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LOU DOBBS TONIGHT

President Bush Orders Troops to Liberian Coast

Aired July 25, 2003 - 18:00   ET

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

ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, July 25. Sitting in for Lou Dobbs, Kitty Pilgrim.
KITTY PILGRIM, CNN ANCHOR: Good evening.

President Bush today ordered U.S. Marines to be ready to intervene in the civil war in Liberia. The president sent warships carrying troops to the coast of that country. He said conditions in Liberia were getting -- quote -- "worse and worse."

Pentagon correspondent Chris Plante reports.

(BEGIN VIDEOTAPE)

CHRIS PLANTE, CNN PENTAGON CORRESPONDENT (voice-over): With a mounting death toll and continuing chaos in the Liberian capital, President Bush Friday ordered the Pentagon to organize troops for possible U.S. military action.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're deeply concerned that the condition of the Liberian people is getting worse and worse and worse. Aid can't get to the people. We're worried about the outbreak of disease.

PLANTE: Two ships loaded with nearly 2,000 Marines have been ordered to steam toward Liberia. The USS Iwo Jima and the USS Carter Hall are already in the Mediterranean Sea. A third ship, the USS Nashville, is slated to follow on. Army forces may also become part of any task force, sources told CNN. At the Pentagon, there's concern about being sucked into yet another military conflict.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: Whatever we do, that we have a very clear mission, we understand the mission we're asked to do, that we have an idea of when the mission is going to be over, in other words, when can we come out of the mission, and that we have sufficient force to deal with the security situation.

PLANTE: Under the plan envisioned by the Pentagon, U.S. forces would only provide logistics, communications, and other noncombat support, and that only after the fighting has stopped.

(END VIDEOTAPE)

PLANTE: With Liberian President Charles Taylor insisting that he won't leave until U.S. troops arrive and the U.S. insisting that they won't put peacekeepers on the ground until after Taylor is gone, the situation may already be at an impasse -- Kitty.

PILGRIM: Chris, how far away, in terms of time, are these troops? How long will it take to get there?

PLANTE: Well, it's a little bit of a tricky question. But the two ships carrying nearly 2,000 Marines are probably a seven-day sail away from the coast of Liberia. But it's possible that, if troops are needed in a hurry, they could pull Army troops out of Europe and fly them down there, should the situation require.

PILGRIM: All right. Thanks very much, Chris Plante reporting -- thanks, Chris.

In Liberia, at least 14 people were killed today when mortar bombs rained down on refugees in the capital of Monrovia. It was the heaviest mortar attack in several days. Now, government and rebel forces blamed each other for the shelling. Monrovia's residents again pleaded for American intervention in that civil war.

President Bush also turned his attention to the Middle East crisis today. He welcomed Palestinian Prime Minister Mahmoud Abbas to the White House. It was the first time a Palestinian leader had visited the White House since President Bush entered office.

Senior White House correspondent John King has the story -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Kitty, for 30 months, this president shunned Yasser Arafat simply because he did not trust him and did not trust his commitment to peace -- today, a warm welcome here at the White House for the new Palestinian prime minister, Mahmoud Abbas. Mr. Bush says he is a partner he can trust in the pursuit of peace.

Now, there has been some progress, but only modest progress, in the seven weeks since Mr. Bush held that big Mideast summit, the Israelis and the Palestinians both saying constant White House pressure is necessary to make progress on the so-called road map to peace. One issue Mr. Abbas wanted help with was the issue of Palestinian prisoners. He wants Israel to give blanket release to thousands of Palestinian prisoners.

On that issue, Mr. Bush made clear he has a disagreement with the Palestinian prime minister.

(BEGIN VIDEO CLIP)

BUSH: Well, it doesn't make any sense. If you've got somebody who is bent upon destroying lives and killing people in prison, to -- if you were to let them out, it would make it harder to achieve the peace we all want. And so I think it's very important to analyze the prisoner situation on a case-by-case basis.

(END VIDEO CLIP)

KING: Two other contentious issues holding up progress right now: the longstanding contention over Israeli settlements. Prime Minister Abbas says all of the settlements must go. Prime Minister Abbas also wants White House help in getting Israel to stop construction of a security wall.

The Israelis say it is critical to stopping attacks from the Palestinian territories. Mr. Abbas says it is demeaning and a way for the Israelis to humiliate his people.

(BEGIN VIDEO CLIP)

MAHMOUD ABBAS, PALESTINIAN PRIME MINISTER: Mr. President, attacks on the dignity of the Palestinians must end. Palestinians must be able to move, go to their jobs and schools, and conduct a normal life. Palestinians must not be afraid for their lives, property, or livelihood. Some steps have been taken by Israel so far, but these steps remain hesitant.

(END VIDEO CLIP)

KING: On the issue of the security wall, Mr. Bush made clear he agrees with Prime Minister Abbas. He called the wall a problem, said he would discuss it with Prime Minister Sharon when he is here at the White House next week.

On the issue of settlements, the president split the difference, if you will. He said it will be a much more easy issue for Israel to deal with in the negotiations if Prime Minister Abbas proves in the days, weeks, and months ahead that he can keep Palestinian militant groups under wraps -- Kitty.

PILGRIM: John, let's talk money for a second. Now, Prime Minister Abbas says he needs more money from the United States to make the peace process work. Do you think he'll get it?

KING: No firm commitment just yet. There is $20 million in direct U.S. aid Mr. Bush has authorized for the Palestinian Authority. That money has already been sent or is in the pipeline. The president did say this, though. He said, the secretary of the treasury and the secretary of the commerce will go to the Palestinian territories in the next couple of months.

They will come back with recommendations on how to increase U.S. investment and other ways to create jobs for the Palestinian people. So it is possible after that mission that there could be a bit more U.S. aid as well -- Kitty.

PILGRIM: John, I need to switch topics with you for a second. What about the deployment of U.S. troops toward Liberia? What about that from the White House tonight?

KING: Well, the White House is keeping its options open. As Chris Plante just noted, there are troops going to the region. The White House will not say how many and when they will go ashore. It says there is still too much uncertainty. The White House is making clear of this, though: West African troops will go in first. President Taylor must leave the country. And it also says there are ongoing negotiations with the United Nations for the U.S. peacekeepers to be there for a very short period of time, most White House officials saying two to three months, four, at the most -- Kitty.

PILGRIM: All right, thanks very much, John King, reporting from the White House. Thanks, John.

In Baghdad today, U.S. officials showed journalists the bodies of Saddam Hussein's sons. And it was the latest attempt to persuade skeptical Iraqis that Uday and Qusay are dead. Now, the video in our report has been edited, but it still does contain gruesome images.

Nic Robertson joins us live from Baghdad -- Nic.

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: Well, Kitty, earlier in the day, the coalition provisional authority here said it acknowledged that it needed to do more to convince Iraqis that Uday and Qusay really were dead, and that's why they took journalists to see the bodies of Uday and Qusay.

They were laid out on morticians' tables. Now, people we talked to in Baghdad who were able to watch this on some of the regional satellite broadcast stations here said that this convinced them that Uday and Qusay were dead, that the photographs shown on the previous day hadn't been so clear but now they could recognize them. That seemed to be the majority opinion, people expressing that in a number of ways, saying, good, this was a time to move forward, others saying, look, it would have been better that they surrendered, that they could have been put on trial here, that justice could have been seen to be done.

But there does remain here still a small group of people who refuse to accept that Uday and Qusay are dead. They say, for example, well, they never would have been in the same building at the same time together. They just wouldn't have done that, others saying this is all part of a U.S. fabrication; this just isn't true.

Certainly, the picture made much easier today for Iraqis to recognize Uday and Qusay, because Uday, the older brother, his beard had been shaved down to the stubble, the same way people would normally recognize him. And the younger brother, Qusay, also shaved, just presented with his mustache, the bullet wounds on their faces filled in with mortician's putty, so the job for Iraqis to recognize them made much easier today, Kitty.

PILGRIM: All right, Nic, another question. There are some reports that Saddam's bodyguards have been captured. Now, does this mean the coalition is closing in on Saddam Hussein, or can you even tell?

ROBERTSON: It is difficult to tell. What we have seen this week and in Mosul as well, where Uday and Qusay were killed, there were indications, not only from neighbors, but from other sources indicating that they thought perhaps Saddam Hussein was in the area. There appears to be an effort at this time, not only with the bodyguards rounded up in Tikrit, but there appears to be a coalition effort to perhaps use the momentum gained with the deaths of Uday and Qusay, use the momentum of new information, perhaps, and close down some of the places Saddam Hussein might run and hide and thereby perhaps make it more likely that he's captured at this time -- Kitty.

PILGRIM: All right, Nic, is the United States going to pay the reward for the tip that led to the death of Saddam Hussein's sons? They had promised one.

ROBERTSON: They say they're going to pay. It's $30 million, $15 million for each of the two brothers. It's a thing that will be viewed here -- will be appreciated here. It's certainly something that may encourage other people to try and claim the $25 million reward by offering information on Saddam Hussein. It's certainly something that Iraqis may well -- may well accept and move towards, Kitty.

PILGRIM: All right, thanks very much, Nic Robertson, reporting from Baghdad. Thanks, Nic.

Still ahead: a decisive vote on prescription drugs tonight. But does it mean cheaper drugs at a higher risk? Congressional correspondent Jonathan Karl has that story live from Capitol Hill.

Then: U.S. troops are poised to go to Liberia, but the administration is split. Michael O'Hanlon of the Brookings Institution will be our guest.

And the latest details to emerge in the Kobe Bryant case. Rusty Dornin will join us live from Eagle, Colorado, with the very latest.

(COMMERCIAL BREAK)

PILGRIM: Coming up: Sherron Watkins is the woman that brought the Enron scandal to light, but would-be whistle-blowers in the federal government can't seem to get their complaints heard. And Lisa Sylvester will have the report.

(COMMERCIAL BREAK)

PILGRIM: The House of Representatives has voted to let Americans buy prescription drugs where they are usually the cheapest, which is outside the United States. And the bill passed by a pretty comfortable margin, despite fierce opposition from some lawmakers, who say it could lead to dangerous counterfeits.

Congressional correspondent Jonathan Karl is live on Capitol Hill with more on that. We will be back to Jonathan in a minute. We'll continue with the broadcast with another story also from Capitol Hill.

The first of more than 25 million child tax credits are in the mail to American families. Now, the checks for $400 a child were sent out across the country today. President Bush yesterday toured a federal check processing center in Philadelphia, where many of the checks were mailed. So the check is in the mail.

California's Supreme Court today decided not to stop a recall election set for Governor Gray Davis in October. But, as angry voters move to throw the governor out of the office, the question tonight is, which candidate will the Republicans pick to take on the embattled Democrat?

Candy Crowley reports.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): No, he hasn't said yet. He's still working his day job.

ARNOLD SCHWARZENEGGER, ACTOR: I think it's very important that you send a message, which means (UNINTELLIGIBLE) knows "Terminator 3." So that's all we want to talk about. I have no announcements to make, if that's your question.

CROWLEY: Well, yes, that is the question, everybody's question.

GOV. GRAY DAVIS (D), CALIFORNIA: The Terminator may be back, he may not be back, we'll see about that.

CROWLEY: As delicious as the prospect is, political oddsmakers are betting Arnold Schwarzenegger will turn down the role of Gray Davis slayer. The recall vote is guerrilla theater, anything can happen, and nobody knows what it will mean.

The theory is if Schwarzenegger is serious about changing careers, his political debut is less likely to be panned in a more conventional election. Say (ph) one everybody expects where motives are less likely to be suspect. Besides, Schwarzenegger is not a template conservative in the mold envisioned by the folks who set up the recall scenario.

This man does not have a star on Hollywood Boulevard, but former vice presidential candidate Jack Kemp is said to be pondering a go at the governor. He has pass for glamour for political circles, he played football for the Buffalo Bills and the San Diego Chargers. You see where this is going. Kemp is a Republican, has a House in California, need we say more? Although he has yet to say anything.

Speaking of not saying anything, what does this man think about efforts to replace a Democratic governor with a Republican one? Let's get to the point: 55 electoral votes, more than any other state. Win here, you are one-fifth of the way to the White House. Any political ripple in California registers in national politics. And this recall is pretty much a tsunami, but the White House is headed for high ground.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think that this is an issue that the people of California are going to address, and that's where our position is. We're not involved in it at this point.

CROWLEY: Not a word, not in public, and if you can believe it, not in private. "We had a meeting with White House types about '04, said one California Republican, "and they refused to talk about the recall."

Two words, explained one Bushie: Richard Riordan. Riordan was the White House fave to run for governor last year. He was defeated in the primary by Bill Simon. Then guess who had to fly to California and make nice?

Candy Crowley, CNN, San Francisco.

(END VIDEOTAPE)

PILGRIM: Still ahead tonight: mission ready, U.S. troops prepared to enter Liberia. Michael O'Hanlon is a senior fellow at the Brookings Institution. And he will be our guest.

Then: Many of you were outraged about the American military buying parts overseas. We will share some of your e-mails.

And 2002 was the year of the whistle-blower, but, this year, complaints on waste and abuse in the federal government are buried in a mountain of bureaucracy in our nation's capital. Lisa Sylvester will have that report.

(COMMERCIAL BREAK)

PILGRIM: As we mentioned a moment ago, the House of Representatives has voted to let Americans buy prescription drugs where they're usually the cheapest, which is outside the United States. Now, that bill passed by a pretty comfortable margin. That's despite fierce opposition from some lawmakers. They say it could lead to dangerous counterfeits.

Congressional correspondent Jonathan Karl is live on Capitol Hill with more -- Jonathan.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Kitty, this was a bill that the pharmaceutical industry spent mightily to defeat. It's also a bill that the Republican leadership in the House tried to stop in any way it could, including trying to stop it from coming up for a vote in the first place.

But it did end up passing by a very comfortable margin. That margin was 243-186. And the coalition of representatives that voted for this spanned the ideological spectrum. You had socialist Bernie Sanders in favor of it, and you also had Dan Burton, one of the most conservative Republicans, in favor of it.

When it was done, the woman who led the charge for this, at least helped to lead the charge, Republican Jo Ann Emerson, had this to say:

(BEGIN VIDEO CLIP)

REP. JO ANN EMERSON (R), MISSOURI: You saw all of us come together for one reason. And that's so the American public can get a fair price for its prescription drugs and doesn't have to subsidize the rest of the world. We did this against an army of 600-plus lobbyists and millions of dollars of misinformation.

(END VIDEO CLIP)

KARL: Now, this bill would allow drugs to be imported from Canada, also imported from the European Union and seven other countries. The issue here, of course, is that drugs are cheaper elsewhere. Look at this price comparison between the U.S. and Canada: drugs like Paxil twice as expensive, or nearly twice as expensive in the U.S., Lipitor, Allegra, prices much more expensive in the United States than in Canada.

And the reason for that is quite simple, of course. That's because Canada, like the European Union, has price controls on pharmaceuticals. That's why Republicans say this is simply a bad bill; it's a bill that would force the United States essentially to adopt other price controls from other countries and would also, the belief is, make the drugs unsafe, because there are less controls, the belief would be. The FDA is against this. Previous administrations have been against it.

And today, Tom DeLay, the majority leader for the Republicans over in the House, had this to say.

(BEGIN VIDEO CLIP)

REP. TOM DELAY (R-TX), MAJORITY LEADER: Sometimes, decisions are made that, frankly, are not based on what I felt was very strong evidence that this bill undermines safety of drugs coming into this country, that imported price controls, that would disrupt our pharmaceutical system in the United States. And I still feel that way.

(END VIDEO CLIP)

KARL: Now, the bill passed overwhelmingly in the House, but it is a long way from becoming law.

Over here in the Senate today, a letter went out signed by 53 U.S. senators saying that they oppose this. The letter was signed by many Republicans, but also by several Democrats, including Ted Kennedy of Massachusetts. So there's still a battle to be fought here. Those letters -- what those senators in that letter said is that they want to have current law which would allow for the importation of drugs from Canada, but only if the health and human services secretary certifies that it can be done safely.

Now, neither Bill Clinton's health and human services secretary, nor George Bush's have decided to do that -- Kitty.

PILGRIM: A very tough issue. Thanks very much, Jonathan Karl. Thanks, Jonathan.

It's not really a good time to be a whistle-blower in the federal government. Investigators responsible for looking into complaints are understaffed and they're absolutely swamped. And now many important cases are buried under red tape. Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): 2002 was the year of the whistle-blowers. That's when three graced the cover of "TIME" magazine.

But now federal whistle-blowers are having a tough time having their complaints heard. The Office of Special Counsel reviews claims of waste and abuse by federal employees. By law, the office is supposed to turn around cases within 15 days, deciding if they warrant an investigation. But at the end of June, there were 628 pending cases; 448 of those are six months or older.

Public Employees For Environmental Responsibility, a government watchdog group, is concerned that the complaints from whistle-blowers involving homeland security, the environment, and public health are being ignored because they're sitting in a folder on someone's desk.

JEFF RUCH, EXECUTIVE DIRECTOR, PEER: In the vast majority of cases they blow the whistle and nobody hears it. We liken it to calling 911 and being put on hold.

SYLVESTER: Norman Laberge, an environmental protection specialist for the Navy, filed a complaint with the Special Counsel's Office earlier this year, warning that Naval workers at a military communications facility in Maine were being exposed to asbestos. He's still waiting for a response.

NORMAN LABERGE, WHISTLE-BLOWER: And I think it discourages other individuals to pursue complaints that they might have, because it's not a very effective system.

SYLVESTER: The Special Counsel's Office declined an on-camera interview. But the agency's former director says the problem is, there are only six full-time workers in the disclosure unit and the number of new whistle-blower complaints has jumped 46 percent since October 2001.

ELAINE KAPLAN, FORMER SPECIAL COUNSEL: The people who are working there really work their buns off, but there's just not enough of them.

(END VIDEOTAPE)

SYLVESTER: The Office of Special Counsel is seeking money to hire five new people. The Bush administration has included the request in its budget proposal for fiscal year 2004. And now it's up to the Appropriations Committees in Congress -- Kitty.

PILGRIM: All right, thanks very much, Lisa Sylvester, reporting from Washington. Thanks, Lisa.

Let's look at some of your thoughts. We love to do that. And many of you wrote about Lou's interview last night with Congressman Duncan Hunter. And he says American defense contractors and the Pentagon should strictly buy American.

Carol Sram of Fairfax, Virginia, said: "It is beyond rational thinking that a nation would let this kind of technology out of our hands to begin with. Hooray for Congressman Hunter."

Joan Fell of Tracy, California, wrote: "I agree with Congressman Hunter. Our legislators should make every effort to ensure that our defense is built by American companies with American materials. This would provide more job for Americans, too.

Helen Flood of Haslett, Michigan, wrote: "I do not want to depend on our so-called friends for anything. I think we should be able to provide our own parts, components and whatever we need to run our military."

Richard Hall of Phoenix, Arizona, he disagrees. He says: "The United States is a bastion of capitalism and the military should always try to get the best deal for its money."

And Morton Flexer of Westfield, New York, he gets the last word. And he says: "It's perfectly fine to limit military purchases to American companies, as long as those companies are headquartered in the United States and pay taxes here."

We do love hearing from you. Send us your thoughts at LouDobbs@CNN.com.

When we return: mission ready. U.S. troops prepare to go to Liberia. But our next guest says there is a sleeping giant that is a much more serious problem. Michael O'Hanlon, senior fellow at the Brookings Institution, will join us.

Then, the Kobe Bryant case: the latest details to emerge on the alleged victim. Rusty Dornin will have that report from Eagle, Colorado.

And from blockbusters to bombs: Gitesh Pandya, BoxOfficeGuru.com, will join us with the winners and losers at the summer box office.

(COMMERCIAL BREAK)

PILGRIM: The United States moved closer to intervening in the Liberian Civil War today. As we reported, President Bush ordered warships carrying U.S. Marines to the Liberian coast.

My guest is Michael O'Hanlon. He's a senior fellow at the Brookings Institution. And he says the administration has hedged its bets by being ready to intervene. But many people are asking whether U.S. troops are really ready for action in such a dangerous environment.

Michael O'Hanlon joins me now from Washington. Thanks for joining us, Michael.

MICHAEL O'HANLON, SENIOR FELLOW, BROOKINGS INSTITUTION: Nice to be with you.

PILGRIM: President Bush made a trip to Africa. Was there something implied in that trip that's driving action now, Michael?

O'HANLON: Well, the idea of the Africa trip originally was not to focus on Liberia or military issues at all, focus more on trade, on the president's HIV/AIDS initiative, and so forth.

But, as we all recall, as the president was preparing to go, it seemed there was an opportunity to really bring some stability to this tragically afflicted land and end the violence that's been so terrible there on and off for really a very long time, but certainly at least 15 years. That became, therefore, the defining characteristic of the trip, even though it wasn't intended.

And the president came pretty close to promising American help. He always had these conditions: There has to be a peace. President Taylor has to leave first and so forth. But it also sounded like he really wanted to help and he was essentially preparing the way for U.S. forces to go in. Now he's sort of -- he's been essentially falling back on technicalities, where we haven't quite had all the conditions that we established and so we're not going to go in.

Today, he seems to be moving back towards the position he had a month ago. And I think we ultimately may go in.

PILGRIM: But, Michael, these seem like fairly reasonable conditions, because it's such a volatile situation. Standing on these conditions does seem to be the prudent way to go. And yet in some way does that keep us from going in while it's the worst? It's kind of a Catch 22.

O'HANLON: Well, you're right. It is a Catch 22. On the one hand, the president did say very clearly we're only going to go in if there's a peace. We're not going to go in to impose a peace.

On the other hand, if you're trying to rescue a war-torn country from conflict, does it make sense to give the warlords and the extremist president a veto over your intervention and say we will only come in if you sign a peace treaty, otherwise we're going to leave you to keep wreaking havoc on your people and your country in a war that's already cost tens of thousands of lives? So in a way, it's not a very serious way to talk about military intervention if you're asking for all the parties to first agree to peace before you help out, especially under these circumstances, where President Taylor really is seen as a very ruthless leader by most people who have watched him over the years and the people trying to fight him are also quite ruthless. So if we care about the Liberian people and not just some political settlement, we may have to be a little more assertive. I'm not saying some massive forcible intervention, but a little more twisting of arms and a little more willingness to get our forces ready now and then try to find a way to get them in. PILGRIM: Let me press this just a bit, because the Powell doctrine says that any engagement should have a clear goal and should have an exit strategy and yet it -- to many people it may seem that this is lacking in this situation. What do you think of that, Michael?

O'HANLON: Well, I think that's a fair point. And I do think we've been a little flip.

I support the intervention, but I think we've been a little lazy about thinking it through. When you're dealing with one president who's corrupt and ruthless, a resistance movement that's almost equally corrupt and ruthless, and you go in to somehow to keep a peace, well, what's the peace to keep? You're going to have to do nation building. This is one more case where we shouldn't kid ourselves. If we're going in, somebody is going to have to stay for five or seven or 10 years to help this country rebuild itself. Hopefully it's not the United States. Hopefully it's the West African neighbors of Liberia. But we haven't really talked in those terms.

And so I do think skeptics would have a fair point -- that until we get serious about what the mission may entail, we really haven't quite prepared the groundwork. I think, however, this is a small country. It's 3 million people. It's right off the coast of the Atlantic Ocean. We have a long historical association with this country. Tens of thousands have died in recent years. There's a strong moral argument to do it, and there's a strong military argument that says it's not that hard compared to some missions.

And also, the West Africans are ready to do the lion's share of the work. We just have to push a little harder, be a little more assertive, and I think we can pull it off.

PILGRIM: All right.

Michael, I need to switch topics with you, and this is a topic that we usually talk about, North Korea. You have a book coming out, "Crisis in the Korean Peninsula," and you're quite an expert on this. We had some indication that there may be an announcement of talks, maybe three-way talks with the United States, China, and North Korea, but yet this week no announcement. Why no announcement?

O'HANLON: Well, it's a very tough thing. I think we've made a lot of progress, and give the Bush administration credit for its dealing with China. They have begun to develop a strategy that they and China will together support. But we haven't necessarily gotten the North Koreans to accept all the terms we want. I think we want to have the Japanese and South Koreans involved in negotiations pretty soon. That's the Bush administration preference. And therefore, I'm not sure they've worked out all the modalities of these talks.

But unfortunately we're focusing so much on modalities, on how many seats to have around the table, that I'm not sure we have a very good plan for once the talks actually begin, as I expect they ultimately will, and that's the real crux of the matter. PILGRIM: All right. We'll keep our eye on that along with you. Thanks very much, Michael O'Hanlon. He's the senior fellow at Brookings Institution. Thanks, Michael.

O'HANLON: My pleasure.

PILGRIM: Tonight's quote comes from the streets of Baghdad. Citizens reacted to the pictures of Uday's and Qusay's bodies, and this is the quote: "This is enough proof that they were Uday and Qusay. After this, we hope for a new government and that we will live happily, with security, God willing." That quote from an Iraqi citizen.

A new development tonight in the sexual assault case against NBA star Kobe Bryant. The Colorado judge today ruled on cameras in the courtroom.

Rusty Dornin is live in Eagle, Colorado, with the very latest -- Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Kitty, yes, the judge will be allowing cameras in the courtroom on August 6, when Kobe Bryant appears.

But over the last few weeks Vail Valley, which consists of about four or five towns near where the incident occurred, of course has been besieged by journalists. And what happens in small towns, of course, everybody's talking.

Some of them know the alleged victim. Many of them know her very little or not at all, and efforts to clamp down on some of the gossip and innuendo -- the family has asked her friends not to speak to the media. And even the hotels in the area have told their employees that they will be fired if they do speak to the media.

Of course, the judge in the case also issued an order yesterday warning prosecution, defense, law enforcement, and court staff to keep their mouths shut. Anyone having a direct link to the case must not talk about the evidence in this case. He's concerned about pre-trial publicity.

Now, the defense has had investigators in town, in the Eagle County, of course combing the area, talking to people, trying to find out more about the alleged victim's past. A couple of the things that first they are going to be looking at, apparently at her college town in Greeley, Colorado, in February a young woman, police responded to her dorm room for an overdose. She was considered a danger to herself at that time.

Then in June, Eagle police responded to her home again, it was an overdose. Those are the kinds of things the defense, of course, is going to be trying to bring out to say that she is unstable. But it's unclear whether those things will be admissible in court.

Now, on another little side note, the budget for the four counties in this area -- now, the district attorney heads four counties in prosecuting cases. Sort of an example of the David- Goliath aspect of all this. He has a $2 million annual budget to prosecute cases in four counties. According to "People" magazine, Kobe Bryant bought a $4 million diamond for his wife Vanessa after this incident occurred just recently, more than twice the annual budget for the district attorney for these four counties -- Kitty.

PILGRIM: The facts that are turning up in this case are astonishing. Thanks very much, Rusty Dornin, reporting from Eagle, Colorado.

When we return, our "CEO of the Week" on delivering success in a difficult environment.

And then the runaway winners and box office bombs at the movies this summer. Gitesh Pandya of Box Office Guru will be here with the latest on the blockbuster season.

(COMMERCIAL BREAK)

PILGRIM: Our "CEO of the Week" has steered his company through a challenging economic environment, delivering impressive returns. Now, the company's stock price is up nearly 50 percent since he took charge.

Greg Swienton of Ryder Systems is our "CEO of the Week."

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): They're the trucks that deliver "The Dallas Morning News," carry products to CVS drug stores, and transport auto parts to Nissan's assembly line. More than 13,000 companies rely on Ryder trucks to move their products around the world.

Greg Swienton is the man behind the wheel at Ryder systems, named one of "Fortune's" most admired companies for the past six years.

Since Swienton moved into the executive suite, the economy and the stock market have stumbled, but Swienton has driven his company steadily upward.

He did it by shedding units he did not think fit the core business, making Ryder a leaner, more efficient company.

GREG SWIENTON, CHAIRMAN, CEO & PRESIDENT, RYDER SYSTEM: Over the last couple of years we've saved several hundred million dollars in cost. We have been able, therefore, to weather a very difficult economic climate.

When I make those visits up in those couple of cities...

PILGRIM: Top of the list -- Swienton said good-bye to the corporate jet.

SWIENTON: When I visit with people in the field, I want to be able to always have credibility. And I don't think you have a lot of credibility if you're talking about significant changes in the business, cost reduction, and then you fly in on a jet and fly out and ask them to save money.

PILGRIM: Good corporate governance rates high on Swienton's agenda. In fact, on a recent earnings call, analysts complimented Swienton and his management team for its clarity in disclosure.

SWIENTON: I think that honesty and clarity and being forthright whether times are good or times are bad, or you got good news or bad news, it's important. It's important to our owners. It's important to our employees. It's important to the people who follow us.

PILGRIM: Whether providing trucks, maintenance, or coordinating a client's entire service, customers are key to Swienton. So is safety. He won the 2002 green cross for safety medal for his commitment to workplace safety and corporate citizenship. And in May he was commended for his dedication to environmental improvement.

Swienton is also committed to his employees, who can send their children to the Ryder day care center and the Ryder-sponsored charter school, both down the road from corporate headquarters.

(END VIDEOTAPE)

PILGRIM: Congratulations to Greg Swienton of Ryder systems. He's our "CEO of the week."

Well, it's the beginning of another summer weekend, and movie studios are hoping that it will bring in big money for the latest releases, and so far the summer movie season has been pretty heavy on sequels of past blockbusters. There are some notable exceptions, including one movie that's opening this weekend. And joining me now for an inside look at the summer movies is Gitesh Pandya, the editor of boxofficeguru.com. And thanks for joining us, Gitesh.

GITESH PANDYA, EDITOR, BOXOFFICEGURU.COM: Thanks for having me.

PILGRIM: You know, "Seabiscuit" has such a buzz and is coming out this weekend. Tell us a little bit about it and how you think it will do.

PANDYA: Well, "Seabiscuit" is based on the best-selling novel. It's basically about a horse during the depression era that fights the odds to become a champion. And this is a story of the horse, the jockey, and the owner. Universal Pictures is releasing this film in just under 2,000 theaters. Now, that's not a lot for a summer blockbuster. But the idea here is to use it as a counterprogramming move. This is more of a mature, adult-skewing film.

So far this summer so many action films, so many sequels geared towards teenagers and young folks. This is counterprogramming. And a lot of folks who are more mature adults have not been getting that and they're counting on them to come in this weekend and using the reviews and word of mouth to drive it forward.

PILGRIM: It will be really interesting to see how it does. It looks very interesting. "Tomb Raider", that's more of a teen movie although I might see it myself. PANDYA: Well, it's actually better than the original, I thought. Not by much, but it's from Paramount Pictures, over 3,200 theaters. It's Lara Croft, the videogame-inspired heroine on another worldwide adventure. The first one opened with $47 million and was a $131 million domestic hit. This one is not expected to be as big, but it does have a good chance of opening up at the No. 1 spot because of the whole marketing hype behind it.

PILGRIM: You know, it's been an interesting summer season and maybe a little disappointing. Let's take a look at the top five movies that have been out and talk about how they're doing. And we have "Finding Nemo", which is the animated film.

PANDYA: Right.

PILGRIM: That's really done well, hasn't it?

PANDYA: Right. Disney has hit the gold mine here with Pixar Entertainment. This is going to be the highest grossing animated film of all time. And unlike all these sequels that are out there, people have been flocking to this film, which is an original film, and they like the story, the word of mouth is very good, and whereas a lot of other films are falling by 50 percent, 60 percent, this one is falling by 20, 30 percent. Very good legs, or fins, as you might say, for this kind of film.

So doing very well, past $300 million. It's going to be the biggest blockbuster of the summer. But these grosses are domestic only. So it does not incorporate the overseas numbers, the DVD and video sales, TV rights sales, merchandising, soundtrack. So it's just the tip of the iceberg.

PILGRIM: And for something like this that's huge, every parent goes out and gets the baby-sitter.

PANDYA: Exactly.

PILGRIM: Let's talk about the audiences, though. They haven't really been pushing forward in seeing things. They've been dropping off a bit, haven't they?

PANDYA: Right. It's a very alarming trend this summer. Normally in the summertime we do see a lot of big openings followed by a large drop-off. There's nothing new there. However, this summer, the depreciation rates have been even higher than normal. If you look at the chart here, you know, movies which might drop 50 percent or 55 a percent, now we're seeing movies drop 60 percent, 65 percent, 70 percent even, for "The Hulk." That's not a lot of staying power for these films.

PILGRIM: Why is that?

PANDYA: Well, it's a combination of a lot of marketing on the opening weekend and like a sponge, you soak up the entire audience right up front and there's no one left afterwards. And part of it is just bad word of mouth and bad films, people not liking these films, not recommending it to their friends, and telling their friends to go see something else. So movies like "Finding Nemo" and "Pirates of the Caribbean", they are the few hits that have had legs this summer.

PILGRIM: Let's talk about "Pirates of the Caribbean". and I actually saw it. It was very creatively done. How is it doing?

PANDYA: It's doing exceptionally well. It just passed the $150 million mark in about two weeks, which is incredible. It's a Jerry Bruckheimer production. This man routinely has $100 million hits every single summer. And it's from the Disney label. It's actually the first movie from the Walt Disney brand to be PG-13. They have PG and G films. Gore Verbinski is the director here. He did "The Ring" from last year. So it's appealing to a wide audience, it's not a sequel, it's something different, and it's breaking the curse of all the pirate films, which normally flop at the box office.

PILGRIM: It's a good pirate film. You know I really have to ask you. Any thing that you think -- you watch a lot of movies -- anything you think for the Oscars yet?

PANDYA: Well, of course, this week everyone is talking about "Seabuiscuit" opening up from Universal Pictures. The one caution there, of course, is a year ago we were saying Oscar for "Road to Perdition" with Tom Hanks, and by the time the nominations came out, that movie did not get any, even though it was released in July.

So going forward, not a lot of Oscar contenders coming out of the summer period. "Seabuiscuit" if it can keep some of the momentum by December and January, it could be up there for a couple of awards, but most of the Oscar nominees, that are big, are saved for November, December, and that is when the studios come out with the big marketing plan to get the Oscar votes.

PILGRIM: Well you and I have a lot of movies to watch.

PANDYA: A lot of them.

PILGRIM: Thanks very much, Gitesh Pandya of boxofficeguru.com. Thanks Gitesh.

PANDYA: Thanks for having me.

PILGRIM: That brings us to tonight's poll, what do you think of the new releases at the box office this summer? Oscar worthy, entertaining, beats the heat, or straight to video. Cast you vote at cnn.com/lou and we will bring the preliminary results a little later in the show.

Let's take a look at the final results of yesterday's poll. We asked, would you be willing to pay higher taxes in order for the U.S. military to buy American, 48 percent of you said yes, 30 percent said no, 5 percent said maybe, 18 percent of you said that you didn't have enough information.

Still to come. Would you like to buy a home for no money down? It sounds too good to be true, but that is what's happening. Jan Hopkins will have that story.

And American Classics, our series of special reports continues tonight with the king of colas, Coke.

(COMMERCIAL BREAK)

PILGRIM: Record low mortgage rates have fueled the housing boom in recent years, but now rates are on the rise again. Long term rates have increased 4 weeks in a row, and this week, the average 30 year fixed rate mortgage is just under 6 percent, but even as rates rise perspective homeowners may be able to hold down the costs with financing that requires no money down. Jan Hopkins reports.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): Angela Hughes and her young son just moved into her dream house outside of Charlotte, North Carolina. This first time home buyer didn't put any money down on her house. She qualified for a 100 percent mortgage.

ANGELA HUGHES, HOME OWNER: I had planned on putting down quite a bit of money on my home and then once I realized there was a lot of things I wanted to do to fix up the home, my mortgage lender told me I could do a 100 percent financing and save all that money and put it toward fixing up the home.

HOPKINS: These days lenders are offering loans for 100 percent of the money needed to buy a house. Sometimes they even offer up to 107 percent to pay for closing costs as well.

Lenders sell the loans to Freddie Mac and Fannie Mae. And it's big business. Fannie Mae says 4 percent of the mortgages it bought in the last year are 97 percent or 100 percent mortgages. That's close to $6 billion worth. Mortgage bankers are now tapping younger buyers and immigrants.

SMITA PAREKH, COASTAL MORTGAGE: This way it is allowing them to own a home, which is number one dream for all of us.

HOPKINS: The loans sound great, but they aren't for everyone.

DOUG DUNCAN, MORTGAGE BANKERS ASSOCIATION OF AMERICA: People are so anxious to achieve home ownership, which is really -- that's the American dream, that they sort of rush into it without recognizing the full import of the overall commitment that they've made.

HOPKINS: One hundred percent mortgages have caught the attention of state attorneys general, like Roy Cooper in North Carolina.

ROY COOPER, NORTH CAROLINA ATTORNEY GENERAL: I think you'll end up seeing more foreclosures if people aren't careful about these. I think it's a little early to tell, but I do know that this can be a real potential problem because of the aggressive marketing approaches that are happening now.

UNIDENTIFIED FEMALE: Patio. You can barbecue. HOPKINS: Bankers charge modestly higher interest for the 100 percent loans, but they're still affordable.

UNIDENTIFIED FEMALE: Formal living room.

HOPKINS: Home prices are still rising.

UNIDENTIFIED MALE: Basement?

UNIDENTIFIED FEMALE: Finished basement.

HOPKINS: The problem comes when real estate prices fall, and homeowners are looking at a house that is worth less than what they own.

(on camera): Home prices did fall after the run-up in the 1980s. It left savings and loans around the country holding the bag with foreclosed properties. Ultimately, the taxpayers got the bill. More than $100 billion for home loans that went bad.

Jan Hopkins, CNN, New York.

(END VIDEOTAPE)

PILGRIM: Coming up -- a brand that began in a pharmacy and became an American classic.

(COMMERCIAL BREAK)

PILGRIM: Good news on the economy sent stocks soaring. The Dow Jones Industrials jumped 172 points. The Nasdaq rose 29. The S&P climbed 17. And Christine Romans has the market for us -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: Kitty, four higher weeks in a row now for the Dow. Three out of four higher weeks for the S&P and for the Nasdaq. All 30 Dow stocks rose today; 75 percent of the volume at higher prices. And the Dow and the Nasdaq finished at least 1 percent higher for the week.

Nearly two-thirds of the S&P 500 have reported earnings now showing profit growth 8 percent. The latest durable goods orders rose 2.1 percent, and new home sales hit another record.

And money continues to flow into the stock market. TrimTabs estimates more than $4 billion went into stock funds in the latest week, compared with $600 million in the prior week.

From e-commerce to engines, strong earnings are definitely getting investors' attention. Priceline shares up more than $6 today. Cummins Engine up more than 7. But Ebay slipped after its strong report and news of a two for one stock split.

Kitty, another mover this week was AOL Time Warner, the parent of this network. Those shares closed up a penny today, but they still lost 8.5 percent on the week. There are concerns about just how strong its Internet subscription growth has been, and whether deep discounts may have boosted those numbers -- Kitty.

PILGRIM: All right. Not a bad week. Thank you, Christine Romans.

ROMANS: Sure.

PILGRIM: Now the preliminary results of tonight's poll. What do you think of the new releases at the box office this summer? Most of you, 57 percent, said straight to video. How about that?

Tonight, in our special series of special reports, "American Classics," a brand that was born in a pharmacy, grew to be the world's most valuable brand. It tops "BusinessWeek's" list of the best global brands. It's worth more than $70 billion today. Coca-Cola, an American classic.

(BEGIN VIDEOTAPE)

(MUSIC)

PILGRIM (voice-over): Not hard to do these days. You can do it in nearly 200 countries around the world. More than a billion Cokes are consumed each day. The masters of marketing, since 1893 when the trademark was registered, Coca-Cola has tried to be all things to all people.

Romantic, refreshing...

(BEGIN VIDEO CLIP, COMMERCIAL)

UNIDENTIFIED MALE: Come on, baby.

(END VIDEO CLIP)

PILGRIM: Hip. Cute.

What is it really? Carbonated sugar water? Don't kid yourself. The formula is in a vault under lock and key.

But that formula has a mystique. Coca-Cola, originally invented by a pharmacist, it was sold in a drugstore for five cents a glass.

KEVIN PATRICIO, FOOD & WINE: There were trace elements of cocaine back from the advent of Coke in 1886 until 1903, when the idea of cocaine fell out of favor with many people. But the actual medicinal purposes of it really did wind up stimulating or having certain calming effects on people.

PILGRIM: The genius was bottling it. That made it portable.

The distinctive bottle is an icon in itself. Coke was an early sponsor of the Olympics, 1928 to be precise. In the 1940s, during World War II, American GIs got their deliveries of Coke. General Dwight D. Eisenhower requested 10 bottling plants be built in Europe. Coke became Norman Rockwellesque in its appeal.

The soda fountain favorite of the '50s. It had a young, wholesome image. Ozzy and Harriett, literally.

But then came the sexy phase. Especially with edgier diet coke.

Even today the caffeinated jumpstarter of choice on Wall Street. And one White House resident wouldn't be without one.

Sexy was clearly the sell for Diet Coke. The construction worker commercial actually was a daring role reversal at the time.

Coke's real hometown is Atlanta. And the Coca-Cola Museum draws lots of fans.

JACQUIE WANSLEY, WORLD OF COCA-COLA; Anytime that you talk about soft drinks, automatically the first thing you say is I want a Coke.

UNIDENTIFIED FEMALE: It's yummy and it's fun. I mean, you can drink it anytime anyplace, by yourself. With your friends, by yourself. It cheers you up. Anything.

UNIDENTIFIED FEMALE: Whether it's their Little League field that has the sign, "sponsored by your local Coca-Cola bottler or an eight- ounce bottle of Coke that they shared with their grandfather or some friends after a football game, Coca-Cola means different things to different people.

PILGRIM: So many people already drink Coke you've got to wonder who they will market to next.

(END VIDEOTAPE)

PILGRIM: As American as it is, with distribution in more than 200 countries, more than half of Coke's sales come from overseas.

Finally tonight, astonishing scenes in the Japanese Parliament today. In a country known for its polite behavior, television viewers were shocked to see opposition lawmakers try to storm the desk used by a committee chairman. At issue was a bill authorizing the deployment of Japanese troops to Iraq. Lawmakers from the ruling party protected the committee chairman, and he called the vote and forced the bill through.

That is our show for tonight. Thanks for joining us. Have a great weekend. For all of us here, good night from New York. "LIVE FROM THE HEADLINES" with Anderson Cooper is next.

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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