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Explosions Heard in Riyadh Housing Compounds

Aired May 12, 2003 - 18:00   ET


LOU DOBBS, HOST: Marty, thank you very much. Good evening, everyone.
A bomb explosion in a housing complex for Westerners in Saudi Arabia tonight. Reports of casualties. We'll have full details.

Also tonight, a potentially huge breakthrough in the search for Saddam Hussein's weapons of mass destruction. The woman known as "Dr. Germ" is now in U.S. custody. She was once in charge of Saddam Hussein's biological weapons program. Mike Boettcher will have the report.

President Bush today launched a three-state tour. He's promoting his $500 billion tax cut plan. Chris Burns will report from Omaha, Nebraska.

Senate Majority Whip Senator Mitch McConnell, joins us to talk about whether the Senate will give the President all the support he needs.

And federal regulators appear set to announce a dramatic change in television station ownership rules. The proposal could mean less choice for television viewers. Bill Tucker will have that story.

And as you've probably just heard, a car packed with explosives crashed into a housing complex for Westerners in Riyadh, Saudi Arabia. It blew up. One report says there were two blasts, in fact. Saudi Arabian security officials say there were a number of casualties. It is not known whether anyone was killed in the explosion or explosions. The housing complex is in the eastern part of Riyadh. Saudi authorities recently said they were hunting 19 terrorist suspects.

Mike Boettcher joins us now with more, and, Mike, tonight's explosions follows a warning just issued by the State Department advising Americans to avoid travel to Saudi Arabia.

MIKE BOETTCHER, CNN CORRESPONDENT: Absolutely, that comes on the heels of the Gulf War ending and the U.S. announcing that it is pulling out a lot of its forces from Saudi Arabia. There had been concerns, however, that al Qaeda and perhaps other terrorist groups somehow associated with al Qaeda were planning attacks.

When that last attack was thwarted, and that would have been earlier this month, they found quite a bit of explosives, including five suitcases full of some sort of explosive compound. So, this warning has been out there. The Saudis very vigorous in trying to track down these 19. I am told that some have been arrested and that this is considered a very serious matter to them, attacks against Americans in Saudi Arabia. This is something that they have tried to prevent ever since the bombings of the barracks at Khobar Towers, and this is a threat that will exist in Saudi Arabia because of the very heavy influence of radical Islamic thought there.

Al Qaeda is very strong. There are members in that country. Osama bin Laden hails from Saudi Arabia. Fifteen of the 19 hijackers came from Saudi Arabia. So, Saudi Arabia has been trying very hard to move this back, to try to get control of these extreme Islamists, but there is another attack now, Lou. So, more work is needed, obviously.

DOBBS: And Mike, we're awaiting developments, as we learn more about what happened in Riyadh. These initial reports only sketchy as best.

I would like to turn now to the apprehension of the woman known as Dr. Germ. U.S. authorities questioning them now, once the leader of Saddam Hussein's biological weapons program. What can you tell us about her?

BOETTCHER: Well, Dr. Taha was not on the deck of cards of 55, but a lot of people in the weapons inspection business believe she should have been. We talked to one U.S. official who said she could have been on there. There were just so many bad ones to put on, we chose others instead of her. But she knows where all the skeletons are buried in the WMD program in Iraq.

We obtained exclusively several months ago her handwritten notes that were retrieved in 1995 by U.N. weapons inspectors, in which she detailed the testing of botulinum toxin in 122 millimeter missile and tried to figure out the kill ratio. She was very heavily involved in the weaponizing of biological weapons in recent years.

The Iraqis have tried to say she wasn't involved. I'm told differently, that she was not a retired housewife, that she was still heavily involved in the program, and they believe this is a very big get. Lou?

DOBBS: A big get, and yet, curious. Weapons of mass destruction, the reason that the United States carried out a war against Saddam Hussein, yet the woman, once the head of the weapons program, the biological weapons program, not in the 55 most wanted. Peculiar, don't you think?

BOETTCHER: Well, it is. It is peculiar. I mean, it's peculiar to me, as well, that they have not yet found these caches of the weapons of mass destruction. Now, I spent quite a bit of time in Iraq during the war and afterwards with U.S. Special Operations, who were out there looking for these various substances. And, there is a concern that some of it may have been moved out of the country, out of Iraq.

There is also the belief that top scientists like Dr. Taha were also out of the country. So, a lot of inspection and searching will need to be conducted.

The people that I have spoken to in the region are still convinced that those caches are there, either in Iraq or countries neighboring Iraq.

DOBBS: Mike, Boettcher, as always, thank you very much.

National Security Advisor Condoleezza Rice today said Saddam Hussein's regime had a sophisticated deception program to hide those weapons of mass destruction. She said the existing team of coalition experts in Iraq will be replaced by a much larger group of inspectors. Rice said the new team will be more expert at exploiting intelligence about biological and chemical weapons.

General Tommy Franks, who led the coalition forces to military success against Saddam Hussein, has turned down the top job in the U.S. Army. General Franks, instead, has decided to retire, rather than become Army chief of staff.

Senior Pentagon correspondent, Jamie McIntyre reports.


JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): CNN has learned that General Tommy Franks, who guided the U.S. to victory in Iraq and Afghanistan, has said no thanks to being the next Army chief of staff, the highest ranking job in the service.

Franks himself says his discussions with Defense Secretary Rumsfeld are private.

GENERAL TOMMY FRANKS, U.S. ARMY: The Secretary and I have talked about the future. And that's, I think, probably the best I can do right now.

Franks could make more money giving speeches or working in the private sector, but sources say it's not about money. After winning two wars, Franks is said to be not interested in battling the Pentagon bureaucracy. Defense Secretary, Donald Rumsfeld, is trying to whip the Amy into a faster, lighter, more lethal fighting force, an effort which could include cutting two Army divisions.

Rumsfeld last month fired the Army's top civilian, Secretary Tom White, and is moving a close friend, Air Force Secretary, Jim Roach, into his job. Roach is a Rumsfeld-style reformer who likes to challenge wisdom and shake things up, but Rumsfeld denies the commonly held view he's at war with the Army.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It's an inside Washington thing. It's not true.

MCINTYRE: The current four-star in charge of the Army, General Eric Shinseki, retires in June. During his tenure, Shinseki championed more troops in wheeled vehicles so they would be more mobile than tank divisions, but he ran afoul of Rumsfeld when he tried to block plans to kill the Crusader heavy artillery system and later told Congress it would take several hundred thousand troops to occupy Iraq, which the Pentagon dismissed as wildly off the mark.

Sources say a three-star general, John Abizaid, whom Rumsfeld assigned as Frank's deputy at the U.S. Central Command, now has the inside track.


But Rumsfeld is once again poised to ruffle some feathers by possibly elevating a three-star general to the joint chiefs of staff. He will be bypassing a at least a half a dozen four-star Army officers, all of whom's support will be crucial to both Rumsfeld and whoever is the new Army chief. Lou?

DOBBS: Jamie, promoting three stars over a large number of four- star generals -- is that often done?

MCINTYRE: It's been done before. It's happened a couple of times, but normally, it means that you have to go through all that is -- there's 12 four-stars in the Army. You have to basically reject all of them. There are a couple of other three stars in possibly in the running, as well as Abizaid, but what it seems to reflect is that Rumsfeld wants his own person in there, someone he's confident shares his philosophy, and he is willing to reach into the three-star ranks to do that if that's what it takes.

DOBBS: OK, Jamie McIntyre, our senior Pentagon correspondent. Thank you, Jamie.

U.S. officials today said the United States and Iran have held secret meetings in Switzerland. The purpose of those meetings, discussion of Iraq, Afghanistan and other issues. Both countries said the talks were not intended to set the stage for resumption of diplomatic relations, which were broken off in 1979.

National security correspondent, David Ensor, has the report.


DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Even as Iran's president, Mohammed Khatami, made an historic visit to Lebanon, Bush administration officials were confirming that a senior U.S. official has met directly three times already this year with Iranian officials and will do so again within days.

AVAD ZARIF, IRANIAN AMBASSADOR TO THE UNITED NATIONS: I cannot go into the details of the talks, but the talks are primarily focused on Afghanistan and the situation in Iraq and our concerns about the instability in Iraq.

ENSOR: Presidential envoy, Zalmay Halizad , who speaks Iran's language, Farsi, has been leading the U.S. delegation. The U.S. wants Iran to stop supporting terrorism by Lebanon-based Hezbollah against Israel.

Washington also wants guarantees Iran's fast-moving nuclear energy program is not really about making nuclear weapons. And, it wants Iran to stay out of Iraqi politics.

ZARIF: Iran is not interested in imposing its type of government on Iraq.

ENSOR: Teheran is making some of the right noises. It has clear reasons to want to warm up relations with the nation it used to call the Great Satan. One look at the map shows way. Iran is now surrounded by American troops.

SHIREEN HUNTER, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Definitely, think that the Iranians are realizing that they cannot go on as they have and that the geopolitical and military and all the other context has altered dramatically after the Iraq war.

ENSOR: Iran was thrilled to see the Taliban overthrown in Afghanistan and in Iraq, Saddam Hussein gone, too, two of their biggest headaches gone. It is also pleased to see U.S. forces insisting that the anti-clerical Iranian Mujahideen in Iraq give up their heavy weapons.

Former President, Ali Hashemi Rafsanjani, a bellwether politician, has called for a referendum on reopening diplomatic relations with the U.S. Polls suggest 70 percent in Iran would favor it, but that might be going too far, say U.S. officials.

PHILIP REEKER, STATE DEPARTMENT SPOKESMAN: This is not somehow a new opening of diplomatic relations. This is an opportunity to deal with some practical issues.

ENSOR: A real opening would face serious opposition, analysts say, from conservatives in Iran and in the U.S.

GARY SICK, IRAN EXPERT: Iran has its ayatollahs, and we have our ayatollahs, and right now, they're in the saddle.


ENSOR: Still, the series of talks Halizad is holding with Iranian officials appears to be the highest levels sustained dialogue between the U.S. and Iran since the fall of the shah, and Lou, it bears watching.

DOBBS: Indeed. And, David, we're glad you're watching it. Let me ask you, in the case of the Iranian nuclear development program, this is a country blessed with immense oil reserves. Why would it need nuclear power?

ENSOR: Well, Iran says the oil will not last forever, and it doesn't distribute evenly throughout the country. It wants to have nuclear power, but that question you just asked is one that that the White House is also asking, and it believes Iran does not need this nuclear -- this extensive nuclear program, that it's really about weapons.

DOBBS: David, thank you very much. David Ensor, our national security correspondent: Israeli Prime Minister, Ariel Sharon, and Palestinian Prime Minister Mahmoud Abbas, meet for the first time at the end of this week. That meeting follows talks with Secretary of State, Colin Powell, on the new Middle East peace initiative.

Today Secretary Powell was in Egypt talking about the plan. Egypt and other Arab countries wants the United States to put as much effort into the Middle East as it did into the overthrow of Saddam Hussein.

Israel today reimposed a travel ban against Palestinians in Gaza 24 hours after restrictions had been lifted. The order means Palestinians will not be able to enter Israel to work. Israel said the new ban was reintroduced because of the threat of suicide bomb attacks.

More now on those bomb attacks in Saudi Arabia. We now have reports of three separate bombs exploding at three different housing complexes for Westerners. Andrea Koppel joins me now from the State Department and has the latest for us. Andrea?

ANDREA KOPPEL, CNN CORRESPONDENT: Lou, State Department officials tell me that explosions -- they don't know exactly what caused the explosions -- that explosions were heard at three different housing compounds known to house Westerners. There may or may not have been Americans living in those three compounds, but State Department officials say, at this stage, they have no reports of any casualties or any injuries.

The three explosions were heard around -- in and around these housing compounds in the Saudi capital of Riyadh. Now, just last week, your viewers may remember the Saudis had put really out an all- alert bulletin that there were 19 individuals, 19 men, 17 of them Saudi citizens that they were looking for, that they believed to have been planning some kind of terrorist attacks in the kingdom. Those individuals have as yet to be found.

State Department officials say that not only those individuals, but there are other reports out there that they have gotten intelligence reports that there were plots in the works to target American interests.

So, whether or not all of this is related, we don't know if, in fact, these were terrorist attacks, but we do know, according to U.S. diplomats on the ground reporting back here to the State Department, that there were explosions heard in and around three housing compounds in the capital of Riyadh known to house Westerners, and there may or may not have been Americans in those compounds, Lou.

DOBBS: As discomforting and disquieting as this is for the State Department, Andrea, it also has to be extraordinarily embarrassing for the Saudi government on the eve of Secretary of State Powell's arrival.

KOPPEL: Well, it's certainly alarming. This evening, Secretary Powell is spending the night in Amman, the capital of Jordan. He is due to arrive in Saudi Arabia tomorrow. On Tuesday -- and it remains to be seen whether or not this trip will go ahead as planned -- obviously, security officials are going to be scrambling right now to figure out what the next move should be for Secretary Powell, but certainly for Saudi officials, this is not good timing, and they knew, Lou, that there were plots in the works, and they had been trying to apprehend individuals that they say 17 of whom, in fact, Saudi citizens.

DOBBS: Andrea, thank you very much. Andrea Koppel reporting from the State Department.

We will, of course, keep you up to date as we learn more about these three explosions that Andrea has just been reporting on from Riyadh. Three separate explosions, three compounds for Westerners in eastern Riyadh, two of those housing complexes housing Americans.

Still ahead here tonight, our quote of the day on tracking corporate crime.

Then tracking anthrax. The FBI's hunt for evidence led them to a pond in Maryland.

And President Bush has hit the road to push his economic proposals as the Senate debates the tax cut. Majority Whip Senator Mitch McConnell is extraordinarily important in directing that effort. He'll join us later in the hour.

That and much more still ahead here. Stay with us.


DOBBS: Good news for drivers. Gasoline prices haven fallen to the lowest level since the beginning of the year. The government says the national average price of unleaded regular gasoline has dropped to $1.49 a gallon. Gasoline prices have fallen 24 cents in the past eight weeks. Still, the Energy Department says a gallon of gas costs you a dime more than a year ago.

Stocks today surged to close at the highest levels in months. The Dow Jones industrials up 122 points on the day. The Nasdaq up 21 1/4, and the S & P 500 rose 11.70.

Christine Romans now with more on what turned out to be a rally.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: And, indeed. There were three advancing stocks for every one decliner on the Big Board. Only five stocks in the Dow closed lower, and the S&P jumped to the highest close since last summer. It's now up 13 percent since March's low and up 23 percent since the five-year low in October.

But so much for skepticism about analyst calls. Cisco drove the Nasdaq to an 11-month high. Cisco up five percent on an upbeat broker note.

Prudential raised a specialty retail group, that whole sector rallied, and Coca-Cola saw its third upgrade in a little over a week. Meanwhile, as investors have been buying, insiders have been more cautious. Thompson Financial says insider buying plummeted 40 percent in April from March to $70 million. Insider buying has fallen below $100 million only three times since 1999, and Lon Gerber, who compiles those numbers, says insider selling jumped 40 percent in April and appears across the sectors of the market.

Now, speaking of insider selling, Ted Turner spoke to "Fortune" magazine about his recent sale of 60 million AOL shares and says, quote, "I'm the stupidest person in the world not to have sold earlier." He also told "Fortune" he is quitting AOL Time Warner as it's vice chairman because he had not been consulted about management changes at CNN, calling that, Lou, the final straw.

DOBBS: The final straw. A lot of people very glad he wasn't consulted about those management changes. A mixed record in making those judgments at CNN.

ROMANS: May 16th, Friday, is the annual meeting, so maybe expect some fireworks from Ted Turner.

DOBBS: And as I look around, I can't see many people who hope that perhaps as -- they hope, I suspect, that his dumbest move, his really dumbest move, is selling that many shares this early. Christine, thanks a lot.

ROMANS: You're welcome.

DOBBS: Our quote of the day comes from "The New York Times". In Sunday's weekend review paper, the paper points out that keeping count of America's corporate criminals has become increasingly difficult, something we noticed here a long time ago, "The Times" saying, "It has come to this. It takes a scorecard to keep up with corporate scandals in America." End quote.

Of course, on this broadcast, we decided it came to that almost a year ago.

And now for a look at our corporate criminal scoreboard. Sixty- five executives have been charged in all of corporate America, 15 of them from Enron. No one has been sent to jail. It's now been 525 days since Enron filed for bankruptcy.

Coming up next here, Disney and Michael Moore teaming up for a controversial new project, one that alleges ties between the Bush family and the bin Ladens.

And preparing for the unthinkable. How law enforcement across the country tonight is training to protect America.


DOBBS: A national week-long terror drill began today in Seattle on an industrial lot in the city. Strewn with smashed cars, buses and other debris representing the hypothetical damage from a fantasized radioactive dirty bomb. The test designed to measure the responsiveness of emergency workers to a terrorist attack.

It's been a year and a half since a series of anthrax attacks killed five people. No one has ever been arrested in connection with that case, and the FBI is considering draining now a Maryland pond. They are searching for evidence related to those still unsolved attacks. Kelli Arena reports.


KELLI ARENA, CNN CORRESPONDENT (voice-over): The FBI's interest in this state park in Frederick, Maryland, dates back to last December. Officials got a tip back then that someone may have dumped equipment into one of the park's ponds.

Officials say they found the tip significant because the pond is about ten miles from Fort Detrick, where the Army experimented with anthrax. Agents have searched the area at least four times since then, and Frederick's mayor says the FBI is now considering draining one of the ponds. Frederick Police Chief, Kim Dine, has been in regular contact with the FBI.

KIM DINE, POLICE CHIEF, FREDERICK, MARYLAND: There are a number of facets to this investigation. It's very, very significant. After all, it is a murder investigation, multiple murder investigation, so I'm sure there are a number of avenues that they're looking into.

ARENA: According to government sources, agents in December found a large plastic enclosed container with two openings in the side, similar to those used to limit exposure during scientific tests. But still, officials say there is no evidence connecting anything found in the park to anthrax or the anthrax attacks. Nor is there any evidence linking any individual to the deadly anthrax letters.

The FBI has said nothing publicly about anyone it may be investigating, but Attorney General, John Ashcroft, did refer publicly to Steven Hatfill, a former researcher at Fort Detrick, as a person of interest. Hatfill has repeatedly proclaimed his innocence, and his spokesman told CNN...

PAT CLAWSON, HATFILL SPOKESMAN: Well, the FBI can drain the Pacific Ocean, but they are not going to find any evidence that Steve Hatfill was involved with the anthrax attacks because he had nothing to do with the anthrax attacks at all.


ARENA: Investigators involved this case are clearly frustrated. More than 18 months later, there still has not been one single arrest for those attacks that killed five people and sickened 13 others. Lou?

DOBBS: Kelli, where does this investigation on Hatfill stand? I mean, we have rather -- I can't think of another case like it. We've got rather public statements by law enforcement officials saying that he is the suspect ,that they think he's the guy, and then we have denial, and then we have this stuff. It's really -- really extraordinary.

ARENA: Well, the attorney general has been the only person that has even mentioned Steven Hatfill's name publicly, and he called him a person of interest, not a suspect. But privately...

DOBBS: This is all very cute, but the affect is precisely the same.

ARENA: Right. Well, there's, I mean, the bottom line is this. Obviously, if the FBI had anything on Steven Hatfill, they would have arrested him. They would have charged him with the anthrax killings. The investigation continues. We are told by a variety of sources that while they have made progress, they are not close to arresting anyone, Steven Hatfill or anyone else for that matter, that they are not imminent. Nor are they seeing any arrests in the near future. We are a year and a half later. They have done a ton of investigating and interviewing and searches of homes and this park, they have gone back four times to this area to see what they could find, and so far, the bottom line is, they have nothing with any anthrax on it or related to the anthrax killings that they're certain of.

DOBBS: Bottom line, this is an investigative failure right now on the part of the FBI and the Justice Department.

ARENA: Some critics would say that, Lou, yes.

DOBBS: Thank you very much, Kelli. Kelli Arena reporting from Washington.

Disney will bankroll a new documentary film from the controversial film maker, Michael Moore. The documentary will allege ties between the Bush family and Osama bin Laden. A source familiar with the deal tells CNN Moore and Miramax, which is, of course, a subsidiary of the Walt Disney Company, have reportedly signed a multimillion dollar deal to finance the film entitled, "Fahrenheit 9/11." The documentary will examine the events of September 11th and allege ties between President H.W. Bush and the bin Laden family.

Turning to Wall Street, yet another big brokerage firm has taken actions that seem to contradict, perhaps even undermine, the landmark $1.4 billion settlement. This time, it's Bear Stearns. The company apologized after one its analysts showed up in a video promoting an initial public offering. Peter Viles reports.


PETER VILES, CNNfn CORRESPONDENT (voice-over): iPayment, the first big IPO since the analysts' settlement, a test of Wall Street's commitment to a new way of doing business, and it is a test the Street failed.

iPayment stock opened strong and moved higher, but only after a Bear Stearns analyst had appeared in a Web video, a virtual road show, recommending the stock, which is underwritten by, you guessed it, Bear Stearns. That's exactly the kind of cheerleading the billion dollar settlement was designed to stop. And it's not a complicated legal issue. Here's how the chairman of the SEC put it on April 28th.

WILLIAM DONALDSON, CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION: The analyst will resume the role of gatekeeper and shed the recently acquired identity of cheerleader or marketer.

VILES: But on the same day Donaldson said that, Bear Stearns clients could watch a Web video featuring analyst, James Kissane and promoting the IPO of iPayment. After a client complained to the media, Bear Stearns pulled the video and told regulators about it, "We deeply regret that this unfortunate incidence occurred." The company said in a statement, We are taking precautions to ensure that it will not happen again."

Still, the SEC said it was, quote, disappointed in the firm.

STEPHEN CUTLER, DIRECTOR OF ENFORCEMENT, SECURITIES AND EXCHANGE COMMISSION: I think it's unthinkable that, in this environment, any analyst would be involved in an investment banking road show, and it doesn't matter that the global settlement and the terms of the global settlement aren't literally in effect. A firm ought not be having its research analysts promoting investment banking transactions.


VILES (on camera): And this is not a violation of the settlement because the settlement is not yet legally binding. It won't be until 60 days after a judge approves it and, in any event, after all this Bear Stearns now says it will implement the settlement immediately as if it were legally binding - Lou.

DOBBS: Well, the SEC expressing its displeasure it may not breach the settlement but doesn't Bear Stearns comprehend that there's a new world here?

VILES: I think they do now and the head of Bear Stearns, James Cayne, has expressed his contrition to Eliot Spitzer and you did not hear a strong condemnation from Eliot Spitzer, so perhaps he's satisfied with this. In public, the firm says it's a mistake. It won't happen again.

Privately, we are told, it really was an editing mistake. He was never intended to be in this video. The analyst made a presentation in house to the sales people which he'd be allowed to do, we understand, under the settlement but that settlement has to go to the sales people not to investors and bankers were not involved in this. Nonetheless, the appearance here is awful.

DOBBS: It's unbelievable. Well, we'll find out more about what the SEC thinks of this and a few other missteps still on Wall Street. Bill Donaldson, the chairman of the SEC, will be our guest here tomorrow evening. Peter Viles, thank you sir.

The White House tonight reiterated its support of a strong dollar, that after comments from Treasury Secretary John Snow and a Commerce Department official that a weak dollar was good for exporters.

The comments raised questions about the Bush administration's commitment to a strong dollar and it sent the dollar to a new four- year low against the euro today. Checking on the mounting U.S. trade deficit tonight, by our estimate, it stands at just about $181 billion, adding almost $1.4 billion each and every day.

FCC Chairman Michael Powell testifying before the Senate Commerce Committee tomorrow, he is expected to defend his position that would ease the rules of media ownership. In our poll tonight, the question: "Do you believe too few corporations own too many media outlets?" Again, I'll try that again. "Do you believe too few corporations own too many media outlets?"

Cast your vote at We'll have the special report on precisely this matter later in the broadcast as well as the preliminary results of the poll.

And, the final results of Friday's poll question: "Do you think NYSE member firms should decide the salary of the man who regulates them?" Fifteen percent said yes, 80 percent said no, six percent of you said hey it's business.

Still ahead here, the dollar changing colors, the Treasury tomorrow will unveil a new hue for the $20 bill.

And, the American population growing in more ways than one, the airlines are taking notice and making changes.

That story and more still ahead, stay with us.


DOBBS: The Federal Aviation Administration today raised its guidelines on how much the typical airline passenger and his or her luggage can weigh. It comes as weight has been cited as a possible factor in the crash of a commuter plane in North Carolina this year.

Patty Davis reports.


PATTY DAVIS, CNN CORRESPONDENT (voice-over): The captain of Air Midwest Flight 5481 Katie Leslie (ph) frantically radioed their traffic control. The emergency locator transmitter sounds 37 seconds into the flight as the Beech 1900 crashes killing all 21 onboard.

The National Transportation Safety Board is looking into whether faulty maintenance on the plane's elevator cables made the plane hard to control. The NTSB says weight and balance may also be to blame. Those factors are especially critical in smaller aircraft. The Air Midwest plane was just 100 pounds below its maximum weight limit.

BOB FRANCIS, FMR. NTSB VICE CHAIR: They're sensitive and that's why it's so important to make sure that your weight and your balance is put in the proper place and that you don't have too much weight totally.

DAVIS: The crash spurred the FAA to take a second look at its weight estimates. It had assumed the average person weighed 180 to 185 pounds. What it found, passengers actually weigh 20 pounds more.

Monday, the agency ordered all air carriers to hike their estimates of average passenger weight by ten pounds to 190 to 195 and a spokesman said the FAA might hike them further. It also raised estimated bag weights from 25 to 30 pounds. Regional airlines say the changes could cost them money.

DEBORAH MCELROY, REGIONAL AIRLINE ASSN.: It could mean that they would be able to carry a reduced number of passengers or fewer baggage.


DAVIS: Even so, many of the commuter airlines now assume their passengers are heavier, much heavier in the case of Air Midwest. Now following the January crash in Charlotte, that carrier found its passengers weigh an average of 200 pounds - Lou.

DOBBS: An average that I might influence in a negative way.

DAVIS: I'm not going there, Lou.

DOBBS: Patty, thank you very much for not going there. I shouldn't have. Thanks a lot, Patty Davis.

A reminder now to vote in tonight's poll, the question: "Do you believe too few corporations own too many media outlets, yes or no?" Please cast your vote at We'll have the preliminary results for you later in the broadcast.

Well, it's all a very long time now been nicknamed the greenback but now the dollar, at least the $20 bill, is changing its hue. The Treasury Department will unveil a new $20 bill tomorrow in a shade other than green. The new color has not been announced so that surprise awaits us all. The change will incorporate additional security features to thwart counterfeiters.

In our corporate crime watch tonight, new fallout from the technology and telecom boom of the '90s as a former star investment banker is indicted and a former telecom chief nears a multi-million settlement deal and with that story, Jan Hopkins.


JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): Frank Quattrone faces two counts of obstruction and one of tampering with a witness. Today's grand jury indictment follows a line of reasoning laid out last month by the U.S. attorney.

JIM COMEY, U.S. ATTORNEY: The message of this case is simple, if you or your company get a subpoena from the SEC or the federal grand jury, do not even think about playing games with that subpoena, about destroying documents, about throwing roadblocks in the way of the investigators trying to find facts.

HOPKINS: Quattrone faces a fine of $750,000 and a maximum prison sentence of 25 years if convicted.

In another case, CNN has learned that New York Attorney General Eliot Spitzer is close to closing a deal with Qwest's former chairman Philip Anschutz. Anschutz would pay back the $5 million he made from hot initial public offerings that were allocated by Salomon Smith Barney and its star telecom analyst Jack Grubman. Grubman has agreed to pay $15 million to settle his case.

Former Qwest CEO Joseph Nacchio is charged with making $1 million on IPO spinning. Former WorldCom CEO Bernie Ebbers is charged with pocketing $11 million on the deals. CNN has learned the former Qwest chairman is the only one close to a deal.


HOPKINS: As for the criminal case against four Qwest employees who have been charged with pumping up revenues by more than $2 billion, there's a lot of talk about a settlement being close but all the parties involved refuse to comment - Lou.

DOBBS: Jan, thank you very much, Jan Hopkins.

Turning now to our Thought of the Day: "It is not the critic that counts, not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena," that from a man who most certainly was in the arena, America's 26th President Theodore Roosevelt.

Coming up next, President Bush on the road to push his economic agenda, at the top of the list the tax cut. The Senate took up the debate today. We'll be talking with Majority Whip Senator Mitch McConnell next.

And, in the David and Goliath battle between local broadcasters, media conglomerates, a new rule could give, we are told, little guys a fighting change. We'll tell you what it could mean for your local broadcasters. Stay with us.


DOBBS: Well, turning now to tax cuts, President Bush today began a three state tour pushing the tax cut proposal. It comes ahead of a key vote expected in the Senate this week. Friday, the House approved the $550 billion version. The president told workers in New Mexico and Nebraska that his plan will best stimulate the economy.

White House Correspondent Chris Burns with the president in Omaha, he joins us now - Chris.

CHRIS BURNS, CNN WHITE HOUSE CORRESPONDENT: Well, hi Lou. The president tried to stir up grassroots support across the country by going, as it were, to Main Street, to small business success stories, one in New Mexico and here at Air Light (ph) Plastics in Omaha, Nebraska.

Some of the people coming out, these are the people that the president is trying to persuade to put the heat on a number of swing Senators, the swing Senate Democrats in all three states, in New Mexico, here in Nebraska, as well as in Indianapolis.

The Bush administration contends that they are getting some positive comments from at least two of those Senators, Evan Bayh in Indiana, and Ben Nelson here in Nebraska. The president is really up against a race against time.

He's trying to get through this $550 billion tax cut over ten years that he says will create a million jobs before the end of next year, (UNINTELLIGIBLE) the elections, the presidential election by the end of next year. That is why it's very important for him to push that through and he's talking about a race against time and trying to get the American public to agree with him.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I submit it to the United States Congress, strongly supported by the people here, that let's just make it happen now. Let's not wait. Let's get tax relief to the American people as quickly as possible.


BURNS: Now, the president is trying to push the Senate into approving more than $350 billion as they're sticking to right now. They're up against a budget ceiling, but at least (AUDIO GAP)

DOBBS: We have to apologize. Chris Burns we lost his microphone out there in Omaha, Nebraska, again, our apologies.

One of the factories on the president's road trip drew some unwanted attention when the company said employees who chose to attend the president's speech would have to make up the day of work or take it as an unpaid vacation day. Air Light Plastics of Omaha, Nebraska, however reversed its decision ahead of the president's speech today and instead said workers would be paid whether or not they chose to attend.

Joining us now for more on the tax cut debate Senate Majority Whip Senator Mitch McConnell. Senator, good to have you with us.

SEN. MITCH MCCONNELL (R), KENTUCKY: Good to be back with you, Lou.

DOBBS: Senator, the president pushing hard for this proposal. Senator Grassley has moved out of committee a somewhat more modest version than the House certainly and far more modest than what the president wants. What can we expect?

MCCONNELL: Well, it's a little more modest than a number of us wanted but we're going to try to form it in a way on the Senate floor even if it's a lower amount than in the House in a way that puts some real juice into the effort to create new jobs and new growth for the American people, and that debate, Lou, is going to occur here in the Senate this very week.

DOBBS: The tax cut itself when do you think you could actually see this tax cut become law?

MCCONNELL: It could be before Memorial Day. We intend to pass the bill in the Senate this week. The House acted last Friday. We expect an early conference between the House and Senate next week and a vote on the conference report before Memorial Day. So, the relief is on the way and we want to do it and we want to do it now.

DOBBS: Senator Grassley has also proposed an interesting idea that is phasing in, if you will, and certainly scaling back dividend taxes to the level of $500. What do you think of that idea yourself?

MCCONNELL: I don't like it. We're going to try to make that better. We think there ought to be close to a complete dividend exclusion to the taxpayer and even if we can't under our overall framework that we've got to operate within make that a permanent one, we'd like to get the maximum amount of relief on the double taxation of dividends and get it, Lou, quickly.

DOBBS: Are you amongst those who subscribe to the idea that the stock market will rally as a result of this elimination of taxation on dividends?

MCCONNELL: Yes, we think so. I mean it increases the value of stock and over 50 percent of Americans are in the stock market now. They watch their IRAs and their 401(k)s. They're not happy about what they see over the last three years. We think this could really begin a rally in the stock market, which would certainly help get this tepid growth rate that we've got going on in the country right now up to a level that creates new jobs and opportunity for our people.

DOBS: Well, you know, as you say it would be helpful certainly to those stocks that pay a dividend, but as you well know most stocks don't pay a dividend, and there's a great question amongst economists as to whether or not the impact of this tax cut could have a significant impact, a significant effect over the course of the next 12 to 16 to 18 months, that is Election Day 2004. What do you think?

MCCONNELL: Well, I mean the reason a lot of companies don't pay dividends is because of the tax treatment of it. Dividends are taxed twice, one to the company and the second time to the shareholder.

We think that by eliminating this unfair double taxation of dividends you no doubt raise the value of stock and you enhance the sense among corporate executives that they ought to pay dividends.

So, we think it will completely change the corporate culture, be good for the stock market, and of course so much of what we feel about our economy is based upon what we see in the market. So, we think this is the single most important thing we could do to jumpstart our economy, get the kind of growth rate that we ought to have and the kind of employment figures that we ought to have. DOBBS: Job creation let me pose the question to you. If we're going to create jobs here and it's obviously been a jobless recovery. We've lost more than two million jobs why not go straight at it? Why not a targeted investment tax credit, specific incentives to corporate America, small business in particular, an infrastructure program?

MCCONNELL: Well, there are some expensing provisions in this bill that we think are going to be a boon to small business.

DOBBS: Right.

MCCONNELL: And also by advancing the reduction in the top income tax rate, which we passed in '01 but over a period of years by advancing that we catch the vast majority of small businesses, Lou, that pay taxes as individuals not as corporations.

DOBBS: Right.

MCCONNELL: So, we think in two important ways this package is going to help small business and help job creation.

DOBBS: Senator Mitch McConnell, as always, it is good to talk with you.

MCCONNELL: Thank you, Lou.

DOBBS: Thanks for being here.

Now, our nightly look at the national debt level. Tonight it stands at $6,460,000,000,000, your family's share, or if you don't have a family, this is all yours, $69,722.

Coming up next, television as we know it could be changing if the government has its way and we always want the government to have its way, don't we? Bill Tucker will have the story.

And, we'll share some of your thoughts including what about the sizeable paycheck of New York Stock Exchange Chairman Dick Grasso. Dick, this story is for you.


DOBBS: Around the world tonight, 37 people are dead, more than 200 wounded, following a bombing in Chechnya. A suicide bomber crashed a truck packed with explosives into a government building. That blast left a crater 16 feet deep, 40 feet across.

Floods in Kenya have killed at least 30 people. Tens of thousands forced from their homes mainly in the western part of the country. Nearly two weeks and heavy rains washed out roads and bridges and submerged entire villages.

The worldwide toll from SARS continues to grow. Health officials say nearly 7,500 cases, 30 countries, 552 people have now died. A 67- year-old woman died this weekend in Canada, the first death there since the 30th of April. In China, another 75 cases reported, 12 more deaths. This is the third day in a row that China has reported fewer than 100 SARS virus cases however.

In other news tonight, actor Ray Romano is about to become one of the richest men in television. Sources tell CNN that CBS will pay Romano nearly $50 million for the upcoming eight season of his show "Everybody Loves Raymond." The network has also quietly agreed to renew the show for another two years.

Meanwhile, the government is about to change its rules on television ownership. At issue how many media outlets one company can own and how large its audience can be.

Bill Tucker reports.


BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Chairman Powell could be defending his new position on TV ownership as early as Tuesday when he's scheduled to testify before Congress. Powell has already come under sharp attack for his proposals to ease ownership restrictions on television stations. He's expected to prevail but in a sharply divided FCC.

JONATHAN ADELSTEIN, FCC COMMISSIONER: I'm afraid if we allow people to buy newspapers and television stations and radio stations we could create a new "Citizen Kane" for the 21st century or maybe a small handful of them.

TUCKER: But maybe not. A study done last September by the FCC shows that from 1960 through 2000, the number of media outlets in a random ten city study increased by 200 percent while the number of owners grew by 140 percent. The study says ownership growth would have been faster but the Telecommunications Act of 1996 encouraged a wave of consolidation.

Powell points to the growth in the number of media outlets and underlines the sharply competitive nature of the business saying that cable, the Internet, direct satellite, represent a serious threat to free broadcast TV, arguing that the market needs to get a little more free.

FRANK BODENCHAK, EDGE CAPITAL: I'm not expecting that the largest companies get bigger but it may be the case that certain smaller TV groups that now control five or seven or ten percent of the country can expand significantly.

TUCKER: In other words, a large company like a Viacom or a FOX which already reached 40 percent of the national audience are not likely to grow much more.


TUCKER: But a smaller broadcast company, like Granite Broadcasting or Hubbard Broadcasting, which each own eight television stations apiece, are in a position to bargain with those assets and perhaps grow - Lou.

DOBBS: So no big move at the FCC to deconsolidate, if you will, to de-leverage, to get more voices, to spread out rather than encourage concentration?

TUCKER: Well, the point that the proponents would make is that if you're 40 percent already how much bigger can you get, whereas if you're eight to ten percent you can get a lot bigger.

DOBBS: Sounds like we're about to find out.

TUCKER: We could.

DOBBS: All right, Bill, thank you very much, Bill Tucker.

Still time to vote in tonight's poll. The question: "Do you believe too few corporations own too many media outlets, yes or no?" Cast your vote at We'll have the preliminary results coming up here in just a few minutes.

And when we continue, the preliminary results and we'll share some of your thoughts, including reaction to the tax cut proposals and the export of American jobs overseas, all of that still ahead. Stay with us.


DOBBS: Now the preliminary results of our poll, the question: "Do you believe too few corporations own too many media outlets?" Ninety-eight percent of you said yes, two percent said no. I presume that includes an exemption for AOL Time Warner in that poll result.

Let's take a look at some of your thoughts. Many of you wrote to us about a report on the salary of the New York Stock Exchange Chairman Dick Grasso.

Benjamin Rhodes of Daytona Beach, Florida said: "I am outraged at the pay package of the CEO of the NYSE. I am one of the individuals who still has his money on the sidelines waiting for integrity to return to the best business country in the world."

Ray O'Bear of Illinois wrote about the tax cut proposal and jobs. "It's been claimed that the $550 billion tax cut will generate a million new jobs, jobs being cited as the main reason for the cuts. If my math is correct, each new job will cost $550,000. Doesn't this seem like an expensive way to create jobs?" Well, it is Washington after all, and your math by the way is absolutely correct.

Ken Richards from Davenport, Iowa, upset that many jobs, U.S. jobs, are being exported overseas: "How can people spend more money when the average person is afraid of what might happen with their job. The middle class is decreasing because our government is letting our jobs go overseas. America is the largest buyer of all the world's products. How can we buy them if we are losing the very jobs that pay for these products?"

Send us your thoughts at, and please include your name and home town.

Thanks for being with us. Tomorrow our guests will include the Chairman of the SEC William Donaldson.

And Rashid Khalidi, director of International Studies at the University of Chicago, on why the roadmap to Middle East peace is riddled with obstacles, for all of us here goodnight from New York.

"LIVE FROM THE HEADLINES" with Anderson Cooper coming up next.


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