four numbers and selling somebody else the Powerball in five numbers is astronomical. I said, let me see that ticket. And I looked at that ticket and sure enough we had the winner and we were very excited. We called our daughter and then we started calling our family a and everything.

QUESTION: What are your immediate plans? What are you planning to do in the next few days?

WHITTAKER: We're going to -- I don't know. We're going to do some publicity for the lottery, for the West Virginia Lottery. We want to represent them and just do some things that they want us to do, and we want to advertise the West Virginia Lottery.

QUESTION: What's going to be the first thing you want to buy for yourself?

WHITTAKER: I'm not going to buy anything for myself. The very first thing I'm going to do is I going to go home and make out three checks to three pastors for 10 percent of this check. That's the very first thing I'm going to do. I play the lottery, every time once it reaches $100 million. I don't play if it's under $100 million. That's the truth.

QUESTION: Have you won before? Is this the first time you have won anything.

WHITTAKER: This is the first time I won anything. I have won $15, $20 out of $100.

QUESTION: How long have you been playing the (UNINTELLIGIBLE)

WHITTAKER: Every time it reaches 100 -- ever since it started. Ever since the lottery started I play. Say I win $15, the next drawing I invest another 100 and play the $15 I have won so I have got $115 worth of tickets. That's what I had for this drawing.

QUESTION: Are you going to keep playing?

WHITTAKER: Yes. I may play now when it's $10 million.

QUESTION: How do you think your life is going to change?

WHITTAKER: It's not, if I can help it, it's not going to change. I'm content with my life.

First thing I did was call my lawyer, Norm Dangles (ph), at 6:00 this morning and he's been working steady since then. And he told me stay at home until 8:00, until he notified the Lottery people and then right after 8:00, because I normally go to the office about 5:30 or 6:00 in the morning. And I just decided to get my gas and my wife was hungry. She was real nervous, and she was hungry.

So I went to get our biscuits. And we just kind of walked in and -- or I walked in. I got my gas, filled my Navigator up with gas and I walked in and paid for everything. I had to wait in line. There was -- must have been 30 people in the store or more. I had to wait in line.

I told the little girl that sold me the ticket. I told her -- I asked her, how do you feel today? Do you feel any different? She said, you won the Lottery, didn't you? I said, yes, I did. She said, no, you didn't. You're not excited enough to have won the Lottery. And just kind of pushed me on out the door.

And then the Associated Press guy, he's interviewing me because I gave the girl that makes my biscuits, I gave her $100 for Christmas and he -- I guess I caught his eye. And he just followed me all through the store interviewing me. When I got him out to the car I told him I'd be back at 11:00. He said, you didn't win nothing. You're pulling my leg.

QUESTION: You weren't excited enough.

WHITTAKER: I tell you, every morning I wake up, I feel like I have won the Lottery.

(END VIDEOTAPE)

BLITZER: Congratulations to Jack Whittaker. He loves those biscuits. He's a good man. He also says he's going to give a tenth, a tithe of that money to his church. He's a good person. Congratulations.

By the way, if you want to know the numbers look at these winning numbers that won. Five, 14, 16, 29, 53, the Powerball number was 7. Those are lucky numbers, at least they were yesterday for Jack.

It's the last minute rush to save on your 2002 taxes. What can you do before the end of this year and the next few days that can save you potentially big money on your tax bill? Also, help to avoid the headaches of trying to return gifts that were bought online. We'll have some practical advice for all of you. Stay with us.

(COMMERCIAL BREAK)

BLITZER: The day after Christmas is always a busy year (sic) for retailers as shoppers return unwanted gifts and search for after Christmas bargains. But not all of the activity on this day at the stores any more.

With more and more people shopping by computer, December 26 is a busy day online as well. Regina Lewis is an online adviser with our sister company AOL. She's in our New York bureau to help us better understand what we can do to save some money.

I guess, everyone's looking for some bargains. A lot of people were waiting for this day. What's the best deal out there right now?

REGINA LEWIS, AOL ONLINE ADVISER: There are some unbelievable deals. Keeping in mind lot of retailers are trying to unload excess inventory.

And there's another phenomenon that drives the deals online. They want to get you shopping year round. They cannot just afford for you to just shop on their site during Christmas.

So they want to give you a good deal so that you bookmark come the site and come back again and again. We're talking, Wolf, about 60, 70, 80 percent off, in some cases, online. Not a measly 30, 40 percent.

BLITZER: So where do you go? Are there any specific sites all of us should be bookmarking right now?

LEWIS: Well, when you go to a site, almost every site has a clearance or deals area. Sometimes it's a little bit hidden. It's a tab at the top. Always check that out. It's worth going to.

Also, lot of people don't realize there are the equivalent of outlet centers online, sites like Overstock.com and SmartBargains.com which guarantees the lowest prices. They aggregate lots of great deals and put them in one place. It's sort of the online equivalent of a T.J. Maxx or Marshalls or Ross.

BLITZER: What about the whole issue of shipping fees when we're looking for these bargains?

LEWIS: Here's what's happening with shipping. The offers are coming back. Free shipping was enormously popular early on in the holiday season.

Now a lot of major e-tailers are saying, hey, we've got it again on select items maybe for a limited time. Some are only promising free shipping through January 1. So you have to read the fine print. And I think it sometimes throws people to say, what do you mean they're offering it intermittently? Because the online medium is so dynamic, retailers can switch it up. So you want to be decisive.

If you see a deal online, you don't have the luxury of being able to size it up. Well there's a lot on the shelf, I'll see a lot of these sweaters. I'll come back later.

So many people say to me, wait a second. I saw it. I logged on a few hours later and it was gone. So be decisive. Grab the deal when you can and take advantage of the free shipping when it's being offered.

BLITZER: The flip side of the shipping fees, of course, is returning gifts, the gift that you got online. What's the best way to handle that?

LEWIS: There's a lot of progress on that front. Keeping in mind, a lot of the major e-tailers are the major retailers, Gap, Banana Republic, Target, Circuit City. In large part you can return items purchased online at their off-line stores, usually in a 30 day period. So that's a real great convenience for a lot of people.

Also, you might be economically incented to exchange instead of return. OldNavy.com is a good example. They give you a prepaid return package. If you return something, they'll deduct $5 from the refund. If you exchange, they won't deduct anything so essentially it's a free return.

BLITZER: I have always felt the best online gift is an online gift certificate, which is easy to just cash in and use at your favorite store. I guess those are pretty popular?

LEWIS: They were really popular this year. Another secret. Lot of people don't understand that if you have an online gift certificate, take the Gap, for example. It has a number on it. You can use that gift certificate online. And of course the deals are so terrific right now, you might want to do that.

So if someone gave you a gift certificate, even if they didn't buy it online, you can redeem it online.

BLITZER: I'd rather pick out my own tie than let someone else pick it out for me. Regina Lewis, always giving us some practical, important advice, especially around this time of year. Thank you very much for all that information.

And there's still time to save on your 2002 taxes. A look at what you need to do right now in the next few days. What you can do to save on your tax dollars. We'll have some practical advice when we come back.

(COMMERCIAL BREAK)

BLITZER: Now that the Christmas deliveries have been completed, the Postal Service is getting ready for its next big task: delivering income tax forms.

CNN's Sean Callebs reports that if you want to save money on taxes, the time to start thinking about it is right now.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): One year-ending tip: charitable donations. You can write off a certain percentage of items or cash you donate.

However, if you, say, give a car to charity, or something that is worth several thousands of dollars, the IRS mandates that you must have it appraised and mail in that appraisal with your tax form.

Another way to save a few bucks, you can pay your January mortgage in December. That will give you a slight reduction in the tax rate for next year.

In the past, stockholders have focused on capital gains. Well, let's face it. Not many people made money on stocks the past couple of years. Did you know you can write off stock losses, up to $3,000?

STAN BERGER, TAX ACCOUNTANT: Any additional capital losses over the $3,000 will be carried forward into subsequent years until used up.

CALLEBS (on camera): That's right. If you lost more than $3, 000 in stocks this year, let's say $5,000, you cannot only claim $3,000 this year, but you can claim $2,000 in the next tax year.

(voice-over): Many people get refunds, but if you get socked with a huge IRS bill, and realize that you don't have enough money to pay the bill by April 15, it is important to mail in your return on time.

BERGER: If you're going to owe a lot of money, there are penalties for not filing tax returns as well as for not paying the tax when due.

CALLEBS: And the penalty for not filing on time is greater.

Also, tax accountants say the IRS will work with you and help work out an installment plan to pay off the bill.

Sean Callebs, CNN, Atlanta.

(END VIDEOTAPE)

BLITZER: Time's running out for your turn to weigh in on our "Web Question of the Day." Do you think North Korea would actually launch a first strike nuclear attack? Log on to cnn.com/wolf.

That's where you can vote and we'll have the results immediately when we come back.

(COMMERCIAL BREAK) (INTERRUPTED BY CNN COVERAGE OF BREAKING NEWS)

BLITZER: Here's how you're weighing in on our "Web Question of the Day." Remember, we've been asking you this: "Do you think North Korea would launch a first strike nuclear attack?"

Fifty-nine percent of you said yes; 41 percent of you said no. You can find the exact total -- tally, by the way, and continue to vote. Just go to my Web site, cnn.com/wolf. This is not a scientific poll.

Let's get to your e-mail. Time to hear from you.

Pam is writing us this: "Wolf, I just wanted to say thank you for your report on PSAB." That's the Prince Sultan Air Base. "My husband has been there since August and it isn't his first time there. But finally we," his family, "have more of an understanding as to where he is and how he is living."

Art writes: "The Christmas season is being judged by retail sales being down and Powerball sales being up. The Christmas message itself seems to be lost in the equation."

Finally, Robert took exception took exception to our poll question. At least of them. He writes this: "Dear Wolf, I know your mother taught you better than to stick your nose into other people's business, such as your 'Question of the Day' re: my holiday spending. Please tell your producer it's none of his damn business. Other than that, happy holidays to you and yours."

Very nice. Thanks very much, Robert. And it's a female producer in any case. Never mind.

That's all the time we have today. Please join me tomorrow, 5:00 p.m. Eastern. Don't forget "SHOWDOWN: IRAQ," Weekdays, noon Eastern.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washintgon.

"LOU DOBBS MONEYLINE" is up next. Jan Hopkins tonight sitting in for Lou. Jan is here to tell us what she has -- Jan.

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