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CNN NEWSNIGHT AARON BROWN

Bush Campaigns in the South; Gun Battle Erupts in Baghdad

Aired July 7, 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.
A regular viewer of the program wrote today to say that it seems to her that the Kerry-Edwards ticket is, in her words, an unavoidable winner. This was based on a poll she conducted, her daughter, her daughter's new boyfriend, her brother and her ex-husband. She herself is undecided at least today.

May I suggest that while there is no harm in talking about the impact of Senator Edwards in the end that isn't going to be what decides the election. A lot of unknowables will.

Will Americans continue to die in Iraq? Seven died in the last three days. Will the perception grow that the war was a mistake or will people stand, as they often do, with the commander-in-chief? Unknowable. Will there be a major terror attack here or somewhere close enough to here? Unknowable also. Even the strength of the economy, which has clearly been growing, remains an unknowable. Wall Street doesn't seem so certain.

We're not foolish enough to believe that the candidates themselves will have nothing to do with the outcome but, if I were a betting man, I would bet the outcome will be decided not so much by the undecideds as by the unknowables.

We begin, however, with the knowns, the whip and our Senior White House Correspondent John King, John a headline from you tonight.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Aaron, the president said today he was confident that even though the Democrats now have a southerner on the ticket it will not affect his deep support across the south. Then he campaigned as if he was worried it would, saying John Edwards isn't qualified to be president and "the Senator from Massachusetts is out of step with the values of the south" -- Aaron.

BROWN: John, thank you. We'll get to you early tonight.

In Baghdad, the makings of future law and order in the middle of the present gunfire and chaos, CNN's Brent Sadler is in Baghdad, so Brent a headline from you.

BRENT SADLER, CNN CORRESPONDENT: Yes indeed, Aaron. A deadly four-hour gun battle erupted in a district off central Baghdad as the new interim government was announcing tough new security measures, including marshal law to defeat deteriorating security here. We'll have that story.

BROWN: Brent, thank you.

And finally the Pentagon and a question of numbers, how big a force is needed and is the present force too small, CNN's Jamie McIntyre back with us tonight, Jamie a headline.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Aaron, one congressman called it eating the seed corn, overworking the Guard and Reserve to the extent that they're mortgaging the future of the U.S. military but the Pentagon denied it's abusing the Reserves and it also denied it has any plans to ever go back to a draft.

BROWN: Jamie, thank you. We'll get back to you and the rest shortly.

Also coming up on the program tonight, a first look at a story that alleges the administration is pressuring Pakistan to find Osama bin Laden before the November election for political gain.

Also, the collection plate is empty out west in Portland, Oregon where the Catholic Archdiocese is looking at Chapter 11.

And later, NEWSNIGHT's version of the paperboy swings by, feathers and all, all that and more in the hour ahead.

We begin with the public debut of the Kerry-Edwards ticket. Today with the $64,000 question answered, images trumped words. It was a day to showcase not just the running mate but their respective mates and a gaggle of offspring as well.

It was billed as the launch of a four-day campaign swing through battleground states but, above all else, it was a day to demonstrate chemistry, reporting tonight CNN's Candy Crowley.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): The first official photograph of the Kerry-Edwards ticket, message we like each other.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: We had a wonderful dinner last night. We sat around. We laughed. We chatted. We talked politics.

CROWLEY: And John Edwards' first public words since being tapped as number two, message he's on Kerry's message.

SEN. JOHN EDWARDS (D), VICE PRESIDENTIAL CANDIDATE: This is the kind of man we grew up looking up to, respecting, somebody who believed in faith and family and responsibility.

CROWLEY: The newly-formed Democratic ticket and families had little of substance to say but that wasn't the point of this photo op, picked in part to soften Kerry's remote edges. Edwards did that by simply showing up smiling, charming, bringing the kids. KERRY: We want to announce today that we have a new campaign manager, Jack Edwards is taking over everything. He does a -- he does a wild cannonball.

CROWLEY: The bonding moment was set against the pastoral setting of Teresa Heinz-Kerry's farm, the kickoff point for a road trip aimed at middle class voters.

By the time they arrived en masse in Ohio, it looked like a family reunion with gigantic flags, Kerry kids holding Edwards kids and a lot of reassuring pats between number on and number two.

KERRY: Cleveland rocks.

CROWLEY: It was here, as the Democratic ticket in waiting campaigned for the first time together that John Edwards began to earn his keep.

EDWARDS: Some of the academics call it the middle class squeeze. This is real. People, you can't say, you know what I'm saying, you can't save any money. It takes every dime you make just to pay your bills. If something goes wrong, if somebody gets laid off, you have a child that gets sick, you go right off the cliff. John Kerry understands this.

CROWLEY: Kerry-Edwards was determined to be seen and not questioned Thursday so they could ride this wave for a little while longer but a digression while introducing his running mate signals Kerry has heard the static.

KERRY: John Edwards who has more experience than George Bush and better judgment than he does when he became president of the United States.

CROWLEY: Less than 48 hours after putting together what he calls his dream team, John Kerry was playing a little defense.

Candy Crowley, CNN, Dayton, Ohio.

(END VIDEOTAPE)

BROWN: Asked yesterday whether he agreed with the Republican National Committee's characterization of John Edwards as a "disingenuous unaccomplished liberal," President Bush said I look forward to a good spirited contest. Today in North Carolina, the president was a bit less generous.

Here's our Senior White House Correspondent John King.

(BEGIN VIDEOTAPE)

KING (voice-over): That the president was in North Carolina was coincidence. That he was on the attack anything but. The race in John Edwards' home state is too close for comfort from a Republican perspective and Mr. Bush was ready when asked to compare Vice President Cheney to a Democratic V.P. nominee described as charming, engaging, even sexy.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Dick Cheney can be president, next.

KING: Democrats say adding Edwards helps their chances in North Carolina and across the south but the president says what matters most is the name at the top of the ticket.

BUSH: I did well in the south last time. I'll do well in the south this time because the Senator from Massachusetts doesn't share their values and that's the difference in the campaign.

KING: In 1992, the Clinton-Gore ticket carried five southern and border states. If you count Florida as part of the south, it was five states again for the Democrats in 1996 but four years ago it was a clean sweep for the Bush-Cheney ticket, as even Al Gore's native Tennessee went Republican for president.

The president calls his opponent the Senator from Massachusetts and not by his name for a reason. In much of the south, Massachusetts means Dukakis, Kennedy, liberal.

UNIDENTIFIED MALE: The fact that it just happens to be the state that has legalized gay marriage kind of solidifies the notion that the way things work in Massachusetts are not the way things work in, you know, in Georgia, Mississippi, Alabama, North Carolina, South Carolina. These are huge cultural differences.

KING: The Kerry campaign said Mr. Bush was on the attack in North Carolina because he has failed to address the job losses that have devastated the textile industry. And the Democratic National Committee suggested Mr. Bush is so worried by the new ticket he went from zero to negative in less than 24 hours.

The North Carolina trip was scheduled long before the White House knew Senator Edwards would be on the Democratic ticket. Mr. Bush came to chide Edwards and other Democrats for blocking his judicial nominees and before heading home he also managed to work in a stop designed to give the local economy a little extra juice.

BUSH: It's really good.

(END VIDEOTAPE)

KING: Now the Bush campaign insists, as the president seemed to think today, that adding Edwards simply will not help in the south. They say if Edwards had run for reelection in North Carolina this year for the Senate he probably would have lost.

They also insist though, Aaron, that they're willing in the short term when the polls are tight to fight very hard and you can tell from the president's rhetoric today he's not going to take any chances.

BROWN: Does it, let's set aside what they say publicly for a second, does it change either the strategy in where they have to campaign, where they must win or the issues they must run on? KING: Well, it could add to the issues. On the issues they must run on, they believe they can highlight the differences between Senator Kerry and Senator Edwards on trade, on issues like that in the short term.

In terms of what they're worried about is time and money spent in those states. They are hoping after their convention to not have to go back to North Carolina much, not have to go back to Arkansas much, not have to spend too much time in the south. Florida is an exception. That state will be hardly fought over until the very, very end and they know that.

Bill Clinton tried twice to get North Carolina. It was one of his great frustrations that he could not. These Republicans think in the end the polls will break late for the Republicans as they usually do in North Carolina. That's the theory now. That's the theory that they will test over the next two months.

BROWN: And we shall watch it. John, thank you, John King at the White House tonight.

You heard from the 43rd president. The 42nd president weighed in on politics as well today, something he has done sparingly so far. Former President Bill Clinton spoke with CNN's Christiane Amanpour in Washington.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Edwards ran second in the primary process to John Kerry and he was energetic and articulate and popular, even with a lot of people who voted for Senator Kerry. People know he has great potential.

Secondly, he was on the Intelligence Committee. It's not like he has no experience at all. Thirdly, he is running for vice president with more international experience than President Bush ran for president with just four years ago.

(END VIDEO CLIP)

BROWN: Bill Clinton's take, Christiane sat with the former president for nearly a half an hour tonight and we'll have more from her interview with him tomorrow right here on this program, if I can read the graphic correctly.

In Iraq today, the interim government took up broad new powers aimed at establishing public order. That is what most ordinary Iraqis say they want, order and security. It's what they've criticized the American forces for not delivering and what the insurgents have done in terms of stopping, at least so far.

That might yet change. That's the aim and the hope now that Iraqis are governing Iraqis again but today at least the hope was just that, a hope punctuated by small arms fire.

Reporting from Baghdad, CNN's Brent Sadler. (BEGIN VIDEOTAPE)

SADLER (voice-over): A gunfight rages in downtown Baghdad on the day Iraq's interim government announces tough new measures to defeat anarchy. Bursts of machine gun fire and explosions sent Iraqis running for cover under a hail of bullets.

This shootout involved what Iraqi officials call insurgents and criminal gangs battling the national guard, turning normally busy streets into a killing zone. Iraqi security forces, backed by U.S. firepower, contained the spread of this shootout and the Iraq authorities have now armed themselves with sweeping new powers to crush a worsening insurgency.

MALIK DOHAN AL-HASSAN, JUSTICE MINISTER (through translator): These circumstances right now and the security situation, the deteriorating security situation right now urges these laws because the security situation in Iraq now threatens all fields of life here.

SADLER: In future, Iraq's embattled leaders can impose periods of Marshal Law on areas that threaten national security providing it's sanctioned by the president and the cabinet. Other new emergency powers have been modeled on the U.S. Patriot Act, imposed after the 9/11 attacks on America.

They can also call in multinational troops, if Iraq's own security forces are overwhelmed. The measures were being announced as terrified Iraqis shut their shops in Haifa Street to escape some four hours of fighting.

(on camera): This district of central Baghdad is known locally as little Fallujah, a stronghold of hard line Sunni Muslims pro Saddam Hussein, anti Iraq's new authorities.

(voice-over): Some Iraqis caught in the crossfire say the tough new security law is all words and no action.

"We only hear about it," says shop owner Talal Haddad (ph). "No one's implementing it. There's no security. The killing and looting hasn't stopped."

Iraq's security forces are scoring some successes though here intercepting and diffusing a car bomb before it could kill and maim. But insurgents sent another violent message in what appeared to be an attempt to undermine confidence in the government's new emergency law firing rockets at the home of interim Prime Minister Ayad Allawi, missing their mark but making their point.

(END VIDEOTAPE)

SADLER: Iraqi officials admit their new laws could curb some rights in this country, new found rights but, at the same time, they say the laws offer assurances that do guarantee new found freedoms here.

However, they say, the emergency laws will only be in place for as long as they're needed, unlike in neighboring Syria where emergency laws were put in place 40 years ago and, in Egypt, back in 1981 -- Aaron.

BROWN: Brent, just as briefly as you can, did the Iraqi defense forces and civil defense forces stand and fight today?

SADLER: Yes, they did get involved in that firefight. They did hold their ground and, as best we can understand, they did not need the U.S. firepower to actually fire any shots from helicopter gun ships or on the ground. They managed that on their own.

BROWN: Brent, thank you, Brent Sadler who is in Baghdad now for us.

Whoever runs Iraq, 140,000 American troops are in it with them. That reality has forced the Army to do some considerable stretching, extending tours of duty, shuffling troops from other hot spots, possibly calling up soldiers long gone from the military out of training.

To many in and out of uniform this paints an obvious picture to a Defense Department leadership bent on reshaping the military it's not nearly that simple. In any case, the question played out again today in Congress.

And, from the Pentagon tonight here's CNN's Jamie McIntyre.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The decision by the Army to recall to active duty some 5,600 ready reservists to go to Iraq or Afghanistan, many of whom thought they were done with military service, is clear evidence to some in Congress the U.S. armed forces are stretched too thin.

REP. CURT WELDON (R), ARMED SERVICES COMMITTEE: I think we're taxing our part time soldiers in the Guard and Reserve nearly to the breaking point.

GEN. RICHARD CODY, ARMY VICE CHIEF OF STAFF: Are we stretched thin with our active and reserve component forces right now? Absolutely. We just did the largest move of the Army since World War II.

MCINTYRE: The Pentagon insists the problem is not size but how the U.S. military was organized for the Cold War. It insists its transformation plan now underway will solve the problem by making a much higher percentage of the U.S. Army deployable on short notice. but as for the burden on reservists now, Pentagon officials make no apologies for expecting them to fulfill their obligation.

UNIDENTIFIED MALE: I disagree with the conclusion we're overusing the reserves. Vigorous use of reserves is part of the answer.

MCINTYRE: Despite the grumbling, the Pentagon insists it's not seeing any significant drop off in either recruiting or reenlistments and officials emphatically reject persistent rumors circulating on the Internet that a return to the draft may be coming.

UNIDENTIFIED MALE: Let me reiterate for the record, the administration does not support resumption of the draft. There is no secret plan on this front. I do not know where these people in the e- mails are getting this idea from.

(END VIDEOTAPE)

MCINTYRE: And, as for adding between 30,000 and 40,000 troops to the U.S. military, something advocated by some in Congress and presidential candidate John Kerry, the Pentagon points out it already has 30,000 more troops in uniform now under emergency authority it has now.

And it's asking Congress not to make that change permanent because it argues it will not need those extra troops forever and keeping them on permanently would be very expensive -- Aaron.

BROWN: Jamie, these concerns that were raised today about the reserves reaching the breaking point and so on, to what extent, if any, were they partisan?

MCINTYRE: Well, quite a few of the comments were from Democrats but there's also been concerns from Republicans as well and it really gets down to a philosophical disagreement between whether or not this is something that needs to be fixed by a bigger military, which is a permanent solution, or something that they can handle on a short term basis.

The Pentagon argues that by making the changes they're making, they can address the problems and reduce the burden on the reserves to the point where reservists will only be called up for a mission once every six years. Right now we're in a situation where some of them have come back and gone back in less than a year.

BROWN: Jamie, thank you, Jamie McIntyre at the Pentagon tonight.

Ahead on NEWSNIGHT, a most serious allegation. "The New Republic" tomorrow will report the administration is pressuring Pakistan to find bin Laden before the November election, pressuring with both the carrot and the stick.

A bit later, John Edwards' other life, as trial lawyer, how that might affect his run for the vice presidency, a break first.

From New York this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Starting with the obvious, we can't imagine there's anyone in the country who doesn't want to see Osama bin Laden and his henchmen killed or captured and the sooner the better. No doubt either that when it happens the administration on whose watch it happens will win an awful lot of gratitude and maybe more. Where all this leaves the obvious and enters the realm of the cynical has to do with the timing. "The New Republic," in a piece to be released tomorrow, will allege that the administration through various means is pressuring the government of Pakistan to deliver bin Laden and his henchmen before the November election, preferably during the Democratic Convention a couple of weeks from now.

Peter Beinart is the editor of "The New Republic." Peter, good to see you. Let's start with the allegation itself. Have I basically laid it out correctly?

PETER BEINART, EDITOR, "THE NEW REPUBLIC": That's right. Our story by Spencer Ackerman and John Judis and a Pakistani journalist named Massoud Ansari quotes four Pakistani officials, all people in a position to know, saying that they have been receiving pressure from Bush administration officials to deliver Osama bin Laden or another high value al Qaeda target like his deputy Ayman al-Zawahiri before the November election.

And, one of those sources, a very senior person, said that -- specifically said that they want those -- they want that capture in the last days of July during the Democratic Convention.

BROWN: All right, let's talk about sourcing here because obviously the allegation itself is explosive. It's reminiscent of the talk of the October surprise during the Iranian hostage crisis. Some of the sources, most of the sources in fact are unnamed, correct?

BEINART: Yes.

BROWN: What sort of jobs do they have?

BEINART: They are people in the Pakistani Intelligence Service, people who are well known within Pakistan as having relations with American officials and people who would be in a position to know this information. We don't claim that this story, by any means, closes the book on this.

We would hope that other people would pursue this story and do further reporting on it but we think when you have four Pakistani officials in positions in the government who are saying, who all say virtually the same thing that they've been receiving this pressure, pressure that they did not receive in 2002 and 2003, all pressure that they link to the election, in their words, we think it's a story that deserves to be told.

BROWN: Who is the pressure coming from?

BEINART: The pressure is coming from Bush administration officials. We don't know who in particular has been pressuring, although we do know that a number of high level Bush administration officials from George Tenet to others at the CIA to Colin Powell to others at the State Department have, in fact, visited Pakistan recently and applied an increased amount of pressure to Pakistan to go into the tribal areas and try to hunt down and capture bin Laden or Zawahiri or perhaps former Taliban leader Mullah Omar. BROWN: All right. I want to deal with the tribal areas and where it is believed bin Laden and his folks are hiding in a second. Just one more question on the sourcing on this.

The Pakistani Intelligence Service, and at least two of the sources in this story come from there, that's a very complicated organization that has some allegiance to extremist Islamic groups, has sometimes questionable allegiance to President Musharraf himself. What is their motivation, do you think, in talking right now?

BEINART: Well, that's a good question. I'm not sure honestly I know what their motivation is. I think that it's true that the Pakistani intelligence is a complex web of people with a lot of different allegiances but I think they -- one potential reason they're talking is that it's a very difficult business for Pakistan to go into these tribal areas and try to hunt down bin Laden.

As you know, these are areas where the Pakistani military has essentially not had any presence for decades and decades and decades. There is a certain amount of resentment.

One might hypothesize that one reason for them talking is that there is significant resentment within the Pakistani government after the increased pressure they're facing from the U.S. to go into these tribal areas where they're facing very, very difficult firefights with a population that is not very supportive of the Pakistani government.

BROWN: Well, and on this point we can attest to some resentment from our own experience over there within the Pakistani government on the pressure that the Americans put on them. It is for the Pakistani government a very complicated question. They have a population that is not unsupportive of Osama bin Laden in many respects and they have an area that in their view could break out in civil war.

BEINART: That's exactly right. I think one of the reasons this is -- the increased incursion into those tribal areas in recent months under American pressure and, according to some, with American involvement have been so controversial in Pakistan is because of the threat that they pose a threat to civil war that they perhaps pose a threat to President Pervez Musharraf's government because there has been a -- there has been a kind of de facto understanding in Pakistan for many, many decades that the central government essentially leaves these very lawless tribal areas alone and that compact has now been violated under American pressure.

BROWN: Does the administration flat out deny the story?

BEINART: The administration has a denial in the story and I would encourage people to read it for itself and to parse the words but, yes, it's a denial.

BROWN: Is it, let me just try it one more time, is it a flat out, this is absolutely untrue denial or is it more hedged than that?

BEINART: The way I read it, it is somewhat hedged. It could have been a stronger denial. Others might read it differently. BROWN: Listen, you're putting this on the Web site and putting it in the magazine. You're obviously extremely confident in the story. You're a sophisticated political guy. You understand the stakes here. Do you have any second thoughts about putting the story out there?

BEINART: No, knowing these reporters that we're working with, you know, knowing that we have this source from four people, even though as you said they're not on the record, we feel comfortable about this.

The story is written in a very careful way. We did not oversell the story but we felt that we had enough information to put this out there and as part of the public debate.

BROWN: Peter, it's good to see you again. It's a story in total is on "New Republic" online. You can check it out there and I assume it will be in the magazine when the magazine comes out next, good to see you.

BEINART: That's right. Thank you.

BROWN: Still to come on NEWSNIGHT, a look at John Edwards' history as a trial lawyer why it could help or might hurt him in the campaign ahead. I'm sure Mr. Edwards will turn up again when we wrap it up with morning papers. He has a way of doing that. They all do, don't they, a break first.

From New York this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Candidates are out there in the state of Florida. It's one of those key battleground states. There's John Edwards, the senator from North Carolina, taking off his coat and going to work as a politician this time.

It is often said that a powerful personal story is an invaluable tool in a political campaign. And as personal stories go, the up-by- the-bootstraps variety is one of the best. John Edwards is fond of emphasizing his working-class roots, the son of a mill worker, first in his family to go to college. His critics are just as fond of pointing out how far the former trial lawyer has come from those humble beginnings. Whichever side you take, the issue is now clearly in play.

Walter Olson is a senior fellow at the Manhattan Institute for Policy Research and the founder of the Web site Overlawyered.com. He's also the author of "The Rule of Lawyers." You can pretty much figure out where he stands on all of this. And joining us tonight from Oxford, Mississippi, trial lawyer Richard Scruggs, who played a key role in the pioneering litigation to recover public health costs from the tobacco industry and is among the most successful and formidable trial lawyers in the land.

It is good to have you both with us. Mr. Olson, let's start with you.

I was reading a quote from the Chamber of Commerce, which normally stays neutral in these campaigns. This is war to them.

WALTER OLSON, AUTHOR, "THE RULE OF LAWYERS": It definitely is.

BROWN: Why?

OLSON: Well, there's something about litigation. It is not like taxes. It is not like red tape.

It is seen as very personal by the business community and also by the medical community. And that means that it is going to galvanize a constituency, mostly Republican in the first place, but one that does not necessarily get involved in every election.

BROWN: That's an interesting issue to me.

Dick, we did a poll last night, and one of the things we asked was whether it matters a great deal to voters this trial lawyer question. Do you believe it's a big deal to the average voter whether John Edwards is a trial lawyer or anything else?

RICHARD SCRUGGS, ATTORNEY: You know, Aaron, I really don't.

But I have to say that I don't think the American public has seen an advocate in a long time as effective as John Edwards is in championing the working Americans' cause.

BROWN: But you don't think that if this is -- which is how I assume the Democrats will play this. They'll say, OK, well, he was a trial lawyer. Who do you want, trial lawyers or corrupt corporations? There's a pretty black-and-white way to play it.

SCRUGGS: Well, trial lawyers are perhaps the only effective advocate for average -- for the vast majority of working Americans. Trial lawyers champion the cause of the greatest generation who are preyed upon by predatory lenders, gouging pharmaceutical industries, the insurance companies, the Enrons and the Halliburtons of the world.

Without trial lawyers, certainly, the Bush administration is not going to do anything about the predations of these industries. John Edwards is a marvelous addition to the ticket. He and John Kerry are going to be advocates for the common man. And I think that you'll find that John Edwards is going to take the skills he succeeded in as a trial lawyer and apply those for the American people.

BROWN: I assume, Mr. Olson, he in fact will become the poster child for everything that the business community, the medical community finds distasteful. He's not been a classic class-action lawyer. He's certainly been a personal injury lawyer and that sort of thing.

OLSON: Although his main backers include other leading trial lawyers. It is not just Edwards himself. A lot of people change careers. Edwards makes $38 million in trial law, goes off and becomes a politician. That's only half the story.

The other half is that as a politician, he has very effectively, very articulately been the spokesman for the litigation business in the causes he's taken up in the Senate.

BROWN: But isn't that what politicians do? Not to be the world's biggest cynic or fool, but couldn't you make the same argument, for example, that if you took a lot of money from the pharmaceutical industry, which the Republicans have, you are not going to argue, are you, that they become stooges for the pharmaceutical industry, are you?

OLSON: Well, it's interesting. It was John Kerry's press secretary who said it. And this is at least as scathing as anything the Bush people have come out with, that...

BROWN: So far.

(LAUGHTER)

OLSON: Yes. Give them time.

But said, well, you know, this is the only people funding the Edwards campaign. And I found it fascinating the way that the Edwards spokeswoman then came around and said, well, it would be fine with us if 100 percent of our money came from the trial lawyers. At that point, yes, everyone takes money, but, you wonder, 100 percent?

BROWN: Look, at some point, there has to be something big here. What is the damage in your view that these trial lawyers are causing?

OLSON: Well, trial lawyers do some good. But most doctors can tell stories, most people in manufacturing can tell stories about how it is not just about operators who worry about being sued. It is not just about operators who pay out.

And John Edwards has gone to the mat again and again for the business of suing people. As far as how popular it is in the general public, I think it's interesting. The last few elections, it is the Republicans who have generally gone out and made it part of their stump speech. The Democrats have reacted, but have not affirmatively said, you elect us and you'll get more litigation. It would have been a Republican issue probably anyway. This guarantees it's going to be on the front burner.

(CROSSTALK)

BROWN: Dick, we'll give you the last word. Go ahead.

SCRUGGS: Yes.

Walter seems to be complaining about the working-class Americans' lawyers. He doesn't say anything to complain about the legions of lawyers that Enron hires, that Halliburton hires, so that it can disguise and get away with predations on the American till. It is only the working man's lawyer, the average American's lawyer that he complains about. There's a huge mismatch in resources in the revenue and the financial resources that corporate America, like Enron and Halliburton, pours into lawyers to protect its business practices. Those business practices seem to be embraced by the Bush and Cheney administration.

BROWN: Mr. Scruggs, good to see you. It's been a long time since the tobacco days, when we spent some time together. It's nice to see you.

(CROSSTALK)

BROWN: Mr. Olson, good to see you. If I'm ever in trouble, I'll take either of you as an advocate.

(LAUGHTER)

SCRUGGS: Thank you.

BROWN: Thank you.

Ahead on the program -- a program note before we go to break here. Tomorrow, Larry talks with John Kerry and Teresa Heinz Kerry. That's on "LARRY KING LIVE" tomorrow night, 9:00 Eastern time, just before NEWSNIGHT.

Still to come on NEWSNIGHT, the priest sex abuse scandal and the hugely controversial way that one archdiocese is trying to dig its way out of it.

And later, the beat really does go on, on the radio, perhaps the last real jazz radio station in the land.

A break first. This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Ordinarily, a bankruptcy plays out on the business pages. And even by business page standards, this one barely measures up. It involves millions of dollars, not billions and, when all is said and done, not very many jobs.

What it does involve, however, is lives, young lives that the corporation in question allegedly destroyed and now allegedly is using Chapter 11 to avoid responsibility, all of which might raise the story beyond the business pages even if the corporation in question wasn't also a Catholic archdiocese, which it is.

From Portland, Oregon tonight, here is CNN's Kimberly Osias.

(BEGIN VIDEOTAPE)

KIMBERLY OSIAS, CNN CORRESPONDENT (voice-over): During his formative years, from 8 to 19, James Devereaux (ph) stood side by side with Maurice Grammond. He trusted him. After all, he was his parish priest.

UNIDENTIFIED MALE: And it wasn't really that I thought of him as next to God. I thought of him as God, as all powerful, all knowing and that he could do no wrong.

OSIAS: Devereaux says he was forced to have sex with Father Grammond and strip naked with three other boys in the presence of the priest.

UNIDENTIFIED MALE: I want the truth to come out and the story to be told.

OSIAS (on camera): But Devereaux won't get to tell his story to a jury. That's because, on Tuesday, the Archdiocese of Portland became the first Catholic Church entity ever to file for Chapter 11 bankruptcy protection, halting Devereaux's case and others out there.

UNIDENTIFIED MALE: It gives us a way to begin to handle the matter. First of all, I can deal with all the victims who are making claims against us in a fair way.

OSIAS (voice-over): But Devereaux and other critics say the archdiocese is simply trying to avoid paying the claims of any more victims. In the case of Portland, there are 62 outstanding cases. Two came in just Tuesday. More than half have already been settled; $55 million has been paid out. And the archbishop says that diocesan coffers are dry. He says he doesn't have the authority to liquidate land or money already earmarked for a special purpose.

So now who gets what is all up to a federal bankruptcy judge to decide.

UNIDENTIFIED MALE: In a case like this, where there is no precedent, I would say you can throw predictability out the window.

OSIAS: A decision could take months or even years. But for a victim like James Devereaux, it isn't about time. It's about justice.

Kimberly Osias, CNN, Portland.

(END VIDEOTAPE)

BROWN: A few other stories that made news today.

In Yemen, six alleged members of al Qaeda were charged in connection with planning the attack on the USS Cole now nearly four years ago; 17 American sailors died in the bombing. One of the defendants charged today is already in U.S. custody. The other five appeared in court to hear the charges read. All five refused to enter any pleas. All requested lawyers.

Sources are telling CNN tonight that a grand jury in Houston, Texas, has indicted the biggest fish of all in the Enron scandal, Kenneth Lay, former chairman and CEO of Enron. The Justice Department not commenting tonight, but sources say the indictment is expected to be unsealed tomorrow. In southeastern Arizona tonight, wildfires that have already destroyed more than 20,000 acres are now threatening two small communities and a $200 million observatory as well. The observatory is part of the University of Arizona and is home to some of the world's most powerful telescopes.

Now, far be it from us to knock other people's hobbies, but, really, one too many par fives, this is not. It is, as it always is this time each year, a mess, the Running of the Bulls in Pamplona, the running of the people and the trampling of the people as well. A handful were hurt, people, that is.

Ahead on NEWSNIGHT, they've been grooving now for 25 years. and, tonight -- I think this is a first, too -- NEWSNIGHT grooves as well with Jazz Radio 88. And after we're all mellowed out, we'll wrap it up with morning papers.

Around the world, this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: There's an old slogan from the old Soviet Union under Stalin's reign of terror that went like this. Today, he plays jazz. Tomorrow, he betrays his country. Good thing the right side won, eh?

Good thing, too, the fight is still being fought, not for toppling empires anymore, if it ever really was, just an ordinary mission making a joyful noise in smoky clubs and out-of-the-way corners on your FM dial, places like public radio station WBGO in Newark, New Jersey, Jazz 88, 25 years old this month. Like the music itself, the station has not had an easy run, but it is still there.

(BEGIN VIDEOTAPE)

GARY WALKER, MUSIC DIRECTOR: There are less than 10 jazz stations, full-time jazz stations, in this country.

MICHAEL BOURNE, RADIO HOST: Support for Jazz 88 comes from the New Jersey Music Society.

We get a lot of listeners who are channel-surfing. And they get down to the bottom of FM and there's this music. And they stay there.

On Jazz 88.

DORTHAAN KIRK, SPECIAL EVENTS AND PROGRAMS COORDINATOR: We actually moved into this building here at 54 Park place in Newark in January 1979.

UNIDENTIFIED MALE: WBGO.

WALKER: he naysayers thought, no news and information or not much. The mainstay is not news and information? It's jazz music? You've got to be kidding. And guess what? Twenty-five years later, we ain't kidding. KIRK: I think you have to look for jazz more now than you did, say, in my generation. Jazz was all over the place. It was everywhere. It was in the community.

BOURNE: I don't know. Once upon a time, jazz was the mainstream music. It was the pop music of the time. And it's been a long time since then.

KIRK: Artists of yesteryear came up in a time where they didn't have certain advantages, such as always flying to a gig. And, instead, they rode the bus. Those artists had something more to play about than just the music that was on the sheet music. They played about life.

BOURNE: We have plenty of people who have been listening all their lives. But we need to get younger audiences. And we do that here. We aim at kids.

UNIDENTIFIED MALE: What's up? Jazz is up.

KIRK: I coordinate a series for children, a jazz series for children. And our spring series is in collaboration with the New Jersey Performing Arts Center and their teen program. This is for young people learning to play jazz.

BOURNE: You don't really think you have to pay for radio because it's there when you turn it on. But the message we have to get across is, yes, you have to pay for it. Otherwise, it's not there. We exist because of listener support.

KIRK: Thank you for calling WBGO.

BOURNE: It is phenomenal to get e-mails from Brazil, somebody who is listening right now in Brussels.

We got a pledge. Somebody sent money to keep the music playing in Malaysia.

WALKER: What's at stake in a station like WBGO goes off the air? Will it be a ripple through the economy? No. Will the stock market drop 500 points in one day? No. But I think one of the most important things that this country has given the world will end up on a dusty shelf somewhere.

(END VIDEOTAPE)

BROWN: That was the work of CNN photographer Doug Carroll (ph). Nicely done, Mr. Carroll.

Morning papers after the break.

(COMMERCIAL BREAK)

(ROOSTER CROWING)

BROWN: Okeydokey, time to check morning papers from around the country and around the world.

We'll start with this morning's papers and just give you a taste of the New York tabloid wars. Here's "The New York Post" from today. "Kerry's Choice: Dems Pick Edwards as V.P. Candidate, Really." Widen out a little more. It says "Not Exclusive." You'll recall yesterday, "The Post" reported that it was Dick Gephardt. OK, they did that with a sense of humor. Good for them, because they were pretty embarrassed yesterday.

"The Daily News," the competing tabloid, "Kerry's Real Choice." And just to rub it in, they put "The Post" down in the corner, where they have the Gephardt thing. The wars goes on.

Now on to tomorrow's papers. "The International Herald Tribune," published by "The New York Times." "Fallujah An Out-of-Control Haven for Insurgents," a piece Filed by Dexter Filkins. We'll read that tomorrow, I suspect, in "The New York Times" as well.

"Christian Science Monitor" leads with today's news. "In Charge: Iraqis Crack Down Hard. A New Emergency Security Law Comes on the Heels of Major Criminal Sweeps in Baghdad, a Curfew in Najaf., Local Judges Reinstating the Death Penalty." The Iraqis are in charge of their own country and I guess this is the way they want to do it.

A couple of stories dealing with slot machines in various parts of the country, slots being seen as a way to save economies or state governments or city governments. "Slots Bill Bypassed the Usual Procedures," "The "Philadelphia Inquirer." Pennsylvania just dealt with this in the capital of Harrisburg.

It's also a lead in "The Washington Times." "Newell Key Player in Bid for Slots. Idaho Financier With Dubious Record Downplays Role in D.C. Project."

Ken Lay makes the front page in lots of papers, "San Antonio Express-News" one of them. "Indictment Lands on Lay."

"Dallas," same. "Feds Add Lay to Enron Haul." I love this story in "The Atlanta Journal-Constitution." "Battleground Blues. Georgia on Sidelines as Campaign Targets 17 Key States." Georgia pretty much figured to be in President Bush's pocket, so they're not going to campaign there. You kind of feel left out.

"Chicago Sun-Times," ready for the weather?

(CHIMES)

BROWN: Thank you.

The weather tomorrow in Chicago is "gentle." I like that.

We'll wrap it up for the night in a moment.

(COMMERCIAL BREAK)

BROWN: A look ahead to tomorrow's "AMERICAN MORNING." Here's Bill Hemmer.

(BEGIN VIDEO CLIP)

BILL HEMMER, CNN ANCHOR: Aaron, thanks.

Tomorrow on "AMERICAN MORNING," what happened to Marine Corporal Wassef Hassoun? There are reports out that he is free. But if he's alive, where is he and what does the military know about his whereabouts? We'll check that out for you tomorrow morning at 7:00 a.m. Eastern time here on "AMERICAN MORNING" -- Aaron.

(END VIDEO CLIP)

BROWN: Bill, thank you.

And thank you for joining us. "LOU DOBBS TONIGHT" next for most of you.

We'll see you tomorrow, 10:00 Eastern time. Until then, 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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