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Your World Today

Blackwater Booted from Iraq?; French Foreign Minister Threatens War over Future Iran Nukes; E.U. Decides Against Microsoft; Burn Victim, Youssif, Seeing The Sights Of California

Aired September 17, 2007 - 12:00   ET

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

MICHAEL HOLMES, CNN ANCHOR: Blackwater in hot water. Iraq's government moves to boot out the U.S. security firm after a fatal gun battle.
HALA GORANI, CNN ANCHOR: Search for answers. What caused Thailand's worst air disaster in a decade? Officials hope flight data recorders will provide some clues.

HOLMES: Behind bars. O.J. Simpson jailed without bail, facing multiple robbery charges.

GORANI: And a severely burned Iraqi boy gets a dose of Southern California, sun and fun on his long road to recovery.

It is 8:00 p.m. in Baghdad, 9:00 a.m. in Los Angeles. Hello and welcome. Our report is broadcast around the globe this hour. I'm Hala Gorani.

HOLMES: And I'm Michael Holmes, from Baghdad to Boston, London to Los Angeles, wherever you're watching, this is YOUR WORLD TODAY.

Welcome, everyone. The Iraqi government has had enough of one private American security firm doing business in Iraq.

GORANI: Blackwater USA is one of many firms filling the security void in Iraq in extremely dangerous areas.

HOLMES: But after a firefight that left eight Iraqis dead, 14 others wounded, Baghdad revoked Blackwater's license to operate in Iraq.

GORANI: Security contractors like Blackwater have been accused of killing innocent Iraqi citizens, but no one has ever been charged.

HOLMES: You may remember Blackwater from a gruesome incident three years ago when four of its security personnel were burned and mutilated in Falluja. The first coalition battle for Falluja followed that, and was seen as retaliation in part for the killings.

Well, the U.S. State Department says it is investigating what it is calling a terrible incident. For more on that we're joined by Pentagon correspondent Barbara Starr.

The latest from there, Barbara? BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Michael, the State Department along with the multinational force in Iraq is now investigating this incident. It all began yesterday. We have one photo to show you.

Apparently what happened is in this Baghdad neighborhood, a car bomb went off. And that led to whatever happened next, now a matter of investigation. A convoy was moving through the area where this car bomb went off. And a firefight apparently erupted.

Apparently Blackwater security personnel were in the area, perhaps as part of that convoy it is our understanding. And when it was all over, eight Iraqis dead, 14 injured. The Iraqi government now having yanked the license of Blackwater to operate.

But what does this all mean? It's a very significant action. Blackwater, one of the largest private security firms in Iraq, handles security for many reconstruction projects, for diplomats, for VIPs moving through Baghdad, moving through other areas of Iraq. Things simply cannot be done in Iraq at this point without these private security contractors.

But, of course, their operations in Iraq have always been very controversial. They are heavily armed. They have been in firefights before. And it is a matter of great controversy when situations like this erupt and there are civilians left dead afterwards.

What is the legal jurisdiction for these contractors? They do not fall under the Uniform Code of Military Justice. They are generally potentially brought back to the United States for prosecution by federal authorities.

It's a matter of great uncertainty, great controversy as to what will happen next -- Michael.

HOLMES: Also an issue of sovereignty for the Iraqi government, I suppose, Barbara. They're saying they want to bring these people to justice, as they say. But really they don't have jurisdiction either. There has been 60 U.S. soldiers court-martialed, but no contractors have faced the music for what they've done.

STARR: That is one of the very key questions here. Now that the Iraqi government has revoked their authority to operate in Iraq, what will happen next? Will the Iraqi government move to take control, perhaps putting any of these American contractors into detention?

There's no specific protection, it's our understanding, for them. This has been a murky area. So, that's one of the issues. Because, of course, if contractors suddenly do become subject to the sovereignty and the government of Iraq, the question is, will American contractors still want to operate there -- Michael.

HOLMES: Indeed many questions remain unanswered. But thanks for answering some of them, Barbara, thanks. Barbara Starr at the Pentagon. GORANI: Now some interesting perspective on that Blackwater controversy from a private security contractor in Baghdad. Carter Andress is CEO of a security company and author of the book "Contractor Combatants." He joins us now live from Baghdad.

Carter Andress, thanks for being with us. First off, you had a team respond to that incident yesterday, I understand. Is that the case? And if so, tell us what they saw.

CARTER ANDRESS, CEO, AISG, AUTHOR, "CONTRACTOR COMBATANTS": Well, we travel through that square every day. Nisoor Square, on our way to the Checkpoint 12 going into the Green Zone and also going to the airport. So, one of our routine movements passed by the scene of the incident several minutes afterwards.

GORANI: All right. And what was there then? What was seen there? Because this is really what sparked the entire controversy and the license of Blackwater being revoked in Iraq.

ANDRESS: Right, well, there was -- this is the entrance way to the national police headquarters. It's also a very busy circle. This was late morning rush hour. There were -- there's -- the circle is packed with cars during this time. People trying to get around, go about their business in Baghdad. Our people saw a couple cars destroyed. People -- dead bodies, wounded people being evacuated.

The U.S. military had moved in and secured the area. So, it was not a good scene.

GORANI: Now, tell us how and for our viewers all over the world and those who are not familiar with the way these private contractors operate in Iraq, what exactly do they do? What accountability do they have when things go wrong?

ANDRESS: Well, primarily we're a U.S. Department of Defense contractor. We operate under the federal acquisition regulation, which is our governing body according to the contracts that we're under in Iraq. And in turn, what has been represented, because we are a relatively new phenomenon to war, what I referred to in my book as "contract combatants."

So we fall into a bit of a gray area. So in reality there is no law that you can prosecute. A -- no effective body of law that you can prosecute anyone that's found guilty of any kind of crime in...

GORANI: So there is no accountability, Carter. It's really the wild, wild west there, isn't it, in Iraq for people like you who have these security companies?

ANDRESS: Well, I wouldn't say that there's no accountability. But there's not a criminal accountability. There's not an accountability under law in a criminal sense. But Blackwater could be fined. Blackwater could lose its contract with the Department of State. These people could be -- that were involved could become persona non grata in Iraq, forced out of the country, lose their livelihoods. But we're talking about the fog of war here. And this incident is regrettable. But you know, it's something that has happened.

GORANI: Well, what have you seen in your experience, and you're the CEO of a security company yourself, that you find bothersome? That you find should be changed with regard to these security firms operating in Iraq?

ANDRESS: Well, my company, American-Iraqi Solutions Group, our security division is Salaam (ph) in (ph) Iraq, and it's Iraq Safety. And we're the first foreign company to receive a security license from the ministry of interior in Iraq for a foreign company. And we, though, are 90 percent Iraqi.

We pride ourselves on working closely with the Iraqis. And as a result, these high-profile operators like Blackwater seem to operate in an aggressive and arrogant manner that alienates the exact population that we need to win over as the mission here in Iraq.

GORANI: All right, Carter Andress, thanks very much for joining us there from Baghdad. He's also the author of that book he mentioned, "Contractor Combatants." Thanks very much -- Michael.

HOLMES: Let's turn to Thailand now, where emergency workers continue to sift through the wreckage of that deadly plane crash in Phuket. They have found the plane's two recorders -- data recorders, which will be sent to the United States for analysis. At least 89 people are known to have died in the crash which happened during stormy conditions on Sunday.

Now, some of you are sending in images that you took of this accident. Let's take a look at that one there. That is from Ted Gugelyk. He took it from a hillside overlooking the airport. And do continue to send us photographs and videos to I-Report, as always, take care when you're doing so.

GORANI: Now, we've heard a lot of criticism from the West over Iran's nuclear ambitions and talk of tougher sanctions if Tehran keeps rejecting international demands. But one word we don't often hear is war, especially coming from France. The French foreign minister didn't mince any words when laying out what he calls the worst-case scenario.

Jim Bittermann is in Paris and has this.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN CORRESPONDENT (voice-over): Bernard Kouchner is known for dramatic statements, but even so reporters were surprised to hear him suggest that if Iran does not rein in its nuclear program, plans must be made for military action.

BERNARD KOUCHNER, FRENCH FOREIGN MINISTER (through translator): We must prepare ourselves for the worst, that means showing...

UNIDENTIFIED MALE (through translator): What does it mean, "prepare ourselves for the worst"?

KOUCHNER (through translator): That is war, sir.

UNIDENTIFIED MALE (through translator): Yes. And how do you prepare for that?

KOUCHNER (through translator): We prepare ourselves first by trying to set up plans which are the responsibility of the general staff.

BITTERMANN: Kouchner quickly added that he did not think war was imminent, but further sanctions against Iran are. The United Nations already has imposed some sanctions and is considering ways to toughen them up. But Kouchner says Europeans should consider sanctions outside the U.N. framework and that France is beginning to act on its own.

The foreign minister said major French companies, including those in the energy sector, are being told to stop any further investing in Iran. While Kouchner's rhetoric seemed hard-line, President Sarkozy took an equally hard line last month when he told the French diplomatic corps that if Iran constructed a nuclear bomb, it will, as he put it, "face bombardment."

NICOLAS SARKOZY, FRENCH PRESIDENT (through translator): For me, an Iran armed with nuclear weapons is not acceptable.

BITTERMANN: Analysts believe the foreign minister has not deviated from the president's line.

DOMINIQUE MOISI, FRENCH INST. ON FOREIGN RELATIONS: Was there an agreement on the fact that he should speak so openly? I don't know. Maybe in terms of style he overdid it. But in terms of content, this is what he meant.

BITTERMANN (on camera): Iranian commentators reacted with hostility, accusing the French government of pandering to the U.S. even as the French prime minister echoed his foreign minister's tone, although he added that at the moment a confrontation with Iran was the last thing any political leader would want.

Jim Bittermann, CNN, Paris.

(END VIDEOTAPE)

HOLMES: Well, the head of the U.N.'s nuclear watchdog is urging everyone to cool it, calm down on the rhetoric. Without specifically mentioning France, the IAEA chief, Mohamed ElBaradei, said any talk of attacking Iran is hype and should be avoided.

ElBaradei says there are international rules regarding the use of force and "I would hope that everybody would have gotten the lesson after Iraq where 700,000 innocent civilians have lost their lives on the suspicion that a country has nuclear weapons."

GORANI: All right, this is YOUR WORLD TODAY. HOLMES: Yes, coming up the rest of this hour, a huge court defeat for Microsoft. The fine is immense, but the software giant stands to lose a lot more than dollars. We'll explain.

GORANI: Also, O.J. Simpson in trouble again. He beat a murder rap, but can he wrangle out of his latest legal mess? Stay with us.

(COMMERCIAL BREAK)

HOLMES: Welcome back, everyone. The former American football star O.J. Simpson prepares to face a judge again. It has been 12 years since he was acquitted of the murders of his ex-wife and her friend. Now, he's being held by police in Nevada for an alleged armed robbery. Ed Lavandera is following developments in Las Vegas. He joins us now with the very latest -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Well, Michael, it has been 12 years, as you mentioned, that O.J. Simpson beat the murder rap of his ex-wife and her friend. And now O.J. Simpson, who came to Las Vegas to attend the wedding of a friend, has now found himself here in Sin City in jail being held without bail, and accused of robbery and burglary, facing six charges that if he is convicted of, could put him in jail for the rest of his life.

At the age of 60, O.J. Simpson now facing charges that could put him in jail for up to 30 years. So, that is quite a long time. His attorney tells the Associated Press that they will fight these charges vigorously, that this is all a -- something that has been blown out of proportion, that O.J. Simpson was simply trying to recover sports memorabilia that rightfully belonged to him.

One of the men that was in that room Thursday afternoon when this altercation took place, recorded what had happened, and you can listen to this profanity-laced tirade as O.J. Simpson walked into this room with his entourage.

(BEGIN AUDIO CLIP)

O.J. SIMPSON: Don't let nobody out of this room, mother (expletive deleted)! Think you can steal my (expletive deleted) and sell it?

UNIDENTIFIED MALE: No.

SIMPSON: Don't let nobody out of here. Mother (expletive deleted)! You think you can steal my (expletive deleted)?

(END AUDIO CLIP)

LAVANDERA: So O.J. Simpson sitting here in Las Vegas, being held without bail. He was arrested Sunday afternoon. He will continue to wait there. There's a lot of confusion as to when exactly he will make his first court appearance, and to talk about this bail situation.

Another man that was arrested over the weekend in connection with this has already been arrested and released as well. So, you can imagine that O.J. Simpson and his attorney will be vigorously trying to get him out of jail. But that decision will be left up to a judge -- Michael.

HOLMES: Interesting take too. Ed, thanks. Ed Lavandera there in Nevada.

GORANI: Now, it's a bad day for Microsoft. A European court has handed a major setback to the multinational company, whose software runs on nearly all of our personal computers. The company lost its appeal in an E.U. anti-trust case. As Jim Boulden reports, the ruling, along with emerging online technologies, are leaving the company facing rather uncertain future.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): The ruling has been nine years in the coming, and it wasn't what Microsoft wanted to hear. Europe's second highest court upheld decisions by regulators forcing Microsoft to change the way it does business.

The case before the court dates back to the late 1990s, when rival U.S. software firms complained Microsoft abused its dominance. The European Commission agreed. In 2004 it imposed a record fine of more than $600 million and forced Microsoft to offer its operating system without a media player. Microsoft also had to share some of its secret code behind Windows so rival software would work better when run on Windows.

Microsoft appealed. The crux of the ruling Monday, the E.C. can force companies to share proprietary information for the good of consumers, much to the delight of the commissioner, whose reputation as a regulator was very much on the line.

UNIDENTIFIED FEMALE: If competitors are unable to make their products talk to or work properly with dominant company's products, they are prevented from bringing new, innovative products on to the market.

BOULDEN: This case is unlikely to set a precedent for other companies. Few industries have a player with more than 90 percent of the market, as Microsoft has with Windows. Though, the floodgates could be opened for other software companies to pursue Microsoft.

UNIDENTIFIED MALE: The legal issues which affect the outcome of those complaints have really been decided today, and a number of those companies will be expected to push forward with complaints to the commission.

BOULDEN: A lot has changed since the case began. The market, for one. Microsoft had no competition then from the likes of Google. There were no social networking sites. And no music downloads through iTunes.

Microsoft says it has changed, too. That includes a settlement with Sun Microsystems, one of the first to complain about Microsoft. Microsoft says it will work with the E.U. to comply with European law. But it can also appeal the ruling to Europe's highest court, which could drag the case out for a further two years.

UNIDENTIFIED MALE: I don't want to talk about what will come next in terms of the legal process. As I said, we need to read the decision. It's a long decision.

BOULDEN: For Microsoft, the ruling might not mean much. It long ago paid the fine.

(END VIDEOTAPE)

GORANI: All right. Well, Jim Boulden joins us now live. He's in London. And, Jim, the big question now for American companies is, the European Union, essentially, what kind of power will it have to regulate competition questions for American companies abroad?

BOULDEN: Oh, I think it's very clear, this has given the E.C. a head of steam, and they are definitely going to be looking at other companies. It was very critical for them, because if Microsoft had won this appeal, then it would have thrown out a whole bunch of law, it would have thrown out a whole bunch of precedent set by the European Commission over the years.

You remember, it stopped a merger between General Electric and Honeywell. It's now going to look at Google. It's now looking at IBM. It could be looking at other companies like Intel. And so this will definitely give it more control, more power. And I think it will give it more confidence to go after any company that it thinks is abusing any kind of dominance in any one of those markets.

GORANI: All right. Jim Bolden in London. The European Commission flexing its competition muscle. Thank you very much.

Well, the E.U. court ruling puts Microsoft in the spotlight, but the company Bill Gates built is not the only one, as we heard with Jim there, that stands to lose from this decision. It raises a flag for other Silicon Valley darlings with a big footprint in Europe.

Take for example Google. We just talked about it. Its planned buyout of advertising giant DoubleClick is already under the scrutiny of European regulators. They fear that deal will give Google too much power to control online advertising rates. Many analysts say Google's fast expansion in the online ad market reminds them of Microsoft's growth.

Next up, Microsoft's old rival Apple. Its iTunes music store operates in 22 countries, but Apple's price for a download is not the same everywhere. All you international travelers know this. It ranges from 99 cents in the United States for one song to the equivalent of $1.50 in the U.K. and a $1.30 in France. The European Commission is already looking into that. Besides iTunes requires an iPod or an iPhone, the service is closed to competition.

And, finally, Intel, the giant company, it controls 75 percent of the chip market. European regulators accuse it of slashing prices and forcing its competitors like Advanced Micro Devices for one, to sacrifice profits just to stay in business. Now, Intel says its conduct is fair and in the end beneficial for customers.

For smaller companies, though, Monday's ruling creates a "window" of opportunity. They're able to compete perhaps in a more level playing field.

Ahead on YOUR WORLD TODAY, the latest on the Northern Rock mess. Investors of the British bank queue up in droves, ongoing fears their money may soon vanish.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): We try to talk to him. He wouldn't talk to us. He was upset all the time, 24 hours a day. He would say it himself, I'm upset. Now, he's happy.

(END VIDEO CLIP)

GORANI: Well, he has got years of surgeries and recovery ahead of him. But for now at least life for little Youssif, well, it's like a day at the beach. Stay with us.

(COMMERCIAL BREAK)

T.J. HOLMES, CNN ANCHOR: Hello there, everybody, I'm T.J. Holmes at the CNN Center in Atlanta, Georgia. More of YOUR WORLD TODAY in just a few minutes. But first, a check on stories making headlines here in the U.S.

Up first here, President Bush reveals the person he wants to become his third attorney general. He's former federal Judge Michael Mukasey.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Judge Mukasey's clear-eyed about the threat our nation faces. As a judge and a private lawyer, he has written on matters of constitutional law and national security. He knows what it takes to fight this war effectively. And he knows how to do it in a manner that is consistent with our laws and our Constitution.

(END VIDEO CLIP)

HOLMES: Mukasey has handled several high-profile terrorism cases, including the trial of blind Sheikh Omar Abdel-Rahman. Analysts don't foresee any problems with Senate confirmation.

O.J. Simpson under arrest and apparently on tape. The former football star accused of armed robbery. An audio tape captures the confrontation inside a Las Vegas hotel room. The alleged victims, memorabilia dealers selling Simpson collectibles. Here's some of that audio tape. I want to give you a heads-up here that some of the viewers may find this language a bit offensive.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: (expletive deleted) you. Mind your own business.

UNIDENTIFIED MALE: Look at this (expletive deleted).

UNIDENTIFIED MALE: Get over here.

SIMPSON: You think you can steal my (expletive deleted)?

UNIDENTIFIED MALE: Backs to the wall.

UNIDENTIFIED MALE: I was trying to get past you.

UNIDENTIFIED MALE: Walk your ass over there.

SIMPSON: Think you can steal my (expletive deleted)?

UNIDENTIFIED MALE: Mike took it.

UNIDENTIFIED MALE: You, up against the (expletive deleted) wall.

SIMPSON: I know (expletive deleted) Mike took it.

UNIDENTIFIED MALE: Search him.

UNIDENTIFIED MALE: And I know what Brian is trying to prove.

UNIDENTIFIED MALE: I'm cool, I am.

UNIDENTIFIED MALE: Stand up.

UNIDENTIFIED MALE: So, so...

UNIDENTIFIED MALE: Get your (expletive deleted) asses up.

UNIDENTIFIED MALE: Stand the (expletive deleted) up.

(END AUDIO CLIP)

HOLMES: A judge will consider bail for Simpson on Tuesday. He faces a long list of charges.

(BEGIN VIDEO CLIP)

CAPT. JAMES DILLON, LAS VEGAS METRO POLICE: Robbery with a deadly weapon, two counts. Assault with a deadly weapon, two counts. Conspiracy to commit burglary and burglary with a firearm.

(END VIDEO CLIP)

HOLMES: Simpson denies that guns were involved and he says the confrontation was not a robbery. Of course, he was acquitted of murder charges 12 years ago, what are the chances O.J. Simpson could walk free again this time? Ahead in the CNN NEWSROOM, we'll take a closer look at the charges with former prosecutor B.J. Bernstein and criminal defense attorney Drew Findling.

Also at the top of the hour, a shocking story out of Gary, Indiana.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Down there looking at my son's lifeless body, just looking at him.

(END VIDEO CLIP)

HOLMES: A father's anguish and anger. A one-car crash sent two teens to the hospital. But local police did not find two other boys who had been in that car. One victim's father found their bodies hours later, and is haunted by the possibility they could have survived if they'd have been found in time. We will have that story.

(WEATHER REPORT)

HOLMES: In the meantime, folks, YOUR WORLD TODAY continues right after a quick break. I'm T.J. Holmes. See you in the NEWSROOM at 1:00 p.m. Eastern.

(COMMERCIAL BREAK)

HOLMES: Welcome back, everyone. Viewers joining us from 200 countries around the world, including the United States.

GORANI: Well, this is YOUR WORLD TODAY. I'm Hala Gorani.

HOLMES: And I'm Michael Holmes.

Let's update you now on the top stories to this minute. Thai officials are working to identify 89 people known to have died in Sunday's plane crash in Phuket. The flight filled with international tourist slammed to the ground while trying to land during stormy weather. Officials investigating the crash have already recovered the plane's flight data recorders. They will be returned to the United States for analysis.

GORANI: Also in the headlines, diplomatic tensions over Iran are reaching a boil again. This after the French foreign minister warned the world should prepare for war if Iran obtains nuclear weapons. Bernard Kouchner said EU leaders are considering their own sanctions outside the U.N. Iran refuses to stop uranium enrichment despite two sets of U.N. sanctions. The International Atomic Agency Chief Mohamed ElBaradei says nations need to be cool and not hype the Iranian issue.

HOLMES: The U.S. State Department is conducting it's own investigation into a firefight incident that led to the expulsion of a top private security firm. It was a gun battle that involved Blackwater Security personnel and it ended with the death of 8 Iraqi civilians, more than a dozen others wounded. Iraq's interior ministry has revoked Blackwater's operating license, worldwide while it investigates.

GORANI: Well, Blackwater USA is headquartered in a rural part of North Carolina, in America.

HOLMES: Indeed our Senior International Correspondent Nic Robertson recently got unprecedented access there.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTL. CORRESPONDENT (voice over): Most of the companies operating in Iraq don't want journalists around, but Blackwater did allow us exclusive access to its U.S. facilities.

(On camera): It's uncanny, I'm driving around North Carolina, and seeing contractors in SUVs. It's like I'm back in Baghdad again.

(Voice over): The company has never let a TV crew in like this before. Blackwater Vice President Chris Taylor escorts us around. He shows us police officers shooting on a practice range. Unmarked ships, Blackwater trained sailors, enforce protection after the bombing of the U.S.S. Cole in 2000. Would-be private military contractors train to defeat insurgents.

CHRIS TAYLOR, VICE PRES., BLACKWATER SECURITY: What we're on right now is the country's largest tactical driving track.

ROBERTSON: It's 2.6 miles. Custom built, training here matches daily realities in Baghdad.

TAYLOR: We're going to do a little slalom work here. Again, imagine that you've been attacked and you're weaving in and out of traffic to get your principle off the X (ph) to get to a safe zone.

ROBERTSON (voice over): Blackwater is the brainchild of camera- shy multimillionaire Eric Prince. After 9/11, business boomed. They've just built a brand new headquarters.

(on camera): Thanks.

You see the gun barrels on the doors.

TAYLOR: Yes.

ROBERTSON: A nice touch.

TAYLOR: A little bit of the Blackwater motif.

ROBERTSON: Yeah, yeah. And here it is as well, Blackwater.

(Voice over): Wartime demands allowed them to expand. They're now the second largest employer in northeastern North Carolina.

TAYLOR: Right, 8,000 square feet in the original building. 64,000 square feet here.

ROBERTSON (on camera): That's a big expansion. TAYLOR: It's a rather big expansion. But it's need. Certainly we've left room for growth.

ROBERTSON: Growth, because Taylor believes Blackwater has a bright future.

TAYLOR: There's opportunities all over the world, where we think that we can make a very big impact immediately is in peacekeeping operations.

ROBERTSON: The protection of innocents in Darfur, Sudan, is just one of the global hot issues, the company says it is ready to tackle. It's so committed to expansion in new markets, Blackwater hired 30- year CIA veteran, Cofer Black, who for years headed the U.S. for hunt Osama bin Laden.

COFER BLACK, VICE CHAIRMAN, BLACKWATER: My company could deploy a reasonably small force, under the guidance and leadership of any established national authority, and do a terrific job.

ROBERTSON: As vice chairman of Blackwater, he's using his global contacts to search out new, lucrative contracts. And not just in the realm of peacekeeping. The company is developing air ships for surveillance. In the aftermath of Hurricane Katrina, heavily armed Blackwater protection teams were among the first on the scene.

TAYLOR: If you notice, the hull is in -- in a V shape.

ROBERTSON: And frustrated by the high U.S. troop death toll from roadside bombs, Blackwater has built a prototype for an armored alternative to the HUMVEE. The company says it can assemble hundreds of battle-ready men. A small, private army, at a moment's notice.

(END VIDEOTAPE)

HOLMES: Let's get some more perspective now on the Blackwater controversy and turn to a critic of that security firm, Jeremy Scahill authored the book "Blackwater: The Rise of the World's Most Powerful Mercenary Army." He joins us live from New York.

And thanks for doing so. A lot of private security firms are fairly low profile and do their jobs less overtly like companies like Blackwater, which -- let's say, is an understatement that they are highly visible. What's your main concern?

JEREMY SCAHILL, AUTHOR, "BLACKWATER": Well, the in fact of the matter is the Bush administration failed to build the coalition of willing nations to occupy Iraq. And so, instead, the administration has built a coalition of billing corporations.

Right now in Iraq, the private personnel on the U.S. government payroll outnumber official U.S. troops. There are 180,000 so-called private contractors operating alongside of 165,000, 170,000 U.S. troops. So really now the U.S. military is the junior partner in this coalition. The mercenary component of the private sector involvement has been totally unaccountable. They operate with impunity. They kill Iraqi civilians and no charges are ever brought against them, in Iraqi law, U.S. law, military law.

HOLMES: Why is that, do you think? Do you think that's just an oversight? A slip through the cracks, the fact that there was a word missing from the military code of justice that allowed these guys to not get charged with anything? Or do you think there was something more intentional about that? As you say, they can't be charged in Iraq. They can't be charged in the U.S. They can't be charged at all.

SCAHILL: Right, it's hardly an oversight. Either we have tens of thousands of Boy Scouts running around Iraq calling themselves private security, or something is fundamentally rotten with the system. I mean, how can you have ten of thousands of mercenaries operating in Iraq and not a single prosecution? No, this is political expediency on the part of the Bush administration.

The deaths of these mercenaries don't get counted in the official U.S. death toll. Their crimes against Iraqis go undocumented and unreported. This is a shadow war. We're in the midst right now of a discussion about a surge, and about troop withdrawals, and we hear conflicting messages. But there's been a surge on for four years of the private sector, in Iraq, this mercenary army that the Bush administration has built up all over that country.

HOLMES: But the overtly aggressive contractors -- and, you know, we've seen them, they've pointed guns at our convoys -- but the overtly aggressive ones, what's in it for them to be overtly aggressive? How does that help the U.S. mission in Iraq to have guys going around shooting up Iraqi taxis because they happen to get too close?

SCAHILL: Well, I mean, it's shock tactics. The fact of the matter is that Blackwater guards, the senior U.S. occupation officials in Iraq, and their job is to so-called keep the noun alive, and they'll do that at any price. We've seen numerous reports over the years of Blackwater contractors opening fire on Iraqi vehicles and in some cases killing Iraqi civilians.

There was an incident last Christmas Eve, where an off-duty Blackwater contractor allegedly shot and kills a body guard to the Shiite vice president of the country. Part of it I think is shock tactics. And the fact is it is good for Blackwater's business when they keep Paul Bremer alive, they keep Zalmay Khalilzad alive, they keep John Negroponte alive. I mean, war is business and it's very profitable and Blackwater is doing an incredible job of making itself a lot of money.

HOLMES: If you're critical of what companies like companies like Blackwater are doing and how they are behaving, what's the alternative?

SCAHILL: I think the United States needs to withdraw from Iraq. And I believe the U.S. government needs to pay reparations to the Iraqi people. We hear all of this talk of militias and sectarian violence. What about the militias that the U.S. has deployed in Iraq that are running around the country unaccountable? No, I believe -- and I've spent a lot of time in Iraq -- I believe the United States needs to withdraw and pay reparations to the Iraqi people. The arrogance of the West, toward Iraq is incredible. This is a civilization that's been around for thousands and thousands of years. We think that we're going to somehow bring the solution to Iraq? No, these are people that can very much dictate their own destiny and they should be allowed to do so, and mercenaries need to get out of Iraq immediately.

HOLMES: Jeremy Scahill, author of "Blackwater: The Rise of The World's Most Powerful Mercenary Army", joining us from New York. Thanks for your perspective.

SCAHILL: My pleasure.

HOLMES: And of course, it goes without saying that we did contact Blackwater officials to get their side of the story. They have not responded to our requests. But the U.S. State Department spokesman says while the U.S. tries to avoid innocent casualties, he says, quote, "We are fighting people who don't play by the rules.", unquote, and have no problem killing innocent civilians.

That's the perspective there from State.

GORANI: Witnessing a transformation. When we come back an Iraqi boy starts a new life.

HOLMES: And coming up, our cameras follow little Youssif and capture what his parents consider a dramatic change since their boy was so brutally attacked in Iraq.

GORANI: Also ahead, weighing in on culture and calories. A shift towards fast food is forcing some Japanese to hit the gym. Stay with us.

(COMMERCIAL BREAK)

HOLMES: Welcome back, everyone. An update now on Youssif, the young Iraqi boy who is in the middle of an incredible odyssey from a horrible personal encounter with the violence in Iraq, to new hope in a new land.

GORANI: Absolutely. As we've been telling you, Youssif is the five-year-old who was set on fire by masked men in Iraq, and he's now undergoing treatment in Southern California. Thanks partly to an outpouring of support from you, our viewers.

HOLMES: Arwa Damon tells us more about how he's experiencing life here, a very different one from back in Iraq.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN INTL. CORRESPONDENT (voice over): Even Youssif's favorite superhero thinks he's the real hero. A five-year-old boy fighting to ward off his demons, emotional and physical.

UNIDENTIFIED FEMALE (through translator): "I'm so happy for him. He's been deprived and now he's seeing things for real."

DAMON: And there is plenty for Youssif to see at Universal Studios, Hollywood.

UNIDENTIFIED FEMALE: Stick his tongue out?

(LAUGHTER)

DAMON: A special audience with Archie, the orangutan, who took a special liking to Youssif. And though not part of the show, Youssif made sure his sister was part of the act.

Here the little boy once doused with gasoline, and set on fire by masked men in Baghdad, isn't afraid of anything.

"I'm not scared," Youssif pipes up. "I'm not even scared of fire."

But he is a little scared of water, at first. It's the first time he's seen the ocean. His parents say it's the first time they've seen him laugh like this since the attack.

UNIDENTIFIED FEMALE (through translator): We try and talk to him. He wouldn't talk to us. He was upset all the time, 24 hours a day. He would say it himself, "I'm upset." Now, he's happy.

DAMON: He's put the past aside, at least for now. The little boy who was once silent, can't stop chatting. So comfortable, he's even ordering us around. Back in Baghdad, he had trouble interacting with other kids.

"The other kids would tell me to stop when I wanted to play with them," he says.

But today, even the wildlife was coming to play. People can't seem to get enough either. A church group spots Youssif and asks if they can pray for him.

UNIDENTIFIED MALE: And take care of Youssif and his mom and dad and everybody.

DAMON: The spontaneous act by the Rocky Peak church group was too much for his mother.

UNIDENTIFIED FEMALE (through translator): I was overcome with emotion. Here in America, people are more moved by him than in Iraq.

DAMON: And Youssif's parents can use all the support they can get. As they see their son through multiple surgeries in the coming months. All in an effort to try and restore what was taken from him. Arwa Damon, CNN, Los Angeles.

(END VIDEOTAPE)

GORANI: Well, so many of you responded to Youssif's plight by going to our website and offering help, and all the money needed for his many surgeries has actually been raised. But, of course, there are other young victims. A countless number in Iraq and all over the world. Learn more about what you can do and the organizations that are making a difference as well. You can go to the website, cnn.com/impact for that.

HOLMES: We'll take a short break now. When we come back, expanding waistlines are a problem all over the industrialized world. Japan is no different.

GORANI: Just ahead on YOUR WORLD TODAY. The Japanese battle of the bulge being fought with the help of an American fitness guru. We've got the report, just ahead.

(COMMERCIAL BREAK)

HOLMES: The world's number one golfer showed his class in this weekend's finale to the FedEx Cup. It was, of course, the tour championship in Atlanta. That gives you a clue how it went for Tiger. He lapped the field in an event where he pocketed nearly $12 million all up. Tiger won by eight strokes leading his fans, his competition, and our own Mark McKay in awe.

(BEGIN VIDEOTAPE)

MARK MCKAY, CNN SPORTS CORRESPONDENT: Tiger Woods' PGA-tour leading seventh win of the year and 61st of his career, was no contest in the end. Woods made history here at the historic East Lake Golf Club, smashing the tour championship record by six shots in route to winning the inaugural FedEx Cup.

TIGER WOODS, PROFESSIONAL GOLFER: I think winning this week was pretty special. I mean, we're -- to win the Fed Ex Cup is one thing, but I think as a player, you always want to win the tour championship.

MARK CALCAVECCHIA, PROFESSIONAL GOLFER: You know, it was a battle for second, really. Tiger didn't get off to his normal start, but you knew it was just a matter of time for him.

ZACH JOHNSON, PROFESSIONAL GOLFER: You put pressure on him, he seems to step up his game. It just doesn't matter. If he's behind you, he moves in front of you. He's very impressive.

CALCAVECCHIA: When he bombs it down the fairways his distance control is so good, and his short irons are so good. He controls his spin. He's just -- and putting, he's the best ever. Best ever, period.

JOHNSON: It doesn't cease to amaze me anymore. He's unbelievable.

WOODS: When you play, you play to win, period. And, you know, my -- that's how my dad raised me, is to go out there and win. If you -- if you win, everything will take care of itself. And, you know, it's -- you take great pride in what you do on the golf course. And when you're able to win events, that's when you can go home, and be very proud of what you've done. MCKAY: After Woods plays in the upcoming President's Cup he'll take the longest break of his career, saying he looks forward to putting down the golf clubs and picking up his daughter. Mark McKay, CNN, Atlanta.

(END VIDEOTAPE)

GORANI: Well, the ease of modern life and Western culinary delights have taken hold all the way in Japan.

HOLMES: Many there are worried about some likely consequences. Eunice Yoon tells us how Japan is fighting its own battle of the bulge.

(BEGIN VIDEOTAPE)

EUNICE YOON, CNN INTL. CORRESPONDENT (voice over): American fitness guru, Billy Blanks, is helping millions of Japanese, run, punch, and squeeze their way into shape. These people are terrified of catching what's known here as metabolic syndrome, what the rest of the world would call getting fat.

UNIDENTIFIED MALE (through translator): I'm a fat person to-be.

YOON: Japan isn't known for its heavy people. Most live on a traditional diet of rice and fish. Only 3 percent are considered obese, compared to a third of all Americans. But as lifestyles here become more sedentary and include more Western fare, the government is growing increasingly concerned that this -- will turn into this --

KEIZO TAKEMI, ANTI-OBESITY CAMPAIGNER: The standard of life in our people becoming much higher and higher, and enjoy the very, you know, delicious foods, this is a real challenge for our people.

YOON: Keizo Takemi is a former health official. He put himself on a diet for six months and broadcast his progress on TV. Takemi stuck to Japanese food and took up, as he showed me, speed walking.

TAKEMI: Very simple, but very efficient.

YOON: Takemi lost a little over seven kilograms, about 16 pounds. Other people are hitting the gyms pushing the number of fitness clubs up over a quarter from last year. Dieters like Miyumi Yonazuka (ph) are also staying skinny with the help of Internet and their mobile phone. She snaps photos of every meal and sends the data to a nearby lab.

UNIDENTIFIED FEMALE (through translator): You can see she eats a lot of bread and fast food.

YOON: Putting Yonazuka (ph) in danger of wreaking havoc on her figure. But beyond beauty --

(On camera): The public's growing waistline could hurt the healthcare system here. Officials say weight-related diseases have already started to take their toll. (Voice over): Yet it's all relative.

BILLY BLANKS, CREAT TAE BO: Since we've been here in Japan, we've seen everybody wants to get the honor. Everybody wants to get their discipline. Everybody wants to get in shape.

YOON: To beat the battle of the bulge before it really begins.

BLANK: One, two, three, victory!

YOON: Eunice Yoon, CNN, Tokyo.

(END VIDEOTAPE)

HOLMES: And that will do it for this hour. I'm Michael Holmes.

GORANI: I'm Hala Gorani. Stay with CNN.

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