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CNN Wolf Blitzer Reports
Struggling Retail Giants Sears and Kmart Merge
Aired November 17, 2004 - 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, HOST: Happening now. You're looking live at this K-Mart store in New York. For the troubled retailer relief may be on the way. It's name, Sears. There's a huge merger in the works and it raises this question. What does it mean for you the consumer?
Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)
(voice-over): New nuclear concerns as Russia boasts it's working on a weapon nobody else can match. Is Iran pulling the wool over the eyes of U.N. inspectors?
Door to door. The troops tighten their hold on Falluja. But there are fires to put out elsewhere in Iraq.
Marine mystery. He disappeared in Iraq and turned up in Lebanon. We'll tell you what has now turned up in Falluja.
And Monday night fumble. What were they thinking? I'll ask insider Pat O'Brien.
ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, November 17, 2004.
(END VIDEOTAPE)
BLITZER: Like a shot out of the dark, Russian President Vladimir Putin revealed today that Russia is developing a nuclear weapon system he says unlike any now held by the United States or other nuclear powers. Is this a sign the Cold War may be coming back? Our Moscow bureau chief Jill Dougherty has more on just what this weapon system might be and why Mr. Putin says it is necessary.
(BEGIN VIDEOTAPE)
JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: President Putin made his comments as he was meeting with the top brass of the Russian military saying that Russia is developing a new nuclear missile that other countries simply do not have.
PRES. VLADIMIR PUTIN, RUSSIA (through translator): We will continue our efforts to rebuild our armed forces as a whole and their nuclear component. We're not only conducting research and successfully testing new nuclear missile systems, I'm sure that they'll be put into service within the next few years. And what's more there will be developments. There will be systems of the kind that other nuclear powers do not have and will not have in the near future.
DOUGHERTY: President Putin did not say what this weapon actually is but analysts that CNN spoke with said presumably what he's talking about is a mobile form of the Topple-M (ph) missile. That's a missile that the Russians already have. They now use it in silos. But this would be mobile. It would be able to be moved around the countryside.
President Putin did say that he still considers terrorism the key threat, one of the major threats for Russia but in order to fight that and other threats, Russia has to keep its nuclear powers in good shape. Now, many are questioning could this be a return to the Cold War, a type of arms race but these experts say no. That is not what is going on here. They say that President Putin frequently when he meets with the top brass has made some very strong statements and that essentially this is a type of P.R. both for the rest of the world and internal Russian politics showing that Russia still is a power, a nuclear power, even if it is not a superpower and that it intends to remain nuclear power. Jill Dougherty, CNN, Moscow.
(END VIDEOTAPE)
BLITZER: Here in Washington the White House is reacting cautiously to Mr. Putin's announcement saying he and President Bush had discussed the issue previously. A State Department spokesman says Russia's plans are not threatening, that's a direct quote, and consistent with current treaty obligations.
There's another serious issue for the Bush administration unfolding right now. Iran and whether it is secretly developing its own nuclear weapons. An Iranian opposition group says that's exactly what the Tehran government is doing right now. CNN's Matthew Chance reports.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): Are these the images to unearth Iran's nuclear secret? 60 acres in Tehran housing undeclared chemical, biological and nuclear facilities at least according to the dissident group that has brought them to light.
MOHAMMAD MOHADDESSIN, NATL. COUNCIL FOR RESISTANCE: (UNINTELLIGIBLE). And the order of how many (UNINTELLIGIBLE) of this regime to his nuclear apparatus is to achieve all necessary facilities for making first, nuclear bomb to reach to this point in middle 2005 which means about eight months or ten months later, next year.
CHANCE: Iranian officials insist the allegations are false timed to coincide they say with next week's meeting of the U.N.'s nuclear watchdog the IAEA but the dissident group that is making the claim has been right in the past.
JOSEPH CHINCIONE, CARNEGIE ENDOWMENT FOR PEACE: They blew the whistle on the original facility that was disclosed 2 1/2 years ago at (UNINTELLIGIBLE). That turned out to be a major secret facility. If, in fact, these charges are true, this blows a huge hole through the recently concluded Iran/E.U. agreement and would put discussion of the security council right back on the table.
CHANCE: It was only last week that Iran agreed to halt all uranium enrichment activities, part of that European brokered deal to avert a looming nuclear crisis. If these new allegations are proven, that crisis could be back on.
The U.S. and other countries remain deeply suspicious about Iran's nuclear intentions but analysts say there must be a degree of caution here too. Dissident groups provided volumes of information about Iraq's nuclear program, much of that information found to be false and the IAEA says it will be investigating this latest allegation against Iran very carefully. Matthew Chance, CNN, London.
(END VIDEOTAPE)
BLITZER: Initial reaction from the State Department stopped short of endorsing the allegation by the Iranian opposition group. But a spokesman says some of the group's previous claims have turned out to be true.
(BEGIN VIDEO CLIP)
ADAM ERELI, STATE DEPT. SPOKESMAN: We're not in a position to evaluate the credibility of this report. There have been reports -- similar reports in the past however which have proven to be -- which the IAEA has substantiated which have proven to be true. Therefore it is our hope that as the IAEA continues its investigation into Iran's nuclear program that it will take all credible information about Iran's nuclear activities into account including these reports and investigate them seriously.
(END VIDEO CLIP)
BLITZER: A European Union diplomat asked to comment on the claim, said if true, it would be a significant development.
Turning now to Iraq. It wasn't completely quiet in Falluja today. Rockets fell on a U.S. camp and marines killed seven suspected insurgents in one clash. But troops are mopping up in the city. CNN's Jane Arraf is embedded with an army unit which has been going door to door looking for insurgents and their weapons.
(BEGIN VIDEOTAPE)
JANE ARRAF, CNN CORRESPONDENT: After a week of intense combat, Falluja has been secured but that doesn't mean that it is entirely safe. The army and marines are going back into sectors that they have already been through clearing building by building. We went with a unit of the army task force that we're with as they went back into the industrial sector that they first moved through at the start of the intense combat during the defensive. But this time they were clearing building after building, breaking down every single door in that sector in the industrial area. Factories, shops, the place has been absolutely abandoned. They shot open locks with rifles. They (UNINTELLIGIBLE) with armored vehicles all in a search for weapons and gunmen. They didn't find any gunmen. No live ones. They did find some dead bodies. But what they did find in one very ordinary looking building a huge weapons depot with anti-aircraft guns, mortars, armor- piercing rounds for heavy machine guns, all the makings, they say, of a bomb factory. Jane Arraf, CNN, reporting from Fallujah.
(END VIDEOTAPE)
BLITZER: After a period of chaos, troops have regained the upper hand in the northern city of Mosul. CNN's Karl Penhaul has an update.
(COMMERCIAL BREAK)
KARL PENHAUL, CNN CORRESPONDENT (voice-over): In Mosul the scene of fighting between U.S. military, Iraqi security forces and insurgents over the last few days. U.S. military commanders tell us the situation there is stable. All the police stations which had been a focal point for insurgent attack over the last few days are now back under control of the U.S. military or the Iraqi security forces. U.S. commanders have said though that over the next few days they'll be continuing operations to take out insurgent cells believed to be based in the area. Karl Penhaul, CNN, Baghdad.
(END VIDEOTAPE)
BLITZER: And there's been a series of developments in the congressional investigation under way here in Washington into alleged corruption in the Iraq Oil for Food program. This humanitarian program began in 1996 and allowed Iraq to trade oil for goods to help Iraqis get food, medicine and other necessities all of which became scarce under strict U.N. sanctions imposed after the first Gulf War in 1991. The series of investigations have found Saddam Hussein used oil smuggling, bribes and kickbacks to generate up to $21 billion in illegal revenue. Joining us now with more on these hearings, new developments, our senior U.N. correspondent Richard Roth who is monitoring all of this for us -- Richard.
RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Wolf, here are the quick headlines. On another day of flurry of news regarding the Oil for Food potential big scandal at the U.N., that congressional hearing going on right now on Capitol Hill that you took a brief look at is the House international relations committee. Testifying right now is an official with the French bank, BNP Paribas. That's the bank that was the loan major bank dealing with all the Oil for Food accounts. $60 billion plus. This official from the bank is saying that his bank did nothing wrong.
The committee run by Henry Hyde (ph) is alleging that the bank made some mistakes in conforming with U.S. bank law. They're not going to settle this tonight. Another point, Paul Volker (ph), running the U.N. independent probe, he is still defending his refusal to have his people, witnesses, any U.N. officials who come to him to testify before the Congress. Congressmen are still outraged about that but one important senator dealing with a similar probe says he's gotten a letter from Volker, he thinks there's some progress regarding this dispute on sharing information and that there could be a better relationship ahead. Russia also denying any corruption today. The U.N. saying it's perverse to say, Wolf, there's any type of cover up. Back to you.
BLITZER: Voler, the former Federal Reserve chairman now running this investigation for the United Nations. Richard, thank you very much.
New cabinet appointment. President Bush calling on another friend to fill a top spot.
And just in case. House Republicans changing the rules to protect their leader in the event he's actually indicted.
A blue light special on Craftsman tools? Yes, it could happen. We'll tell you why.
Also ahead...
(BEGIN VIDEO CLIP)
TERRELL OWENS, NFL: I don't know how my acting skills were but you know I can't play football forever so you know I'm trying to work on the Hollywood thing.
(END VIDEO CLIP)
BLITZER: Not yet ready for prime time though after his starring role in a controversial skit, the NFL's Terrell Owens may not be quitting his day job any time soon.
(COMMERCIAL BREAK)
BLITZER: Important comings and goings in the Bush administration continuing with the announcement today of a nominee for education secretary. Our White House correspondent Suzanne Malveaux is over at the White House with an update on the latest cabinet shuffle -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, the president is naming his replacements about as fast as the departures. Today in the Roosevelt Room it was secretary of education replacing Rod Paige with Margaret Spellings. She is a top domestic policy adviser to the president on issues of education, health, and labor over the last four years. She also worked with then Governor Bush for six years in Texas on education reform. She, like her predecessor, are very much involved in pushing forward the No Child Left Behind legislation.
It is really all a part of a pattern that we're seeing by the president recently to nominate those who are close to him, his trusted advisers with whom he has had a history. Some critics say perhaps too close that will stifle some of the debate that is necessary. It was just yesterday that we saw National Security Adviser Condoleezza Rice nominated to replace Powell for secretary of state. Before that White House counsel Alberto Gonzales who was tapped for attorney general. Today also of course President Bush named his new White House counsel Harriet Myers (ph). Now -- used to be Mr. Bush's personal lawyer back in Texas. She followed the president here to the White House as staff secretary and then was promoted just last year to deputy chief of staff. But, Wolf, as you know, the president is eager to work with a new team, also eager to push forward his second term agenda.
BLITZER: Suzanne Malveaux, thank you very much. She's at the White House.
Over on Capitol Hill not far awy House Republicans have approved a rule change aimed at protecting the majority leader Tom DeLay's position should he be indicted in an ongoing criminal investigation. Our congressional correspondent Joe Johns joining us now live with more.
JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Wolf, it was another win for Tom DeLay in this lame duck session but his colleagues in the House are taking heat for it.
(BEGIN VIDEOTAPE)
(voice-over): Fearing House Majority Leader Tom DeLay could be indicted in a grand jury investigation in Texas rank-and-file Republicans in the House move to protect him from losing power, if it happens. They see the Texas case led by a prosecutor who is a Democrat as politically motivated.
REP. HENRY BONILLA (R), TEXAS: We are trying to protect members of our leadership from any crackpot district attorney in any state in the nation from taking on a political agenda and indicting any member for any frivolous cause that they think is important.
JOHNS: House Republicans voted to change a rule that requires members of the leadership to step down at least temporarily if under indictment. The new rule says they only have to step down if convicted. In the case of an indictment, a steering committee of Republicans first decides whether the charges are serious enough to require stepping aside. DeLay steadfastly defended the decision.
REP. TOM DELAY (R), MAJORITY LEADER: Democrats have decided that they're going to use politics of personal destruction to gain power, and what we are doing is protecting ourselves from those assaults. I'm not going to let the Democrats dictate who the chairman or subcommittee chairman or leadership are in the Republican majority.
JOHNS: Three associates of DeLay have been indicted in the Texas case investigating alleged violations in 2002 of a state law against corporate contributions to political campaigns. DeLay denies wrongdoing and says he hasn't even been questioned in the case. The investigation is led by Democratic prosecutor Ronnie Earle who indicted Republican Senator Kay Bailey Hutchison in an unrelated matter but dropped the case before trial. Still some House Republicans like Chris Shays of Connecticut oppose changing the rule because it rolls back a reform they put in place ten years ago to distinguish themselves from ethical lapses by some top Democrats.
REP. CHRISTOPHER SHAYS (R), CONNECTICUT: I just think it's a slippery slope that we are building momentum in and we're losing our uniqueness and our difference.
JOHNS: Democrats went on the attack.
REP. NANCY PELOSI (D), MINORITY LEADER: That the first order of business following the election on the part of the Republican majority is to lower their ethical standards for their leaders in the Congress by saying that if indicted, you can serve.
(END VIDEOTAPE)
JOHNS: A couple of points. Number one, Ronnie Earle's defenders say he has prosecuted in fact more Democrats than Republicans. Also, apparently there is no rule in the House for Democrats as to whether leaders have to step down if indicted. Pelosi says she wants to change that. Wolf, back to you.
BLITZER: Joe Johns on Capitol Hill. Thank you very much.
It's a blockbuster merger. Up next why K-Mart and Sears are coming together to the tune of $11 billion and what it may mean for shoppers. Our Mary Snow standing by with details.
Also a discovery in the Iraqi city of Falluja and its link to that mysterious disappearance and reappearance of a U.S. marine.
And this...
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I think that everything that T.O. is involved in is made into a controversy unnecessarily. It shouldn't happen.
(END VIDEO CLIP)
BLITZER: The NFL star in the center of ABC's controversial "Monday Night Football" introduction. I'll get reaction. And we'll get the inside story from the insiders, Pat O'Brien. Stay with us.
(COMMERCIAL BREAK)
BLITZER: Two well known but struggling retail chains are getting together. Kmart and Sears have agreed to an $11 billion merger. It may help both chains compete with much larger Wal-Mart. But will it help shoppers?
CNN's Mary Snow has been looking into that. She's joining us now live from outside a Big Kmart in New York -- Mary.
MARY SNOW, CNN CORRESPONDENT: Well, Wolf, it's a bit of an odd couple. Kmart known for blue light specials buying Sears, one of America's oldest department stores. Is this a good thing for consumers? Well, some say that depends on how this new couple sells itself.
(BEGIN VIDEOTAPE)
SNOW, (voice-over): Craftsman tools meet Martha Stewart sheets. They'll share the same aisles when Sears and Kmart marry. They merger combine they're roughly 3,500 stores. Together, the retailers face stiff competition. Consumers at first blush don't seem to need a hard sell.
UNIDENTIFIED FEMALE: I think when you put two of them together, stores like Target are going to have a lot of competition.
UNIDENTIFIED FEMALE: I think, it might help consumers. You know, I don't know they're going to close stores or expand or whatever.
UNIDENTIFIED MALE: I think it would be a good idea, yes. If it slows down Wal-Mart, because Wal-Mart is getting more and more of the share.
SNOW: Stealing market share from Wal-mart and Target is the stiffest challenge. Just two years ago, the fierce competition helped land Kmart in bankruptcy. Now, it will not only have to jockey for better prices, industry watchers say the new stores which will bear both the Sears and Kmart name will also have to compete for identity.
LINDA KAPLAN THALER, BRANDING EXPERT: I think the consumer are just going to be a little confused. Am I now going to go to Kmart to get tires. Am I now going to go to Sears to get, you know, a white satin sheet. I think they're is going to be a lot of confusion. Is there going to be a name change? Is there not going to be a name change ?
SNOW: Some expect the merger to result in better prices for consumers. Others point out that independently Sears and Kmart have both seen a drop in sales, will have a lot difficulty just to survive.
HOWARD DAVIDOWITZ, RETAIL ANALYST: The only way to compete with Wal-Mart is not to try out Wal-Mart Wal-Mart, but to differentiate yourself. And so far, these folks have been unsuccessful at doing it.
(END VIDEOTAPE)
SNOW: Well, some are skeptical about the success of this deal. Wall Street certainly applauded it. Stocks of both companies surged today. But consumers will only applaud this deal if Kmart is able to pass along some of the hundreds of millions of dollars it says it will save by completing this deal -- Wolf.
BLITZER: Mary Snow, reporting for us. Thank you, Mary, very much.
Mourning a murdered humanitarian. We'll take you to Ireland. That's the scene of a memorial for Margaret Hassan, the care official killed in Iraq.
Also, a strange new twist in the case of a U.S. Marine missing in Iraq and found in Lebanon.
And a civil lawsuit against Kobe Bryant gets underway. Pat O'Brien joins us with the inside story. Stay with us.
(COMMERCIAL BREAK)
ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.
BLITZER: Welcome back. He disappeared in Iraq and then reappeared in Lebanon. Now a new find in Falluja may help explain the mystery of this U.S. Marine. We'll get to that.
First though a quick check of some other stories now in the news.
On Capitol Hill, the Food and Drug Administration was under fire for the flu vaccine shortage. The agency was harshly criticized in a meeting of the House Government Reform Committee. The ranking minority member accused the agency of ignoring problems that led to the shutdown of a vaccine plant in England.
Rush Limbaugh's case is heading to the Florida Supreme Court. At issue, whether prosecutors violated the conservative radio talk show host privacy rights, when they seized his medical records to see if he was doctor shopping, as it's call. Limbaugh has not been charged, but he admitted he was addicted to prescription pain killers.
A surprise announcement from archaeologists right here in the United States. They are now saying humans may have arrived in North America 50,000 years ago. That's a long time. In fact, that's 20,000 years earlier than previously thought. The findings are based on radio carbon dating of an archaeological site along the Savannah River in South Carolina -- 50,000 years.
This year, a U.S. Marine vanished from his post in Iraq. He turned up weeks later in Lebanon,saying he had been kidnapped. The case has confounded investigators, but there's now a strange now twist.
Our Pentagon correspondent Barbara Starr reports.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Now that U.S. and Iraqi forces have established control in Falluja, the city is giving up clues, but no answers to one mystery. What happened to corporal Wassef Hassoun? He's the Marine shown in this alleged hostage videotape after disappearing from his base near Falluja this summer.
He then suddenly appeared 19 days later in Lebanon, and questions emerged about how he got there and whether the video was genuine. After returning to the United States, Hassoun publicly insisted he did not stage his own kidnapping.
CORP. WASSEF HASSOUN, U.S. MARINES: I did not desert my post. I was captured and held against my will by anti-coalition forces for 19 days. This was a very difficult and challenging time for me.
STARR: CNN has learned that troops searching a building in Falluja have found some of Hassoun's belongings, including his military identification card, some military gear and his passport. And according to one source, his uniforms found in remarkably good shape, apparently the same uniform shown in the videotape broadcast after Hassoun disappeared.
It is not clear if the discovery of Hassoun's belongings helps or hurts his contention.
(on camera): Two weeks ago, military criminal investigators finished their probe into the Hassoun case, but now with the new evidence the case remains open and no decision about whether he was a hostage or a deserter.
Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
BLITZER: Hundreds of mourners packed a memorial today for Margaret Hassan, the CARE International official kidnapped in Iraq last month and now presumed dead.
CNN's Diana Muriel reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: May the lord be with you.
DIANA MURIEL, CNN CORRESPONDENT (voice-over): Here in Ireland, the land of her birth, Margaret Hassan is remembered with love and with sorrow after her apparent violent death at the hands of Iraqi militants. It is widely thought a blindfolded Hassan was executed by a single bullet at the hands of a hooded militant. Hassan was snatched from a Baghdad street last month on her way to work as a director for the charity CARE International.
HAROLD WALKER, FORMER BRITISH AMBASSADOR TO IRAQ: She was a very splendid woman, a very slight woman in stature. She had a backbone of steel and did very good work for CARE through very stressful days.
MURIEL: Born Margaret Fitzsimons, Hassan devoted more than 30 years of her life to working in Iraq, a country she came to from London as a young bride with her Iraqi husband, Tahseen Ali Hassan.
She converted to Islam and learned the language, refusing to leave, despite the privations of the eight-year Iraq/Iran War, the first Gulf War, and the subsequent 13 years of United Nations sanctions. She traveled to the U.N. headquarters in New York to protest the sanctions in January 2003, but returned to Iraq and waited for the bombs to fall in Baghdad as the second Gulf War began in March that same year.
She was involved in countless projects, one of the most recent, a rehabilitation hospital for patients with spinal injuries. After she was captured, those patients that could made a public protest demanding her release. A doctor and a close personal friend spoke of his incomprehension at her killing.
DR. KAYDAR AL-CHALABI, BAGHDAD HOSPITAL: She feels our suffering. She was not only representing a nongovernmental organization, but she was Iraqi -- feeling the suffering of the Iraqi people.
MURIEL: It is a sentiment echoed across Iraqi society, even by those that did not know her.
It is not the Arab way to treat women like this or to kill her," says this Baghdad man, "even if she was an enemy."
But Margaret Hassan was no enemy to Iraq. According to close friends, she felt herself to be Iraqi. One of those, freelance filmmaker Felicity Arbuthnot, too emotional at the news of her Hassan's death to give an interview to CNN, told this reporter:"The Iraqis look after their own and those that help them. Every Iraqi will be shocked and appalled," she said. "Margaret had a very special place in their hearts."
Diana Muriel, CNN, London.
(END VIDEOTAPE)
BLITZER: About one month before the start of the Iraq war, Margaret Hassan spoke with CNN from Baghdad. She was interviewed by our Jim Clancy and Zain Verjee.
Zain is joining us now live from the CNN Center with her reflections on that interview -- Zain.
ZAIN VERJEE, CNN CORRESPONDENT: Wolf, I interviewed CARE's Iraq director, Margaret Hassan, in February of 2003, before the war, as you say. At the time, as you will remember, there were major concerns about a possible humanitarian catastrophe that could results if there was an invasion.
Here's a look now back at Hassan's view of Iraq then.
(BEGIN VIDEOTAPE)
MARGARET HASSAN, CARE INTERNATIONAL: People do not have any of the cushion that they had in '91, when they had money, a good standard of living. After all, Greece was -- Iraq was ranked with Greece in '91. And now it ranks amongst the poorer African nations. I think that speaks for itself.
VERJEE: Give us a sense of the food and water situation in the country, the amount of people that have those kind of accesses, and also children and their health status.
HASSAN: Well, you have to remember that Iraq was a country where the remotest village had electricity. People were used to having water at tap level in their houses. Now lots of people have no electricity. Lots of people no longer have water at tap level and have been reduced to breaking part of the network pipe and constructing a small little collecting channel so that they can collect water as it drips through.
Of course, such water will not be pure water or safe water, and this will have a detrimental effect on the health and particularly on the health of children, the most vulnerable in the population.
VERJEE: If there is a war, your looking at refugees, starvation, disease, more displacement, and all sorts of things like that. How is CARE planning for that sort of situation? How are you going to handle that?
HASSAN: Well, we're planning in a very small way to continue doing what we do now, which is intervention in water and health care, which is what we've been doing for the last 12 years.
But this is a catastrophe beyond the capabilities of any aid agency if the infrastructure, because of lack of electricity, ceases to function properly.
(END VIDEOTAPE)
VERJEE: Wolf, the Iraqis who knew her say that her loss is a blow to all Iraqis. Billboards in Baghdad that were part of a campaign for information on her whereabouts show Margaret Hassan holding a sick Iraqi child and the caption reads, "Margaret Hassan is truly a daughter of Iraq" -- Wolf.
BLITZER: What a tragedy, indeed. Zain Verjee, thanks very much for that report.
Fresh fallout from the "Monday Night Football" flap -- what the head of the FCC is now saying about that risque spot.
Also, speaking of risque, nude on the news. Why did one anchorwoman bear it all? I'll give you a clue: ratings.
A year of the governator. We'll talk about Arnold Schwarzenegger's anniversary with "The Insider"'s Pat O'Brien.
And out of the oven, thanks to a presidential pardon. All that coming up.
First, though, a quick look at some other news making headlines around the world.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): Bombs exploded at banks in Buenos Aires, Argentina, including a branch of the U.S.-based Citibank. One security guard was killed. There's no claim of responsibility. And one U.S. official says there's no evidence of involvement by international terrorists. Rude welcome. Anti-globalization protesters clashed with police in Chili, where Pacific Rim leaders are arriving for a summit that begins Saturday. President Bush is scheduled to attend.
Colombia floods. Government officials are promising to step up relief efforts in northern Colombia, where floods and landslides have left thousands without homes. Torrential rains and their aftermath have killed at least 14 people.
And that's our look around the world.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
BLITZER: The game is long over, but the controversy over ABC's risque "Monday Night Football" introduction refuses to die.
CNN's Brian Todd has been monitoring the fallout and he's joining us now live with the latest developments -- Brian.
BRIAN TODD, CNN CORRESPONDENT: Wolf, there was a delayed reaction all week to this story. It didn't really blow up until almost a full day after the "Monday Night Football" skit aired. But now it has got a network, a pro football team and a powerful sports league circling the wagons.
(BEGIN VIDEOTAPE)
TODD (voice-over): This was clearly not a towel malfunction.
(BEGIN VIDEO CLIP, "MONDAY NIGHT FOOTBALL")
NICOLETTE SHERIDAN, ACTRESS: Terrell, wait.
(END VIDEO CLIP)
TODD: But there are plenty of questions and criticism over this week's opening of "Monday Night Football." The who-knew-what-when question is central.
UNIDENTIFIED MALE: I think everybody who has issued these ham- handed, half-hearted we didn't know what was going to happen, I think everybody is being a little disingenuous.
TODD: That's leveled partially at the NFL, which is also taking heat for publicly rebuking ABC for the skit while its teams feature scantily clad cheerleaders on the sidelines.
HOWARD KURTZ, "RELIABLE SOURCES": Look, professional football has used sex for a long time to try to peddle its product. No shock there. But there's a line or there are certain lines that you shouldn't cross.
TODD: On Tuesday, an NFL official told us the league had no advance knowledge of this production. On Wednesday, when we tried to get the NFL to elaborate on that and to respond to charges of hypocrisy, league officials did not return our calls.
For their part, the Philadelphia Eagles don't deny cooperating in the production. But the Eagles and their star receiver who is in the skit, Terrell Owens, implied they didn't know how the finished product would turn out. In a statement, the Eagles say -- quote -- "We appreciate ABC has taken responsibility and apologized to 'Monday Night Football.' It is normal for teams to cooperate with ABC in the development of an opening for its broadcast. After seeing the final piece, we wish it hadn't aired."
Owens was also quoted by CNN affiliate WPVI as saying Eagle officials threw him into the project. Contacted by CNN, two Eagles officials would not comment on that charge and wouldn't say whether the team had any contact at any time with the NFL over the production. ABC would give us no further comment beyond its apology. Everyone is circling the wagons, even on the most basic questions.
TERRELL OWENS, NFL PLAYER: I can't play football forever, so I'm trying to work on the Hollywood thing.
QUESTION: She wasn't really naked, was she?
(LAUGHTER)
OWENS: I'm not telling.
TODD: Officials at the Federal Communications Commission tell CNN they are still reviewing thousands of complaints over the production. In an interview with CNBC, the FCC commission had his own choice words for the network at the center of it all owned by Disney.
MICHAEL POWELL, FEDERAL COMMUNICATIONS COMMISSION CHAIRMAN: Well, I think it just sort of very disappointing. I wonder if Walt Disney would be proud.
(END VIDEOTAPE)
TODD: Now, the FCC could eventually fine ABC over this. What do fans and viewers make of this controversy? Well, we took a sampling of radio talk stations.
Executives at those stations tell us reaction has been mixed over the indecency question and the racial component. And they say, interestingly, that calls didn't really start pouring in until the hosts brought up the topic. Wolf, it's a big criticism that this is a media-driven controversy.
BLITZER: All right, thanks very much, Brian Todd, for contributing.
(LAUGHTER)
TODD: All right.
BLITZER: Here's your chance to weigh in on this story. Our Web question of the day is this: Was ABC's opening to the Philadelphia- Dallas game Monday night inappropriate? You can vote right now. Go to CNN.com/Wolf. We'll have the results a little bit later.
And speaking of nudity and sports and all of that, was it art for art's sake or art for ratings' sake? A Cleveland television news anchor appeared bare naked on her 11:00 p.m. broadcast in a story about an artist who staged mass displays of nudity all over the world. The news director of station WOIO, which is a CBS and CNN affiliate, says the story was meant to boost audiences during the crucial November ratings period. It did.
Monday's newscast drew a record number of viewers and the station has scheduled a follow-up report. What a surprise.
More on the controversy surrounding the "Monday Night Football" from "The Insider." That would be Pat O'Brien. He's standing by to join us live.
Plus, Arnold Schwarzenegger is marking his first year in office. But how is the California governor faring? We'll find out.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: The football flap lives on, even after ABC apologized for its risque opening to "Monday Night Football."
For the inside scoop on that and other stories, we're joined, as we are every Wednesday, Pat O'Brien, the host of the syndicated show "The Insider."
All right, give us the inside story. What happened, Pat? What were they thinking?
PAT O'BRIEN, "THE INSIDER": Well, first of all, I think I know why ABC and the NFL apologized. The score was 49-21. It wasn't a very good football game.
But this is one of those stories -- and you were right when you were talking about it a little while ago. The media response and the apologies make it a much bigger story than it should have been, maybe. What we saw, what I saw, what you saw was not much more than you would see on a soap opera. The difference is, it was at 6:00 on the East time. A lot more people are watching. It's supposed to be in front of a football.
There was -- quote, unquote -- nudity. Terrell Owens talked to us today. I'll give you these "Insider" facts, which you can see on "The Insider" tonight at 7:00 in New York, 7:30 in L.A., and check your local listings.
Eight rehearsals. They did eight takes of the moves. She was wearing some short pants, some colorless pants that you can see -- if you watch our show tonight, you can actually see them right below her waist. And the controversy really stems from, after the apology, people started thinking about it. And there really were a lot of people who were sitting on their couches with your 6-year-old sons or daughters and 12-year-old daughters. And the word for it probably would be inappropriate. And that's the words that came out in the apology.
BLITZER: And is it started at 9:00 on the East Coast, 6:00 p.m. on the West Coast. And a lot of young people clearly watching at 6:00 or at 9:00.
But if you didn't know watch "Desperate Housewives," if you didn't know what the spoof was all about...
O'BRIEN: You wouldn't know what was going on.
BLITZER: ... you would be totally confused. You would just see this and you're saying to yourself, what is going on here?
O'BRIEN: Yes, and her role -- Nicolette's role on that show is one of a seductress and a sexy seductress.
And so here we have her in a locker room of a football game. So, if you had no idea what the show was about -- and, by the way, not many people don't, because it is a huge hit show -- but if you had no idea, you would really, really wonder what was going on here.
Now, I don't think the FCC has a legitimate fining complaint. I know they came out and said inappropriate and what would Walt Disney think, Disney being the folks who own ABC. But it's not like somebody swore. It's not like there was a swear word that came out on the air that you would be responsible for or nudity that CBS is looking at a $550,000 fine for. This was something different.
Put your own label on it. I won't here. But people are saying inappropriate. I don't think you can be fined for that.
BLITZER: Today, the first hearing started today in the civil lawsuit involving Kobe Bryant and the woman who is accusing him of rape. I'm surprised there hasn't been a financial settlement yet.
O'BRIEN: Well, we don't know if there has or hasn't been. You remember the apology in the letter that -- news release they put out that was written by 50 or 60 lawyers, probably.
But this started the first day of -- in a civil suit, as you know, it depends on what people want to do, if they want some sort of public vindication or if they want money. That's what civil suits are about. Usually, they become, in some lawyers' circles, settlement suits. Now, there is a report that she might file another suit.
In Colorado, you are limited to only $773 in damages on these civil suits in these kinds of cases. If you file one in Orange County, I don't know if the sky is the limit, but it is a lot more. So there could be another suit followed in that case.
BLITZER: What is the fallout from the Quincy Jones-Vibe Awards melee the other night which got pretty violent? O'BRIEN: It did get violent. Nobody knows exactly why it started.
We're told that and we reported on "The Insider" that somebody came up and just decked Dr. Dre in the face out of nowhere and then all heck broke loose in this auditorium. It is a 2-year-old award show. So it's not one that is in a huge place. It was in a hanger in Santa Monica. Security probably wasn't as big as it, obviously, at the Oscars or Emmys.
But it was quite a battle. And there were a lot of -- by the way, a lot of cheap shots taken in that battle. The young man who was stabbed is in stable condition. So thank God he's not going to be hurt much more than we thought. We thought he was in much worse condition. But it was a big mess. Quincy Jones was fine. And the people on stage were rushed off and it was over with.
BLITZER: Finally, Pat, Arnold Schwarzenegger, he has been in office now for about a year, first year anniversary. A lot of speculation he wants to go up, despite the fact he was born in Austria.
O'BRIEN: Well, he's not stupid. He sees how people react to him. And so do you. They have been on your show. They have been on our show.
And as he goes across the country, he's bigger than just a politician. He's bigger than life. You call him Arnold. We don't call him the governor. You call him Arnold. He has got one name. He's like Madonna. But he's also a very good politician, very -- knows how to walk his way through politics. And you and I have studded politics and economics together, as a matter of fact. And he's done a great job in the state of California. They are already seeing some growth. They have stepped out in front on stem cell research.
He's going around the world getting people to buy California. Employment is better here. So he's doing a great job. Whether he can get another constitutional amendment, that is another story.
BLITZER: Pat O'Brien, the host of "The Insider," thanks, as usual.
O'BRIEN: See you next week.
BLITZER: And the results of our Web question of the day, that is coming up next.
(COMMERCIAL BREAK)
BLITZER: Here are the results of our Web question of the day. Remember, though, this is not a scientific poll.
A presidential pardon, it's our picture of the day. The president took two turkeys off the menu, pardoning them in the traditional White House ceremony. "LOU DOBBS TONIGHT" starts right now.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired November 17, 2004 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now. You're looking live at this K-Mart store in New York. For the troubled retailer relief may be on the way. It's name, Sears. There's a huge merger in the works and it raises this question. What does it mean for you the consumer?
Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)
(voice-over): New nuclear concerns as Russia boasts it's working on a weapon nobody else can match. Is Iran pulling the wool over the eyes of U.N. inspectors?
Door to door. The troops tighten their hold on Falluja. But there are fires to put out elsewhere in Iraq.
Marine mystery. He disappeared in Iraq and turned up in Lebanon. We'll tell you what has now turned up in Falluja.
And Monday night fumble. What were they thinking? I'll ask insider Pat O'Brien.
ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, November 17, 2004.
(END VIDEOTAPE)
BLITZER: Like a shot out of the dark, Russian President Vladimir Putin revealed today that Russia is developing a nuclear weapon system he says unlike any now held by the United States or other nuclear powers. Is this a sign the Cold War may be coming back? Our Moscow bureau chief Jill Dougherty has more on just what this weapon system might be and why Mr. Putin says it is necessary.
(BEGIN VIDEOTAPE)
JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: President Putin made his comments as he was meeting with the top brass of the Russian military saying that Russia is developing a new nuclear missile that other countries simply do not have.
PRES. VLADIMIR PUTIN, RUSSIA (through translator): We will continue our efforts to rebuild our armed forces as a whole and their nuclear component. We're not only conducting research and successfully testing new nuclear missile systems, I'm sure that they'll be put into service within the next few years. And what's more there will be developments. There will be systems of the kind that other nuclear powers do not have and will not have in the near future.
DOUGHERTY: President Putin did not say what this weapon actually is but analysts that CNN spoke with said presumably what he's talking about is a mobile form of the Topple-M (ph) missile. That's a missile that the Russians already have. They now use it in silos. But this would be mobile. It would be able to be moved around the countryside.
President Putin did say that he still considers terrorism the key threat, one of the major threats for Russia but in order to fight that and other threats, Russia has to keep its nuclear powers in good shape. Now, many are questioning could this be a return to the Cold War, a type of arms race but these experts say no. That is not what is going on here. They say that President Putin frequently when he meets with the top brass has made some very strong statements and that essentially this is a type of P.R. both for the rest of the world and internal Russian politics showing that Russia still is a power, a nuclear power, even if it is not a superpower and that it intends to remain nuclear power. Jill Dougherty, CNN, Moscow.
(END VIDEOTAPE)
BLITZER: Here in Washington the White House is reacting cautiously to Mr. Putin's announcement saying he and President Bush had discussed the issue previously. A State Department spokesman says Russia's plans are not threatening, that's a direct quote, and consistent with current treaty obligations.
There's another serious issue for the Bush administration unfolding right now. Iran and whether it is secretly developing its own nuclear weapons. An Iranian opposition group says that's exactly what the Tehran government is doing right now. CNN's Matthew Chance reports.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): Are these the images to unearth Iran's nuclear secret? 60 acres in Tehran housing undeclared chemical, biological and nuclear facilities at least according to the dissident group that has brought them to light.
MOHAMMAD MOHADDESSIN, NATL. COUNCIL FOR RESISTANCE: (UNINTELLIGIBLE). And the order of how many (UNINTELLIGIBLE) of this regime to his nuclear apparatus is to achieve all necessary facilities for making first, nuclear bomb to reach to this point in middle 2005 which means about eight months or ten months later, next year.
CHANCE: Iranian officials insist the allegations are false timed to coincide they say with next week's meeting of the U.N.'s nuclear watchdog the IAEA but the dissident group that is making the claim has been right in the past.
JOSEPH CHINCIONE, CARNEGIE ENDOWMENT FOR PEACE: They blew the whistle on the original facility that was disclosed 2 1/2 years ago at (UNINTELLIGIBLE). That turned out to be a major secret facility. If, in fact, these charges are true, this blows a huge hole through the recently concluded Iran/E.U. agreement and would put discussion of the security council right back on the table.
CHANCE: It was only last week that Iran agreed to halt all uranium enrichment activities, part of that European brokered deal to avert a looming nuclear crisis. If these new allegations are proven, that crisis could be back on.
The U.S. and other countries remain deeply suspicious about Iran's nuclear intentions but analysts say there must be a degree of caution here too. Dissident groups provided volumes of information about Iraq's nuclear program, much of that information found to be false and the IAEA says it will be investigating this latest allegation against Iran very carefully. Matthew Chance, CNN, London.
(END VIDEOTAPE)
BLITZER: Initial reaction from the State Department stopped short of endorsing the allegation by the Iranian opposition group. But a spokesman says some of the group's previous claims have turned out to be true.
(BEGIN VIDEO CLIP)
ADAM ERELI, STATE DEPT. SPOKESMAN: We're not in a position to evaluate the credibility of this report. There have been reports -- similar reports in the past however which have proven to be -- which the IAEA has substantiated which have proven to be true. Therefore it is our hope that as the IAEA continues its investigation into Iran's nuclear program that it will take all credible information about Iran's nuclear activities into account including these reports and investigate them seriously.
(END VIDEO CLIP)
BLITZER: A European Union diplomat asked to comment on the claim, said if true, it would be a significant development.
Turning now to Iraq. It wasn't completely quiet in Falluja today. Rockets fell on a U.S. camp and marines killed seven suspected insurgents in one clash. But troops are mopping up in the city. CNN's Jane Arraf is embedded with an army unit which has been going door to door looking for insurgents and their weapons.
(BEGIN VIDEOTAPE)
JANE ARRAF, CNN CORRESPONDENT: After a week of intense combat, Falluja has been secured but that doesn't mean that it is entirely safe. The army and marines are going back into sectors that they have already been through clearing building by building. We went with a unit of the army task force that we're with as they went back into the industrial sector that they first moved through at the start of the intense combat during the defensive. But this time they were clearing building after building, breaking down every single door in that sector in the industrial area. Factories, shops, the place has been absolutely abandoned. They shot open locks with rifles. They (UNINTELLIGIBLE) with armored vehicles all in a search for weapons and gunmen. They didn't find any gunmen. No live ones. They did find some dead bodies. But what they did find in one very ordinary looking building a huge weapons depot with anti-aircraft guns, mortars, armor- piercing rounds for heavy machine guns, all the makings, they say, of a bomb factory. Jane Arraf, CNN, reporting from Fallujah.
(END VIDEOTAPE)
BLITZER: After a period of chaos, troops have regained the upper hand in the northern city of Mosul. CNN's Karl Penhaul has an update.
(COMMERCIAL BREAK)
KARL PENHAUL, CNN CORRESPONDENT (voice-over): In Mosul the scene of fighting between U.S. military, Iraqi security forces and insurgents over the last few days. U.S. military commanders tell us the situation there is stable. All the police stations which had been a focal point for insurgent attack over the last few days are now back under control of the U.S. military or the Iraqi security forces. U.S. commanders have said though that over the next few days they'll be continuing operations to take out insurgent cells believed to be based in the area. Karl Penhaul, CNN, Baghdad.
(END VIDEOTAPE)
BLITZER: And there's been a series of developments in the congressional investigation under way here in Washington into alleged corruption in the Iraq Oil for Food program. This humanitarian program began in 1996 and allowed Iraq to trade oil for goods to help Iraqis get food, medicine and other necessities all of which became scarce under strict U.N. sanctions imposed after the first Gulf War in 1991. The series of investigations have found Saddam Hussein used oil smuggling, bribes and kickbacks to generate up to $21 billion in illegal revenue. Joining us now with more on these hearings, new developments, our senior U.N. correspondent Richard Roth who is monitoring all of this for us -- Richard.
RICHARD ROTH, CNN SR. U.N. CORRESPONDENT: Wolf, here are the quick headlines. On another day of flurry of news regarding the Oil for Food potential big scandal at the U.N., that congressional hearing going on right now on Capitol Hill that you took a brief look at is the House international relations committee. Testifying right now is an official with the French bank, BNP Paribas. That's the bank that was the loan major bank dealing with all the Oil for Food accounts. $60 billion plus. This official from the bank is saying that his bank did nothing wrong.
The committee run by Henry Hyde (ph) is alleging that the bank made some mistakes in conforming with U.S. bank law. They're not going to settle this tonight. Another point, Paul Volker (ph), running the U.N. independent probe, he is still defending his refusal to have his people, witnesses, any U.N. officials who come to him to testify before the Congress. Congressmen are still outraged about that but one important senator dealing with a similar probe says he's gotten a letter from Volker, he thinks there's some progress regarding this dispute on sharing information and that there could be a better relationship ahead. Russia also denying any corruption today. The U.N. saying it's perverse to say, Wolf, there's any type of cover up. Back to you.
BLITZER: Voler, the former Federal Reserve chairman now running this investigation for the United Nations. Richard, thank you very much.
New cabinet appointment. President Bush calling on another friend to fill a top spot.
And just in case. House Republicans changing the rules to protect their leader in the event he's actually indicted.
A blue light special on Craftsman tools? Yes, it could happen. We'll tell you why.
Also ahead...
(BEGIN VIDEO CLIP)
TERRELL OWENS, NFL: I don't know how my acting skills were but you know I can't play football forever so you know I'm trying to work on the Hollywood thing.
(END VIDEO CLIP)
BLITZER: Not yet ready for prime time though after his starring role in a controversial skit, the NFL's Terrell Owens may not be quitting his day job any time soon.
(COMMERCIAL BREAK)
BLITZER: Important comings and goings in the Bush administration continuing with the announcement today of a nominee for education secretary. Our White House correspondent Suzanne Malveaux is over at the White House with an update on the latest cabinet shuffle -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Wolf, the president is naming his replacements about as fast as the departures. Today in the Roosevelt Room it was secretary of education replacing Rod Paige with Margaret Spellings. She is a top domestic policy adviser to the president on issues of education, health, and labor over the last four years. She also worked with then Governor Bush for six years in Texas on education reform. She, like her predecessor, are very much involved in pushing forward the No Child Left Behind legislation.
It is really all a part of a pattern that we're seeing by the president recently to nominate those who are close to him, his trusted advisers with whom he has had a history. Some critics say perhaps too close that will stifle some of the debate that is necessary. It was just yesterday that we saw National Security Adviser Condoleezza Rice nominated to replace Powell for secretary of state. Before that White House counsel Alberto Gonzales who was tapped for attorney general. Today also of course President Bush named his new White House counsel Harriet Myers (ph). Now -- used to be Mr. Bush's personal lawyer back in Texas. She followed the president here to the White House as staff secretary and then was promoted just last year to deputy chief of staff. But, Wolf, as you know, the president is eager to work with a new team, also eager to push forward his second term agenda.
BLITZER: Suzanne Malveaux, thank you very much. She's at the White House.
Over on Capitol Hill not far awy House Republicans have approved a rule change aimed at protecting the majority leader Tom DeLay's position should he be indicted in an ongoing criminal investigation. Our congressional correspondent Joe Johns joining us now live with more.
JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Wolf, it was another win for Tom DeLay in this lame duck session but his colleagues in the House are taking heat for it.
(BEGIN VIDEOTAPE)
(voice-over): Fearing House Majority Leader Tom DeLay could be indicted in a grand jury investigation in Texas rank-and-file Republicans in the House move to protect him from losing power, if it happens. They see the Texas case led by a prosecutor who is a Democrat as politically motivated.
REP. HENRY BONILLA (R), TEXAS: We are trying to protect members of our leadership from any crackpot district attorney in any state in the nation from taking on a political agenda and indicting any member for any frivolous cause that they think is important.
JOHNS: House Republicans voted to change a rule that requires members of the leadership to step down at least temporarily if under indictment. The new rule says they only have to step down if convicted. In the case of an indictment, a steering committee of Republicans first decides whether the charges are serious enough to require stepping aside. DeLay steadfastly defended the decision.
REP. TOM DELAY (R), MAJORITY LEADER: Democrats have decided that they're going to use politics of personal destruction to gain power, and what we are doing is protecting ourselves from those assaults. I'm not going to let the Democrats dictate who the chairman or subcommittee chairman or leadership are in the Republican majority.
JOHNS: Three associates of DeLay have been indicted in the Texas case investigating alleged violations in 2002 of a state law against corporate contributions to political campaigns. DeLay denies wrongdoing and says he hasn't even been questioned in the case. The investigation is led by Democratic prosecutor Ronnie Earle who indicted Republican Senator Kay Bailey Hutchison in an unrelated matter but dropped the case before trial. Still some House Republicans like Chris Shays of Connecticut oppose changing the rule because it rolls back a reform they put in place ten years ago to distinguish themselves from ethical lapses by some top Democrats.
REP. CHRISTOPHER SHAYS (R), CONNECTICUT: I just think it's a slippery slope that we are building momentum in and we're losing our uniqueness and our difference.
JOHNS: Democrats went on the attack.
REP. NANCY PELOSI (D), MINORITY LEADER: That the first order of business following the election on the part of the Republican majority is to lower their ethical standards for their leaders in the Congress by saying that if indicted, you can serve.
(END VIDEOTAPE)
JOHNS: A couple of points. Number one, Ronnie Earle's defenders say he has prosecuted in fact more Democrats than Republicans. Also, apparently there is no rule in the House for Democrats as to whether leaders have to step down if indicted. Pelosi says she wants to change that. Wolf, back to you.
BLITZER: Joe Johns on Capitol Hill. Thank you very much.
It's a blockbuster merger. Up next why K-Mart and Sears are coming together to the tune of $11 billion and what it may mean for shoppers. Our Mary Snow standing by with details.
Also a discovery in the Iraqi city of Falluja and its link to that mysterious disappearance and reappearance of a U.S. marine.
And this...
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I think that everything that T.O. is involved in is made into a controversy unnecessarily. It shouldn't happen.
(END VIDEO CLIP)
BLITZER: The NFL star in the center of ABC's controversial "Monday Night Football" introduction. I'll get reaction. And we'll get the inside story from the insiders, Pat O'Brien. Stay with us.
(COMMERCIAL BREAK)
BLITZER: Two well known but struggling retail chains are getting together. Kmart and Sears have agreed to an $11 billion merger. It may help both chains compete with much larger Wal-Mart. But will it help shoppers?
CNN's Mary Snow has been looking into that. She's joining us now live from outside a Big Kmart in New York -- Mary.
MARY SNOW, CNN CORRESPONDENT: Well, Wolf, it's a bit of an odd couple. Kmart known for blue light specials buying Sears, one of America's oldest department stores. Is this a good thing for consumers? Well, some say that depends on how this new couple sells itself.
(BEGIN VIDEOTAPE)
SNOW, (voice-over): Craftsman tools meet Martha Stewart sheets. They'll share the same aisles when Sears and Kmart marry. They merger combine they're roughly 3,500 stores. Together, the retailers face stiff competition. Consumers at first blush don't seem to need a hard sell.
UNIDENTIFIED FEMALE: I think when you put two of them together, stores like Target are going to have a lot of competition.
UNIDENTIFIED FEMALE: I think, it might help consumers. You know, I don't know they're going to close stores or expand or whatever.
UNIDENTIFIED MALE: I think it would be a good idea, yes. If it slows down Wal-Mart, because Wal-Mart is getting more and more of the share.
SNOW: Stealing market share from Wal-mart and Target is the stiffest challenge. Just two years ago, the fierce competition helped land Kmart in bankruptcy. Now, it will not only have to jockey for better prices, industry watchers say the new stores which will bear both the Sears and Kmart name will also have to compete for identity.
LINDA KAPLAN THALER, BRANDING EXPERT: I think the consumer are just going to be a little confused. Am I now going to go to Kmart to get tires. Am I now going to go to Sears to get, you know, a white satin sheet. I think they're is going to be a lot of confusion. Is there going to be a name change? Is there not going to be a name change ?
SNOW: Some expect the merger to result in better prices for consumers. Others point out that independently Sears and Kmart have both seen a drop in sales, will have a lot difficulty just to survive.
HOWARD DAVIDOWITZ, RETAIL ANALYST: The only way to compete with Wal-Mart is not to try out Wal-Mart Wal-Mart, but to differentiate yourself. And so far, these folks have been unsuccessful at doing it.
(END VIDEOTAPE)
SNOW: Well, some are skeptical about the success of this deal. Wall Street certainly applauded it. Stocks of both companies surged today. But consumers will only applaud this deal if Kmart is able to pass along some of the hundreds of millions of dollars it says it will save by completing this deal -- Wolf.
BLITZER: Mary Snow, reporting for us. Thank you, Mary, very much.
Mourning a murdered humanitarian. We'll take you to Ireland. That's the scene of a memorial for Margaret Hassan, the care official killed in Iraq.
Also, a strange new twist in the case of a U.S. Marine missing in Iraq and found in Lebanon.
And a civil lawsuit against Kobe Bryant gets underway. Pat O'Brien joins us with the inside story. Stay with us.
(COMMERCIAL BREAK)
ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.
BLITZER: Welcome back. He disappeared in Iraq and then reappeared in Lebanon. Now a new find in Falluja may help explain the mystery of this U.S. Marine. We'll get to that.
First though a quick check of some other stories now in the news.
On Capitol Hill, the Food and Drug Administration was under fire for the flu vaccine shortage. The agency was harshly criticized in a meeting of the House Government Reform Committee. The ranking minority member accused the agency of ignoring problems that led to the shutdown of a vaccine plant in England.
Rush Limbaugh's case is heading to the Florida Supreme Court. At issue, whether prosecutors violated the conservative radio talk show host privacy rights, when they seized his medical records to see if he was doctor shopping, as it's call. Limbaugh has not been charged, but he admitted he was addicted to prescription pain killers.
A surprise announcement from archaeologists right here in the United States. They are now saying humans may have arrived in North America 50,000 years ago. That's a long time. In fact, that's 20,000 years earlier than previously thought. The findings are based on radio carbon dating of an archaeological site along the Savannah River in South Carolina -- 50,000 years.
This year, a U.S. Marine vanished from his post in Iraq. He turned up weeks later in Lebanon,saying he had been kidnapped. The case has confounded investigators, but there's now a strange now twist.
Our Pentagon correspondent Barbara Starr reports.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Now that U.S. and Iraqi forces have established control in Falluja, the city is giving up clues, but no answers to one mystery. What happened to corporal Wassef Hassoun? He's the Marine shown in this alleged hostage videotape after disappearing from his base near Falluja this summer.
He then suddenly appeared 19 days later in Lebanon, and questions emerged about how he got there and whether the video was genuine. After returning to the United States, Hassoun publicly insisted he did not stage his own kidnapping.
CORP. WASSEF HASSOUN, U.S. MARINES: I did not desert my post. I was captured and held against my will by anti-coalition forces for 19 days. This was a very difficult and challenging time for me.
STARR: CNN has learned that troops searching a building in Falluja have found some of Hassoun's belongings, including his military identification card, some military gear and his passport. And according to one source, his uniforms found in remarkably good shape, apparently the same uniform shown in the videotape broadcast after Hassoun disappeared.
It is not clear if the discovery of Hassoun's belongings helps or hurts his contention.
(on camera): Two weeks ago, military criminal investigators finished their probe into the Hassoun case, but now with the new evidence the case remains open and no decision about whether he was a hostage or a deserter.
Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
BLITZER: Hundreds of mourners packed a memorial today for Margaret Hassan, the CARE International official kidnapped in Iraq last month and now presumed dead.
CNN's Diana Muriel reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: May the lord be with you.
DIANA MURIEL, CNN CORRESPONDENT (voice-over): Here in Ireland, the land of her birth, Margaret Hassan is remembered with love and with sorrow after her apparent violent death at the hands of Iraqi militants. It is widely thought a blindfolded Hassan was executed by a single bullet at the hands of a hooded militant. Hassan was snatched from a Baghdad street last month on her way to work as a director for the charity CARE International.
HAROLD WALKER, FORMER BRITISH AMBASSADOR TO IRAQ: She was a very splendid woman, a very slight woman in stature. She had a backbone of steel and did very good work for CARE through very stressful days.
MURIEL: Born Margaret Fitzsimons, Hassan devoted more than 30 years of her life to working in Iraq, a country she came to from London as a young bride with her Iraqi husband, Tahseen Ali Hassan.
She converted to Islam and learned the language, refusing to leave, despite the privations of the eight-year Iraq/Iran War, the first Gulf War, and the subsequent 13 years of United Nations sanctions. She traveled to the U.N. headquarters in New York to protest the sanctions in January 2003, but returned to Iraq and waited for the bombs to fall in Baghdad as the second Gulf War began in March that same year.
She was involved in countless projects, one of the most recent, a rehabilitation hospital for patients with spinal injuries. After she was captured, those patients that could made a public protest demanding her release. A doctor and a close personal friend spoke of his incomprehension at her killing.
DR. KAYDAR AL-CHALABI, BAGHDAD HOSPITAL: She feels our suffering. She was not only representing a nongovernmental organization, but she was Iraqi -- feeling the suffering of the Iraqi people.
MURIEL: It is a sentiment echoed across Iraqi society, even by those that did not know her.
It is not the Arab way to treat women like this or to kill her," says this Baghdad man, "even if she was an enemy."
But Margaret Hassan was no enemy to Iraq. According to close friends, she felt herself to be Iraqi. One of those, freelance filmmaker Felicity Arbuthnot, too emotional at the news of her Hassan's death to give an interview to CNN, told this reporter:"The Iraqis look after their own and those that help them. Every Iraqi will be shocked and appalled," she said. "Margaret had a very special place in their hearts."
Diana Muriel, CNN, London.
(END VIDEOTAPE)
BLITZER: About one month before the start of the Iraq war, Margaret Hassan spoke with CNN from Baghdad. She was interviewed by our Jim Clancy and Zain Verjee.
Zain is joining us now live from the CNN Center with her reflections on that interview -- Zain.
ZAIN VERJEE, CNN CORRESPONDENT: Wolf, I interviewed CARE's Iraq director, Margaret Hassan, in February of 2003, before the war, as you say. At the time, as you will remember, there were major concerns about a possible humanitarian catastrophe that could results if there was an invasion.
Here's a look now back at Hassan's view of Iraq then.
(BEGIN VIDEOTAPE)
MARGARET HASSAN, CARE INTERNATIONAL: People do not have any of the cushion that they had in '91, when they had money, a good standard of living. After all, Greece was -- Iraq was ranked with Greece in '91. And now it ranks amongst the poorer African nations. I think that speaks for itself.
VERJEE: Give us a sense of the food and water situation in the country, the amount of people that have those kind of accesses, and also children and their health status.
HASSAN: Well, you have to remember that Iraq was a country where the remotest village had electricity. People were used to having water at tap level in their houses. Now lots of people have no electricity. Lots of people no longer have water at tap level and have been reduced to breaking part of the network pipe and constructing a small little collecting channel so that they can collect water as it drips through.
Of course, such water will not be pure water or safe water, and this will have a detrimental effect on the health and particularly on the health of children, the most vulnerable in the population.
VERJEE: If there is a war, your looking at refugees, starvation, disease, more displacement, and all sorts of things like that. How is CARE planning for that sort of situation? How are you going to handle that?
HASSAN: Well, we're planning in a very small way to continue doing what we do now, which is intervention in water and health care, which is what we've been doing for the last 12 years.
But this is a catastrophe beyond the capabilities of any aid agency if the infrastructure, because of lack of electricity, ceases to function properly.
(END VIDEOTAPE)
VERJEE: Wolf, the Iraqis who knew her say that her loss is a blow to all Iraqis. Billboards in Baghdad that were part of a campaign for information on her whereabouts show Margaret Hassan holding a sick Iraqi child and the caption reads, "Margaret Hassan is truly a daughter of Iraq" -- Wolf.
BLITZER: What a tragedy, indeed. Zain Verjee, thanks very much for that report.
Fresh fallout from the "Monday Night Football" flap -- what the head of the FCC is now saying about that risque spot.
Also, speaking of risque, nude on the news. Why did one anchorwoman bear it all? I'll give you a clue: ratings.
A year of the governator. We'll talk about Arnold Schwarzenegger's anniversary with "The Insider"'s Pat O'Brien.
And out of the oven, thanks to a presidential pardon. All that coming up.
First, though, a quick look at some other news making headlines around the world.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): Bombs exploded at banks in Buenos Aires, Argentina, including a branch of the U.S.-based Citibank. One security guard was killed. There's no claim of responsibility. And one U.S. official says there's no evidence of involvement by international terrorists. Rude welcome. Anti-globalization protesters clashed with police in Chili, where Pacific Rim leaders are arriving for a summit that begins Saturday. President Bush is scheduled to attend.
Colombia floods. Government officials are promising to step up relief efforts in northern Colombia, where floods and landslides have left thousands without homes. Torrential rains and their aftermath have killed at least 14 people.
And that's our look around the world.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
BLITZER: The game is long over, but the controversy over ABC's risque "Monday Night Football" introduction refuses to die.
CNN's Brian Todd has been monitoring the fallout and he's joining us now live with the latest developments -- Brian.
BRIAN TODD, CNN CORRESPONDENT: Wolf, there was a delayed reaction all week to this story. It didn't really blow up until almost a full day after the "Monday Night Football" skit aired. But now it has got a network, a pro football team and a powerful sports league circling the wagons.
(BEGIN VIDEOTAPE)
TODD (voice-over): This was clearly not a towel malfunction.
(BEGIN VIDEO CLIP, "MONDAY NIGHT FOOTBALL")
NICOLETTE SHERIDAN, ACTRESS: Terrell, wait.
(END VIDEO CLIP)
TODD: But there are plenty of questions and criticism over this week's opening of "Monday Night Football." The who-knew-what-when question is central.
UNIDENTIFIED MALE: I think everybody who has issued these ham- handed, half-hearted we didn't know what was going to happen, I think everybody is being a little disingenuous.
TODD: That's leveled partially at the NFL, which is also taking heat for publicly rebuking ABC for the skit while its teams feature scantily clad cheerleaders on the sidelines.
HOWARD KURTZ, "RELIABLE SOURCES": Look, professional football has used sex for a long time to try to peddle its product. No shock there. But there's a line or there are certain lines that you shouldn't cross.
TODD: On Tuesday, an NFL official told us the league had no advance knowledge of this production. On Wednesday, when we tried to get the NFL to elaborate on that and to respond to charges of hypocrisy, league officials did not return our calls.
For their part, the Philadelphia Eagles don't deny cooperating in the production. But the Eagles and their star receiver who is in the skit, Terrell Owens, implied they didn't know how the finished product would turn out. In a statement, the Eagles say -- quote -- "We appreciate ABC has taken responsibility and apologized to 'Monday Night Football.' It is normal for teams to cooperate with ABC in the development of an opening for its broadcast. After seeing the final piece, we wish it hadn't aired."
Owens was also quoted by CNN affiliate WPVI as saying Eagle officials threw him into the project. Contacted by CNN, two Eagles officials would not comment on that charge and wouldn't say whether the team had any contact at any time with the NFL over the production. ABC would give us no further comment beyond its apology. Everyone is circling the wagons, even on the most basic questions.
TERRELL OWENS, NFL PLAYER: I can't play football forever, so I'm trying to work on the Hollywood thing.
QUESTION: She wasn't really naked, was she?
(LAUGHTER)
OWENS: I'm not telling.
TODD: Officials at the Federal Communications Commission tell CNN they are still reviewing thousands of complaints over the production. In an interview with CNBC, the FCC commission had his own choice words for the network at the center of it all owned by Disney.
MICHAEL POWELL, FEDERAL COMMUNICATIONS COMMISSION CHAIRMAN: Well, I think it just sort of very disappointing. I wonder if Walt Disney would be proud.
(END VIDEOTAPE)
TODD: Now, the FCC could eventually fine ABC over this. What do fans and viewers make of this controversy? Well, we took a sampling of radio talk stations.
Executives at those stations tell us reaction has been mixed over the indecency question and the racial component. And they say, interestingly, that calls didn't really start pouring in until the hosts brought up the topic. Wolf, it's a big criticism that this is a media-driven controversy.
BLITZER: All right, thanks very much, Brian Todd, for contributing.
(LAUGHTER)
TODD: All right.
BLITZER: Here's your chance to weigh in on this story. Our Web question of the day is this: Was ABC's opening to the Philadelphia- Dallas game Monday night inappropriate? You can vote right now. Go to CNN.com/Wolf. We'll have the results a little bit later.
And speaking of nudity and sports and all of that, was it art for art's sake or art for ratings' sake? A Cleveland television news anchor appeared bare naked on her 11:00 p.m. broadcast in a story about an artist who staged mass displays of nudity all over the world. The news director of station WOIO, which is a CBS and CNN affiliate, says the story was meant to boost audiences during the crucial November ratings period. It did.
Monday's newscast drew a record number of viewers and the station has scheduled a follow-up report. What a surprise.
More on the controversy surrounding the "Monday Night Football" from "The Insider." That would be Pat O'Brien. He's standing by to join us live.
Plus, Arnold Schwarzenegger is marking his first year in office. But how is the California governor faring? We'll find out.
Stay with us.
(COMMERCIAL BREAK)
BLITZER: The football flap lives on, even after ABC apologized for its risque opening to "Monday Night Football."
For the inside scoop on that and other stories, we're joined, as we are every Wednesday, Pat O'Brien, the host of the syndicated show "The Insider."
All right, give us the inside story. What happened, Pat? What were they thinking?
PAT O'BRIEN, "THE INSIDER": Well, first of all, I think I know why ABC and the NFL apologized. The score was 49-21. It wasn't a very good football game.
But this is one of those stories -- and you were right when you were talking about it a little while ago. The media response and the apologies make it a much bigger story than it should have been, maybe. What we saw, what I saw, what you saw was not much more than you would see on a soap opera. The difference is, it was at 6:00 on the East time. A lot more people are watching. It's supposed to be in front of a football.
There was -- quote, unquote -- nudity. Terrell Owens talked to us today. I'll give you these "Insider" facts, which you can see on "The Insider" tonight at 7:00 in New York, 7:30 in L.A., and check your local listings.
Eight rehearsals. They did eight takes of the moves. She was wearing some short pants, some colorless pants that you can see -- if you watch our show tonight, you can actually see them right below her waist. And the controversy really stems from, after the apology, people started thinking about it. And there really were a lot of people who were sitting on their couches with your 6-year-old sons or daughters and 12-year-old daughters. And the word for it probably would be inappropriate. And that's the words that came out in the apology.
BLITZER: And is it started at 9:00 on the East Coast, 6:00 p.m. on the West Coast. And a lot of young people clearly watching at 6:00 or at 9:00.
But if you didn't know watch "Desperate Housewives," if you didn't know what the spoof was all about...
O'BRIEN: You wouldn't know what was going on.
BLITZER: ... you would be totally confused. You would just see this and you're saying to yourself, what is going on here?
O'BRIEN: Yes, and her role -- Nicolette's role on that show is one of a seductress and a sexy seductress.
And so here we have her in a locker room of a football game. So, if you had no idea what the show was about -- and, by the way, not many people don't, because it is a huge hit show -- but if you had no idea, you would really, really wonder what was going on here.
Now, I don't think the FCC has a legitimate fining complaint. I know they came out and said inappropriate and what would Walt Disney think, Disney being the folks who own ABC. But it's not like somebody swore. It's not like there was a swear word that came out on the air that you would be responsible for or nudity that CBS is looking at a $550,000 fine for. This was something different.
Put your own label on it. I won't here. But people are saying inappropriate. I don't think you can be fined for that.
BLITZER: Today, the first hearing started today in the civil lawsuit involving Kobe Bryant and the woman who is accusing him of rape. I'm surprised there hasn't been a financial settlement yet.
O'BRIEN: Well, we don't know if there has or hasn't been. You remember the apology in the letter that -- news release they put out that was written by 50 or 60 lawyers, probably.
But this started the first day of -- in a civil suit, as you know, it depends on what people want to do, if they want some sort of public vindication or if they want money. That's what civil suits are about. Usually, they become, in some lawyers' circles, settlement suits. Now, there is a report that she might file another suit.
In Colorado, you are limited to only $773 in damages on these civil suits in these kinds of cases. If you file one in Orange County, I don't know if the sky is the limit, but it is a lot more. So there could be another suit followed in that case.
BLITZER: What is the fallout from the Quincy Jones-Vibe Awards melee the other night which got pretty violent? O'BRIEN: It did get violent. Nobody knows exactly why it started.
We're told that and we reported on "The Insider" that somebody came up and just decked Dr. Dre in the face out of nowhere and then all heck broke loose in this auditorium. It is a 2-year-old award show. So it's not one that is in a huge place. It was in a hanger in Santa Monica. Security probably wasn't as big as it, obviously, at the Oscars or Emmys.
But it was quite a battle. And there were a lot of -- by the way, a lot of cheap shots taken in that battle. The young man who was stabbed is in stable condition. So thank God he's not going to be hurt much more than we thought. We thought he was in much worse condition. But it was a big mess. Quincy Jones was fine. And the people on stage were rushed off and it was over with.
BLITZER: Finally, Pat, Arnold Schwarzenegger, he has been in office now for about a year, first year anniversary. A lot of speculation he wants to go up, despite the fact he was born in Austria.
O'BRIEN: Well, he's not stupid. He sees how people react to him. And so do you. They have been on your show. They have been on our show.
And as he goes across the country, he's bigger than just a politician. He's bigger than life. You call him Arnold. We don't call him the governor. You call him Arnold. He has got one name. He's like Madonna. But he's also a very good politician, very -- knows how to walk his way through politics. And you and I have studded politics and economics together, as a matter of fact. And he's done a great job in the state of California. They are already seeing some growth. They have stepped out in front on stem cell research.
He's going around the world getting people to buy California. Employment is better here. So he's doing a great job. Whether he can get another constitutional amendment, that is another story.
BLITZER: Pat O'Brien, the host of "The Insider," thanks, as usual.
O'BRIEN: See you next week.
BLITZER: And the results of our Web question of the day, that is coming up next.
(COMMERCIAL BREAK)
BLITZER: Here are the results of our Web question of the day. Remember, though, this is not a scientific poll.
A presidential pardon, it's our picture of the day. The president took two turkeys off the menu, pardoning them in the traditional White House ceremony. "LOU DOBBS TONIGHT" starts right now.
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