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CNN NEWSNIGHT AARON BROWN

Snatched Baby Reunited with Family; Historic Prague Flooded; Spokesman for Hatfill Attacks FBI As Irresponsible

Aired August 14, 2002 - 22:00   ET

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


AARON BROWN, CNN ANCHOR: Good evening again. I'm Aaron Brown. A lot of ground to cover tonight, but for a second, we want to revisit a theme from last night about accountability, and we got some inspiration from a eulogy we came across, one delivered in honor of a businessman.
It went like this: "Wherever his name and his company is known, it is the equivalent to integrity. He could not be bought with money or power or influence or prestige. His principles got him into much trouble, but that was trouble he liked. To him there could never be any real trouble as a result of following principles."

That eulogy was delivered in 1947 for a guy named Arthur Andersen. We wonder what Mr. Andersen would think of all that is going on today, literally today.

"The New York Times" called it D-Day for corporate America, which may be a bit of a stretch, but we get the idea. Today was the deadline for CEOs of about 700 big companies to file sworn statements with the federal government, their name literally on the line. If their company's financial statement turn out to be shady, they got trouble.

There's a practical reason for doing this: It will make it somewhat easier to punish a rogue CEO, fine them, or throw them in jail. But there's also a lot symbolism here, and the hope that having a name and a reputation at stake just might make an executive stop and think. Think before cutting corners or trying to sneak something by the government or investors or the auditor.

We're guessing that Arthur Andersen would be pretty stunned that CEO's would be forced to be accountable. As they put it in his eulogy, Arthur believed in truth. For him there was no alternative.

We begin "The Whip" tonight the way we did last night as well. Another case of a kidnapped child who was found unharmed. Two-for- two, it seems, on the good news department about kidnapped kids this week. Ed Lavandera is in Abilene, Texas.

Ed, the headline from you, please.

ED LAVANDERA, CNN CORRESPONDENT: Well, Aaron, how do you put into words what the Chavez family has experienced here in the last 24 hours: fear, anxiety, happiness -- probably impossible to describe in words what has happened, but they were gracious enough to allow a news media camera to capture a moment that should make you happy and cry at the same time.

BROWN: Ed, thank you. Back to you in a moment. A story about a child welfare system doing it the right way for a change, and it did take change. Nissen, a headline from you please.

BETH NISSEN, CNN CORRESPONDENT: Now that the head of Florida's child welfare system has resigned, there's renewed debate on how to fix that troubled system. We've been to Allegheny County, Pennsylvania, which includes the city of Pittsburgh, to see how they've transformed their child welfare system into a national model.

BROWN: And now to the extraordinary and deadly floods rampaging across Europe. Mike Hanna is in the Czech capital of Prague tonight. Mike, a headline from you, please.

MIKE HANNA, CNN CORRESPONDENT: Well, here the floodwaters are slowly beginning subside. But the full cost of this disaster will take days to fully count -- Aaron.

BROWN: Mike, thank you. Back to you -- all of you shortly. Also, coming up in the program tonight, "Their News." It comes to us from Germany, how Dresden and other German cities are literally weathering the storms that seem unable, unwilling to stop. We'll talk with Pat Clawson, a friend and spokesman now for Dr. Steven Hatfill, the so-called "person of interest" in the anthrax case.

And, a legend in the airline business on the dramatic things going on in that industry. The former chief executive of American Airlines, Robert Crandall, will join us. We'll also have the latest on the priest abuse scandal. We haven't said that in a while, it seems. Some fascinating testimony released from Cardinal Law of Boston, or maybe infuriating, depending on how you see it all.

And the contest that's the talk of the state fair. Not the tallest corn stalk or the ladies' chicken calling, though those too went on at the state fair. In this case, really hot contests are political ones at the Iowa State Fair. Bruce Morton on that a little bit later also, so it's a very full hour.

Coming up, we begin in Abilene, Texas with the safe return of a kidnapped baby girl. These stories have come so frequently that one seems to segue into the next. We found out about this child's abduction last night, just as we were reporting on the return of another child, Jessica Cortez, in Southern California.

Here we go again, we thought, and please, oh please, let this one end well. Thankfully it did. Tonight, a mother held her daughter in her arms again, but with the scars of what she's gone through written all over her face. Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

LAVANDERA (voice-over): There's nothing quite like holding your newborn baby, so imagine the feelings and emotion rushing through the arms of Margarita Chavez, her one-month-old baby back safely, and a family reunited. MARGARITA CHAVEZ, MOTHER: My hopes never ended. I trust the Lord. I was very sure that I was going to get my baby back.

LAVANDERA: Tuesday afternoon, Margarita Chavez walked out of Wal-Mart with her three children, but what she didn't know, police say, was that 24-year-old Paula Lynn Roach had been circulating the parking lot looking for a baby of her own. A surveillance camera captured the abduction. It only took a moment.

Margarita turns around to put away a shopping cart. Just seconds later the baby is gone. Take a closer look at the video and you see a 13-year-old boy, Roberto Gann, lunging for the car. He tried to save little Nancy but couldn't.

ROBERTO GANN, ABDUCTION WITNESS: I started chasing the car. I seen her (UNINTELLIGIBLE), that made me run fast. I got to the car and I tried to open the door, I couldn't open the door, so I swung at the window.

LAVANDERA: Years from now little Nancy Chavez probably won't remember this day, but you can bet her mother and father will share this story with her. After all, they say, you never forget the most frightening 24 hours of your life.

SALVADOR CHAVEZ, FATHER (through translator): My family and I are very happy to have our baby back with us.

(END VIDEOTAPE)

LAVANDERA: Now about the suspect, Paula Lynn Roach. She's 24 years, being held on $200,000 bond, and being charged with aggravated kidnapping. Now police sources have told us throughout the day that they believe that Roach was trying to fulfill some sort of need to have a baby, and that when she was pulled over in Quanah, Texas, which is about 120 miles north/northeast of Abilene, with the baby and with her own mother alongside, she told police that she had just had the baby the day before.

And obviously when the police looked at the baby and saw that it was clearly not a day old, that's when police here started suspecting that they had found the child that this whole state has been looking for -- Aaron.

BROWN: Was her mother taken into custody also?

LAVANDERA: Well, that's one the things I spoke with the police chief a few hours ago, and that's one of the issues that they're trying to iron out at this point.

They don't believe the mother's story at all. Apparently, police tell me that the mother has told them that she believed the story, that her daughter had the baby the day before, and in fact she told that story as well to her stepfather.

But as the police chief said, that's not a story they're buying into at all at this point. But despite that, it's still not clear what they're going to do with her at this point.

BROWN: So that investigation goes on. Ed, it's a different story tonight than it seemed last night. Thank you for your work.

On we go. There is something profoundly unsettling, at least to us, about seeing Cardinal Bernard Law of Boston being deposed in the priest sex abuse scandal. He is the country's most senior Catholic cleric, an important man, and there he sits answering questions, bobbing and weaving some, trying to explain what in many cases is simply inexplicable.

There was also something quite common about the testimony, something seen every day in every courthouse everywhere in the country. The cardinal, saying in different ways and in different words, it's not my fault. I cared about kids. I wanted to protect kids. The fault lies elsewhere. Here's CNN's Brian Cabell.

(BEGIN VIDEOTAPE)

BRIAN CABELL, CNN CORRESPONDENT (voice-over): Cardinal Bernard Law has now completed four grueling days of deposition testimony. More lies ahead. But now there's renewed talk of a possible pre-trial settlement.

OWEN TODD, ATTORNEY FOR ARCHDIOCESE: The odds are very good in any case that there will be a settlement. I don't see anything to distinguish this case from any other case.

CABELL: That came as news to lawyers representing alleged sex abuse victims of Reverend Paul Shanley.

RODERICK MACLEISH, PLAINTIFF'S ATTORNEY: Settlement discussions with the archdiocese have been off the table for weeks now. There has been absolutely no indication of any interest.

CABELL: Legal posturing perhaps, in a series of potentially big money civil cases involving Reverend Shanley, who now awaits criminal trial for repeatedly raping a child. Cardinal Law faces allegations that he ignored, or at least downplayed, sexual misconduct by Shanley and other priests in his archdiocese.

His defense in the just released deposition? He sometimes wasn't shown the confidential files of pedophile priests, he said. In other cases, he said he was told by others that the priests had been rehabilitated.

LAW: I simply don't have the professional competence in this area. I am not a psychiatrist, I'm not a psychologist, and in order to make a decision as to whether or not someone can appropriately be assigned, I have to depend on those who have that competence.

CABELL: The Reverend Shanley civil cases may go to trial later this year, if there's no pre-trial financial settlement. The archdiocese may not have enough money for it. It's already facing possible bankruptcy because of other lawsuits involving defrocked priest and convicted pedophile John Geoghan. A possible $30 million settlement in those cases has been put on hold by the archdiocese. Amid all the talk of money and settlements comes this plea from the parent of one of Reverend Shanley's alleged victims.

RODNEY FORD, FATHER OF ALLEGED VICTIM: My son and other children were abused, raped by a priest, under the supervision of Cardinal Law. That focus has to remain.

CABELL: Cardinal Law faces no criminal charges. He's resisted repeated calls for him to step down from his post.

Brian Cabell, CNN.

(END VIDEOTAPE)

BROWN: We go to Europe, now. Depending on who you ask, this is either the worst flooding Europe has seen since the time of Kaiser Wilhelm, Napoleon Bonaparte, or Henry VIII, making this anywhere from a once-in-a-century disaster to the kind that only comes around twice in a millennium. Either way it's pretty bad. About 100 people have died. Thousands are without homes tonight. And, all of this is happening in an architectural and historical treasure house. Many of the cities that are now under water were around for the floods of the 18th Century and the 15th Century and floods even before.

We turn again to CNN's Mike Hanna who comes to us tonight from Prague - Mike.

HANNA: Well, there aren't many around who can remember it but the last time there were floods like this according to Prague's records, were way back in 1890. It's shortly before dawn here, but the sun is likely to reveal that the waters have begun to subside. Authorities saying that the flood has reached its peak in this city, at least. And it is now time for them to begin to clean up the immense amount of damage.

Well, the river Vltava has been storming through the city for a number of days now, flooding a lot of very, very historic real estate, in particular the Old Town of Purg (ph), the city of Prague. There the flood embankments that were built did prevent a lot of destruction. The water did seep through many parts of the town but did not destroy the entire Old Town completely.

But there were lots of other buildings along the river, on islands in the middle the river that was seriously destroyed. Tens and thousands of people were evacuated from their homes. They will have to stay away until it's found clear how extensive the damage is.

In the course of Wednesday, too, a moment of drama. Onlookers had gathered around the banks of the river to look at the current as it went through the capital. Police tried to keep them away. And it became clear why they were trying to, when one of the onlookers fell into the river. He managed to grab onto the spans of one of the many bridges that line - that cross river through Prague, and a very brave rescue worker managed to come down and hoist the man to safety. And amidst all this human suffering, a part of animal tragedy, the Prague Zoo is just down river, in very low-lying area. Officials there had attempted to move a number of animals to safety, this they managed to do. Many of the animals moved to quarters in higher grounds, but they were not able to succeed in a case of 35-year-old Indian elephant, Kareem (ph), who's enclosure was slowly becoming flooded. The officials tried to get him out of the enclosure but failed. And they had to put the elephant down rather than let him die from drowning. Also killed in the floods a hippopotamus and a gorilla. Also reports that two seals escaped. They've been seen reportedly swimming in the river.

But all this a side bar in terms of the human disaster here, tens of thousands out of their homes, and city officials now saying it could take weeks before it can be discovered whether their buildings or many of the houses and homes are safe to move back into - Aaron.

BROWN: Mike, I just missed the key word in the last part, unfortunately. It will how soon before they know how bad the damage has been, how high a cost?

HANNA: Well, at the moment, some areas are drying out quicker than others. They know that certain historic buildings like the National Theater, this an absolute symbol of Czech culture, which was flooded badly Wednesday, they're already in there pumping out the water. They are seeing certain areas where they are drying out, where they are able to ascertain how much damage has been done. But the real danger is that the water table has risen around the river. There are seepage problems in various areas. And in order to see how much the buildings been undermined, how much these old cobblestones have been undermined is going to take a long, long time. They're not predicting exactly how much time at this stage, Aaron, but they are saying that it's rather a matter of weeks rather than days.

BROWN: Mike, thanks. Mike Hanna is in Prague, in the Czech Republic tonight.

A little later in the program, we'll take a look at their news which comes to us from Germany. This flooding has cut a wide path across much of Europe. We'll see how the Germans are dealing with it. And for purposes of their news, we'll take a look how they're reporting on this. That's later in the program.

Ahead also coming up, a child welfare agency that seems to be doing things right. We'll take a look at that later.

Also, up next, the situation of scientist Stephen Hatfill, the FBI so-called "person of interest" in the anthrax investigation. More of his side of the story as NEWSNIGHT continues on CNN.

(COMMERCIAL BREAK)

BROWN: Some progress to report tonight on the anthrax investigation, on the scientific side. Investigators are telling us tonight that the anthrax found on a mailbox in Princeton, New Jersey probably came from one of the deadly letters. In other words, this wasn't a case of cross contamination somewhere else along the line. At least that's the way they're leaning tonight. Lots of testing still to be done.

On the human side, the focus remains either on Dr. Steven Hatfill or someone who looks an awful lot like him. Yesterday, federal agents were showing a picture to people in Princeton, New Jersey. They have been reluctant to say that it is, in fact, a picture Dr. Hatfill. Some people though do say it sure looked like him. Others said they didn't know. And a few said it simply looked like a guy they'd seen on TV.

And Dr. Hatfill was on TV on Sunday telling his part of the story. Part of the challenge in all of this also for our next guest, Pat Clawson is a friend and is also as a spokesman for Dr. Hatfill. And Mr. Clawson joins us tonight from Washington.

PAT CLAWSON, SPOKESMAN FOR STEVEN HATFILL: Good evening.

BROWN: Thank you. Good to have you with us.

By the way, wouldn't it be easier if just Dr. Hatfill came and answered these questions and then you could be home doing whatever it is you do and we could go right to the source?

CLAWSON: He wants to.

(CROSSTALK)

BROWN: Pardon?

CLAWSON: He wants to speak out quite loudly, but his attorneys have advised him to stay quiet for the time being because they don't know what the Justice Department is trying to do to him.

BROWN: Well, let me - maybe I'm leaping a little hard here, but since they seem to be showing his picture to people in Princeton, New Jersey, and not showing anyone else's picture to those people, it sounds to me like maybe they think he's the guy?

CLAWSON: Well, I don't think there's any question about it. And I've got to tell you, Aaron, the showing of the Hatfill photograph in New Jersey is very troublesome. Because that's not the way that investigators normally do a photo canvas. Normally when they're doing such a canvas, they have several pictures with them so that they can weed out false positives, erroneous witnesses, that sort of thing. That's not happening here at all. This is actually setting him up for a fall. It's a very unfair investigative tactic. I'm a private investigator and a long-time private investigative reporter for news organization, including CNN, and I've done these spreads myself, and this is simply not how you do it.

BROWN: Well, just briefly, because I want to try and get to some other things here, if he's being set up, why? Why would the government set this guy up when -- there's a whole universe of people and, frankly, in other countries, that for political reasons, they might rather nail on this? CLAWSON: It's a good question why he's become the focus of the spotlight here. Obviously, it's because he's had kind of an interesting background. He's done some interesting things. But there's been no evidence at all tying him into the anthrax attacks. The Justice Department acknowledged that yesterday to the Associated Press. They said that there was no evidence that he was involved, but they wouldn't clear him.

Aaron, we have a very troublesome situation developing here. And it basically boils down to this: Steve Hatfill told me as recently as this afternoon that he has never been in Princeton, New Jersey to the best of his knowledge. Never been there. But we have the United States government coming out now and saying basically, "you know, fellow, you look a little funny. We don't have anything on you. We don't have any evidence that you committed a crime, but you look a little funny."

So, we're going to call you a person of interest. We're going to say that we're interested in what you're doing and we're going to broadcast that to the nation. Do you realize the tremendously chilling effect that's having on the man's civil liberties? And I'll tell you, Aaron, tomorrow it's going to be you, and it's going to be me and it's going to be our next door neighbor if this kind of stuff doesn't stop.

BROWN: OK. Let's -- point made. Let's move on. I'm a little confused about a couple of things. I'm hoping you can answer them. If you can't, let's move on. I have some -- I'm confused about the lie detector test. There have been several. There was one given, I believe, by the CIA, and he failed that. This didn't have to do with anthrax. It had to do about his background. Can you...

CLAWSON: I don't know if that's true or not.

BROWN: OK, fine.

CLAWSON: I don't know if that is true or not. There's been a number of misleading reports that have come out about him. What is clear, as he stated in his news conference on Sunday, he took a polygraph and passed, that he had nothing to do with the anthrax.

BROWN: We'll deal with that in a second. Is it true that he has lost his security clearance based on a polygraph test that was given? Is that true?

CLAWSON: I do not fully know the circumstances of what happened with the polygraph or the loss of his security clearance. And I don't have all that information for you. I don't want to mislead you.

BROWN: All right. Then -- thank you, I appreciate that. Then on the anthrax polygraphs, there have -- just let's walk carefully here -- there's been more than one, is that correct?

CLAWSON: It is my understanding that there was one polygraph test.

BROWN: There haven't been three polygraph tests dealing with anthrax?

CLAWSON: I'm not aware of three polygraph tests. I'm aware of the one.

BROWN: And is it your -- is it Dr. Hatfill's position that he was told by the FBI or by the Justice Department that he passed those polygraphs, because as I'm sure you know, the "New York Times" and other news organizations said something quite different, that he was evasive on the anthrax questions?

CLAWSON: Well, I'm advised by his attorney that the references to the polygraph tests and the "New York Times" articles are bunch of bunk. And I will tell you, Aaron, I have personal knowledge of many of the facts that had been alleged in those "New York Times" articles and they're total fabrications.

BROWN: Well, let's just deal with the polygraph. Let's not go wandering.

CLAWSON: Sure.

BROWN: That is bunked to you, that he failed these tests, correct?

CLAWSON: I'm unaware of him failing any test.

BROWN: OK. Then, the other thing that was in the "Times" yesterday and also been widely reported in the last several days is the bloodhounds or the dogs in the apartments, the restaurants, Dr. Hatfill himself and his girlfriend's apartments, do you have any sense of whether these dogs were also part of a set-up of Dr. Hatfill?

CLAWSON: I don't know if they were part of a set-up. And I'll tell you this much, we don't know anything about these bloodhounds. We don't know what these bloodhounds were trained to find. We don't know who trained. We don't know how they were put into operation.

Bloodhounds are almost like police officers, Aaron. They're special dogs, and they have to have extensive training records. And to the best of my knowledge, I've heard an awful lot about bloodhounds in the media, but I haven't heard anybody in the media asking the FBI what these dogs were actually trained to do, who trained them and what their qualifications actually are. That's a pretty big mystery.

I have a friend who trains police dogs, has done it for over 10 years. They tell me this is baloney what the FBI has put forth and "Newsweek" magazine.

BROWN: Pat, we'd love to talk to Dr. Hatfill if you can help us out there. He's welcome to join us anytime.

CLAWSON: Well, I can tell you that Steve Hatfill wants to tell his story to the American public. I think when his lawyers feel that he's able to make some television appearances, he will do that.

But something very, very terrible is happening in this country, Aaron. And this is just a sign of it. We're losing our liberties in the war against terrorism.

BROWN: Point made. Thank you, and made it well. Pat Clawson, who is a friend and a spokesman in this moment for Dr. Steven Hatfill on the investigation that is certainly uncomfortable for Dr. Hatfill.

Coming up on NEWSNIGHT, we'll take you to the Iowa state fair, not just for the fun of it, because politics is being played out there. That's coming up later.

Up next, America's airlines, not American Airlines, but all of them, will they survive? What will it look like if they survive? We'll talk with a man who knows the former CEO of American Airlines. Robert Crandall joins us as NEWSNIGHT continues from New York.

(COMMERCIAL BREAK)

BROWN: We came across an interesting article in "USA Today" about the airline business. The industry, said the article, is bleeding from domestic travel cutbacks. Foreign fliers staying at home, dramatic decline in business travel, which, by the way, is a huge profit center for airlines because they charge business travelers their highest fares. It is all interesting stuff, especially when you look at the dateline on the story: September 10, 2001.

This, of course, a long-winded way of saying the business, the airline business, was having a rough time even before September 11. The attacks made a bad situation a whole lot worse. And over the past few days, we've seen just how bad it is. U.S. Airways on Sunday filed for bankruptcy protection. American Airlines yesterday, and now 7,000 job cuts and a complicated restructuring plan. Today came United, saying it may file for bankruptcy by fall if dramatic cost cuts don't do the trick.

We can't think of a better person to talk to about what's happening to the industry, which was his industry, Robert Crandall, the former chief of American Airlines. Mr. Crandall joins us tonight from Dallas, Texas. Welcome.

ROBERT CRANDALL, FORMER CEO, AMERICAN AIRLINES: Thank you.

BROWN: It's always been a boom and bust sort of business. As the economy went up and down, the airlines' fortunes went up and down. This clearly though is more than just that and more than September 11. So what is it?

CRANDALL: Well, it's a whole variety of things, Aaron. The airline business has always been subject to radical change. Back in '78, we deregulated the industry. Every airline had to revise its business model very dramatically. What you're seeing now is a confluence of many factors, the recession, the decline in business travel associated with the recession and with September 11, the discouragement that some travelers feel about new and very stringent security requirements, the development of the Internet as a distribution channel, which makes it easier for people to find the lowest fare, where ever it may be. So you've got half a dozen, seven or eight factors that are putting enormous pressure on the airline business and the business model that was built up between deregulation and 2000 and the recession that began and in the fall of 2000. So every airline, every major airline is going to have to redo that business model. And that's going to be a very, very difficult.

BROWN: And so will they all end up looking like Southwest Airlines, which seems to be the one airline that goes to the bank quite regularly to make a deposit?

CRANDALL: Well, that's right. Even Southwest, of course, as they've had a very narrow profit, but even they've had a tough time. I think you're going to see airlines moving towards the kind of simplified service structure, the kinds of more efficient service structure that US Airways is trying to move towards in its bankruptcy filing, that American Airlines announced yesterday, changing the way the hubs operate, putting different a configuration of seats in the airplane, simplifying the fleet. And I might add, a long the way, and absolutely essential, all of the traditional carriers are going to have to accomplish some very, very substantial wage cost, labor cost reductions. And that's going to mean some hard bargaining between the executives who run those companies and the unions. But it's just one of those things that has to be done.

BROWN: Well, you did a lot of hard bargaining when you were running American Airlines, most people, I suspect, are familiar with your face for the periods of hard bargaining you engaged in. Is it that pilots are simply making too much money and mechanics are making too much money, is that what it is?

CRANDALL: Well, I don't think it's entirely of making too much money, Aaron. It's a matter in many cases of some very inefficient work rules that came into effect during the period when the competitive and economic pressures on the airlines were not as great. It is also true, I think, that if Southwest and or US Airways coming out of his bankruptcy filing establish a certain wage level, that all those carriers that compete with those lower costs, are going to have to move in that direction. You know, the public regards airline seats, unfortunately, pretty much as a commodity. And the public has voted very vigorously with its pocketbook, they're voting for the lowest price.

BROWN: Mr. Crandall, I have got about 20 seconds and one more question. Are there just too many airlines out there?

CRANDALL: No, I don't think there's not too many airlines, there's too much capacity. You saw American and other airlines announcing recently less capacity. I think you will see still less capacity over the next couple of years.

BROWN: Mr. Crandall, it's nice to talk to you, retirement seems to suit you fine, you look terrific.

CRANDALL: I love it, thank you very much, Aaron.

BROWN: Thank you, sir, very much.

Still ahead on the program, we'll report on a child welfare agency that seems to come up with a way to make it all work.

And, up next, how the devastating floods in Europe are playing on their news.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: More now on the floods in Europe over the last week which have hit the city of Dresden in Germany very hard. This is, of course, a city that knows what it means to be under siege. And after watching some of their news from our sister network, Germany's NTV, some Dresden residents seem determined to stick it out by staying at home.

(BEGIN VIDEOTAPE)

(SPEAKING IN GERMAN)

UNIDENTIFIED NTV ANCHOR (THROUGH TRANSLATOR): Dresden this afternoon, helicopters are the final hope for those locked in by the floodwaters. The river Elba has lost all romantic meaning and become a deadly trap. Pilots are pushing their 'copters to the limit. They have been deployed continuously for more than 24 hours.

UNIDENTIFIED NTV ANCHOR (THROUGH TRANSLATOR): Good evening. And welcome to NTV.

As if these scenes from Dresden weren't bad enough, they are only the beginning. Meteorologist using data from Czech authorities are predicting that the situation will worsen dramatically in the next few days.

This flood of the century has hit the cities of Regensburg, Dresden, Prague and presumably will soon hit Dachau as well.

Let's take a look first at the capital of the state of Saxony and its surrounding areas. At least eight people have perished there so far.

UNIDENTIFIED NTV ANCHOR (THROUGH TRANSLATOR): Dresden's main railway station offers dramatic pictures. Flash floods of Elba water pour forth from the entrance to the newly renovated building. The track hall is a lake stranding long distance trains. Everything has come to screeching halt. The well-known pastoral panoramic view of the Elba at the state's capital is unrecognizable. The historical architectural wonders of the Old Town have survived many a flood. But there has not been one in memory that has been as bad as this one. What can be saved must be saved: Saxon baroque, priceless cultural treasures or simply one's own four walls.

Professionals and volunteers are filling and stacking sand stacks at a fever pitch. Many Dresdeners refuse to leave their homes despite eminent danger to lives and well-being. They want to defend their possessions from destructive floodwaters or from looters. UNIDENTIFIED NTV ANCHOR (THROUGH TRANSLATOR): The Elba is carrying four times its normal volume past Dresden at the moment. Over night the flood subsided slightly. The water has left the state parliament building, but people of Dresden have no reason to feel relieved. A new flood wave will be arriving from northwest Bohemia via Prague. A tremendous new water level surge awaits the Elba River cities.

Almost the entire state been affected by the floods, leading to dramatic rescue missions in many parts of Saxony. The number of deaths climb to six overnight. More than 95 have been injured. The number of missing persons cannot yet be established due to the scale of the situation.

UNIDENTIFIED NTV ANCHOR (THROUGH TRANSLATOR): There's little hope of short term improvement in Saxony, in Saxony and (UNINTELLIGIBLE). Weather experts have expressed concerns that things could get worse in the coming days.

(END VIDEOTAPE)

BROWN: Their news from NTV in Germany tonight on the flooding.

Some other stories making news around the world tonight. We begin in Israel and the trial of senior adviser to Yasser Arafat. The trial got under way with the defendant, Marwan Barghouti, denouncing Israel and denouncing the charges against him. He's accused of being a key organizer of the Al Aqsa Martyrs Brigade. The prosecution says it could tie him to 37 attacks and 26 killings over the past two years.

And everywhere he went all week long, Fidel Castro has heard the same darn thing, happy birthday. He's 76 today. He spent part of the birthday inspecting school restoration project in Havana. Also there, California Congresswoman Maxine Waters, who supports closer ties with Cuba.

Ahead on NEWSNIGHT tonight, the story of child welfare system that works.

And up next, let the campaign begin. Oh, I can hardly wait. We're off to the Iowa State Fair where they're playing politics. We'll be right back.

(COMMERCIAL BREAK)

BROWN: Tip O'Neill, who used to say all politics is local, would have had a tough time saying it today. These days, most politics, especially presidential politics, is wholesale, and most of the selling takes place on television. Except, perhaps, in Iowa, where the state fair can feature prize heifers, the president of the United States, and a lot of men who would like to have that job, too. Here's CNN's Bruce Morton.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We produce more pork -- have more pork than any state in the nation. We're number one.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Senator Tom Harken, flipping pork chops at the fair. He's running for reelection, so why not? And there's Governor Tom Vilsack with House Democratic Leader Dick Gephardt. He's running for maybe House speaker, maybe president. Maybe just helping a friend.

UNIDENTIFIED MALE: We'd be glad to give you one of these pork chop in exchange for Medicare (UNINTELLIGIBLE).

MORTON: President Bush went to the fair to say the economy was doing well. It's his seventh visit to Iowa since his election.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our working people can outwork anybody. Our entrepreneurs are more visionary. Interest rates are low. Inflation is low.

MORTON: And look over there. That's Connecticut Senator Joseph Lieberman, who may want Bush's job, saying things aren't that great.

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: As strong as the president has been in responding to the attacks of September 11, he has been weak in responding to our economic recession. And we need to do better together.

MORTON: Even for Iowa, this is the early season for presidential politics. Still, they're here.

UNIDENTIFIED MALE: We're from Des Moines, but we didn't vote for you.

LIEBERMAN: Well, maybe next time.

UNIDENTIFIED FEMALE: I'm from New Hampshire, and I did vote for you.

MORTON (on camera): If you're counting all the presidential wannabes at the fair in this piece, you may be wondering, where is John Edwards? Don't worry. He's not lost. He's not behind this sign. He'll be here later this week.

DAVID YEPSEN, "DES MOINES REGISTER": It's real early yet to be starting this campaign. There's some interest. But people are more worried about the economy, the drought, and things like that.

MORTON (voice-over): But most of the people who come to the fair come to enjoy the fair.

RECORDED FEMALE VOICE: Welcome to the Iowa State Fair, home of the world famous butter cow sculpted by Norma Lyon.

MORTON: About a million people come to the fair every summer, and the butter sculpture may be the most popular attraction.

And the food, well, you wouldn't believe it all. Turkey legs.

UNIDENTIFIED MALE: Weekends, we'll go though about a thousand a day.

MORTON: And there's music, all kinds of music. This is the Colfax-Mingo Swing Choir (ph), and they're right, the joint is jumpin'. The fair is jumpin'. Just ask anybody.

(COW MOOING)

Bruce Morton, CNN, at the Iowa State Fair.

(END VIDEOTAPE)

BROWN: It is the season. On to the future of ground zero -- I used to work at the state fair -- and an announcement today from the officials overseeing the redevelopment. They said today they'll pick up to five design firms -- five new design firms -- they want some new ideas. One of the officials admitted that the first six proposals floated a few weeks back, quote, "lacked spunk."

No one could quite describe the ideas we're getting on our Web site as lacking spunk, though last night architecture critic Paul Goldberger did call them passionate more than once, even if he was, well, a bit critical at times. By he's a critic. That's his job. Keep the ideas coming. We promise we won't beat you up. Cnn.com/NEWSNIGHT, and follow the links. They'll take you to the site and tell you how to do it, or more or less how to do it.

From Robert in Michigan -- we like this one because it's one of the few designs we've seen that includes the fragments from the original towers, so nice job there. Paul probably would beat the heck out of the guy.

Larry Purtell from Texas sent us this one, which seems to focus a lot on remembering on that distinctive look of the tower frames.

And this one from Hilary: a 60-story atrium space with a park inside that can be used in all seasons. That certainly does not lack vision.

Send it to us, CNN.com/NEWSNIGHT. Follow the links. You won't get a prize. Don't worry. And we won't beat you up. I promise, more or less.

Next on NEWSNIGHT, we'll take you to the city where the child welfare agency actually takes care of children. Son of a gun. This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: Yesterday, we poured over the "Miami Herald"'s Web site after the head of the state's child welfare agency resigned. And we found an enormous list of stories about kids lost in the system: a chronicle of bureaucratic dysfunction, one that makes your eyes glaze over and tear up at the same time.

And, we began the program last night by saying you can't run or dodge these sorts of problems, and call yourself a leader. You are paid to fix things, and they are fixable. We know that because NEWSNIGHT correspondent Beth Nissen traveled to Pittsburgh for us to report on one county, Allegheny, and its troubles, and lo and behold, its solutions.

(BEGIN VIDEOTAPE)

NISSEN (voice-over): Just six years ago, Pennsylvania's Allegheny County, which includes the city of Pittsburgh, had a child welfare system in crisis: 10,000 children in caseworker files, a third of those children in foster care, most with strangers, scores of foster children abused, scores more shuttled from foster home to foster home until they "aged out" at 18.

RICHARD WEXLER, EXEC. DIR., NAT'L COALITION FOR CHILD PROTECTION REFORM: Allegheny County once was a pathetic national disgrace. Today, it is a shining national model. Allegheny County is showing the nation that child welfare systems can be fixed, and it is showing the nation how to fix them.

NISSEN: What did Allegheny County do? They changed standard procedures, standard philosophy, starting with the children who need, for their own safety, to be taken from their parents' care.

UNIDENTIFIED FEMALE: Who's that?

UNIDENTIFIED CHILD: My mommy and me and my brother.

NISSEN: This six-year-old girl and her four-year-old brother were taken from their mother, a heroin user who was neglecting them. In the past, they would most likely have been placed, separately, with foster parents, strangers.

MARC CHERNA, DIR., DEPT. OF HUMAN SERVICES, ALLEGHENY CO., PA.: Anytime you remove a child from their biological home, it's traumatic for that child, no matter what has transpired.

NISSEN: Marc Cherna is the architect of Allegheny County's redesigned child welfare system.

CHERNA: If you have to place a child in foster care, the first thing we try to do is find relatives.

NISSEN: And license those relatives as foster parents. These children are living with their grandparents while their mother goes through the county's drug treatment program. Fifty-five percent of the children in foster care in Allegheny County are in "kinship care," and it has been a marked success: Children living with relatives are less likely to "act out," more likely to stay in one foster home.

UNIDENTIFIED MALE: They're with somebody that they know. They're not with a complete stranger. I think it's easier for them to be with somebody that is family.

NISSEN: When children are placed with relatives, their parents visit more often.

CHERNA: If you can do frequent visits, it keeps their bond, it gives them hope that they will get their children back.

NISSEN: And more of them do get their children back: 70 percent of children in foster care are now reunited with their parents within a year, six years ago, only 25 percent were. Allegheny County's broader goal is to keep children from being taken from their parents in the first place.

WEXLER: Most parts of the country have felt that the answer to all child welfare problems can be boiled down to "take the child and run."

NISSEN: Six years ago, authorities would almost certainly, protectively, have taken 17-year-old Dominique Byers (ph) from her parents' home.

UNIDENTIFIED FEMALE: I was running away a lot and drinking a little bit, and smoking a little bit, and doing stuff I hadn't done before.

REGINA BYERS, MOTHER: We just thought, she's out of control, they'll probably take her. We didn't know.

NISSEN: Instead of taking Dominique from her home, authorities sent help to her home: a caseworker expert in handling family crises involving adolescents, who make up 45 percent of the children in Allegheny County's care.

CHERNA: First thing we look at is, are there any kind of services or help that they need to adequately care for their child? And if we can maintain a child there, that makes us happy.

NISSEN: Intensive intervention has worked for the Byers.

(on camera): Do you see a change in Dominique?

UNIDENTIFIED MALE: Yes, most definitely. Like I said with your help...

UNIDENTIFIED FEMALE: She slowly helped me to be able to be able to like control my anger and stuff, the problems that I had, and things are starting to kind of turn around.

NISSEN (voice-over): Allegheny County wants to turn things around, offer crucial help and services, before families reach crisis. So the county helps fund a network of community-based resource centers, such as Hosanna House, located in a rusted corner of Pittsburgh, with a high number of child welfare cases.

LEON HAYNES, EXEC. DIR., HOSANNA HOUSE: They are losing their children, not because they don't love their kids, not because they've abused their kids, but just because "I can't make enough money to take care of my kid."

NISSEN: Anitra Bowen (ph) is a single mother with three young children, one of whom is autistic. She has no money, owes back rent, is unemployed and overwhelmed, a set of conditions that can lead to child neglect.

WEXLER: They do not take chances in Allegheny County. What they do is they remove the risk instead of the child.

NISSEN: At Hosanna House, a team of specialists work with Anitra, coordinate her job training, and her search for work as a paralegal.

UNIDENTIFIED MALE: The first thing we're going to do is we're going to get your resume together.

UNIDENTIFIED FEMALE: Any barriers that might impede your training goals, your ideas of what you want to do?

UNIDENTIFIED FEMALE: Housing.

NISSEN: They help her apply for low-income housing. They offer emergency and long-term child care.

HAYNES: The children, as a result of getting these resources, they're going to be healthier, they're going to be happy, and they're going to be home.

NISSEN: Support services for entire families are expensive: Six years ago, the annual budget for the county's children and youth services was $80 million, now it's $135 million, from a patchwork array of federal, state and local sources. Child welfare authorities say it's worth it.

CHERNA: An investment in services now, to help families before they really fall apart, saves a tremendous amount of money down the road.

NISSEN: In Allegheny County, the savings have been remarkable: Intervention and prevention programs have reduced the number of children taken from their families by a full third, 33 percent, in six years. County authorities are the first to say their system is not perfect, it cannot save every family, protect every child. But they can show evidence that the system is a vast improvement, is strengthening hundreds of families, and keeping thousands of children more safely in the care of those who love them most.

Beth Nissen, CNN, Pittsburgh.

(END VIDEOTAPE)

BROWN: It can be done.

Finally tonight, a quick note on a story we ran on Monday, a piece from Garrick Utley on celebrities who go on TV to talk about an illness they have or a drug they take, without letting you know and sometimes letting us know, frankly, that they're getting paid to do it. He also pointed out there are celebrities who do not do this, and the piece featured two of them: Michael J. Fox, who is battling Parkinson's; and Christopher Reeve. Today, we heard from both, making their positions even more clear. Mr. Fox, who we admire a lot, had this to say: "For the record," he writes, "when answering questions about my personal health situation or Parkinson's advocacy in general, my only agenda is to share my experience honestly and to encourage support for medical research.

He went on to say: "I received no fee or compensation from any pharmaceutical or health services company for doing so, nor would I ever enter into such an agreement."

And he adds: "The Michael J. Fox Foundation for Parkinson's Research has a strict policy of making no endorsements, paid or otherwise."

Christopher Reeve responded thusly with a smile: "I think there probably are a lot of celebrities who should be medicated, but I don't think anyone should pay them for it. I have never received money," he writes, "for any medical purposes whatsoever. Several companies have provided me with specialized equipment such as an exercise bicycle with electrical stimulation devices, maintains muscle strength," and the like, "I however, in return, have endorsed those products without charge to encourage their use by others with disabilities."

In any case, we thank them both for writing us. And we're delighted to know they watch. And we hope you'll watch tomorrow at 10. Good night from all of us.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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