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Aired August 19, 2002 - 18:00   ET

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JAN HOPKINS, GUEST HOST: Tonight, never-before-seen al Qaeda tapes obtained by CNN. Experts say that they show a well-organized, sophisticated terrorist group determined to develop weapons of mass destruction. Tonight, we begin our coverage with Nic Robertson, who made a treacherous journey to acquire those tapes.
NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Thanks, Jan. The videotapes CNN acquired clearly show al Qaeda's pursuit of chemical weapons. A pursuit that they took to the point of killing animals.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: U.S. officials will be looking on the tapes for faces, faces of al Qaeda leaders they may not know yet and faces of prisoners already held who may be closer to bin Laden than they are admitting.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: Stocks rally. Media and retail stocks drive the Dow Industrials and the S&P 500 to five-week highs.

GREG CLARKIN, CNN FINANCIAL NEWS CORRESPONDENT: And the Nasdaq closes in on 1,400 as it soars to its fourth straight winning session.

HOPKINS: Also tonight -- Israel begins handing over security of Bethlehem to Palestinians. It is the first part of confidence- building measures between the two sides.

The death toll rises in Europe. Fast-moving floods. Germans begin the tragic task of tearing down a historic city devastated by floodwater.

And Martha Stewart has just hours to turn over crucial documents to a congressional investigators. We'll have a special report.

ANNOUNCER: This is LOU DOBBS MONEYLINE for Monday, August 19. Sitting in for Lou Dobbs, Jan Hopkins.

HOPKINS: Good evening. Terror on tape. CNN has obtained the most direct evidence yet that Osama bin Laden and his al Qaeda network have been experimenting with poison gas. The evidence comes in 64 videotapes obtained by CNN senior international correspondent Nic Robertson in Afghanistan. The tapes were buried in the desert for almost a year. They provide a revealing look inside al Qaeda's training techniques over more than a decade.

Nic Robertson joins us now from CNN center in Atlanta. Nic, tell us what you found.

ROBERTSON: Well, we discovered in these tapes material that showed al Qaeda was very advanced in manufacturing weapons, TNT. They had a tape showing -- a training tape showing how to make TNT. But not just TNT; to make the detonators and fuses, the detonators, experts say, very difficult to make.

Along with this training video comes a list of chemicals for al Qaeda's operatives so they can pick these chemicals wherever they are in the world from pharmacists, from hardware stores. These are easy to get chemicals. What this told our experts was that al Qaeda could essentially turn up in any country and construct a bomb there. There are training tapes that show how al Qaeda was urbanizing their warfare to take it to Europe, to take it to the United States.

The tapes also show what we've never seen before, security around Osama bin Laden, and also key al Qaeda figures that we've never, ever seen before.

HOPKINS: Nic, you have shown these tapes to experts. What are they telling you is the significance?

ROBERTSON: Perhaps one of the most chilling things overall when viewed in totality -- and we spoke with a dozen experts here -- is that it shows in each of the different areas of expertise they have, be it chemical weapons, be it in explosives, be it in al Qaeda overall, they show a degree of sophistication, a degree of ability, the degree to which al Qaeda has pursued and tried to improve their techniques and capabilities, and also the way that the experts believe that they have disseminated their information by some of these videotapes, training tapes, disseminated that information to operatives around the world, possibly, they say, even to other jihad organizations.

HOPKINS: Nic, why do you think you had access to these tapes now? They were buried for a year.

ROBERTSON: The person who introduced me to these tapes is somebody I've known for some time. He certainly understands the value of putting in the public domain this type of material. He is somebody who is very familiar with the United States and would understand people's mind-set here, if you will, of the importance to him to pass on this material so that people could see better and understand better about al Qaeda.

HOPKINS: Thanks, Nic Robertson, at CNN center in Atlanta.

A senior White House official told CNN that the tapes confirm that al Qaeda has an urgent desire to develop weapons of mass destruction. He also said the tapes demonstrate the sophistication of the terrorist group. Joining us now with more is CNN national security correspondent David Ensor. David, what are people telling you about these tapes?

ENSOR: Well, Jan, U.S. officials are looking forward to getting their hands on these tapes soon. CNN is going to supply them, we are told, I understand from our employers, and they will be interested in looking at who is on the tapes. They are looking for faces. They are looking for new, for al Qaeda personnel they may not yet know about. They are also looking for people who might be on the tapes who might be in custody, perhaps in Guantanamo Bay, refusing to talk.

If they are on the tape, shown in a meeting with Osama bin Laden or other leaders, that might be -- that might help investigators to interrogate them and learn more about their role and the role of others in perhaps future plots that al Qaeda might be planning. So there are some uses for U.S. intelligence and for U.S. law enforcement in getting their hands on these tapes.

At the same time, officials are saying for the most part what we're seeing on them, the experiments on animals with chemical weapons, the rather precise terrorist training techniques, these are things they already knew about, Jan.

HOPKINS: Well, David, also, the tapes are old. So the question is, how much is al Qaeda able to do at this point, after what's been happening in Afghanistan of late?

ENSOR: Well, that's quite right. Some of these capabilities, officials say, may no longer exist. Al Qaeda had a pretty free hand in Afghanistan when most of these tapes were made. At the same time, the fact that the organization was looking in these directions, to weapons of mass destruction and so on, that has to be something that worries U.S. officials and puts them on their guard.

HOPKINS: Thanks very much, David Ensor.

The tapes provide the strongest evidence yet that Osama bin Laden and al Qaeda are testing deadly gas. The question now is, how far did the terrorists get with their experiments? CNN's terrorism analyst Peter Bergen joins us now from Atlanta.

Same question to you, Peter. Do we have any information about what in fact al Qaeda is able to do at this point?

PETER BERGEN, CNN TERRORISM ANALYST: Well, I mean, I second what David said. I mean, the campaign in Afghanistan against al Qaeda and the Taliban severely disrupted their abilities to conduct these kinds of experiments.

However, we know that in February, in Rome, a group of Moroccans were arrested allegedly thinking about introducing some kind of cyanide-like compound into the water supply of the U.S. embassy in Rome. So that would indicate that al Qaeda is sort of -- we see on the videotapes with the dogs, some kind of chemical weapons program. With this February allegation of these guys trying to attack the U.S. water -- the U.S. embassy in Rome, perhaps they are putting that into practice.

HOPKINS: What do you think are the -- is the significance of these tapes, in what you have seen?

BERGEN: I think two things. One, on the narrower question of the dogs being -- we know from core testimony that this was happening. We knew this last year. But this is the first time that we have actual evidence in front of us, in front of our eyes that we can all judge for ourselves. I mean, I'm no chemical weapons expert, but whatever they are giving these dogs is clearly killing them.

Secondly, I think the tapes as a totality demonstrate a number of different things. They really divide into three categories. Some are instructional, how to fire RPGs, how to make your own TNT. We did know from manuals that were collected that al Qaeda was teaching this, but now we have the videos which actually demonstrate to the people who are trying to learn these techniques how to do these things.

The group is also kind of documenting its own history. We see tomorrow the -- we're going to do pieces about a press conference in 1998. Al Qaeda was documenting its own press conference. It also documented interviews with ABC News and with CNN.

And finally, the group was also collecting a wide range of tapes from around the world -- from Burma, from Somalia, Eritrea, Uzbekistan, Chechnya, Bosnia -- about groups that had -- were either affiliated with al Qaeda or groups that al Qaeda was interested in.

So you know, we've got 64 tapes. A lot of the -- we have got these three different categories, instructional, historical and also groups that they are interested in learning more about.

HOPKINS: Peter, why do you think that these tapes are being released now. What do you think is the agenda?

BERGEN: I don't think there's an agenda. I mean, it's just -- they just come out. I mean, you know, Nic Robertson is obviously in a much better position to address that than I am. But I mean, I think this is just one of these things, where Nic's source approached him and the tapes came out. Why they came out now, I have absolutely no clue.

HOPKINS: Do you think that we have been underestimating al Qaeda, and the tapes show us that we should pay more attention?

BERGEN: I think they are a useful reminder. I mean, I think it's difficult to underestimate an organization that killed 3,000 Americans only last year. They are a useful reminder that al Qaeda taught a lot of people a lot of different techniques, all of which were directed -- al Qaeda has, you know, one main goal, which is to kill Americans. We've seen since 9/11 a number of different attacks aimed to kill Americans. They haven't been on the scale of 9/11, but that doesn't mean that something else catastrophic might not happen.

Certainly they are interested in weapons of mass destruction, as demonstrated by the dog tapes that we've seen throughout today, and also bin Laden's own statements on these issues. Bin Laden has said, "I have some kind of nuclear and chemical weapons capabilities." I'm sure their capabilities are very crude. Nonetheless, they are worrisome.

HOPKINS: Peter Bergen, CNN terrorism analyst, thank you. What we have just seen is only the first part of Nic Robertson's exclusive series, "Terror on Tape." He'll be revealing all al Qaeda -- all new al Qaeda videos throughout the week. Tomorrow, "Roots of Hatred." For the first time, a video of Osama bin Laden's May 1998 news conference, where al Qaeda declared war on the West. On Wednesday, "Explosive Force," buried in a movie video, a detailed primer on how to manufacture TNT from scratch, using easily available materials. On Thursday, "In Training." Footage of training in al Qaeda camps, including urban hostage taking and assassinations. And finally on Friday, "The Face of Evil." What all the tapes say about Osama bin Laden the man.

The terror tapes are the subject of tonight's MONEYLINE poll. The question -- do the videotapes make you more concerned about the use of biological and chemical weapons? Yes or no? Please cast your vote at cnn.com/moneyline. We'll bring you the results later in the broadcast.

Israel today began withdrawing its troops from Bethlehem in the West Bank. It's part of an agreement with the Palestinians for a pullout from Bethlehem and Gaza. In return, the Palestinians say they will try to stop terrorist attacks on Israel. Israel sent its army into seven out of eight big West Bank towns and cities two months ago. The incursions followed Palestinian suicide attacks in Jerusalem and elsewhere. Today's withdrawal is intended to be a test case for further transfers of authority in the West Bank.

One of the world's most wanted terrorists is reported to have been found shot dead in Baghdad. Palestinian sources say Abu Nidal's body was discovered in his apartment in Baghdad, Iraq. It's not clear whether he was murdered or committed suicide. He had been suffering from cancer for several years. Abu Nidal's break-away Palestinian terrorist group is blamed for terrorist attacks in more than 20 countries. Hundreds of people were killed, mostly in the 1970s and 1980s.

Thousands of soldiers have been drafted into the battle against floodwaters in Germany. Those floodwaters are surging down the Elbe River toward the North Sea. One of the places already badly damaged is the town of Grimma, near Leipzig. Gavin Morris has the story.

(BEGIN VIDEOTAPE)

GAVIN MORRIS, CNN CORRESPONDENT (voice-over): Right now, the people of Grimma are tearing down their town, by machine or with bare hands. Their ruined homes, businesses and schools are being tossed away.

UNIDENTIFIED FEMALE: It's strange. It's really strange to see all this destroyed. It was so nice.

MORRIS: Less than a week ago, Grimma was one of the more beautiful spots along the banks of the Mulba (ph) river. Take a look at it now. The flood that came through here six days ago didn't just break the previous record; it swamped it. This place has been Thomas Langmickel's home all his life. He saw it like this for the first time this morning.

THOMAS LANGMICKEL, GRIMMA RESIDENT: My eyes are very wet when I see this street, this (UNINTELLIGIBLE) dry a week ago. I can't believe it yet.

MORRIS: Most of the town's 20,000 residents never imagined that the river which gave the town its life could turn so horribly against it.

Christina Strellap owns Grimma's largest hotel. Like as many as 90 percent of the affected businesses in Germany, she was uninsured for this because no other flood had ever come close.

CHRISTINA STRELLAP, HOTEL OWNER (through translator): I thought, my God, it cannot be. The work of my life was in half an hour was completely destroyed. A lot of work. A lot of memories.

MORRIS: Now she has to find the money to rebuild. And she's lost the rest of this tourist season.

(on camera): Grimma hasn't just been flooded, it's been devastated. And not just the buildings. This is easily the worst disaster ever to strike these people. But whatever their loss, the work on their recovery is already in full swing.

(voice-over): The waters may have shifted structures standing for 300 years and ruined precious records, generations old. But the locals say Grimma will be a gem again.

LANGMICKEL: We have to work 10 years again, and then the city is again beautiful, and we'll have tourists.

MORRIS: For now, they are taking their town apart. Sometimes, however much it hurts, it's necessary to tear something down to build it up again.

Gavin Morris, CNN, Grimma, Germany.

(END VIDEOTAPE)

HOPKINS: In this country, stocks rallied across the board today. One quarter of a trillion dollars in market value was created. Only two Dow stocks finished lower. Advancing issues swamped declining issues by a two to one margin. The Dow surging 213 points; the Nasdaq gaining nearly 34. The S&P 500 adding 22. We'll have complete market coverage later in the broadcast.

Up next on MONEYLINE, our Enron/corporate America criminal charges scoreboard.

Plus, federal agents search a training complex in New Mexico. They are looking for hundreds of missiles and their warheads.

Saddam Hussein and Russia plan to sign a $40 billion trade deal. We'll tell you why Moscow and Baghdad appear to be developing closer ties. And Martha Stewart has less than 24 hours to hand over documents about her controversial stock dealings to Congress. We'll have the latest.

(COMMERCIAL BREAK)

HOPKINS: Two U.S. Special Operations soldiers were injured during an intelligence gathering operation in central Afghanistan. Men came under small arms fire yesterday. Both were hit by bullets, but neither case is life-threatening. As a result of the operation, four people were taken into custody for questioning.

At least 80 Russian soldiers were killed today when their military transport helicopter crashed. The helicopter was carrying more than 130 troops when it crashed during an emergency landing near the Chechen capital of Grozny. Russia's Defense Ministry says an engine fire forced the pilot to make an emergency landing. Chechen rebels claim that they shot it down. Russia sent troops back to Chechnya in 1999, following a three-year break from fighting Chechen rebels.

Russia is planning to sign a $40 billion trade deal with Iraq. The country's denied the agreement would violate U.N. sanctions on Iraq. But U.S. officials are concerned the deal could complicate a possible attack on Iraq. Russia today talked down the deal, stressing it was a long-term program to be rolled out over a decade. This is Russia's latest activity with a nation that President Bush called part of "the axis of evil." Russian President Vladimir Putin is set to meet with North Korea's president later this month.

The news of the trade agreement between Russia and Iraq comes amid fresh reports of the continuing U.S. military buildup in the Persian Gulf. The Bush administration is committed to regime change in Baghdad, but it's not saying how or when it is going to achieve that.

Joining us now to talk about this and the continuing threat from al Qaeda is Bill Cohen. He is a MONEYLINE regular and former secretary of defense.

Bill, let's talk first about the tape, the al Qaeda tapes. Some of these were made during the time that you were the secretary of defense. Are you surprised at what you've been seeing?

WILLIAM COHEN, FORMER SECRETARY OF DEFENSE: Not at all. I think some of these tapes, in fact, may go back some 15 or 20 years. It's not surprising, because we've had intelligence reports for some time now indicating that al Qaeda and others were trying to get their hands on chemical and biological weapons. We know that there was an attack by another group in Japan, the Aum Shinrikyo, with the seren gas attack in the Tokyo subway some time ago.

So we've known about this. We have been concerned about it. In fact, it was one of the reasons why we went after that plant in the Sudan, to take out a so-called pharmaceutical plant, because of the connection that al Qaeda and Osama bin Laden had to that country and the fear that they were trying to get their hands on chemicals being manufactured potentially there. So we've known about it. This is just visual confirmation of what we've known for some time now.

HOPKINS: One of the things that's interesting in the tapes is anti-Saddam Hussein rhetoric. Does that surprise you, and does it mean that there's really no link between Saddam Hussein and al Qaeda?

COHEN: Well, we have, to my knowledge, have not ever established a link between al Qaeda and Saddam Hussein. Saddam Hussein has never been seen, I think, by those groups as a supporter of their efforts. There are those who wish to draw a link between al Qaeda and Saddam Hussein, but to my knowledge, we have seen no such link, any convincing evidence of it. So it's somewhat surprising, because you'd think they would find a soul brother, so to speak, in Saddam Hussein. But to my knowledge, based on all of the information I had at my hands at the time I was in the secretary of defense position, we didn't see Saddam linking up with them.

HOPKINS: Bill, we need to interrupt and go to the Pentagon and Barbara Starr. A possible attack on a chemical facility in Iraq. Barbara, what can you tell us?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Jan, officials have now confirmed to CNN that the Bush administration had been considering a possible covert attack on a suspected chemical and biological weapons facility in northern Iraq, a facility they believe had ties to the al Qaeda.

The facility is located in the northern portion of Iraq, we have been told, which is Kurdish-controlled territory. A portion of Iraq not controlled by Saddam Hussein, and it has been known to U.S. intelligence for some time now that the al Qaeda has been operating in this area of northern Iraq.

Officials tell CNN that no final decision has been made one way or the other about whether or not to attack this site, and it is not clear that the U.S. military had placed a formal proposal before the president for a mission to go after this site.

But sources -- intelligence sources believe that this site was a place where possible chemical and biological tests were being conducted against barnyard animals and possibly even one human. And senior administration officials tonight have confirmed to our senior White House correspondent John King that the president has been briefed about this matter by his national security team, and that the discussions with the president and his national security team have included what to do about it -- Jan.

HOPKINS: Barbara Starr at the Pentagon. Let's go back to Bill Cohen who is standing by. What's your reaction to this, Bill?

COHEN: Well, if it's confirmed, then I think it's very important that the Bush administration address it as quickly as possible. If al Qaeda, in fact, has been experimenting with either chemicals or biologicals up in that region, then it's certainly going to present a target for the administration. The question becomes then, how does one attack it? Covertly or overtly? And a lot of factors have to be taken into account in terms of what the suspected facility is, what kind of chemicals, what would be released depending on how it's attacked. All of that would have to be taken into account, but I'm sure that the administration is focusing on that right now.

HOPKINS: And we are hearing reports of a build-up of troops in the area. Does this give more evidence that something is going to be happening soon?

COHEN: I think that this is a continuation of a policy that's been under way for some time. I had discussions with many of the leaders in the region about the need to modernize their facilities and to take -- undertake preparations for increased activity in the future. So I think it's a continuation. It may be an acceleration of that. But also it does provide a basis for President Bush to take action in the future if he decides to go against Saddam Hussein.

HOPKINS: Thank you, Bill Cohen, former defense secretary and MONEYLINE regular.

COHEN: My pleasure.

HOPKINS: Coming up next on MONEYLINE -- federal agents search a training camp in New Mexico for missiles and explosives. We'll have a live report.

The insurance industry calls for government help to deal with another terrorist attack. Lawmakers are divided over how to respond. We'll have a report on that.

And Amtrak returns some of its high-speed Acela trains to service. We'll have details and lots more when MONEYLINE returns.

(COMMERCIAL BREAK)

HOPKINS: A 75-year-old woman in St. Louis died of West Nile virus today. Four other residents have been infected, according to state health officials. The virus has spread to two more Western states. The disease has now been detected in horses in Wyoming and Colorado for the first time. The Center for Disease Control confirmed two more human deaths over the weekend. Eleven people have now died from the disease, eight of them in Louisiana. The virus has been found in 37 states and the District of Columbia.

Federal agents searched a counterterrorism training center in southwest New Mexico today. Last week, agents seized more than 2,000 unregistered missiles at that site. Ed Lavandera is in Roswell, New Mexico and joins us now with details -- Ed.

ED LAVANDERA, CNN CORRESPONDENT: Jan, behind me what you see is the gate entrance to a company called High Energy Access Tools here on the southern edges of Roswell, New Mexico.

HOPKINS: We're having problems with the transmission from Roswell, New Mexico. Hopefully we will get back to him in just a moment.

Coming up next on MONEYLINE -- bargain hunting lifts the broader market to its highest level in five weeks. The Dow Industrials and the Nasdaq also posting big gains.

Counting the cost of terrorism, lawmakers are sharply divided over how to help insurance companies if there is another terrorist attack.

Toys "R" Us reports better financial results. CEO John Eyler will tell us how the retailer can win market share from Wal-Mart.

And the pressure grows on Martha Stewart to give congressional investigators documents about her controversial stock dealings. All that and more when MONEYLINE returns.

(BEGIN VIDEO CLIP, "XXX")

SAMUEL L. JACKSON, ACTOR: If you do what I want, I'll make all your criminal transgressions go away.

UNIDENTIFIED MALE: It must be great to go on a mission, danger, death, destruction and mayhem.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HOPKINS: We were telling you that federal agents have been searching a counterterrorism training center in southeast New Mexico today. Ed Lavandera is in Roswell, New Mexico and he joins us now with details -- Ed.

LAVANDERA: Jan, behind me what you see is the entrance to a company called High Energy Access tools, and there in the background you see where the tree line is. There are federal ATF agents and U.S. Customs agents that are inspecting this area.

What they found over the last couple of days is about 1,000 pounds worth of weaponry and missiles to be more specific and they found about 2,300 of those. Now what happens here, company officials say that this is a counterterrorism and police training ground, where people from all over the world come here to train as well.

And they say that over the last couple of weeks, there's been about 25 students in part of a counterterrorism military unit of a U.S. ally, that has been training here and given all of that and based along with all the amount of weaponry that was here, the federal authorities came in and arrested the president of this company, David Hudak, last Thursday.

He's been charged on federal ammunition charges, as well as immigration charges. He's a Canadian citizen we understand. Authorities believe he was here illegally, so that search continues. We understand the search here will continue for probably the rest of the week. Special teams have been brought in to handle the mass amounts of weaponry that have been stored here.

But company officials say that the U.S. government knew fully well what was going on here, that they had started filling out the paperwork and done the right paperwork and they knew who these 25 students were and why they were training here.

But one of the alarming parts was, is that and from the federal perspective, the investigative perspective, what drew a lot of attention was that they were teaching these students how to fire these missiles off of a shoulder-propelled grenade launcher if you will.

So that was what drew a lot of attention here but a spokesperson for the company saying they've done everything properly and that they have the open doors here for federal investigators to look at whatever they need to look at.

(BEGIN VIDEO CLIP)

FRANK FISH, SECURITY DIR., HEAT: These federal firearm licenses and all those things are very important, even more so after September 11th to make sure that we're doing everything in compliance, and we've been trying our best to make sure that we have. We feel that we are. We hope we haven't missed anything, and if we have, you know we'll take care of that when it becomes apparent.

(END VIDEO CLIP)

LAVANDERA: Now just to give you a little bit of perspective here, this ground is actually an old Air Force base that was closed down in 1967. Now it's an air park, if you will, industrial air park, and that's why you see so many of these airplanes, large 747s. A lot of planes are stored here or repaired here so that gives you a little bit just to get an idea of what's going on here.

None of these planes necessarily connected to this HEAT office but we understand that HEAT, this company, was leasing space from the industrial air park here and that's why they've been operating. They also have several other locations around New Mexico where they operate from.

But given all of this information, federal authorities stress that at this point they have no information linking either the president of this company or any of the students that were here to any kind of terrorist organizations anywhere in the world. Jan.

HOPKINS: Thanks, Ed Lavandera in Roswell, New Mexico. A powerful rally on Wall Street, the Dow soaring more than 200 points, nearing the 9,000 level; the Dow, the NASDAQ, and the S&P 500 all gained more than two percent. Christine Romans is at the New York Stock Exchange and Greg Clarkin is at the Nasdaq marketsite -- Christine.

ROMANS: Well, Jan, the rally here was pretty broad but volume was a light 1.2 billion shares. Now Lowe's rallied 11 percent after another strong quarter. Wal-Mart joined that retail rally even though August sales are tracking at the low end of targets. An upgrade lifted Nokia five percent and Vivendi paced the media rally. Positive comments from its new CEO mingled with hopes of asset sales to pull Vivendi from all-time lows.

But Astrazeneca was a noted lagger down $6.00 on disappointing tests for a cancer drug. Now there was technical progress today as well. The Dow moved above its 50-day moving average for the first time since April; the S&P 500 cracking above it for the first time since May.

But after the bell, Agilent Technologies warned and reported a steep quarterly loss; the company actually reporting a loss, not sure of a warning there, now to the Nasdaq and Greg.

CLARKIN: And, Christine, volume was a touch on the light side for the Nasdaq as well but the buying was incredibly heavy. Now Internets are among the big winners of the day, shares of Yahoo jumping 11 percent on the session, also Invidia got a nice boost, that after the graphics chips held to manufacturer's word that they'll be included in a new computer from Hewlett Packard. That was good for an 18 percent jump.

Take-Two Interactive rose nicely on optimism for video game sales in the fall. Oracle, that was the biggest of the big cap winners, and you heard about the Astrazeneca setback with its cancer-fighting drug.

Well, companies developing similar drugs took a big hit. OSI Pharmaceuticals falling 57 percent on the day, a loss of $18.74. So with today's win, the Nasdaq extended the winning streak to four straight sessions, and during that span it has risen just about ten percent. Jan.

HOPKINS: Impressive, thanks Greg Clarkin at the Nasdaq. The SEC ordered corporate CEOs to swear by the accuracy of their financial statements by August 14th. Last week's deadline seemed to come and go without any major surprises.

The SEC has since ruled that a dozen companies that filed statements did not, in fact, comply with the requirements to certify those results. Late today, the agency cleared several companies after initially withholding judgment. That list includes: Bristol Myers- Squibb, Whirlpool, and AOL Time Warner, the parent of this network.

Late this afternoon, the House Energy and Commerce Committee said it expects Martha Stewart will meet tomorrow's deadline to hand over documents about her sale of ImClone stock. The panel is investigating insider trading allegations. Also today, the committee released a letter to ImClone's CEO Harlan Waksal. Steve Young is here with the latest -- Steve.

STEVE YOUNG, CNN FINANCIAL NEWS CORRESPONDENT: Jan, the committee spokesman, Ken Johnson, told me even thought the committee now expects Martha Stewart to produce her requested documents by tomorrow's deadline, she could still be subpoenaed. The records, said Johnson, could reveal something that could require a face-to-face explanation. The committee sent a letter to current ImClone Systems CEO Harlan Waksal asking for a written assurance that no records of information concerning committee requests were destroyed. Harlan's brother Samuel, the former CEO, has been indicted on charges included that he told people at the company to destroy records when he learned of an SEC insider trading investigation.

The committee also wants all records relating to communications from or with Samuel Waksal about the congressional investigation. ImClone says it will cooperate. Stewart may believe there is a Republican conspiracy behind the probe into her questioned ImClone stock trade or so reports gossip columnist Matt Drudge. He quotes a Stewart intimate as saying (UNINTELLIGIBLE) calls it "a witch hunt" and says: "They're probing her sex life."

Committee spokesman Johnson says: "Frankly we could care less about her sex life. I don't want to hear about it from her or Drudge." Johnson says Martha is telling one story. Her stockbroker is telling another and his assistant a third. He adds: "Somebody has lied to Congress. Our committee will never be able to function if people can come before us, lie, and get away with it." Jan.

HOPKINS: But those documents are due tomorrow and the expectation is at this point that she will provide them?

YOUNG: Her lawyers are saying that they will be provided by the end of business tomorrow.

HOPKINS: We'll keep track. Thanks, Steve Young. Time now for our first look this week at our Enron scoreboard, 18 people have been charged with criminal wrongdoing in corporate America in the last eight months. From Adelphia Communications to WorldCom numerous charges have been brought against high-ranking executives of those companies but not Enron. So our scoreboard remains 18 to zero, and once again tonight the only number that we can update is the number of days since Enron's bankruptcy. That is now 260.

Since September 11th, the prospect of future terrorist attacks has sent shudders through the insurance industry. Many insurance companies have moved to limit or cancel terrorism coverage. That means that some sectors like real estate and airports are operating with reduced or no insurance but proposed legislation aims to use the government as the insurer of last resort. Tim O'Brien has the story.

(BEGIN VIDEOTAPE)

TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Maryland has been told its insurance will be dropped, no coverage for Camden Yards, its class new ballpark, nor for Baltimore-Washington Airport. Even the state capitol faces losing its insurance.

ROBERT RUSBULDT, CEO, INDEPENDENT INSURANCE: Projects in New York City, Las Vegas, Chicago, with some big name companies, the Hyatt Corporation and Steve Wynn's project in Las Vegas that would have created 16,000 jobs are not happening now. Why? They can't get loans. Why? They can't get terrorism coverage. O'BRIEN: Last fall, the House passed a measure that would have the government carry 90 percent of the losses that exceed $1 billion. The insurance companies would eventually have to reimburse the government. Under the Senate bill passed last June, losses would have to exceed $10 billion before the government kicks in, but insurers would not have to reimburse the government. The Bush administration is leaning on Congress to compromise.

DAVID JOHN, THE HERITAGE FOUNDATION: The president is recognizing that this lack of action on Congress' part is clearly hurting and he's pushing them to come to a resolution.

O'BRIEN: Opponents of any government backstop point out that the insurance industry with $300 billion in assets could handle half a dozen 9/11s and still be in the black. There are also those in Congress and elsewhere who have philosophical problems with government aid through private enterprise.

(END VIDEOTAPE)

O'BRIEN: Both houses of Congress are poised to back up the insurance industry. Their biggest difference is on the role that the lawyers should play and whether there should be limits on the civil liability of those not involved in the terrorism. Whatever remedy Congress settles on, it is expected to be temporary, lasting no more than a year or two. Jan.

HOPKINS: Tim O'Brien in Washington. Now a reminder to vote in tonight's MONEYLINE poll. Do the al Qaeda videotape obtained by CNN make you more concerned about the use of biological and chemical weapons, yes or no? Cast your vote at cnn.com/moneyline. We'll bring you the results later in the broadcast.

Coming up on MONEYLINE, Toys "R" Us prepares to take on its rivals in the all-important holiday season. We'll be talking with John Eyler. He is the CEO of Toys "R" Us about the challenges ahead. Relatives of victims of 9/11 sue for a trillion dollars. Author and attorney Philip Howard will be our guest.

Brand name American food arrives in Cuba for the first time in more than 40 years, and real American beef makes its way through New York's Times Square. We'll tell you why.

(COMMERCIAL BREAK)

HOPKINS: Toys "R" Us narrowed its second quarter loss to $17 million. The number two toy retailer cut its losses by clearing inventories and (UNINTELLIGIBLE) advertising spending. Analysts were encouraged by the increase in core toy sales in this difficult retail environment.

Shares of Toys "R" Us jumped nearly ten percent today. They have fallen though nearly 40 percent this year. John Eyler is CEO of Toys "R" Us and he joins us now. So you're number two? Wal-Mart is number on, is that right, in toys?

JOHN EYLER, CEO, TOYS "R" US: They're the number one retailer in the world and they keep growing.

HOPKINS: And so it's really hard for you to take market share away from Wal-Mart?

EYLER: Oh, I don't think anybody takes market share away from Wal-Mart because they're just building too many stores. We do about three and a half times as much toy business per store as they do, but they're building 100, 150 stores in the U.S. a year and so their market share continues to grow but so does ours.

HOPKINS: Now one of the things that's interesting about your report is that although you've spruced up your stores, sales in existing stores actually fell. That's discouraging, isn't it?

EYLER: Well not really, the toy business is really, it's like a sporting event with two halves. The first half of the year is relatively low volume and the name of the game to improve profitability is to really operate the business more efficiently and more cost effectively. The back half of the year is when the real sales occur and in that side of the game you really take the offense and try and drive the top line.

HOPKINS: What does this holiday season look like to you at this point? We're just a little over halfway through the year.

EYLER: You know it's interesting, the economy, it's a tough time for retailing in general, but the economy is only one factor. We are testing products in the last 60 days that are the big projected sellers for holiday.

We have not seen in the number of years as many items that are really showing much greater than we thought velocity. We have been rapidly reordering with our key resources quite a wide range of items that we think have a lot of upside potential.

HOPKINS: That's because the products are better or because the consumer is there ready to spend?

EYLER: I think that there is a breadth of products this year that is really uncharacteristically strong, but I also think the resiliency of the consumer is better than most people give them credit for.

HOPKINS: And you saw that last holiday season, right? We were all concerned after September 11th that people wouldn't buy at Christmastime and it wasn't true.

EYLER: Well it was pretty slow all the way up to Thanksgiving, but there's something magical about the holiday season, and as you know we had a very successful holiday season and the last two quarters have beat expectations as well.

HOPKINS: So you're saying basically the same thing, that if you have the right product that parents will buy toys for kids?

EYLER: Well not only is it product and we really have improved a lot on that, but we've remodeled our stores and changed our service level. If you give just about any kid in the United States $10 and say where would you like to go buy some toys, they'll say Toys "R" Us.

HOPKINS: John Eyler, CEO of Toys "R" Us, thanks for joining us.

EYLER: Thanks, Jan.

HOPKINS: Coming up on MONEYLINE, CEOs signed off on their financial results, but will those certifications be followed by a rush of lawsuits? Author and attorney Philip Howard will be our guest. Amtrak is working ahead of schedule for a change. It's restored half of its high-speed Acela trains that were suspended last week.

And, an unusual group of visitors storms Times Square. We'll tell you about the cattle drive in the heart of New York City, all of those stories and much more coming up.

(COMMERCIAL BREAK)

HOPKINS: Now to our weekly look at how lawsuits can act against the common good. Today we're looking at the $1 trillion lawsuit filed by the families of some of the victims of September 11th. We'll also talk about CEO certification and how that could lead to a flood of lawsuits.

Philip Howard, the author of "COLLPASE OF The Common Good" joins us as he does every Monday. Philip, welcome back. Let's look first at this 9/11 lawsuit against people and a number of them Saudi Arabians that the lawyers say are helping to fund terrorism. Is there a reason to file this kind of lawsuit? Is there a good reason to file this kind of lawsuit?

PHILIP HOWARD, AUTHOR "COLLAPSE OF THE COMMON GOOD: Well, if you have evidence that someone helped in a mass murder or any murder, you can certainly sue them and that's a very reasonable thing to do, just as the victims or the families of the victims in Lockerbie sued and eventually got money from the State of Libya.

So the idea of suing for this kind of crime is perfectly valid. The question, however, is who they're suing and whether they have evidence, and if they end up suing everyone in Saudi Arabia or many responsible organizations as some people say they are, then of course the lawsuit will be perfectly counterproductive. The people we're looking to help us catch terrorists will end up hating us because of this private lawsuit.

HOPKINS: Now this lawsuit is brought by lawyers that have been involved in the tobacco lawsuits.

HOWARD: Right.

HOPKINS: They have a good track record. I mean will they use the same strategy?

HOWARD: Well they say they're using the same strategy. I mean basically they're suing for the moon. Their initial complaint actually had $100 trillion in it, which is I think more than the whole world economy is worth. They lowered that to $1 trillion, which is also an absurd number. I have no reason to believe that they will conduct the lawsuit in a responsible way.

HOPKINS: No reason to believe that they'll conduct in a responsible way?

HOWARD: Yes. I mean it's very important, I think, to get the people who participated in this crime, but that requires you to actually get the evidence, figure out who they were, target the wrongdoers not the people who you might want to get help from in catching the wrongdoers.

HOPKINS: Now CEO certifications, is this also opening the door for a lot of lawsuits?

HOWARD: Well it is. On the one hand, the certifications are sort of a good idea. I mean it's like a valve but the valve says we're really going to work hard at taking our books seriously. But it doesn't take a great imagination to know that when one company does poorly in six months, some lawyer is going to go back and say "hey wait a minute. Was that disclosed completely or might they have had the numbers a little different in the books. Maybe we have a lawsuit over this certification." So I'm quite certain that we will see a lot of lawsuits there.

HOPKINS: Philip Howard, thanks.

HOWARD: Thank you.

HOPKINS: A commercial shipment of American brand name food has arrived in Cuba for the first time in more than 40 years. The 132-ton shipment included butter, margarine, and cereals. It's the first half of a $750,000 order that Cuba placed with Marsh Supermarkets of Indianapolis. Shipments began after the United States eased the 40- year-old trade embargo on Cuba. Previous orders were for bulk products like apples, onions, and rice.

Now the results of tonight's MONEYLINE poll, do the al Qaeda videotapes obtained by CNN make you more concerned about the use of biological and chemical weapons? Sixty-two percent of you said yes, 38 percent said no. Remember this is not a scientific poll.

"CROSSFIRE" begins in a few minutes. For a preview let's go to James Carvel and Tucker Carlson in Washington -- James.

JAMES CARVILLE, CO-HOST, "CROSSFIRE": Well, Jan, we got a hell of a show here tonight. First of all, it's to go or not to go, that would be to go to war with Iraq or not to go to war with Iraq. We have two very distinguished guests, former Deputy Secretary of State Lawrence Engleberger, and Kenneth Adelman from the Reagan administration, so it's going to be very, very interesting. Tucker and I are looking forward to it, and Tucker we got a couple of other things here, don't we?

TUCKER CARLSON, CO-HOST, "CROSSFIRE": Yes, we do. Then slavery reparations, should 320,000 Union soldiers who died in the Civil War their descendants have to pay? That's part of our debate. And then, a woman who's been called the bin Laden of love, Judy Brant (ph), she's written a book about adultery why you ought to commit it. We'll ask her why -- Jan.

HOPKINS: Interesting combination of topics, thank you. Some better news for Amtrak tonight. Nine of the railroad company's high- speed Acela trains were back in service today. All 18 of the express trains were sidelined last week after inspectors found mechanical problems, actually a crack. Amtrak was not expecting many trains to be back in operation today but it says the repair work is proceeding ahead of schedule. The Acela trains operate on the Amtrak route between Washington, New York, and Boston.

The ideas of bulls and bears storming Wall Street is nothing new but today cattle took over the Nasdaq in the heart of Times Square. Crown Media opened the Nasdaq promoting "Johnson County War," an epic four-hour western to be shown on the Hallmark Channel. Actors Luke Perry and Tom Berenger led the cattle drive on horseback along with Burt Reynolds. The movie premieres August 24th. Still ahead on MONEYLINE, your e-mails and "In Their Words."

(COMMERCIAL BREAK)

HOPKINS: Let's take a look at your e-mails. Sep Seddigh in London says: "In my opinion, the way CEOs and CFOs are being asked to sign for their accounts is the same as some airlines asking passengers, do you have a bomb in your suitcase?"

Scott in California comments: "Don't you think it's time that not only CEOs but our elected officials should have to attest to the integrity and accuracy of their finances?"

Thomas Newmann in Texas writes: "Regarding the pending baseball strike, I wonder if the players and owners remember the fans are the sole source of their income in the end. Sooner or later the fans will strike. If this lunacy keeps up, the owners and players may be playing for no more than the leftover peanuts and the empty stands."

Dave in California writes: "If I were to blame anyone in the baseball strike thing, I would put most of the blame on the fans. The fans have coddled and revered these people, owners and players alike, and for so long that the baseball industry thinks that being paid such huge amounts of money is an entitlement."

Gael Harlow from California says: "Airline pilots and mechanics take an enormous responsibility on a daily basis by ensuring that hundreds, if not thousands of passengers get to their destination safely. They literally make life and death decisions as part of their job description. As a passenger, I would think twice about flying if I felt pilots and mechanics were underpaid. If the big airlines really want to cut cost, why not start by cutting the salaries of those at the very top?"

Finally, Richard Arneson in Wisconsin writes: "Regarding Iraq, why should our government worry about the opinions of other do nothing countries? If we go in, some will criticize. If not, they will criticize because we didn't."

As always, thanks for your e-mails. Our address is moneyline@cnn.com. When you write, please include your name and address. From your words to "In Their Words."

(BEGIN VIDEO CLIP)

PHILIP REEKER, STATE DEPT. SPOKESPERSON: Abu Nidal is a craven and despicable terrorist and the world would certainly be a better place without people like Abu Nidal. He's reportedly been living in Iraq since 1998 and as we talked about for some time, Iraq's record of providing support, safe haven, training, logistical assistance and financial aid to terrorist groups like the Abu Nidal Organization is why Iraq is listed as a state supporter of terrorism.

MAYOR MICHAEL BLOOMBERG, NEW YORK CITY: Interagency competition may be unavoidable and even healthy to some extent, but it can never impair our ability to respond to emergencies. The stakes are just too high. The two commissioners standing with me believe that and the top members of their organizations are firmly in agreement.

JULIA CHILD, CHEF: It looks exactly right. It makes me homesick to look at it. Thank you all very much and I hope that this will encourage people to have fun in the kitchen and to start creating their own food. It's a wonderful hobby and it's certainly a great profession.

(END VIDEO CLIP)

HOPKINS: That's MONEYLINE for this Monday evening. I'm Jan Hopkins in for Lou Dobbs. Join us tomorrow when our guests will include Dr. Philip Tierno (ph) of New York University Medical Center. He'll be telling us about the growing threat from West Nile Virus. Thanks for joining us tonight. From all of us here, goodnight from New York.

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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