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CNN NEWSNIGHT AARON BROWN

Rice Agrees to Testify Publicly Before 9/11 Commission; Will Rising Gas Prices Impact Presidential Race?

Aired March 30, 2004 - 22:00   ET

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


AARON BROWN, CNN ANCHOR: Good evening again, everyone.
There are problems you can't avoid and then there are problems that you create and we submit that the White House's problems with the 9/11 commission fall into that latter group. There never should have been any, at least not big ones, and there still has been hardly anything but big problems for the White House.

The White House opposed the creation of the commission, preferring it be left to Congress. The families objected. Polls showed the country did as well. The president gave in.

The White House resisted documents the commission said it needed and, after a nasty public spat, the White House relented again. When the commission said it needed more time, 60 more days to do its work, the White House again said no and, again under political pressure relented.

And now today, after weeks of saying no to public testimony by his national security adviser and absorbing all the political heats that position entailed, the president gave in again. The president, a very sharp politician, has been slow to learn that where the commission is concerned resistance, to steal a phrase, is futile and should be.

No rest for the White House, a long day for our Senior White House Correspondent as well. John King joins us tonight to start us off with a headline -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Aaron, now that the president has given in, aides here at the White House say they want to schedule that testimony by Condoleezza Rice as soon as possible.

The president says he changed course so the commission gets a "full and complete picture." Even many of the president's allies say he changed course because of mounting political damage.

BROWN: John, thank you.

And next to Massachusetts where the already naughty question of same-sex marriage got legally simpler perhaps but almost certainly more politically complicated. Dan Lothian there again for us tonight, Dan the headline. DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: Well, Aaron, the latest battle over same-sex marriage is between the governor here and his attorney general. They are both on the same side but with very different views about what should happen next -- Aaron.

BROWN: Thank you, Dan.

Finally, the price of gas at the pump and the polls come November, Kelly Wallace covering the political angles from New York where gas is hardly cheap, Kelly a headline.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: That's right, Aaron. Not cheap, not as bad though as other parts of the country. This though could be perhaps the most potent pocketbook issue. And no surprise, President Bush and John Kerry are publicly dueling over who has the best plan to bring those prices down -- Aaron.

BROWN: Kelly, thank you. We'll get back to you in a moment, the rest as well.

Also on the program tonight, an 11-year-old girl from Oklahoma sent home for wearing a headscarf, the story behind the story tonight.

Plus, a British voice in America, a masterpiece himself, the world and NEWSNIGHT bids farewell to Alistair Cooke.

And later, the rooster, our rooster stops by with your morning papers for tomorrow, all that and more in the hour ahead.

We begin 180 degrees from where we were last night and almost exactly where we expected to be eventually. When two Republican commission members said on this program last night that nothing short of an under oath appearance by Condoleezza Rice would do, it seemed the game was over.

Whatever the principle, and it is a legitimate one, the real world is governed by political reality, which is why the president changed course and made the announcement himself.

We begin tonight with our Senior White House Correspondent John King.

(BEGIN VIDEOTAPE)

KING (voice-over): The president's dramatic turnaround came as perceptions mounted that the White House had something to hide.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I consider it necessary to gaining a complete picture of the months and years that preceded the murder of our fellow citizens on September the 11th, 2001.

KING: After months of saying no, National Security Adviser Condoleezza Rice will now testify before the 9/11 commission in public and under oath.

BUSH: So that the public record is full and accurate.

KING: The deal clears the way for a high stakes rebuttal, one of the president's closest advisers taking issue with former deputy Richard Clarke and his explosive allegation the president and Rice ignored warnings al Qaeda was poised to strike.

THOMAS KEAN, 9/11 COMMISSION CHAIRMAN: We've got to try and clear up those discrepancies as best we can.

KING: Democrats can no longer claim stonewalling by the White House.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Now the White House bowed to the inevitable and they conceded to the obvious.

KING: And Republicans are counting on Rice to supplant Clarke as the commission's star witness.

UNIDENTIFIED MALE: She will have the opportunity to come forward with what I know will be a very powerful testimony and one that will set the record straight.

KING: The White House also is granting more access to the president and vice president.

They had offered meetings only with the commission chairman and vice chairman but now an invitation for a joint meeting with the full 9/11 commission where the president and vice president will answer any and all questions, though in private and not under oath in their case.

White House counsel Alberto Gonzales told the commission "the president recognizes the truly unique and extraordinary circumstances of helping the 9/11 panel investigate the attacks."

To seal the deal, the commission agreed 9/11 was such a unique event that Rice's testimony should not be considered a precedent for having senior White House officials testify before Congress or other commissions created by Congress. The commission also agreed Rice is the only White House official who will be asked to testify publicly.

(END VIDEOTAPE)

KING: And now that the months of legal haggling over whether Dr. Rice should testify are over, sooner the better, Aaron, is the White House motto when it comes to scheduling that testimony.

Aides say it could come as early as the end of next week. The White House now in a hurry to get Dr. Rice out in public taking issue with the damning portrayal painted by Richard Clarke.

BROWN: John, just going back months and we'll ask this question I suspect several times tonight, who has been driving the argument in the White House "to be difficult" with the commission? I'm sure they wouldn't concede they've been difficult. KING: Well, Dr. Rice has said for weeks that she wants to testify. The White House counsel Alberto Gonzales is a firm believer in presidential privilege and in protecting the president's top aides.

We are told the president was essentially a split personality on this issue, on the one hand wanting to fiercely defend the right of his top aides to give him the most free, most candid advice without being worried about being hauled up before Congress.

But at the same time in the end, and you noted this at the top of the program I believe, the president is a politician seeking reelection. The polls began to shift. The president did as well.

BROWN: John, thank you, a long day for you, Senior White House Correspondent John King.

As we said at the start tonight, the 9/11 commission has been a lightning rod for controversy since the president signed the bill creating it 16 months ago. He named Henry Kissinger as chairman, which set off the first public outcry. Dr. Kissinger resigned, replaced by Thomas Kean.

There have been plenty of reversals for the White House since and today's turnaround, like others, followed days of nasty political debate.

From the White House again, CNN's Dana Bash.

(BEGIN VIDEOTAPE)

BUSH: Dr. Rice will participate in an open public hearing.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president told aides he had to now find a way to let Condoleezza Rice appear before the 9/11 commission because the process he said was getting in the way of the substance, process often euphemism for politics.

JAMES THOMPSON, 9/11 COMMISSION COMMISSIONER: Which is true?

BASH: Even from sometimes helpful Republican commission members, a drumbeat of pressure.

THOMPSON: This commission has voted unanimously to ask Dr. Rice to appear.

JOHN LEHMAN, 9/11 COMMISSION MEMBER: The White House is making a political blunder, an important miscalculation of the political impact of this.

SCOTT REED, REPUBLICAN CONSULTANT: This was a classic instance of this was boiling and gaining more momentum and the White House recognized it's time to do something about it and shut this down.

BASH: The latest CNN-USA Today Gallup poll shows the president's overall approval up but there were danger signs for Mr. Bush. Fifty- three percent of Americans said they think the Bush administration is covering up how it handled intelligence information before 9/11 and 53 percent also believe the president has misled the public for political reasons.

This for a commander-in-chief whose reelection theme is strength and leadership against terrorism. Democrats saw the opening and were mounting a Senate floor offensive to pressure Dr. Rice just as the White House changed course. They quickly claimed victory even if they may have lost one election year issue.

SEN. TOM DASCHLE (D), MINORITY LEADER: Well it wasn't only good politics. I think it is a good policy. I don't think that in this case they had any choice but to do what the American people are clamoring for.

BASH (on camera): Some Republican strategists argued to hold out on Dr. Rice testifying saying Democrats could overplay their hand and look like they're politicizing the issue but Bush aides privately say the pressure was too great. They needed to diffuse the situation and move on.

Dana Bash, CNN, the White House.

(END VIDEOTAPE)

BROWN: Mike Allen has been covering all of this for "The Washington Post" and he joins us from Washington tonight. It's good to see you.

MIKE ALLEN, "THE WASHINGTON POST": Hi, Aaron.

BROWN: What happened between last night when they were talking compromise, trying to figure out a way short of public testimony and today when they capitulated?

ALLEN: Well, Aaron, it was clear from your opening remarks that you could see where it's going. Surprising people in the White House didn't seem to. They rarely back themselves into a corner so publicly. Someone said to me today capitulation is one thing. We should have done this before it looked like total surrender.

They are used to playing hardball, you know, partly because Republicans control both ends of the capital and winning. Here they didn't. Here the commission held the cards and when Judge Gonzales proposed this idea of a transcript and I didn't realize until this week there had not been a recording or a transcript of Dr. Rice's previous testimony. It shows how difficult they've been being.

When they proposed this they said no way and it was clear from the clips you just saw there, the commission members would not accept that. And so, last night finally about eight o'clock, Carl Rove made some calls to the Hill. Judge Gonzales made some calls to the commission and they made this deal that contained almost none of the elements that they'd been hoping for.

BROWN: Just as what seems an aside to me but throw it out there anyway, why is it important to the White House, I'm not sure it's great politics, why is it important to the White House that the president and the vice president testify or talk to the commission together?

ALLEN: Well, I think that's one of the hidden benefits for the White House in this deal. When you think about it's genius actually and surprising that they didn't talk about it before.

Here you'll have the two of them sitting next to each other. There's no way that anybody can take two transcripts and look for daylight between them. One of them certainly will have a better answer than the other on certain issues, so there they are as a team and it will be much more difficult to pick apart their testimony or find problems in what they did.

So, the White House was looking for the silver lining in what they did today. One of them is that they think Dr. Rice is a strong spokesperson. They think that she is going to make a strong case but the other is this deal with the president and vice president as a joint package.

BROWN: What would have happened I suppose if the commission had said no? And the reason I ask it is because in the end everything the commission has wanted essentially the commission has gotten simply by speaking with one voice.

ALLEN: Yes, that's totally true and the list of examples of that that you had at the beginning it made me think of Charlie Brown and the football. They keep falling for this over and over, keep not leaving themselves an out and keep in the end capitulating.

One person said to me today that this has been obvious to the political people for some time. The president, as John King pointed out, the president himself was very concerned about the precedent here.

The one person said to me that they finally realized that if you want to preserve this president's powers, one thing you have to do is make sure that he stays president for four more years and that wound up being the trigger for this.

BROWN: I'm just, again, I asked this of John and I'm not sure I've asked it very clearly. I'm trying to figure out who it is in the White House who is saying to the president you know you got to play hardball with the commission. Don't allow it to extend its time. Don't set it up in the first place. Don't give it the documents. Don't let Dr. Rice testify. Only give them an hour. Who is that person and is that person still getting paid?

ALLEN: Well, those people include the president. They include the vice president. I think Karen Hughes thought it was important to uphold this principle but let's look at why -- and Judge Gonzales, John pointed out a very strong defender on presidential privilege.

This has been a project of this presidency, of this vice president since the beginning to -- we always talk about how they want to preserve the powers of the presidency. In fact, it's their project to enhance the powers of the presidency and they will tell you that.

But the reason that they kept doing it is that they thought they could. Remember, this dispute has been going on for weeks and it didn't get the oxygen that it's had until Mr. Clarke's testimony and I think a lot of people around the president will tell you they underestimated how much velocity the Clarke testimony would have and that is what has precipitated this change in -- literally an overnight change in their position.

BROWN: It certainly was. Mike, it's good to see you again. Thank you very much, Mike Allen of "The Washington Post" who's been writing about that for that fine paper.

A related item now, just how intimately related it is, how formally connected may soon be a question for Congress. It concerns 9/11 and Danny Pearl and whether his widow, Mariane, ought to receive the same compensation the 9/11 families get.

Here's CNN's Deborah Feyerick.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Forty stories above Ground Zero, Mariane Pearl looks out to where the World Trade Center towers once stood. The 9/11 tragedy she feels forever entwined with the death of her husband, "Wall Street Journal" reporter Danny Pearl.

MARIANE PEARL: There was no doubt in my mind that it was the same thing.

FEYERICK: Like the Twin Towers, Mariane Pearl believes her husband was targeted by al Qaeda for his symbolic value. U.S. authorities believe Pearl was killed by the alleged mastermind of the 9/11 attacks.

ROBERT KELNER, PEARL'S LAWYER: The killer is the same. The only difference between Danny Pearl and the victims of 9/11 is the date.

FEYERICK: But the date is important. Under a statute passed by Congress, only those who lost loved ones on 9/11 in New York, Pennsylvania, or at the Pentagon are eligible for damages. Pearl's claim seeking compensation from the victims' fund was rejected three weeks ago.

(on camera): Ken Feinberg (ph) the man in charge of that fund tells CNN he's sympathetic but adds Pearl is simply not eligible. She's appealing and is asking Congress to amend the statute. It won't be easy. Others have already tried.

(voice-over): Families of Americans who died in terror attacks like the USS Cole and the African embassy bombings have all been turned down.

EDITH BARTLEY, VICTIM OF NAIROBI BOMBING: My heart goes out the Pearl family and any victim of al Qaeda. An American citizen deserves to have their government support in securing compensation.

FEYERICK: Some 9/11 families don't think Pearl should get damages though Mariane Pearl will fight for herself, for the husband she lost and for his son born after his father was killed.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

BROWN: Still ahead on NEWSNIGHT tonight, 700 police officers, months of surveillance, how the British stopped a terror attack in London.

And another attempt to stop gay marriages in Massachusetts, this time by the governor, a break first.

From New York this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: The new normal now, which in Great Britain, especially in London, involves waiting for the other shoe to drop, waiting in so many words for what happened in Bali, in Madrid, and in New York to happen there.

Today in a major operation, police took action aimed at heading off such a catastrophe. At the very least, they seemed to have gotten their hands on the makings of a big one.

From London tonight, CNN's Sheila MacVicar.

(BEGIN VIDEOTAPE)

SHEILA MACVICAR, CNN CORRESPONDENT (voice-over): After months of surveillance and planning, more than 700 police from five different regional forces made their move.

When the raids began on Tuesday morning, police knew what they would find here in a self storage locker in a residential neighborhood in West London, half a ton of the fertilizer ammonium nitrate. It can be used as an explosive. It was packed into a reinforced polyethylene bag like this one, displayed by police officers at a rare news conference.

PETER CLARKE, BRITISH TERRORISM OFFICIAL: Today's operation is part of continuing and extensive inquiries by police and the Security Service into alleged international terrorist activity and I must stress that the threat from terrorism remains very real.

MACVICAR: Eight men, all British of Pakistani origin, aged between 17 and 32, have been taken into custody from addresses across London. Police and counterterrorism officers searched 25 homes and businesses. The men are being held on suspicion of involvement in the commission, preparation or instigation of acts of terrorism.

(on camera): For months, senior British officials have warned that an Islamist terror attack somewhere in the U.K. was "inevitable" and the discovery of the ammonium nitrate, a potential explosive, here underlines the seriousness of the threat.

(voice-over): Because it is still relatively easy to acquire, terrorists from the IRA in Manchester, to Timothy McVeigh in Oklahoma City, to al Qaeda in Nairobi and Bali, have used ammonium nitrate to devastating effect.

DAVID CLARIDGE, RISK ADVISORY GROUP: It's a fertilizer which can be acquired in large quantities which is what's necessary to build a significant bomb without really too many questions being asked.

MACVICAR: There is still no public word what the intended target here was but security sources say they believe the target was British and probably somewhere in London.

Sheila MacVicar, CNN, London.

(END VIDEOTAPE)

BROWN: Back in Washington, the battle over 9/11 and all the details aren't the only game in town. The new chief weapons inspector in Iraq testified today in a closed hearing before a Senate committee.

The man he replaced, David Kay, has said he doesn't believe any WMD will be found in Iraq. The new man on the block sees it somewhat differently. He also says the U.S. occupation in Iraq is making the search harder than ever.

Here's CNN's David Ensor.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Just back from his first six weeks on the job in Iraq, Charles Duelfer, the CIA's new man in charge of looking for weapons of mass destruction says though nothing has been found yet, he does not rule out finding weapons.

CHARLES DUELFER, CIA CHIEF WEAPONS INSPECTOR: We continue to receive reports almost on a daily basis of hidden weapons, of hidden materials, which we have to investigate.

ENSOR: Duelfer told Senators he's found more evidence Saddam Hussein's regime had civilian factories able to quickly produce biological and chemical weapons but he said most Iraqi scientists and engineers are afraid to tell what they know.

DUELFER: There's a fear that if they're seen to be cooperating with the United States and its coalition partners that regime elements may seek retribution on them so there's enormous reluctance on the part of scientists to come forth. That surprised me. This is more akin to a homicide investigation than simply a search to find existing weapons.

ENSOR: Duelfer, who was deputy director of the U.N.'s effort to find weapons in Iraq in the '90s, says the U.S. occupation has actually made the job harder, not easier.

DUELFER: I've got a lot of armored cars which are riddled with bullet holes that our inspectors were in and were they not armored these people would be, you know, injured or dead.

ENSOR: One senior Senator in the room for Duelfer's closed door testimony says after looking at the unclassified version put out in public by the CIA that he is troubled.

SEN. CARL LEVIN (D), MICHIGAN: Again, the CIA is making a mistake of having its public statements different in tone in a significant way from its underlying classified documents.

DUELFER: It may simply be that in the process of declassification something is lost but certainly it is not my intent to show, you know, a different version in the public as opposed to the classified version.

ENSOR (on camera): Charles Duelfer is heading back to Baghdad soon, which he says will be a relief after the intense political atmosphere in Washington. Only half joking he said it's safer in Baghdad.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

BROWN: Coming up on the program tonight, trouble in the Scott Peterson murder trial as a stealth juror allegedly taints the jury pool.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: In the battle over gay marriage, May 17 has become a key date, a potential landmark in a debate causing deep divisions in the country. On May 17, Massachusetts must begin allowing same-sex marriages under a state Supreme Court ruling.

With a month and a half to go, opponents are pulling out all the stops to postpone the deadline while a proposed state constitutional amendment banning gay marriage makes its way through legislative hoops. Today the state's governor weighed in and lost.

Here's CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): In Massachusetts, it's one more flare-up in the gay marriage firestorm, a governor trying to halt the May marriages until voters can have a say in two years.

GOV. MITT ROMNEY (R), MASSACHUSETTS: We believe that the arguments in favor of such a stay are lengthy and strong.

LOTHIAN: And an attorney general refusing to carry Governor Romney's legal torch to the state's highest court.

UNIDENTIFIED MALE: There is no legal basis at this stage of these proceedings for a request of a stay.

LOTHIAN: That's why he's also rejected the governor's latest maneuver, a request to appoint a special assistant attorney general to petition the State Supreme Court for a stay.

On Monday, Massachusetts lawmakers narrowly approved a constitutional amendment that bans gay marriages but legalizes civil unions. If next year's legislature also gives the green light, then voters will have the final say in 2006 but the governor argues there could be chaos if same-sex marriages go forward and voters later turn back the clock.

ROMNEY: The legal status of these couples, both within and outside the commonwealth, has the potential of creating a great deal of confusion.

LOTHIAN: But legal experts say it's unlikely that argument or any other will work.

UNIDENTIFIED MALE: It's hard to imagine that that avenue could be taken. Remember, this is a case that went to the Supreme Court, not once but twice.

LOTHIAN: Even as gay marriage opponents work to find other options, supporters denounced attempts to put up roadblocks.

UNIDENTIFIED MALE: Gay marriages are going to happen and the people of the commonwealth are going to accept them.

(END VIDEOTAPE)

LOTHIAN: The attorney general, who by the way opposes gay marriages, says he is just following the law, playing by the rules but the governor says this process requires more time and that his argument should be brought before the court. It's unclear, Aaron, what the next move will be.

BROWN: Well, I hate when you steal the next question, which is where do they go from here? Can someone -- do we have any feel for whether someone outside the government, a group that opposes gay marriage, a non-governmental group, can petition the court, any court in the state of Massachusetts to stay this?

LOTHIAN: Well, if you talk to those who oppose it outside of some of the lawmakers they say there's nothing that they can really do now. They're looking forward to the next legislative session and then hopefully to the voters.

But there are some lawmakers who are looking at particular bills that they believe they might be able to put out there. They aren't giving too many details but they're hoping those bills will be able to do something before May 17th.

BROWN: Well, they got about six weeks to come up with something. Thank you, Dan, Dan Lothian in Boston.

LOTHIAN: That's right.

BROWN: From day one, the case of Laci Peterson has been perched at that uncomfortable intersection where 24-hour news meets the criminal justice system. Finding a jury to fairly try the case was problematic enough that the trial was moved from Modesto where Ms. Peterson lived and that it seems is no guarantee an impartial jury can be found. Today, a case in point.

Reporting for us tonight, CNN's Ted Rowlands.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT (voice-over): The potential juror a grandmother estimated to be in her sixties seemed visibly shaken according to those in the courtroom when defense attorney Mark Geragos asked her if she was trying to lie her way on to the jury to convict Scott Peterson. Citing a phone tip to his office, Geragos claims an acquaintance of the potential juror said she was bragging about passing the initial juror test and said of Scott Peterson, quote, he's guilty as hell and I'm going to get him.

Later Geragos labeled her as a stealth juror.

MARK GERAGOS, DEFENSE ATTORNEY: A stealth juror is somebody who comes into a courtroom and has an agenda and does not disclose that agenda and tries to get on the jury to execute that agenda.

ROWLANDS: The man providing the tip, according to Geragos, is a resident of the same seniors citizen center as the potential juror. The statements, according to Geragos, were allegedly made on a group bus trip to Reno, Nevada. In court, the potential juror repeatedly denied the accusations and at one point she raised her hand to seemingly acknowledge that she knew that she was under oath.

DEAN JOHNSON, CNN LEGAL ANALYST: What could happen to her? She could potentially be prosecuted by the San Mateo county district attorney's office for perjury and that carries a maximum penalty of four years in prison.

ROWLANDS: The judge issued a subpoena for the alleged whistle- blower to come to court and tell his story under oath.

(on camera): The district attorney here in San Mateo County has indicated that he's aware of what happened in court, but said that it would be a long shot for him to actually charge this woman with perjury. Meanwhile, court has adjourned for the week. Mark Geragos is scheduled to appear in a Santa Maria courtroom on Friday representing Michael Jackson.

Ted Rowlands, CNN, Redwood City, California.

(END VIDEOTAPE)

BROWN: Still to come tonight, getting campaign mileage out of gas prices. Watch the puns. Here they come. Why John Kerry and President Bush are both getting pumped.

This is NEWSNIGHT on CNN.

(COMMERCIAL BREAK)

BROWN: It's clear tonight that Thomas Riley Marshall never owned an SUV. He's the politician who once said what the country needs is a good five cent cigar. And he was speaking to the political and economic reality of his day.

Today, what the country needs, certainly what the country wants, is a good $1 gallon of gas, not the $1.75 and up it goes for now. Never mind that, adjusting for inflation, prices for gas aren't even that high when you look at it. They look high. They feel high. In a presidential election year, look and feel matter a lot.

Here again, CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): John Kerry, hoping to get political mileage out of sky-rocketing gas prices, makes an unscheduled stop in San Diego, where a gallon of unleaded goes for $2. 15. In his speech, he charges the Bush team has done nothing to bring gas prices down.

KERRY: If the gas prices keep rising at the rate they're going now, Dick Cheney and George Bush are going to have to carpool to work.

WALLACE: But the Bush-Cheney reelection campaign fired the opening salvo in the debate with this new ad now running nationwide, accusing the senator from Massachusetts of supporting higher gasoline taxes on 11 separate occasions.

UNIDENTIFIED MALE: Some people have wacky ideas, like taxing gasoline more so people drive less. That's John Kerry. He's supported a 50-cent a gallon gas tax.

WALLACE: And this from the president himself during a visit to the battleground state of Wisconsin.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are some in the other party in Washington who would like to raise gas taxes. I think it would be wrong. I think it would be damaging to the economy, not positive to the economy.

WALLACE: How potent is the issue? A look at a couple of the key battleground states, Ohio, Missouri and Nevada, show gas prices are close to or above the current national average of $1. 75 a gallon. And in a new CNN-USA Today-Gallup poll, 69 percent of Americans said that rising gas prices were either a crisis or a major problem.

Kerry said as president he would put more pressure on OPEC to increase oil production and would temporarily stop sending hundreds of thousands of barrels of oil every day into the United States' emergency stockpile known as the strategic petroleum reserve.

KERRY: We should stop diverting that so the supply to the economy and to the country is higher, which brings price down.

WALLACE: But the Bush-Cheney team said four years ago Kerry said releasing oil from the strategic reserve would have a negligible affect on prices because it would take months for the oil to goat to the market.

(END VIDEOTAPE)

WALLACE: And a senior Kerry adviser said the senator never actually proposed on the Senate floor a 50 cent increase in the gas tax and said that, since the Bush administration took office, Americans have been paying 12 percent more when it comes to their gasoline.

Well, in response, the Bush/Cheney team says the president has an energy plan to bring gas prices down, but aides say, Aaron, that congressional Democrats are thwarting that plan, although the House and the Senate controlled by Republicans.

BROWN: Well, anyway, this is what's going to go on for a while.

Senator Kerry goes under the knife tomorrow or whatever they do these days to correct, what is it, a shoulder problem?

WALLACE: Rotator cuff in his shoulder. He said it happened in Iowa. He was standing on a bus talking to reporters. The bus driver hit the brakes and he needs to get it fixed.

BROWN: And how long is he off the trail?

WALLACE: Well, a few days definitely. Definitely, he'll have his arm in a sling. He'll be off the trail for several days, won't be able to shake hands, won't be able to be out there, but supposed to be on the road next week.

BROWN: Thank you, Kelly. I expect you'll be with him -- Kelly Wallace with us tonight.

"Moneyline Roundup" tonight begins with outsourcing, a report out today saying the benefits of exporting America outweigh the cost in jobs. According to the study, outsourcing will result in a net gain of 308,000 jobs by 2008. I hope you can hold on that long. A footnote, however: The study was commissioned by the Information Technology Industry, which happens to be sending jobs overseas in the first place. Well, OK.

On to the Tyco trial, the defense again asking for a mistrial. Monday was Dennis Kozlowski's lawyer. Today, the lawyer for his co- defendant raised similar concerns. And, once again, the judge said no. And so it goes. Jurors have been deliberating the case for nine days so far without reaching a verdict or harming each other.

Markets, meantime, held steady, no huge gains or losses despite a less-than-stellar report today on consumer confidence. Not a horrible day, hardly, though, the Dow up 50 points.

Still ahead on NEWSNIGHT, Muslim head scarves in public schools, the U.S. government takes sides.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: In America's courtrooms, religion and education often collide at the intersection of church and state. And so they have again in the state of Oklahoma, where a 12-year-old girl was suspended from school for wearing a Muslim head scarf to class. Her school says that violates the dress code. The sixth grader is suing.

France, as you'll recall, recently banned Muslim head scarves from its public schools. And today, the federal government jumped into the Oklahoma case, siding with this sixth-grader.

Here's CNN's Keith Oppenheim.

(BEGIN VIDEOTAPE)

EYVINE HEARN, FATHER: Explained to the teacher that we were Muslims and this is, you know, how she dressed.

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): Eyvine Hearn was taken aback last September when his 12-year-old daughter, Nashala, was told she couldn't wear a hijab, or head scarf, at her elementary school in Muskogee, Oklahoma.

Nashala been wearing the hijab for a month, but was told the headdress was a violation of the district's ban on headwear in school. She refused to take it off and was suspended twice.

(on camera): What does that make you feel like after that?

NASHALA HEARN, STUDENT: Very sad and angry, like they can wear crosses. So why can't I wear my hijab?

OPPENHEIM: You don't think it's fair?

N. HEARN: No.

OPPENHEIM (voice-over): Neither did her parents, who filed a lawsuit. Now the U.S. Justice Department is backing the Hearns and will intervene on their behalf in federal court.

ALEX ACOSTA, ASTT. ATTORNEY GENERAL FOR CIVIL RIGHTS: And the Constitution says every American has the right to worship as they see fit, as they choose. A student shouldn't leave that right at the schoolhouse door.

OPPENHEIM: Muskogee school officials say they're actually following existing federal guidelines. They say they're not attacking freedom of religion.

(on camera): They say they're protecting it, arguing that if one religious group violates the rules of the dress code, then other groups could do the same. DR. ELDON GLEICHMAN, MUSKOGEE SCHOOL SUPERINTENDENT: They would have the Satanists there immediately. They would have long coats. They would have pierced bodies all over the place. And they would want a room to go in and they'd probably kill the chickens and do all that stuff in the rooms.

OPPENHEIM: Now with a bigger government body challenging a smaller one, this case could be a test for whether Americans can defy a dress code in the name of religious freedom.

Keith Oppenheim, CNN, Muskogee, Oklahoma.

(END VIDEOTAPE)

BROWN: A few items from around the country now, starting with an inferno at a chemical plant in Texas City, Texas. Where else would it be? It began with several small explosions. No word yet on what set them off. No reports yet of injuries or fatalities. Authorities did not evacuate people living nearby, but did warn them to stay inside, the pictures spectacular.

Four Northwest airliners were grounded after someone called in a bomb threat. The planes landed safely and all were searched, nothing found. Police keeping quiet about the nature of the threat or threats.

We learned today that July is the month when the Statue of Liberty will finally reopen. Anyone care to bet it will be, oh, the Fourth of July? Even though the site has stayed open, the statue itself inside has been closed since the attacks of 9/11.

Still ahead tonight, our own letter from America, as we bid farewell to Alistair Cooke.

This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: We take a moment tonight to note the passing of a lover. Alistair Cooke loved America and he loved the language. Perhaps no one before, certainly no one since, has better used one to describe the other. And it's hard to imagine anyone ever will.

(BEGIN VIDEOTAPE)

ALISTAIR COOKE, NEWS ANCHOR: Good evening. I'm Alistair Cooke. We open tonight a new television theater.

BROWN (voice-over): If you thought that all Alistair Cooke did was introduce British television programs, you would be very wrong. Not that 22 years of witty and insightful introductions wouldn't be enough to make most people's careers.

COOKE: It all begins in 1675, with a battle being fought between the French and the Dutch. BROWN: And not that it didn't make him an essential part of the American culture. You can tell when you've become essential. Everyone else makes fun of you.

COOKIE MONSTER, MUPPET: Monsterpiece Theater.

UNIDENTIFIED MALE: Mousterpiece Theater.

UNIDENTIFIED MALE: Rastapiece Theater.

BROWN: Alistair Cooke, who passed away last night in New York at the age of 95, was probably the world's most astute observer of the United States of America. Beginning in 1946, his words went out over the BBC and from the BBC to the world.

COOKE: I want to tell you what it's like to come back to the United States after a sobering month in Britain and say what daily life feels and looks like by comparison.

BROWN: Even his producer at "Masterpiece Theater" had to admit that Cooke thought of his weekly "Letter From America" as his real job.

REBECCA EATON, EXECUTIVE PRODUCER, "MASTERPIECE THEATER": He felt his real contribution to 20th century journalism and to the relationship between the United States and Britain was to be able to explain to the British and explain to the world, because his "Letter From America" was carried on the BBC World Service and heard all over the world, be able to plain America in the most truthful, conversational way that he could.

BROWN: He told of our mythology.

COOKE: I went to see my first Indian, what I then called a red Indian.

BROWN: He told of our highest achievements, the first American to orbit The Earth.

COOKE: For 20 minutes after the launching of Colonel John Glenn in Friendship 7 from its pad at Cape Canaveral, the New York Police Department reported that not a single call had come in to any police station. Even crime stood still.

BROWN: And he laid bare our scandals, Richard Nixon and the Watergate tapes.

COOKE: He knew. He covered up. He lied steadily and unblinkingly to the press, to many a public audience, to the people.

BROWN: And only last month in his final "Letter From America," he was as sharp and as insightful as ever.

COOKE: And it truly was astonishing to see after only weeks the vanishing of the fourth largest army in the world, the flight of Saddam, and the ever-memorable toppling of his statue on to the streets of Baghdad.

BROWN: It was a long run. He covered the birth of the United Nations and the death of a presidential dynasty.

COOKE: I heard somebody cry, "Kennedy shot," and heard a girl moan, "No, no, not again."

BROWN: And he told us about ourselves in a uniquely personal way.

COOKE: Let's not forget either of the millions who struggled for a decent and tidy life and made it and still do.

BROWN: He retained a sense of humor, demonstrated when he was asked to speak before the U.S. Congress.

COOKE: I accept your nomination for the presidency of the United States.

(LAUGHTER)

BROWN: And through it all, he kept his personal style that brought people around the world to their radio sets every Sunday.

EATON: He said, famously, that the way he created that special connection with the audience that people remember him for is that he would always imagine that he was speaking just to one person.

(END VIDEOTAPE)

BROWN: Mr. Cooke became an American citizen in 1941. He died last night in New York. He was 95.

Morning papers after the break.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: Okeydokey, time to check morning papers from around the country. I said okeydokey, didn't I? I haven't said that in a while. Kind of embarrassed I said it tonight.

"The International Herald Tribune," published by "The New York Times" in Paris, leads with terror. "Eight Terror Suspects Arrested in Britain." Also, this is on just about every front page around -- well, around the country. I'm not sure around the world. "In Reversal, Bush Aide to Testify Publicly," the Condoleezza Rice story. But the story that's gotten scant attention and probably should get more, "23 Are Killed in a Third Day of Uzbek Violence." This is in Uzbekistan. And this is terrorist-related stuff. It's nasty over there. OK, that's "The International Herald Tribune."

Here's my favorite story of the day. I'm such a homer sometimes. From the "St. Paul Dispatch and Pioneer Press." Actually, I think it's just "The Pioneer Press" now. "Four Real." Minnesota Gopher women's basketball team makes the final four, the first time in university history, upsetting Duke. You betcha. That's a Minnesota expression, you betcha. I was back there this weekend. That's all they were talking about was the women's basketball team. Nice going. Good for you. Now go win the whole thing. Of course, I'm not sure who else is playing.

"The Washington Times." "Rice to Testify Publicly About 9/11, Will Be Last Bush Official To Do So" is the lead in "The Washington Times." There was something else I liked here, but I don't remember what it was.

"Cincinnati Enquirer," I remember what I liked here, front-page story, a local story in Cincinnati. "Fewer Here Binge Drink Than in the U.S. Still, One in Eight Reports Five-Drink Bender in a Month." Wow. Anyway, "Rice to Testify, President Agrees" makes the front page.

What, do we got about a minute left?

"The Richmond Times-Dispatch." "Bush Allowing Rice to Testify Under Oath." It would be interesting to read all these stories and see how they play them. The headlines are pretty straightforward.

Down in the corner, "Job Loss Debate Reignited By Snow." That would be John Snow, the Treasury secretary. "Says Outsourcing Part of the Global Economy." Well, yes, that it is. But just my advice is, don't suggest it's a good thing, because it doesn't play politically at all.

"Philadelphia Inquirer." "Rice To Address 9/11 Panel Publicly. Bush/Cheney to Meet Jointly in Private With Full Commission." Down here, "Trump's Casinos Could Fold, Auditors Warn." He gets to say to all those people, you're fired.

Where are we in time? That's it. OK. "Like a lamb that's lying" is the weather. I don't know what that means in Chicago. I guess the end of the month.

Here's Bill Hemmer with tomorrow's "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

BILL HEMMER, CNN ANCHOR: Aaron, thank you.

Tomorrow morning here on "AMERICAN MORNING," how to make the most of your summer vacation when the money is tight. Back with us, the guy you want in your corner on money matters, David Bach in 90-second tips, a load of advice, helpful advice, on where to go and what to take. We'll check it out CNN tomorrow 7:00 a.m. Eastern time. Hope to see you then. Never too soon to start thinking about summer -- Aaron, back to you.

(END VIDEO CLIP)

BROWN: Yes, it's going to snow here tomorrow, Bill. Thanks a lot. That's it for us. We'll see you all tomorrow. "LOU DOBBS TONIGHT" for most of you.

Until tomorrow, good night for all of us at NEWSNIGHT.

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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