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CNN WOLF BLITZER REPORTS
Stewart Found Guilty on All Counts; Where Are the Jobs?; Interview With Edward Kennedy
Aired March 5, 2004 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: Happening now. Shocking verdict. Martha Stewart faces the worst case scenario in court.
Stand by for hard news on WOLF BLITZER REPORTS.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): Verdict. Guilty. In the Martha Stewart case. Will the homemaker be making her home in prison?
Where are the jobs? Nationwide, there were barely enough new ones last month to fill an arena.
Warhorse. I'll got one on one with the veteran voice of the Democrats, Senator Edward Kennedy.
ANNOUNCER: This is WOLF BLITZER REPORTS for Friday, March 5, 2004.
(END VIDEOTAPE)
BLITZER: The verdict is in. Martha Stewart found guilty on all four counts, stemming from a controversial stock sale. Now, convicted of conspiracy, obstructing justice, and lying to the government. She could be facing significant prison time. And her former broker and co-defendant Peter Bacanovic also convicted of four charges. We have reporters and analysts covering every angle of the story. CNN's Allan Chernoff. Darby Mullany and Jen Rodgers. They're all standing by in New York but we begin with Allan and the verdicts -- Allan.
ALLAN CHERNOFF, CNN CORRESPONDENT: Wolf, a slam dunk victory for government prosecutors. The jury decided Martha Stewart and her stockbroker Peter Bacanovic lied about the true reason for Martha Stewart's sale of Imclone stock in December of 2001. Stewart, guilty on all four count, conspiracy, obstruction of justice, and two counts of making false statements. And Peter Bacanovic, guilty on four of five criminal counts, including perjury. One of the jurors spoke to the media afterwards, he said this appears to be a victory for the little guy. He said this is a message to the bigwigs that they must abide by the law.
(BEGIN VIDEO CLIP)
CHAPPELLE HARTRIDGE, JUROR: The first thing we wanted to get clear was we had very important decisions to make. We had people's lives in our hands. Before we made any decisions, we combed the evidence, we talked about it, we wanted to be very sure about this.
CHERNOFF: Wolf, Robert Morvillo, Ms. Stewart's attorney said he is definitely appealing. He said he views this as losing the first round and it's onto the second round.
BLITZER: Prosecution was pretty happy, I take it, Allan?
CHERNOFF: Wolf, the most emotion show in the courtroom was from the lead prosecutor, Karen Seymour, she was holding back tears as the verdict was announced. Virtually no reaction from Martha Stewart or her co-defendant Peter Bacanovic.
BLITZER: Allan Chernoff on that. Thank you very much, doing excellent reporting for us.
Trading of stock in Stewart's company was temporarily halted after the verdict. CNN's Darby Mullany is live at the New York Stock Exchange with that and a statement Stewart put out to her supporters immediately after the verdicts -- Darby.
DARBY MULLANY, CNN CORRESPONDENT: It was a rollercoaster ride for the stock in Martha Stewart Living Omnimedia, the merchandising company. The stock was halted temporarily. After the verdicts were announced, the stock sunk more than 22 percent, erasing a big uptick for the day ahead of the verdict announcement. Investors had run up shares almost 20 percent apparently betting that the domestic diva would be exonerated.
However, those hopes were dashed, and the stock ended up the top loser for the day. Kmart, Martha Stewart Living's retail partner, also finished lower down 1 percent on the day. Now Martha Stewart did issue a statement to her supporters on the Marthatalks.com website and I'll read it in its entirety.
It says, "Dear Friends, I am obviously distressed by the jury's verdict, but I continue to take comfort that I have done nothing wrong." She says, "I will appeal the verdict and continue to fight to clear my name. I believe in the fairness of the judicial system and remain confident that I will ultimately prevail. I can't tell you how much I appreciate all the words of encouragement I have received from thousands of supporters. It is your continued support that will keep me going until I am completely exonerated."
As far as Martha Stewart's company, Martha Stewart Living Omnimedia, it released a statement saying that they are deeply saddened by the conviction of Martha Stewart but recognize that they are going to have to evaluate the situation. They say the board of directors will meet promptly to discuss what the company is going to do for the future. They said in the past that they have been well preparing for this kind of scenario -- Wolf.
BLITZER: Reporting from New York, thank you, Darby, thank you very much.
Our senior legal analyst Jeffrey Toobin was inside the courtroom as the verdicts were read just over two hours ago. He's joining us now with more. Give us a little flavor first of all, Jeffrey, what it was like inside.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: It's interesting, Wolf. The lunch break was 1:00 to 2:00. That has been the lunch break throughout this trial. At 2:00, no one really said anything, but it was clear that everybody was gathering. In the strange way that courthouses somehow work, there was -- through osmosis, everybody knew that the jury had come back. David Kelley, the U.S. attorney was summoned from his office to the courthouse. There was a long gap before Judge Cederbaum took the bench.
Everybody somehow knew that a verdict was coming, even though no one had made any official announcement. Judge Cederbaum took the bench, she didn't waste any time. She said we have a verdict, let's get the jury out here. She brought the jury out, and what I thought was particularly interesting.
Like most jurors who have convicted a defendant, they didn't look at either defendant. They looked basically down. But they didn't look upset. Oftentimes when you see jurors who are convicting, they find it very emotional. Their eyes are red. This jury was very matter of fact. They were very business-like, and it was Judge Cederbaum, not the jury foreman, who read the verdict and there was an audible gasp when the first count, which was the conspiracy count against Martha Stewart was read, and the verdict was guilty.
Everybody knew once the conspiracy count was guilty, that virtually all the other counts would be guilty as it turned out to be. Just one other note, in terms of emotion, Martha Stewart didn't change the expression that she had held basically the entire trial. But her daughter, Alexis Stewart (ph) who sat behind her, she did break down, her face, she covered her face with her hands. She was quite moved, upset, heart broken, she was the only person in the courtroom visibly distraught.
BLITZER: All right, listen to this, Jeffrey, I want our viewers to listen as well of the we got some reaction from both the chief prosecutor, David Kelley as well as the defense attorney for Martha Stewart, Robert Morvillo. I want our viewers to listen to what they said after the verdicts came down.
(BEGIN VIDEO CLIP)
DAVID KELLEY, U.S. ATTORNEY: If you are John Q. Citizen or Martha Stewart or Peter Bacanovic, we're going to go after you if you make these types of lies. We do cases each and every day, we do large ones, we do small ones...
ROBERT MORVILLO, ATTORNEY FOR MARTHA STEWART: We are disappointed at the outcome. We look at this as having lost the first round, we look at this as an opportunity for us to go to the next rounds and to explain to the court of appeals what we think went wrong in this case, and why the case came out the way it did. We are confident that once we get our day in the court of appeals, the conviction will be reversed, and Martha Stewart will ultimately be determined not to have done anything wrong.
(END VIDEO CLIP)
BLITZER: All right, Jeffrey, you're a former prosecutor, how difficult is to get it reversed?
TOOBIN: Very, very difficult. Remember, this is a judge who frequently in this trial ruled for the defense. This is the judge who threw out the securities fraud count. This is a judge who restricted the government's proof specifically on not allowing them to admit certain telephone records that shocked the government not to be allowed. I think Martha Stewart's lawyers have very slim reads to appeal on. I would be shocked if the successful appeal is in the cards here.
BLITZER: Do you think she's going to actually wind up in prison?
TOOBIN: Absolutely, Wolf. Under the federal sentencing guidelines, there is some wiggle room, but under any calculation that I've been able to do using these crimes. I think it is a virtual certainty that Martha Stewart will go to prison, and given the fact that she was convicted of all four counts against her, that is one thing that has got to weigh heavily in Judge Cederbaum's considerations. Judge Cederbaum is known as not a particularly heavy sentencer, but given the overwhelming nature of the verdict, and given the federal sentencing guidelines, I think a prison sentence is close to a virtual certainty.
BLITZER: Jeffrey Toobin, our senior legal analyst watching this for us. Jeffrey, thank you very much.
Stewart is so closely associated with her corporate empire, that some experts say the effects on Martha Stewart Living Omnimedia could be devastating. CNN's Jen Rodgers joining us live with more on that -- Jen.
JEN RODGERS, CNN CORRESPONDENT: Hi there, Wolf. That's right. You said the name of the company, Martha Stewart Living Omnimedia. Now the first two words of the name of the company are synonymous with a convicted felon. That alone would be a huge hurdle for any company to overcome. The issue for this company is not only the name but that the brand is so intimately tied to Ms. Stewart's lifestyle and image.
Now already during the scandal, the company cut ad rates for "Martha Stewart Living Magazine" and agreed to reduce licensing fees for syndicated programs. We have heard from the company this afternoon in a statement Martha Stewart Living Omnimedia said, "our board of directors will meet promptly to carefully evaluate the current situation and take actions as appropriate. In the meantime, we are confident that our assets are more than sufficient to continue MSO's development as a leading how-to brand building company."
So what could those action be? Expectations are that the company will move forward, but move forward and away from Ms. Stewart herself. She has already given up day to day control of the company. She founded, Wolf -- two new examples of initiatives could be seen as moving away from Martha Stewart and those are a magazine called "Everyday Food" and a TV show on pets and both of those do not feature Ms. Stewart herself -- Wolf.
BLITZER: CNN's Jen Rodgers reporting on that aspect of the story. Thank you very much.
Stewart maintained almost complete silence throughout investigation and the trial, but did give an exclusive interview to CNN's Larry King in December, offering some rare insight into what she was feeling.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": Martha, the toughest part of all of this for you, personally, has been? What's the hardest part of this ordeal?
MARTHA STEWART, MARTHA STEWART LIVING OMNIMEDIA: Well, sort of coming to a screeching halt, having to deal with something extremely unpleasant, something that saddens and disheartens me and something that is very, very difficult, not only for me, but for everyone I work with, my family, my friends, that's the hard part.
KING: Have you -- you mentioned earlier about anger, you have no anger toward prosecutors, people coming after you?
STEWART: You have to really temper yourself.
KING: You can do that?
STEWART: Oh, I can.
KING: I'd be through the roof.
STEWART: Well, what are you going to do?
KING: You can look at life that way? What are you going to do?
STEWART: What are you going to do? And there's a process, it must run its course, and you have to believe in the judicial system. And that's...
KING: You have faith in the system?
STEWART: I do. And that's the way it is.
(END VIDEO CLIP)
BLITZER: Martha Stewart speaking with our own Larry King just before Christmas, this last December, and to our viewers, here's your chance to weigh in on this story. Our web question of the day is this. "Do you agree with the verdict in the Martha Stewart case?" You can vote right now, go to CNN.com/wolf, we'll have the results later in this broadcast. And we'll also have much more coming up on the Martha Stewart case, including where she could actually wind up serving in prison. We have experts on that aspect of the story. That's also coming up.
In addition, jobs in America, disappointing news. New numbers out today could paint a dismal picture. We're all over that story.
And the Democrat's leading liberal voice, blasting the White House. I'll go one on one with Senator Edward Kennedy.
And McDonald's new contest. Less complicated and more money. But exactly how does it work? Stay with us.
(COMMERCIAL BREAK)
BLITZER: Much more coming up on the Martha Stewart verdict, guilty. We'll speak with a longtime friend of Martha Stewart coming up shortly. But there's other news we're following, including news involving the attorney general of the United States, John Ashcroft. He's expected to spend several days in a hospital, at least a few days, we're told. He's in intensive care right now being diagnosed with a severe case of gallstone pancreatitis. CNN's Jeanne Meserve has more on this story.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN CORRESPONDENT (voice-over): John Ashcroft will be calling this Washington hospital home for at least several days, after being stricken with an extraordinarily painful condition called gallstone pancreatitis.
UNIDENTIFIED MALE: It is one of the most painful abdominal conditions you can get. The patients can't find a way to get comfortable.
MESERVE: The condition occurs when gallstones lodged in the bile duct on the way to the small intestine causing pain and inflammation in the pancreas.
UNIDENTIFIED MALE: Most cases the gallbladder is removed after the patient is over their acute episode. In some cases it is necessary to take stones out of the bile duct.
JOHN ASHCROFT, ATTORNEY GENERAL OF THE U.S.: Good afternoon, let me thank you for being here.
MESERVE: Ashcroft's last major public event was Tuesday. On Thursday, he was slated to appear in Alexandria, Virginia to hail the verdict in a terrorism case.
UNIDENTIFIED MALE: Good afternoon, I'm going read a statement on behalf of the attorney general.
MESERVE: Ashcroft bowed out at the last minute. During the event he was in the U.S. attorney's office thinking he had the stomach flu. After seeing the White House physician he was sent to the emergency room.
(END VIDEOTAPE)
MESERVE: Ashcroft is in the intensive care unit on pain killers and antibiotics, doctors may determine over the weekend the next steps in his treatment including whether he needs surgery -- Wolf.
BLITZER: I guess the deputy attorney general for the time being takes charge.
MESERVE: That's right. James Cummings (ph) is handling the business of the Department while Ashcroft is hospitalized.
BLITZER: We wish him a speedy recovery, the attorney general of the United States. Thank you very much, Jeanne Meserve for that.
And checking our justice file right now. There are more developments in the same-sex marriage controversy. Lawyers for the city of San Francisco filed briefs with the California supreme court. They argue there's nothing in the state constitution that requires local officials to obey laws they believe are unconstitutional. California's attorney general says the marriages violate state law. More than 3,000 same-sex couples have been married in San Francisco since last month.
And a dashboard camera captures a dramatic traffic stop in downtown Atlanta. A woman who was pulled over for driving alone in a carpool lane apparently tries to speed off. The deputy jumps inside the car to get her to stop and is dragged several feet. He's OK. She's facing four felony counts. Police say she has a criminal history.
Coming up, one-on-one interview with Senator Edward Kennedy. That's just ahead.
(BEGIN VIDEO CLIP)
BLITZER: Did those 500-plus American troops die in vain?
(END VIDEO CLIP)
BLITZER: The veteran voice of the Democrats is fired up about Iraq. We'll speak with him. Also, what's behind McDonald's latest contest? We'll explain.
(COMMERCIAL BREAK)
BLITZER: We're still standing by to speak with a longtime friend of Martha Stewart on this day convicted, guilty, all four charges against her. We'll get to that shortly but let's turn to another story that we're following, namely, jobs, precisely, though, the lack of them. The nation has lost more than two million jobs in the past three years. The Bush administration had predicted that millions would be created this year, but the latest numbers are in, and they're disappointing. CNN's Kathleen Hays of CNN Financial News is joining us now live. She has more -- Kathleen.
KATHLEEN HAYS, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Wolf. You know, one of the strangest things about the U.S. economy right now is that on some measures it's growing quickly. 6 percent at an annual rate the second half of last year, and still job growth is anemic, that's getting a lot of politicians and investors and economists worried.
(BEGIN VIDEOTAPE)
HAYS (voice-over): The latest news on the labor market couldn't be much worse for President Bush or much better for his chief Democratic rival John Kerry. The U.S. economy created only 21,000 new jobs in February for a total of just 364,000 in the past six months. The White House said Friday more jobs are coming and defended the president's policies.
GREGORY MANKIW, WHITE HOUSE CHIEF ECONOMIC ADVISER: I know there are some people who think that raising taxes on the American people will be the right thing for the economy, we couldn't disagree more. Open up any economic tax book and you'll see raising taxes puts a (UNINTELLIGIBLE) force in the economy. It's contractionary. It's not what we need to do to create jobs.
HAYS: John Kerry reminded a crowd in New Orleans that the White House has predicted the economy would create more than 200,000 jobs a month this year.
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: He thought that he could stand up in front of that sign that says "Mission Accomplished" and he thought none of you would notice what's going on in America, but we do, 21,000 jobs in one month. Another broken promise.
HAYS: Outsourcing of U.S. jobs to cheap labor markets in Asia has been demonized as the reason why labor markets remain so weak. But economists say there's a bigger issue. American workers are so efficient, so used to working long hours in order to keep their jobs that companies can get by without hiring more people.
ANTHONY CHAN, BANK ONE CORPORATION: The economy is growing but obviously not growing fast enough to keep up with the towering growth that we're seeing in productivity and that's why we're not creating jobs yet.
(END VIDEOTAPE)
HAYS: The unemployment rate held steady at 5.6 percent last month, a relatively low level, but the details don't look so good. The jobless rate held steady because many workers left the labor force, and that can be a sign people are getting discouraged and stop looking for work -- Wolf.
BLITZER: CNN's Kathleen Hays reporting for us. Thank you very much.
Recap of the hour's top stories, that's coming up next. Then our special coverage of the Martha Stewart verdict continues. What's next for the domestic diva? Will she actually go to prison? Many experts say she certainly will. One legal analyst will join us to talk about prison and Martha Stewart.
Also ahead, a delay in Iraq. Will it affect U.S. plans to hand over sovereignty to the Iraqis?
And who wants to be a millionaire? One fast-food restaurant bets its customers do. We'll have details on what McDonald's is planning to do. A big giveaway. Stay with us.
(COMMERCIAL BREAK)
BLITZER: Welcome back to CNN. Coming up, more on Martha Stewart. She's facing prison time. Where could she wind up serving a possible sentence? We'll get to all of that. First, a quick check of the latest headlines.
Guilty on all four counts. That's the verdict today in the Martha Stewart trial. One juror said, and I'm quoting now, "this is a victory for the little guys." In a written statement, Stewart maintained she did nothing wrong and said she would appeal the verdict. Sentencing is set for June 17. More on this coming up momentarily.
The National Oceanic and Atmospheric Administration has released sonar images of the sunken tanker Bow Mariner. Three crew members were killed and 18 are still missing after an explosion onboard the ship Saturday. Six people were rescued. The images are part of the government's investigation to find out what caused the blast off the coast of Virginia.
Credit card issuer MBNA is discontinuing a mastercard featuring an image from the September 11 terror attacks. The move comes after the New York Fire Department commissioner and the families of some victims criticized the use of the photograph. An MBNA spokesman says the company apologizes if anyone was offended. A portion of the card's proceeds were donated to 9/11 charities.
The parents of a girl allegedly kidnapped six years ago have been reunited with the child. They had been told she died in a fire. A Philadelphia woman is in custody for allegedly staging the blaze, kidnapping the baby and raising her as her own.
A June 17 sentencing date is set now for Martha Stewart. As we've been reporting, Stewart was found guilty of obstructing justice and lying to investigators about a stock sale. Stewart says she'll appeal.
CNN's Brian Todd has this report.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): Martha Stewart's always convinced all the right people of her marketability. But in the end, her lawyers cannot convince eight women and four men that she didn't lie to investigators.
KENDALL COFFEY, ATTORNEY: It's a huge day for the Department of Justice.
TODD: Inside the courtroom, a lead prosecutor is in tears, Martha Stewart emotionless, stone-faced as the verdict is read, guilty of conspiracy, guilty on two counts of making false statement, guilty of obstruction of justice, all related to her sale of stock more than two years ago in a company called ImClone, just before its value tanked.
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: This was a rout. I mean, this was just a total rout.
TODD: It's also a rout against Stewart's ex-broker, Peter Bacanovic, convicted on four of five similar charge. But the media storm is over the so-called domestic diva, everyone probing for some kind of personal reaction.
They get it on Stewart's Web site Web site: "Dear friends, I'm obviously distressed by the jury's verdict, but I continue to take comfort in knowing that I have done nothing wrong and that I have the enduring support of my family and friends. I will appeal the verdict and continue to fight to clear my name."
The maximum possible sentence for Stewart, 20 years, $1 million in fines. Experts say she almost certainly won't serve all that, but will go to jail. Stewart, always convinced she could beat the rap, never testified,but went on a P.R. offensive outside the courtroom.
MARTHA STEWART, DEFENDANT: Having done nothing wrong allows to you sleep, allows you to continue your work, gives you -- gives you the opportunity to think about other things.
TODD: Now, as the onetime billionaire prepares for her fate, one person who knows Stewart says the level of rage inside her must be extraordinary right now.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
BLITZER: Adam Rosman is a former United States attorney. He is joining us now live from Miami.
Thank you, Adam, for joining us.
ADAM ROSMAN, FORMER U.S. ATTORNEY: Good to be here, Wolf.
BLITZER: What basically happens now? I guess she goes to some sort of minimum security federal prison?
ROSMAN: Right, she'll almost certainly go a minimum security federal prison, most likely somewhere around the New York City area, so she can be close to her family. That's what she'll request, anyway. Where she ends up is going to up to the Bureau of Prisons.
BLITZER: We're showing a map, Adam, of female prison locations, federal prisons for women all over the United States. But almost certainly in Connecticut, Pennsylvania, New York, around the New York City area, is that the experience you've had?
ROSMAN: Definitely.
And I assume the judge will go along with what's going to be the defense recommendation for that. And I doubt the prosecution will fight the judge on that. So she'll be close by.
BLITZER: So you're like Jeffrey Toobin. You're convinced she will spend time in prison.
ROSMAN: I am. My close analysis says that she's looking at 10 to 16 months. And I think the judge will have discretion to sentence her to half of that in either a halfway house or home detention. But I think she's doing jail time, yes.
BLITZER: And talk a little bit about what kind of prison life would be for -- you've been to some of these minimum security prisons for women, federal prisons. What would it be like there?
ROSMAN: Well, it's most analogous an Army base, large buildings with lots of cots in them. She'll likely -- she won't be in a cell. She'll be free to move around during the day and at night, she'll have a job. She'll have to do something in the prison. And her freedom will be restricted, but not nearly as much as a maximum security prison, that's for sure.
BLITZER: The fact that she has no criminal record or anything like that, how significant will that be as a factor?
ROSMAN: Well, it's significant in getting her into a minimum security prison. But equally significant is the nature of these offenses. These are obviously nonviolent offenses, and that helps her just as much as her lack of criminal record.
BLITZER: Adam Rosman, as usual, thank you very much.
ROSMAN: It's good to be here.
BLITZER: For now more on the private person behind this very public case, we're joined by R. Couri Hay. He's a society page editor, has known both Stewart and Peter Bacanovic for many years. He's joining us now live from New York.
Couri, thank you very much for joining us.
You know Martha Stewart. How is she dealing? How's she going to deal with the prison sentence?
R. COURI HAY, FRIEND OF MARTHA STEWART: I think you'll find that Martha will probably cry into her pillow tonight. It's a very sad day for both Martha and Martha's friends and family.
And I think that all the glee that is being exhibited by the government is really wildly inappropriate, the fact that they're acting as if they've caught Osama bin Laden or they're Mel Gibson collecting the Oscar for "The Passion of the Christ." I'm waiting for someone to call for crucify her or public flogging. She's become the poster girl of bad corporate behavior, and I'm not sure she's that the right person where.
Where's the Enron crooks? I think that there's too much glee here, and I wish everyone would take a breath, settle back and try to put it in perspective.
BLITZER: Well, she is convicted of all four counts, as Jeffrey Toobin pointed out, a slam dunk, including lying to federal investigators. That's a pretty serious business.
HAY: It is a very serious business.
But, at the same time, she didn't kill little children, and Martha had said that she's innocent. Let's put it this way. In Martha's circle, in the penthouses of Park Avenue and the corporate suites downtown, people aren't jumping up and cheering. It's a sad day. And I just hate to see her overflogged, overwhipped, overprosecuted.
And I hope that that -- the reality of what she's done will sink in. It's nice to see that the 20 years is already being reduced to eight months or 16 months and halfway houses. That sounds a little bit more reasonable I think than 20 years.
BLITZER: Is she psychologically capable of enduring this, even a minimum security, even if it's only six months nine months or a year?
HAY: Yes.
(CROSSTALK)
BLITZER: Can she get through this ordeal?
HAY: Absolutely. Martha Stewart is a strong woman. And she'll get through it, and she'll get it through it. And she'll emerge I think in the end stronger, learning a very important lesson.
Peter Bacanovic, on the other hand, I think is a more difficult case. I think he's more sensitive, and I think this is going to be harder on Peter Bacanovic, her stockbroker, than it is on Martha. But think about Martha's mother and her daughter, join it's -- Martha's a strong, brave girl, and she's got a lot of courage or she wouldn't have gotten where she got.
So I'm not worried about Martha being able to handle this. I don't think we're going find Martha, you know, crocheting sheets to crawl out of window. I think, if she does go in, if she loses her appeal, that she'll serve it with dignity and grace, as she's shown through the trial.
BLITZER: A lot of people, looking back on her strategy during this trial, she did not testify. She did not take the stand. It couldn't have been worse, obviously, given the fact that she got convicted on all four charges. You know Martha Stewart.
I assume she was anxious to get up, look the jurors in the eye and say, I didn't do it, just as she did to Larry King when she did that interview in December with Larry King. How frustrated must she have been to listen to her lawyers' advice and say, don't go up there because under cross-examination, you could be hurt?
HAY: I can tell you, quite frankly, that Martha wanted to testify and that she was basically told not to. In fact, I could even go back further than that. I can tell you that Martha actually at one point said that she regretted that, whatever that she knew, that she didn't say whatever she knew right from the start. I'm not saying I know what that is.
But I think that Martha, in many ways, was held back, and that she listened to the lawyers and that, in retrospect, that might have been a very big mistake. I think that we have to let Martha tell her own story, and I think we're all very eager for Martha to come forward and tell that story. But, even today, I think that you see what's on the Web site. It's a little precanned. It's almost as if it's an Oscar speech.
There's one speech if you win and there's one speech if you lose. And I think, at some point, Martha's going to sit back. She's going to analyze all of the news analysis. And I hope that she'll come forward and just tell us what she feels and what she thinks, without the pressure of, you know, a roomful of million-dollar lawyers.
(CROSSTALK)
HAY: And I think that will be a very compelling story.
BLITZER: All right, we'll be anxious to hear it.
HAY: Thank you.
BLITZER: Couri Hay, thanks very much for joining us.
HAY: Thank you, Wolf.
BLITZER: Giving some special insight into Martha Stewart on this very bad day for her today. Thanks very much.
He's the Democrats' warhorse in the United States Senate. Up next, my one-on-one interview with Senator Edward Kennedy of Massachusetts. Hear what he has to say about the Bush administration's prewar intelligence on Iraq.
Plus, democracy delayed. A last-minute hitch holds up an historic moment in Iraq.
And do you want fries with that? How about $1 million? Why not? McDonald's is ready to give away $1 million. We'll get to that.
First, though, a quick look at some other news making headlines around the world.
(BEGIN VIDEOTAPE)
BLITZER (voice-over): British Prime Minister Tony Blair is defending his decision to join the U.S.-led war in Iraq. Mr. Blair admits the decision was controversial, but says the international community has the right to preempt moral danger and a duty to oppose brutal regimes.
Right turn? Greece holds parliamentary elections Sunday. And the ruling Socialists are playing defense. Polls show Conservatives have a good chance of returning to power for the first time in almost a decade.
People's congress. China's legislature has convened its annual session. While largely a rubber-stamp for Communist Party decisions, this 10-day session is expected to approve constitutional changes protecting private property.
And that's our look around the world.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
BLITZER: Is it democracy on hold or democracy in action? The orchestra was playing. The pens were lined up on the table. But just before Iraq's Governing Council was to sign an interim constitution earlier today, Shiite representatives got cold feet about language relating to a future permanent constitution. The ceremony was delayed for hours as the council went into emergency talks. The wrangling, we can report now, will resume on Monday.
Senator Edward Kennedy blasted the Bush administration over the war in Iraq earlier today as well. He called on CIA Director George Tenet to explain why he never took issue with the administration's prewar assessments.
I spoke with Senator Kennedy just a short time ago. I began by asking him if the people of Iraq are better off without Saddam Hussein in power.
(BEGIN VIDEOTAPE)
SEN. EDWARD KENNEDY (D), MASSACHUSETTS: No question, the removal of Saddam Hussein is a positive step.
Many of us who voted against the war believe that Saddam was a threat, but he never was an immediate threat. And what we have had is -- this administration, this president, manipulated and distorted the intelligence in such a way as to bring the American people to the position that, one, they were close to the point of having nuclear weapons, two, that there was close tie-ins between al Qaeda and Saddam Hussein, and, three, it was an imminent threat. Those facts were wrong.
And the most important responsibility the president of the United States has is bringing a country to war. And when an administration and a president distorts, manipulates information on this, they don't deserve another try. BLITZER: And I want to get through all those points, but on the fundamental fact that, even now, as we sit here in Washington, people in Iraq are ratifying an interim constitution, Shia and Kurds and Sunni Iraqis, they're debating amongst themselves, democracy, albeit very modest, beginning to take hold, that's a positive development.
KENNEDY: That's a positive.
And we've lost 537 Americans. And there's nothing to suggest that, if we didn't have the inspections and the inspections continued, that we couldn't have galvanized an international community that could have seen a replacement of Saddam Hussein and not seen the loss of American lives. We could have given more focus and attention on trying to find Osama bin Laden, and we could have been more effective working with the international community in terms of battling al Qaeda.
We put finding Osama bin Laden, the battle against al Qaeda, on a second row. Now, listen, with regards to Iraq, I'm hopeful that we're going to be successful there. I do think we ought to internationalize elections. I don't think American -- holding the elections, that it's going to have the credibility that it should. And I think we are in a very serious danger of seeing a civil war in Iraq.
(CROSSTALK)
KENNEDY: This is not the end of it.
BLITZER: No one believes it is, but did those 500-plus American troops die in vain?
KENNEDY: Well, I just think it was a war that we never would have had to fight.
BLITZER: I interviewed the vice president, Dick Cheney, this week, and he still holds out the possibility that the U.S. team, the inspectors, will eventually find weapons of mass destruction, not just capabilities, but actual stockpiles in Iraq.
KENNEDY: What was his justification for his statements leading us up to war? What was the possible justification, when now we know, from the intelligence that we have, it was a distortion and misrepresentation. That is what he ought to be faulted for. That is what he ought to be faulted for.
BLITZER: Well, in fairness, he says he was relying on George Tenet and the U.S. intelligence community for those estimates.
KENNEDY: The information -- we'll have a chance. Let both of them -- let's hear, then, from both. Someone has to take accountability. They both can't be right.
(CROSSTALK)
BLITZER: Well, who is to blame, George Tenet or Dick Cheney? KENNEDY: There is no question, it is this administration. It is this president. It is accountability of leadership. Whatever the mistakes were in terms of the intelligence agency, it's this administration and this president that has the responsibility for bringing us to a war and distorting and misrepresenting and manipulating intelligence. That's what we know today.
BLITZER: David Kay, who was the chief U.S. inspector who spent months in Iraq looking for weapons of mass destruction, came back and testified, couldn't find any. But even he says there's no evidence that Vice President Cheney or anyone else forced intelligence analysts, career professionals, to tailor or shape their conclusions?
KENNEDY: The fact is, his representations, his distortions, his manipulations are so in conflict with what the evidence is. And he must have known or should have known it, or Tenet should have told him about it. There's accountability. Americans want accountability.
(CROSSTALK)
BLITZER: Should George Tenet still be the CIA director?
KENNEDY: Whatever you want to do with George Tenet is something where the administration can make a judgment.
I am concerned about the leadership of this president and this administration, distortion, misrepresentation, manipulation on intelligence, and it's wrong. And that -- I think they do not deserve to be reelected. And that's what this campaign is about, among other things.
BLITZER: One other sensitive point on the al Qaeda alleged connection to Saddam Hussein, what Cheney and others point to, including this week, is this one individual, Abu Musab al-Zarqawi, a Palestinian who was born in Jordan who is public enemy, right now, No. 1 in Iraq, that he is associated with Ansar al-Islam, which has ties to al Qaeda, hence the connection.
KENNEDY: There's probably no question that there are al Qaeda units in Iraq. There are al Qaeda units in the United States of America. The question is the degree of control that they were having at the time of the previous regime.
And there is absolutely no evidence, no evidence, according to the FBI and according to the intelligence, that they were. That's the distortion and misrepresentation.
(END VIDEOTAPE)
BLITZER: Much more of the interview with Senator Kennedy, the entire interview, in fact, can be seen this Sunday on "LATE EDITION," the last word in Sunday talk. That will be at noon Eastern, 9:00 Pacific.
Among other things, we'll get his thoughts on gay marriage, Senator Kerry, and all sorts of political matter, including a vice presidential running mate for Senator Kerry -- much more coming up with Senator Kennedy on "LATE EDITION" this Sunday.
Big changes at the world's biggest fast-food chain. What's going on under the golden arches and why? We'll have that for you when we come back.
(COMMERCIAL BREAK)
BLITZER: Customers are seeing some changes under the golden arches, including the end of supersizing and a new contest.
CNN's Jennifer Coggiola is in Atlanta at a McDonald's. She's joining us now live.
What's going on, Jennifer?
JENNIFER COGGIOLA, CNN CORRESPONDENT (voice-over): Hi, Wolf.
Well, anyone that walks into any of McDonald's' 13,000 restaurants over the weekend has a chance to win $1 million. But behind this cash getaway is just a little-known secret.
(BEGIN VIDEOTAPE)
COGGIOLA (voice-over): McDonald's is offering you a lot of cash for nothing. Here's the deal. Walk into the right participating McDonald's at the right time now through Sunday, and if you're randomly selected, you'll walk away with a million bucks. You don't even have to buy a burger. So why? Because they have to.
Quote -- "This giveaway is being offered pursuant to the stipulation of settlement." The settlement is the result of a past contest in 2001 that was rigged by someone from outside the company who walked away with more than $13 million.
SUSAN KUBLANG, MARKETING DIRECTOR, MCDONALD'S: It's simply our way of showing our customers our confidence and our trust with them and making available to them prizes that they should have had.
BOB GOLDWIN, TECHNOMICS INC.: There's almost a begrudging element to it, as opposed to the way they normally do business.
COGGIOLA: Guidelines to pick the winners? A restaurant and a time of day will be randomly be chosen ahead of time. Then, a group of judges will position themselves in the restaurant and identify a potential winner, namely, the first customer who walks in or pulls up at the drive through.
And surely, McDonald's is loving it these days on. On Friday, the company reported, worldwide sales were up for the 10th consecutive month, success attributed to new menu items like all-white chicken nuggets and their new ad campaigns. In another movie that could attract a more health-conscious clientele, McDonald's is eliminating supersized french fries and soft drinks from their menu by the end of 2004, menu changes that focus on an issue spotlighted in a new documentary film, "Super Size Me," that follows a man who eats McDonald's every meal, every day and packs on 25 pounds. (END VIDEOTAPE)
COGGIOLA: Now, the film -- rather, the company has denied that the removal of the supersize option has anything to do with the film, that in fact they did it simply to improve operations and reduce overhead. I guess we'll just let them decide -- Wolf, back to you.
BLITZER: All right, Jennifer Coggiola, thank you very much. I could go for some supersized fries about now myself. But I won't. I'll hold myself back.
Coming up, a king-sized pillow fight. We'll have a blow-by-blow account from a major United States university. That's coming up next.
Also, the results of our "Web Question of the Day" immediately when we come back.
(COMMERCIAL BREAK)
BLITZER: We're already getting some reaction from the White House on our interview with Senator Kennedy that you just saw here on CNN.
Scott McClellan, the White House press secretary, tells us: "Senator Kennedy has said a lot of partisan things in the past. We expect him to say a lot of partisan things in the future" -- that from Scott McClellan, the White House press secretary in Crawford, Texas, with the president.
Time now for our picture of the day. The feathers were flying, literally, at Duke University in North Carolina last night. Look at this; 1,076 people took part in what they hope will be recognized as the world's largest pillow fight. A church sponsored the event, which cost about $1,700. That's a lot of pillows. Participants called it awesome. Duke students. I thought they were very smart. Not very smart.
Here's how you're weighing in on our "Web Question of the Day" " Remember, we've been asking you this. Here's the question: Do you agree with the verdict in the Martha Stewart case? Sixty-three percent of you say yes; 37 percent say no. As always, we remind you, this is not, not, not a scientific poll.
A reminder, you can always catch WOLF BLITZER REPORTS weekdays 5:00 p.m. Eastern. I'll be back, by the way, tonight, 10:00 p.m. Eastern, feeling in for Aaron Brown on NEWSNIGHT.
I'll see you Sunday noon Eastern for "LATE EDITION," the last word in Sunday talk. Among my guests, the chief U.S. administrator in Iraq, Paul Bremer, and the former Democratic presidential candidate, Wesley Clark, as well as the full interview with Senator Kennedy.
Until then, thanks very much for joining us.
"LOU DOBBS TONIGHT," with John King filling in, starts right now.
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Interview With Edward Kennedy>
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