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NEWSROOM for September 1, 2000Aired September 1, 2000 - 4:30 a.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Seen in classrooms the world over, this is CNN NEWSROOM.
TOM HAYNES, CO-HOST: Welcome to your weekending NEWSROOM, everybody. I'm Tom Haynes.
Today we have news of smoke, fire and a hoax heating up the world of high finance. Here's the rundown.
Leading the news, we find U.S. law enforcement officials hot on the trail of an alleged cyber-criminal.
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ALEJANDRO MAYORKAS, U.S. ATTORNEY: Anyone who would use the Internet to commit a crime should also understand one thing: Do not count on the anonymity of the Internet to serve as a shield for your illegal conduct.
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HAYNES: Our "Editor's Desk" rekindles warm memories of a childhood favorite.
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ANNE MCDERMOTT, CNN CORRESPONDENT: Remember your first Etch A Sketch? They came out in 1960 and you can still get them in red or sparkly green.
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HAYNES: "Worldview" recalls the hearty happy birthday wishes given to her majesty, the Queen Mum.
Then, in "Chronicle," we visit a high school getting fired up about teen smoking.
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RHONDA SPANHOUR, PARENT: And I'm very proud to be part of a community that agrees with this and is kind of pioneering that.
(END VIDEO CLIP) HAYNES: Our lead story on this first day of September is the Internet, its power and potential risk. In just a few short years, the Internet has become an integral part of global civilization, from the way we communicate to the way we do business. Access to information is instantaneous on the Net.
Today we underscore the perils that come with that kind of access in the form of an online hoax that cost some investors a lot of money, and allegedly netted one man a quarter million dollars. The incident brings back memories of another instance in which the cyber-world was compromised -- that e-mail worm called "ILOVEYOU," which destroyed computer files and e-mail systems around the globe.
Although the effects this time weren't as widespread, it again raises questions about the security of the Internet.
CHARLES FELDMAN, CNN CORRESPONDENT (voice-over): Less than a week after an Internet hoax caused the stock price of a company called Emulex to nose-dive, cybersleuthing by the FBI and the Securities and Exchange Commission has led to an arrest.
Twenty-three-year-old Mark Jakob, recently a student at this community college in Torrance, California, was arrested at his home Thursday on fraud charges. His alleged crime? Managing to get a false news report to run over an Internet news service saying the Emulex Corporation, a maker of fiber-optic equipment, was in deep financial trouble.
Other news services soon carried the report, causing Emulex stock to plummet from about $113 a share to approximately $43 a share. By engaging in a series of trades of Emulex stock, Jakob allegedly profited to the tune of nearly a quarter of a million dollars. But authorities say Jakob made a serious mistake.
MAYORKAS: Anyone who would use the Internet to commit a crime should also understand one thing: Do not count on the anonymity of the Internet to serve as a shield for your illegal conduct.
FELDMAN: Investigators say they identified Jakob by tracing an e-mail he allegedly sent from a computer in the library of El Camino Community College to the Internet Wire, where he once was an employee. This is the fourth time in less than 18 months the Internet has been used to perpetrate a financial hoax, but...
VALERIE CAPRONI, SEC REGIONAL DIRECTOR: Unlike in previous similar cases, Jakob managed to get his false press release actually distributed by an Internet news service.
FELDMAN: The president and CEO of Emulex says that in one day investors lost an estimated $50 million.
PAUL FOLINO, PRESIDENT & CEO, EMULEX: We believe this is an unprecedented case, an act of electronic terrorism. FELDMAN: After the hoax was discovered and reported, Emulex stock rebounded. If convicted on all charges, Jakob faces up to 15 years in prison. In the meantime, the unfortunate cyber-crime is causing many news organizations to rethink the way they handle news releases.
Charles Feldman, CNN, Los Angeles.
HAYNES: That phony news release led to a $2 billion freefall of Emulex's stocks. Now financial news organizations are looking at their procedures to make sure something like this doesn't happen again.
Deborah Feyerick looks at how the media first reported the Emulex story and what news organizations are doing now to prevent the spread of misinformation in the future.
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Within minutes of the market opening, the phony news was spreading across the Internet: on Yahoo! Finance, on Bloomberg News, and on The Street.com, where executive editor Jonathan Krim says reporters were reacting not to the phony press release, but to the massive $2 billion stock sell- off by traders.
JONATHAN KRIM, THE STREET.COM: This is the kind of thing that often goes directly to the trading desks.
FEYERICK: By 10:30 Friday morning with Emulex stock down 60 percent, Nasdaq succeeded in contacting the company. Trading was stopped as financial stations like CNNfn and CNBC cautiously went on air with the news.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: All we know at this point is there's a press release out that initially that Bloomberg had -- it's on Dow Jones now, it looks like the company is restating the fourth quarter results.
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JOE KERNEN, CNBC ANCHOR: Because of the very bizarre and odd way that everything had transpired, that we just approached it with a lot of caution.
FEYERICK: Everyone trying to piece together what happened.
DARIUS WALKER, CNNFN: When you see a story such as this, alarm bells go off automatically and you're double checking, triple checking. That's just part of the basic, you know, journalistic creed that we follow here.
FEYERICK: A creed media insiders say that will be put to the test again and again.
HOWARD KURTZ, CNN "RELIABLE SOURCES": Hopefully, because billions of dollars are riding on just about every story, I think journalists are going to have to be a lot more cautious about nailing down the basic facts before they use their giant megaphone to transmit this to the public and to investors.
FEYERICK: After the arrest of the 23-year-old former Internet Wire employee, Dow Jones told CNN: "We're pleased to see the matter is resolved. Dow Jones will now independently verify Internet Wire press releases before any story is published."
(on camera): As for Internet Wire, which sends out press releases to 2,500 corporate clients, they have put in place a new system of checks and balances, with no information going out on the Internet until it has been double checked by a manager.
Deborah Feyerick, CNN, New York.
SHELLEY WALCOTT, CO-HOST: In the headlines today, those wildfires burning out of control in the western United States. This week alone, at least 80 fires have scorched more than 1 1/2 million acres. Now, scientists are working on a high-tech way to help firefighters predict wildfire behavior.
AMBER LEE, CNN CORRESPONDENT (voice-over): Any firefighter can tell you that the job would be less dangerous and less expensive if we could tell where a wildfire was headed. Now scientists say they can, using data from past fires to predict where future fires will go, and in the process save lives, homes and money.
MICHAEL BRADLEY, LAWRENCE LIVERMORE LABORATORY: It won't replace tools that they have right now, but it will be a powerful new breakthrough in enabling firefighters to more safely manage how they're fighting fires.
LEE: At Lawrence Livermore Laboratory, scientists use supercomputers to crunch detailed information about a specific area's terrain, weather and fuel, down to individual trees.
BRADLEY: We can tell you how tall the trees are, and databases on how tall, and that's important for how they burn.
LEE: The main focus of the research: urban interface areas, where large populations live in or near wildland, which pose the greatest risk for people and resources.
Scientists use data from real life fires, like the 1996 Corral Canyon fire near Malibu, to recreate those conditions and learn from them.
BRADLEY: There were firefighters and fire trucks up along this area. This is a road that goes along the crest of this bowl. And several of the fire trucks were damaged and one firefighter was seriously burned.
LEE: That information should help cut the time it takes to fight a future fire in the same area. Nowadays, firefighters rely mostly on instinct and experience to predict a fire's path.
UNIDENTIFIED MALE: Hey, this thing's going to blow over us here in a minute. It's coming right here.
LEE: A veteran of a deadly interface fire, the 1991 Oakland, California blaze that killed 25 people and destroyed nearly 3,000 homes, is consulting on the project.
CAPT. DENNIS REIN, EAST BAY REGIONAL PARKS: We need a lot of help. And it's -- you know, we've seen time and time again where there's not enough fire engines in the nation to go and put out every fire that's burning.
LEE (on camera): Scientists hope that within two years their predictions will help decide when it's safe to conduct a controlled burn. And in five years, they want to help provide information to firefighters in realtime while they're actually battling a fire.
HAYNES: You guys ever played with one of these things? Yes, you have. It's an Etch A Sketch toy. The inside of the screen -- check it out -- is coated with a mixture of aluminum powder and plastic beads. And as that little dot moves around -- you can see it -- it scrapes the screen and leaves the line you see there --- CNN.
The Etch A Sketch has been around for 40 years. And during that time, more than 100 million people in 70 different countries have been drawn to it, if you'll pardon the pun.
Well, Anne McDermott introduces us to someone who's one of the best Etch A Sketchers in the world, hands down. Check it out.
MCDERMOTT (voice-over): Remember your first Etch A Sketch? They came out in 1960, and you can still get them in red or sparkly green, and they can still drive you a little crazy. But kids love them, even if the dogs they draw don't exactly match the dogs that posed for their portraits.
But take a look at these Etch A Sketches: Ali, Ripken, the Mayberry gang, the White House gang.
GEORGE VLOSICH, ETCH A SKETCH ARTIST: Hopefully it's hanging in the Oval Office.
MCDERMOTT: That's George Vlosich, a 20-year-old Etch A Sketch artist. And it all began about 10 years ago when his family was traveling to Washington, D.C. VLOSICH: I was bored in the back seat of the car on vacation, and just picked one up and did a picture of the U.S. Capitol building.
MCDERMOTT: And he's rarely had one out of his hands since. His Secret? Well, it helps to be a good artist, and it helps to have patience. He puts in about 40-50 hours on every picture.
Oh, and early on, he learned not to accidentally drop or shake his canvas. And now he makes sure he doesn't erase any art.
VLOSICH: I remove the powder. It's aluminum powder and it sticks to the glass.
MCDERMOTT: These days, the young man from Ohio is enrolled in -- well, what do you think? -- art school, making his mom proud.
UNIDENTIFIED FEMALE: And on top of it, he's a good kid.
MCDERMOTT: Vlosich's latest project: Ah, here comes Mr. Jordan.
Anne McDermott, CNN, Los Angeles.
HAYNES: Hey, we set our sails for "Worldview" next. Our journey takes us around the world and to the bottom of the ocean. We'll also do a little time travel as we head to Great Britain. And we'll revisit a famous ship known as the Titanic. Yes, you've heard of it.
First some background on the disaster.
ANDY JORDAN, CO-HOST: First stop, the Atlantic Ocean, about 400 miles or 650 kilometers southeast of the Canadian province of Newfoundland. That's the location of the wreck of the Titanic, one of the most famous and ill-fated ships in the world. The wreckage was discovered at a depth of about 12,500 feet. That's 3,800 meters.
The Titanic was on its first voyage in 1912 when it left South Hampton, England for New York City in the U.S., but it hit an iceberg on April 14, before it ever reached its destination. It broke apart and sank. Only 705 people survived the disaster; more than 1,500 died. If you saw the movie "Titanic," you got an idea of the ship's size and grandeur. It was the largest and most luxurious oceanliner of its time.
On September 1, 1985, the wreck of the Titanic was found lying in two giant pieces on the ocean floor. A team of French and American scientists led by Robert Ballard and Jean Louis Michel found the wreckage 73 years after it went down.
While the ship has been immortalized in movies and books, divers say the Titanic's bow section is in danger of collapse. It's said to be in a state of horrible deterioration. A salvage operation has been going on this summer and, for the first time, artifacts from inside the ship are being recovered.
That's causing celebration and consternation, as Sonda Pecina reports.
SONDA PECINA, CNN CORRESPONDENT (voice-over): Is bringing bits of the Titanic back up from the deep an act of preservation or just pillage and plunder? That's the question hounding Clearwater native Michael Harris as he surveys blueprints of the Titanic.
MICHAEL HARRIS, RMS TITANIC: We care about Titanic. We always have. And we take care of her, we preserve her, and we spend millions of millions of dollars doing that.
PECINA: Harris heads the RMS Titanic, a corporation that's been salvaging artifacts from the shipwreck since 1987.
HARRIS: We recovered in our first operation 1,800 artifacts. We now have almost 6,000 in our collection.
PECINA: One of them is this piece salvagers call the "big piece," a chunk of Titanic's starboard side.
HARRIS: We think when she hit, she buckled.
PECINA: Salvagers say when they bring artifacts like this to the surface, they not only help preserve the past, they provide for the future.
HARRIS: We also give scientists from around the world a platform to work out in the middle of the North Atlantic at no cost to them.
PECINA: The cost, according to critics, is disturbing an underwater memorial to the people who died in the 1912 disaster. That's why the National Oceanic and Atmospheric Administration wants to declare the Titanic a historic site and limit future salvaging expeditions.
(on camera): What you're looking at is a model of the rear of the Titanic. Now, they tell us when the Titanic went down and hit the bottom, it broke in half, creating this debris field, leaving the back end here half a mile away from the front end. Now, the front end landed here. It is from tip to end, it's 600 feet long. It is 11 stories high and 93 feet in width.
(voice-over): The hull of the ship is what Harris and his crew intend to probe next with two Russian submersibles and a remote operated unit.
HARRIS: I'm in search of the Rubayat, which is a bejeweled book of poems by poet Omar Khayyam. There's $300 million worth of diamonds that was shipped from Switzerland we want to go after.
PECINA: It's what may happen to those jewels if they're found that makes critics fume.
HARRIS: If we find a bag of diamonds and they're the shipment that we're looking for that was coming over from Switzerland, if we're able to retrieve those, we would definitely have to take a hard look at possibly selling them. They wouldn't have an archaeological value to us.
PECINA: But Harris says the company has no intention of selling any real artifacts, just bringing them up for preservation, something Congress could ultimately keep Americans from doing. But Congress could never stop other nations from salvaging what's left of what was once called "the unsinkable ship."
In Clearwater, Florida, Sonda Pecina for CNN.
HAYNES: Our next stop is Lebanon, a country along the Mediterranean Sea. Now, while Lebanon wasn't a port of call for the Titanic, we're going to take you there for a glimpse of the ship anyway.
Check this out. This is a model of the famous Titanic made out of match sticks, of all things. It took a Lebanese man and his son nearly 18 months to build it. He says it was painstaking work to put the ship, which is three meters long, together. He watched the movie over and over again to get the details right, and even included the ship's interior, complete with dining rooms, bedrooms, staircases and swimming pools. It looks pretty shipshape to me.
By the way, if you're wondering how many match sticks it too, you wouldn't want to have to count them. His tally? More that 18 million.
RUDI BAKHTIAR, CO-HOST: She has had a front row seat to history like few others still living. Her majesty, Queen Elizabeth, the Queen Mother, affectionately known as the "Queen Mum," turned 100 years old last month to much pomp and pageantry.
During her lifetime, she's seen Great Britain's glory days and its dark days, and has maintained her dignity through them all. It's been nearly 50 years since she gave up her title of Queen of England to her daughter Elizabeth after her husband King George VI died.
Still, she remains one of Britain's favorite royals, as Margaret Lowrie reports.
MARGARET LOWRIE, CNN CORRESPONDENT (voice-over): Queen Elizabeth, the Queen Mother, the Queen Mum, Elizabeth Bowes-Lyon, born into the bosom of English aristocracy on a summer's day nearly 100 years ago, as if to snare a ring-side seat when the 20th century began to unfold.
But history was to claim her, moving her center stage as her husband become King George VI, forced onto the throne abdicated by his brother Edward VIII.
GERVASE WEBB, BRITISH JOURNALIST: He was the one who was going to take center state. Then, of course, Mrs. Simpson turned up, there was the abdication, he was never crowned. And all of a sudden, a huge shock to the young Elizabeth that she was now the queen.
LOWRIE: Now the queen, what she called an "intolerable honor," to a reluctant king.
INGRID SEWARD, AUTHOR, "THE LAST GREAT EDWARDIAN LADY": He had no training for kingship. He had never seen a state paper. He had a severe stammer and he hated making speeches. So, basically, what it meant was that if he become king, basically, the Queen Mother would have to also be king because she would have to be right behind him.
LOWRIE: Behind him and beside him through the troubled times of war.
WEBB: She's a small, diminutive woman, but a very strong, very powerful, extremely influential person. I think it's probably fair to say that, had it not been for her, then we might not have a monarchy now.
LOWRIE: She refused to leave London during the Nazi blitz, even after the bombing of Buckingham Palace, an example of courage and calm for a country under siege. Hitler himself reportedly had a name for her.
SEWARD: The most dangerous woman in Europe, yes. And Hitler was probably right because the Queen Mother saw through the situation for what it was.
LOWRIE: Soft, flowing pastels on the outside, steel on the inside, the last great queen empress from when the sun never set on the British empire.
Her husband's death in 1952 saw her role gracefully cede to that of the mother of the queen during the years of her daughter's reign as the empire itself slipped away.
WEBB: We've all been through some very unsettled times since the '70s, really, or since the '60s, with the economy going up and down, finding a new role in the world, and generally trying to shake off the past and embrace a new way of life and a new lifestyle. And throughout that, she has been a sort of constant thread.
LOWRIE: A constant thread in the nation's collective scrapbook and her own family album, now known not just as the country's granny, but grandmother of the heir to the thrown, and increasingly as the great-grandmother of the heir's heir. Her admission to the century club means she has lived to see Prince William come of an age himself.
But if the world today is less in awe of the monarchy, less respectful than the world she's inhabited for nearly 10 decades, she nonetheless continues her stately journey into yet another year, another century, the living embodiment of a nation and its history.
Margaret Lowrie, CNN, London.
WALCOTT: Another milestone in Great Britain this year, only this one didn't receive nearly the attention as the Queen Mother's birthday. Walter Leach also turned 100 years old. Who's Walter Leach?
Well, as Richard Blystone explains, he's a British artist who also was a witness to history, though his vantage point wasn't nearly as royal.
RICHARD BLYSTONE, CNN CORRESPONDENT (voice-over): The light of a century shines through Walter Leach; occupation: stained-glass window maker, 80 years; mission: volunteer fighter against leprosy, 71 years.
He's seen the start of two centuries and likes this one better.
WALTER LEACH, CENTENARIAN: We lived in a drab world then.
BLYSTONE: A world of work...
LEACH: We thought nothing if we had to work 12 hours a day. And shops used to open from 8:00 in the morning until no more people came, sometimes 11:00 at night.
BLYSTONE: ... and the fear of disease; as a child, hospitalized with diphtheria.
LEACH: I remember all the little boys, girls with us, used to play together in a play room. And I used to see them, one by one, being wrapped up in a sheet and taken away.
BLYSTONE: Diphtheria didn't get Walter Leach, nor did World War I, when men went over the top never to return, and 700,000 of his countrymen died.
LEACH: I was joined up with all the others and went through my training. And then I had my draft leave, came home, said goodbye to all my family, thinking I was going over the top, too.
BLYSTONE: Then one day he was told to wait, and later, to go home. World War II bombings killed the market for stained glass. Walter Leach joined the Navy. After the war, he set aside his occupation, got married, and pursued the cause he had been raising money for years. He ran a leprosy clinic in Africa. For 13 years, the rest of the world went on more or less without him. He came back to find change at full tilt.
LEACH: So, I says, it's wonderful what they're doing. And all the discoveries, people going to the moon, all that kind of thing, I felt that a tremendous amount of good will come out of it.
BLYSTONE: His wife made him give up bicycling, but he still walks two miles into town and back to do the daily shopping, still sings in his church choir, gives all his earnings to his leprosy charity; and is determined to finish this window he's designed for his church.
Walter Leach never says "in my day." He's on good terms with his world, this world. He remembers what his teachers said about judging stained glass.
LEACH: Try and say something good about it first before you start to criticize it. And he taught me that, always look for something good first.
BLYSTONE: And when the patterns of phosphorescent dots you're watching now have long faded, Walter Leach's work will still be young.
Richard Blystone, CNN, Summertown, England.
HAYNES: With the summer Olympics coming up in Sydney, Australia, you may hear a lot about exercise regimens and drug testing. Olympic organizers want to make sure all the athletes perform to their natural and best ability. High schools want the same assurances, but one high school in Alabama is going an extra mile when it comes to smoking.
Brian Cabell explains.
BRIAN CABELL, CNN CORRESPONDENT (voice-over): Football players at Hoover High School...
UNIDENTIFIED MALE: Got to have it! Got to have it!
CABELL: ... can't smoke cigarettes anymore. The school district is now testing its athletes not only for alcohol and drugs, but also for tobacco.
RUSH PROPST, HEAD FOOTBALL COACH: It's a strong statement for us athletically to take a stand against the tobacco industry. And, you know, I just don't think athletes need to smoke. I don't think any kid needs to smoke.
CABELL: If an athlete's urine test shows positive for tobacco, officials will first notify the parents and tell the student to quit.
(on camera): With a second offense, student athletes will be required to take a tobacco education course and face further drug testing. With a third offense, they will be suspended from one fourth of their upcoming athletic contests.
(voice-over): It's not a total ban, but it is incentive not to smoke.
LANCE RHODES, QUARTERBACK: Hut!
CABELL: Quarterback Lance Rhodes admits some of his teammates do smoke.
RHODES: At our school, yes sir, there's a few that do, and a few that have quit, because we've set it straight at our school.
CABELL: The testing will be random, but officials say at least half the athletes in all sports will be tested, and retested regularly if they fail.
RON SWANN, ATHLETIC DIRECTOR: If your child tests positive for tobacco in the seventh grade...
CABELL: The testing, in fact, extends to the middle schools. Officials say neither parents nor students have objected.
SPANHOUR: And I'm very proud to be part of a community that agrees with this and is kind of pioneering that. And I think it's definitely a wave of the future.
CABELL: Legal challenges? Athletic director Ron Swann says the courts are on their side.
SWANN: If you participate in something after-school hours, then you can pretty much put on them the rules that you -- the community wants for you to have on that group of students.
CABELL: The ACLU concedes as long as students and parents agree to the testing, it's probably legal, but a dangerous precedent.
ARTHUR SPITZER, ACLU: Once Big Brother starts on the path towards chemical testing, who knows where that will end?
CABELL: But for the student athletes in Hoover, that's apparently not an issue yet.
Brian Cabell, CNN, Hoover, Alabama.
HAYNES: All right, good for those guys.
Listen, I was trying to write "bye" on this thing, but instead it looks like some linear mess here. All the lines are connected together. I don't know. Anyway, I need George, that Etch A Sketch expert.
Listen, guys, you have a good weekend. We have Monday off in the United States due to Labor Day. So if you're in the U.S., have a good long weekend, and we'll see you back here Tuesday. Take care.
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