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The Business of Prescription Drugs; Importing Terror From America's Ports; The Fight Over Social Security Reform

Aired February 16, 2005 - 20:00   ET


PAULA ZAHN, CNN ANCHOR: Welcome. Appreciate your joining us tonight.
Tonight, we talk about pain, pills and big problems.


ZAHN (voice-over): First there was Vioxx. Which popular drug will be next? And what's wrong with the way they're approved and prescribed?

MIKE SULLIVAN, U.S. ATTORNEY: I think most patients would be horrified.

ZAHN: And on the CNN "Security Watch," so many harbors, so many ships and no way to check all those containers. How do we make sure we're not importing terror?


ZAHN: Vioxx, a popular pain medication, chances are some of you out there have been on it. Well, now it is off the market. Why? Because it is suspected of causing heart problems.

Well, today, the FDA wanted to know what went wrong. And what about similar drugs like Celebrex and Bextra? Are they next to go? Well, have you been to your doctor lately? And did your doctor prescribe some medicine for you? Well, it turns out that he or she may actually be getting paid to do just that.

Here is Drew Griffin.


DREW GRIFFIN, CNN CORRESPONDENT (voice-over): When Schering- Plough wanted to increase sales of its hepatitis drug, Intron A, it set up clinical trials and pitched the drug physicians. Dr. Chris Pappas says Schering-Plough offered to pay him for every new patient he placed on the trial.

CHRIS PAPPAS, ST. LUKE'S EPISCOPAL HOSPITAL: It was somewhere around $1,500 to $2,500 per patient.

GRIFFIN: The problem, doctors say those clinical trials may not have been trials at all, but sales incentives. The company acknowledges the firm's sales practices are under investigation. When Warner-Lambert wanted to boost sales of its epilepsy drug Neurontin, sales reps told doctors the drug could be prescribed for a lot more ailments than just seizures.

DAVID FRANKLIN, INDUSTRY WHISTLE-BLOWER: The company made a very conscious decision to expand what we would actually the drug to, to about 15 to 20 other indications, other syndromes, illnesses that we had absolutely no evidence that it was actually effective for.

GRIFFIN: Warner-Lambert's promotion of Neurontin for nonapproved use was, according to David Franklin, sales rep turned industry whistle-blower, strictly a decision to boost sales.

FRANKLIN: The company's own documents said that was about a $400 million a year market, which simply wasn't enough. It didn't justify the R&D, the sales and promotion for that particular product.

GRIFFIN: Far beyond free tickets to ball games, golf outings and expensive dinners, the investigations into some of the biggest drug companies have uncovered outright payoffs made directly to doctors to write prescriptions.

Mike Sullivan is the U.S. attorney in Boston.

SULLIVAN: I think most patients would be horrified to think that somehow their physician's judgment could be affected or was affected based on lavish gifts, lavish trips, stipends or based on some false information provided to the pharmaceutical industry.

GRIFFIN: False information? That is exactly what Sullivan's prosecutors exposed when it went after Warner-Lambert. Last may, Pfizer, which now owns Warner-Lambert, pleaded guilty to the off-label promotion of Neurontin and paid a $430 million fine.

In a statement, Pfizer says it is committed to compliance with all health care laws and FDA requirements and to high ethical standards in all aspects of its business practices. As a whistle- blower, David Franklin, the former Warner-Lambert sales rep, will receive $26 million of the fine for his help in the case, a financial victory, but Franklin was hoping for much more.

FRANKLIN: Real change, real congratulations would be in order when docs can start trusting the information that they're getting.

GRIFFIN: Dr. Chris Pappas is one of those doctors who no longer trusts the information drug companies bring to his office, and he says with good reason.

PAPPAS: What this essentially was, was a marketing activity in the guise of a clinical trial.

GRIFFIN: Dr. Pappas heads the clinical trial unit at St. Luke's Texas Liver Institute in Houston. When a sales rep asking him to take part in a clinical trial for the drug Intron A, he said no. Doctors, he says, were to be paid for their time, time to fill out paperwork, report their findings and prove or disprove the effectiveness of the drug.

But Dr. Pappas says there was little paperwork, just the promise of a stream of checks for every new patient added to the so-called trial.

PAPPAS: You know, $25,000 to maybe $50,000.

GRIFFIN (on camera): To the doctor?

PAPPAS: To the doctor.

GRIFFIN (voice-over): Fifty thousand dollars for the doctor, hundreds of thousands of dollars to the company on a clinical trial that Dr. Pappas says, if conducted as pitched, was scientifically worthless.

PAPPAS: Well, nobody would admit that it was to prescribe the drug. That's essentially what happened.

GRIFFIN: Schering-Plough would not discuss the clinical trial, but told CNN it will implement new standards of business conduct for this fall.

"Our focus today," the company says, "is on the benefit to the patient, not to the benefit of the physician and that is how we're training our reps."

But Dr. Pappas says it is not just the drug companies that are to blame.

PAPPAS: I think the medical community has not been very responsible in accepting their part of the responsibility for all of this.

GRIFFIN: And now that may be changing. St. Luke's Hospital has begun seminars and instituted guidelines for doctors about gifts and payments from the drug companies. Other institutions like Duke University Medical Center in North Carolina have banned all drug company freebies, from coffee mugs to lunches, and limited when sales reps can see physicians.

But according to the chairman of Duke's Pharmacy Committee, doctors remain dependent on the drug companies and their sales staff.

DR. PETER KUSSIN, DUKE UNIVERSITY: That's absolutely true. And I think unfortunately, when this is looked at, the pharmaceutical industry is the major source of information about new medications and new treatments.

GRIFFIN: U.S. attorney Mike Sullivan says his prosecutions have netted $2.2 billion in fines. And that, he says, should be a wakeup call to the industry.

SULLIVAN: The message I think is clear to the pharmaceutical industry, you know, that corrupt practices, illegal practices, practices that violate rules, regulations, or loss is not tolerated for this administration and this department.

GRIFFIN (on camera): But David Franklin isn't so optimistic. The prosecutions and settlements here in Boston, even those costing $430 million, are, to the huge pharmaceuticals, just a drop in the bucket.

FRANKLIN: I'm sure there are lots of high-fives, and slapped pats on the back at Pfizer when they settled this for $430 million. It was a stunning success.


ZAHN: Drew Griffin reporting from Boston.

The drug Neurontin could make more than $2 billion for Pfizer this year. We asked PhRMA, the drug lobby, to respond. It refused.

And that's why Dr. Sanjay Gupta is here, to help us understand further the outrage of this.

How do doctors get away with this?

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Well, it's doctors. It's pharmaceutical companies. This is big business. When -- you heard some of the numbers there. To pay out $430 million as a settlement, that was really no skin off their teeth as far as this sort of thing is concerned; $6,000 to $10,000 to $11,000 of marketing dollars per doctor for each drug.

So, the pharmaceutical companies are trying to sell their drugs. That's what's going on.

ZAHN: All right, you're a practicing physician. And you're spreading the blame all the way around. But who is most to blame in all of this?

GUPTA: I think everyone that is involved with this is pretty smart. I mean, I don't think -- there is a lot of nudge, nudge, wink, wink going on, as far as some of these freebies, giveaways, trips to Aspen for performing a certain number of procedures or prescribing these medications.

I will say this. The numbers have gone down. I think that you see less of this now than you saw 10 years ago. But it's still happening.


ZAHN: Because they look at these lawsuits.

GUPTA: They look at the lawsuits.

ZAHN: It frightens them.

GUPTA: And I think that it is an ethical, moral issue that has come more to the surface. I think doctors still in some situations, it becomes a slippery slope. If you take a pen, for example, is that a no-no? Taking a trip to Aspen on behalf of a drug company, most people would say, yes, you really shouldn't do that. But a pen or a lunch, where do you draw the lines? And I think that's where it gets a little confusing.

ZAHN: You've been practicing medicine a long time. How great has the temptation been for you along the way?

GUPTA: You know, when you're a resident, you're starving, you have got someone offer you lunch, giving you pens, giving you freebies.

ZAHN: So you've been bought?

GUPTA: Well, I don't know that I would call it that. But, certainly, I've taken pens. And then you're writing with a pen that has a drug name on it. So, you're perpetuating that even further. People think you're endorsing it. And, sure...

ZAHN: But that is different than prescribing one drug over another because you have a financial incentive to do so. I know you say it is a slippery slope, start someplace, but...


GUPTA: Well, and that becomes the question. If you take a pen, are you going to prescribe that drug more often? I haven't seen a situation where the drug company says, listen, we'll only give you X if you prescribe the drug so many times. I haven't seen that, that transparent a sort of thing.

But there is a sort of more implicit sort of understanding between the pharmaceutical companies and doctors, I think. It is not so clear that they'll say, OK, you got to do X number of procedures and we'll give you a trip to Aspen or you got to prescribe the drug so many times and we'll give a free lunch. You don't see that. But there is a sort of, again, nudge, nudge, wink, wink.

ZAHN: But we heard in this piece there are medical centers who are banning the practice of any interaction between doctors and representatives of the pharmaceutical industry and not being able to accept freebies. Is it really working?

GUPTA: When I was a resident, our chairman of surgery did exactly that. And we all thought he was a little bit going overboard at that time. We thought, what is wrong with getting a free lunch or a free pen?

We didn't really understand the implications of, if you start it, how far it could go. And there are lots of academic centers that are saying, listen, this starts in training, when residents are vulnerable. They don't have much money. They're oftentimes very hungry. So if you are going to offer them a free meal, that can be a big deal.

ZAHN: So, the bottom line for us as patients, we need to ask as many questions as we feel we're entitled to and, why are you prescribing that over that?

GUPTA: I think that's always a good answer. Patients, if you're given a new drug, why am I getting this new drug? Is it because they have to pay for all the advertising on television that we're seeing or is it for some other reason, that it is actually a better drug than others?

ZAHN: Dr. Sanjay Gupta, our senior medical correspondent. You would never would know you were the senior one, Sanjay.



GUPTA: I'm just like a junior one.

ZAHN: Not because of your lack of experience. Because you look like you're 19 years old.

Coming up next, how can it be that one of the nation's busiest ports relies on just two cops and a dog it keep it safe from terrorists? We'll show you.


ZAHN: On our "Security Watch," some scary news out of Washington today. The head of the CIA says it's only a matter of time before terrorists use chemical, biological or nuclear weapons on U.S. soil. How would they get here?

Well, according to this new study from the Department of Homeland Security, our ports would be a likely place. It says that money has been spent too fast. Most projects are incomplete or ineffective. And would you believe that port security money has gone to landlocked states? And that's not all. Listen to what this homeland security official said today.


UNIDENTIFIED MALE: Ports represent that place where it all comes together; 95 percent of what comes and goes to this country comes and goes by the water. So, the port complexes are clearly a targeted area for the terrorists.


ZAHN: And a clear warning at that.

Our Alina Cho visited one city struggling to keep its harbor safe.


ALINA CHO, CNN CORRESPONDENT (voice-over): Nobody knows New Haven Harbor better than Mike Pimer.

(on camera): How long have you been doing this?

MIKE PIMER, HARBORMASTER: Long time. Long time.

CHO (voice-over): As the city's harbormaster, Pimer has always thought about security, but never more so than now.

(on camera): What are you looking for?

PIMER: Bombs, people, anything, people.

CHO (voice-over): The target of opportunity, the Port of New Haven. The port houses the region's second largest home heating oil reserve, supplies jet fuel to an Air Force base and a civilian airport, and handles 700 ships and barges each year, many carrying explosive cargo.

I-95, a major artery, runs right through it. An attack with an explosives-laden small craft, like that on the USS Cole, is what people around here fear the most.

CAPT. STEPHEN VERRELLI, NEW HAVEN POLICE DEPARTMENT: And it wouldn't take much of a vessel to do a substantial amount of damage.

CHO: Police Captain Steven Verrelli's job is to decide where to deploy New Haven's 210 uniformed officers. Each day, he sends two officers to the port and a canine unit does spot-checks.

VERRELLI: We cannot be here 24/7. We don't have the resources for that.

CHO: He'd like to do more.

VERRELLI: It's hard to think and talk about harbor and harbor security and port security without thinking about a boat.

CHO: But New Haven doesn't have one.

(on camera): The city had hoped to buy a police and fire boat with a homeland security grant, but New Haven lost its destination as a high-risk city this year. That means no grant money and no boat for the harbor.

SEN. JOSEPH LIEBERMAN (D), CONNECTICUT: There's just no reason for it.

CHO (voice-over): Joseph Lieberman, Connecticut's senior senator, sits on the Homeland Security Committee. He also lives in New Haven.

LIEBERMAN: It's home. To cut the funding to better secure the New Haven port is just an example of penny-wise and pound foolish. And the pound foolish here really means homeland security foolish.

CHO: There have been scares. In August, two sailors from a Turkish vessel docked in New Haven jumped ship, swam ashore, and disappeared. To this day, they have not been found. The Coast Guard says the crew had been cleared long before the ship entered the port. And the missing sailors pose no security risk.

JOSH BROWN, NEW HAVEN RESIDENT: Nobody knows whether they are a threat or they're not a threat.

CHO: Josh Browns remembers sitting in this harbor-side diner when he heard about the Turkish incident. He lives in the suburbs, hunts for ducks in nearby marches and works a mile and half from the port.

BROWN: I've never seen a police vessel out there. I've never seen a Coast Guard vessel out there.


CHO: The Coast Guard says it is watching the port more than people realize, more than the public can see.

UNIDENTIFIED MALE: This is a tracking system.

CHO: Under new security regulations that took effect in July, the Coast Guard now monitors ships coming into the port days before they arise.

CAPT. PETER BOYNTON, U.S. COAST GUARD: Security starts overseas. Security continues offshore. And security then continues in the port, but security does not start in the port.

CHO: Captain Peter Boynton says the Coast Guard boards 50 percent of ships that come into the Port of New Haven, including this one.

UNIDENTIFIED MALE: Cabin secure. Next one down.

CHO: On board the Liberian tanker Elka Hercules, officers search cabins, check I.D.s and look for anything suspicious, even watch for things that aren't there. For instance, if boarding officers find photos of naked women on the wall, that's OK. Blank walls could mean something out of the ordinary. He says port security has improved dramatically since 9/11. Still, he says, there's always more to do.

BOYNTON: Are there gaps? If there are gaps, what can we do to fill them? And that's a daily discussion.

CHO: So, for now, the Coast Guard does what it can and Mike Pimer does what he can about threats that, for most of his 50 years on the water, were unimaginable.

(on camera): Does it break your heart to have to think about these things?

PIMER: It took a little getting used to. I thought they were crazy at first. But, at this particular point, I don't happen to -- I don't believe they're crazy at all. And I'm out there trying to do a little more than what I did before.

CHO (voice-over): In the harbor he calls home.


ZAHN: Alina Cho in New Haven.

My next guest actually oversaw that port security study, former Homeland Security Inspector General Clark Kent Ervin, now a CNN security analyst in Washington. Welcome back.


ZAHN: How can it be 3 1/2 years after 9/11, we're talking about port security being as vulnerable as it is?

ERVIN: Well, that's a real concern, Paula, needless to say.

This study that was released by the Office of Inspector General today is rather disturbing. It was an evaluation of the Port Security Grant Program, which started in '02, designed to provide security enhancements to our ports against terrorist attack.

Probably the most disturbing finding was that the criteria that had been developed to determine which ports were most at risk were not always used. There were hundreds of projects that were funded over the objection of local field personnel who had used criteria to determine which projects were most worthy of based on threat analysis. Their analysis was overwritten by headquarters. And they were not funded.

ZAHN: That sounds like a bunch of gobbledygook to us that don't follow this as closely as you do. Are we talking about politics trapping everyone here?

ERVIN: There were instances where it appeared as though politics really was the driving force.

There seemed to be a lot of emphasis on getting this money out as quickly as possible and spreading it around the country as widely as possible, as opposed to allocating the money based on threat and risk. And in these tight budgetary times, it is absolutely critical that the department allocate its dollars to ports and other parts of the critical infrastructure of the United States based on vulnerability and threat.

ZAHN: How can anybody defend the fact that you have landlocked states getting port security money?

ERVIN: That makes no sense at all.

ZAHN: It is ridiculous.

ERVIN: That makes no sense at all. Obviously, the ports are very critical to the infrastructure of the United States. They're critical to the security of the United States.

But not every port, not every project is equally worthy. We have to make determinations based upon the ports that are most at risk and fund accordingly.

ZAHN: So what is going to break the logjam here?

ERVIN: Well, let's hope that it doesn't take an attack to do so.

It is important that reports like this be released, that they be taken seriously by the Congress, by the administration, by the American people, so that appropriate pressure is brought to bear to insure that funding decisions are based on risk and not based on politics or parochialism.

ZAHN: You just said something that sent a chill down my spine. Let's hope it doesn't take another terrorist attack. Do you fear that is what might have to happen to change this?

ERVIN: Well, as the correspondents noted, the CIA chief today said it was only a matter of time before there would be another attempted attack. And, certainly, ports are a very critical component of the security of the United States.

So, of course, I'm hopeful, like all Americans, that that does not happen. And the challenge is to rise to the occasion before an attack to do everything possible to prevent. And, certainly, one of the things that we can do is to allocate our very scarce dollars according to what we know are the most vulnerable sites and sector.

ZAHN: But that's not happening.

ERVIN: That is not happening. And, certainly, that's what this report showed today.

ZAHN: I know you said this report is disturbing on a lot of different fronts. Give us the broadest view you can on just how vulnerable our ports are.

ERVIN: Well, our ports are vulnerable.

After 9/11, after all, we were attacked by means of aviation on 9/11. And so the bulk of money and other resources and time and attention was focused on protecting the aviation sector. We're considerably safer now in that sector than we were on 9/11. But, of course, there are gaps there as well.

But, relatively speaking, we haven't done nearly as much with regard to ports. Only about 6 percent of the cargo containers are physically inspected. We do have inspectors stationed abroad to inspect cargo before it comes to the United States, which is very good in theory. But there is a question whether in fact our inspectors are allowed to do as much inspection overseas as ideally we would like for them to do to be able to assure ourselves that cargo is not at risk before it comes to our shores. So there's a lot more to be done.

ZAHN: And I need a real -- briefest answer to this one. We shouldn't ignore the fact, though, when you talk about 6 percent, the fact is, a lot of defenders of what Homeland Security is doing now are saying it is much more targeted searching of that 6 percent of cargo. There have been some improvements.

ERVIN: So the department says. And there have been improvements. But that's why intelligence is critical. It is absolutely critical that the department have access to the best intelligence, so that its targeting decisions can wise ones and that the cargo that should be inspected actually is.

ZAHN: Clark Kent Ervin, thanks for your time tonight. Appreciate it.

ERVIN: Thanks for having me.

ZAHN: Coming up next, how safe is the Port of Miami?


PAUL TOY, MIAMI-DADE POLICE DEPARTMENT: We got the terrorists out there. And they want to try and disrupt something, a cruise ship is a good target.


ZAHN: You might be surprised to learn that four million cruise ship passengers rely on divers to keep them safe.


ZAHN: We have been talking about port security tonight. And our "Security Watch" now moves to the Port of Miami and the fight to protect our harbors from terrorists. What you see on the surface is only half the battle.

John Zarrella shows us what lies beneath.


JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF (voice-over): They wear wet suits, not spacesuits, unassuming guys with the right stuff who defend America from below.

UNIDENTIFIED MALE: We've got Lupo Jiang (ph) on No. 4, Paul Toy No. 5. That's a crease.

ZARRELLA: These Miami-Dade County Police divers are helping to protect the Port of Miami, the largest container port in Florida and home to 18 cruise ships carrying four million passengers a year.

TOY: Since 9/11, it has become very critical that -- if you have got that terrorist out there and they want to try and disrupt something, a cruise ship is a good target.

UNIDENTIFIED MALE: Now, what we do is, I'll go in the water. Paul goes in the water. Paul goes down to the bottom.

ZARRELLA: Paul Toy has been diving since he was a teenager. He's been a police diver since the '80s. Today, Toy and nine others search beneath the 881-foot cruise ship, Majesty of the Seas.

It is called a hull search. The team is not acting on any tips or information. It's just an unannounced peak beneath the water line. That's the way they want it, no schedule for terrorists to track.

SGT. NELSON RODRIGUEZ, MIAMI-DADE POLICE DEPARTMENT: We can be here two or three days in a row and not come for a week and then come back for two weeks in a row.

ZARRELLA: The divers line up along the entire length of the ship, eyeballing every inch. Because visibility is about five feet, flashlights look like light sabers in the green-tinted water. Paul Toy makes his way to the very bottom at the center line of the rope, 30 feet down.

TOY: We learn what's supposed to be on the ship. And when there's something that appears it's not supposed to be there, we can recognize it.

ZARRELLA: The dive can be disconcerting, the ship's sounds, the whirring of generators and throbbing of pumps filling the water. Not every diver can hack it.

TOY: The sound just vibrates through the ship and comes through you. So, you have to be in the right frame of mind to be able to get down there and do things like that.

ZARRELLA: While the divers scour the hull, other police officers are in the engine room and on the bridge making sure a propeller or one of these giant thrusters is not accidentally turned on. That would shred the divers in an instant.

Diver Lewis Sierra (ph) is literally inside the thruster housing. This kind of danger goes with the territory. In 1996, Paul Toy dove the murky crater in the Everglades to bring up pieces of a crashed ValuJet airliner.

TOY: There was no visibility at all. It was all by feel. We call it diving by braille.

ZARRELLA: Much of what they do goes unnoticed, but not unappreciated.

TOY: The people see you, the people on the ship, and they love you, because it gives them a good feeling, like, our ship's OK. These guys are down there checking it out.

ZARRELLA: Cruise ships don't get all the attention, it could be a navy cruiser, like the USS Lazy Gulf just pulling out.

Toy and the other divers searched the see wall and bottom where the guided missile cruiser would dock. These divers believe in their work. They know that they are a deterrent and they make a difference swimming in the shadows of the big ships.

(END VIDEOTAPE) ZAHN: Interesting. I don't think I've ever seen pictures that showed up close and person what those very important divers were doing for our safety. And we promise to keep you updated on stories that affect your safety and security.

When we come back, the other security issue, Social Security. Is the president playing the race card?


ZAHN: There is nothing messier right now than the fight over Social Security. A sign of some give from President Bush says he is now open to the idea of raising the $90,000 cap on taxable income.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It is important to keep the options on the table. And it is important for me to say to the members of Congress if you got a good idea, bring it forward. There will be no political retribution. President Clinton thought raising the age might have made sense, Daniel Patrick Moynihan had an idea, Tim Penny had some idea. And so my message today is bring them forth.


ZAHN: But this president says no way to raising the tax rate. He is also reaching out to African-Americans with his plan for private retirement accounts which has some people asking is the president playing the race card?

Here is senior political correspondent Candy Crowley.


CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Barbara Haile never gave much thought to her husband's Social Security benefits until he died.

BARBARA HAILE, WIDOW: I remember someone said to me you can go, Social Security will give you money to bury him. So, I just called them and they said $250. I laughed. I'm like what am I going to do with $250. It takes at least $6,000 to bury him.

CROWLEY: She should take the $250. It is all she'll ever see of the money her husband put into Social Security. Michael Haile died of bone cancer in 1997. He was 50, old enough to put more than 30 years of payments into Social Security, too young to have taken any out.

ROBERT WOODSON, NATIONAL CENTER FOR NEIGHBORHOOD ENT.: Black men 40 years old stand a 77 percent more of a chance of dying before he reaches retirement age than do white men. If you look at the numbers, under the existing Social Security system, black families transfer $10,000 from black families to white women who live longer.

CROWLEY: It is a fact of death that life expectancy for blacks is shorter than for whites. A turn of actuarial table the president is using to gather support for his plans to fundamentally change Social Security.

BUSH: African-American males die sooner than other males do, which means the system is inherently unfair to a certain group of people. And that needs to be fixed.

CROWLEY: The case goes like this. Had Michael Haile been allowed to invest for himself just a portion of the money he put into Social Security for 30 years, his wife would have inherited that money no matter how long or short his life.

HAILE: I think it is good to know that you have something that you have access to right away. I think it is good to give people an option rather than just having it one way and that's the you to live with it.

CROWLEY: At the AARP, Marie Smith is quick to note that Social Security is a lot more than a retirement fund.

MARIE SMITH, AARP: If you're thinking of the African-American population as a whole: of African-Americans, children receive more benefits -- in relationship to their percentages in the population than any other group. And that would be survivors benefits, or dependent benefits, which could be from retirement or disability benefits.

CROWLEY: AARP says it is all about people investing for retirement, just not with the money they currently put into Social Security. The Haile children were too old for survivor benefits when he died. Barbara will eventually retire having worked longer than her husband. So she will take her own Social Security over his.

The home she bought with Michael was too much for her salary alone, so Barbara moved. She's doing fine, but sometimes when she's dealing with the young cousin she's raising, or when she's with her mother, Barbara thinks about the things she could have done had Michael been able to save something for himself.

HAILE: She's not able to afford all of her medicine. And I would like to be able to do that for her. I mean, I can do it now but it is it stretches me. I can use some money. I could have used some money for her. And even now since I have him I would really rather he be in a private school rather than public school. So, I could have afforded to do that.


ZAHN: Candy Crowley giving us a good idea of how the Social Security issue so personally touches lives.

Survivors of the Enron collapse saw their private retirement savings go down the drain. When we come back hark they say about the president's Social Security plan.

(COMMERCIAL BREAK) ZAHN: Ownership. So how many times have you heard the president say that over the last couple of weeks? Well, that is his new buzzword for Social Security reform; risk is not.

Our Dana Bash met some workers who learned about risk the hard way.


DANA BASH, CNN CORRESPONDENT (voice-over): Omaha, Nebraska, the heart of the conservative Midwest, home to trading giant Ameritrade, Fortune 500 companies like Union Pacific, Berkshire Hathaway and its oracle, Warren Buffett.

It seems an ideal place for the president to sell his plan for workers to divert some of Social Security into private accounts.

(on camera) But hundreds of Omaha residents have also seen investments go south. This was a home base for Enron. The building is now empty.

(voice-over) Former employees like Larry Moore call it simply the collapse. These letters brought word more than 60 percent of his retirement savings was gone.

LARRY MOORE, FORMER ENRON EMPLOYEE: "It is our most sincere wish that payments under the deferral plans could continue. However, under bankruptcy laws the payments must be stopped."

NYDRA KARLEN, FORMER ENRON EMPLOYEE: Activity Fair. This is Nydra. How can I help you?

BASH: Nydra Karlen lost $340,000 in her Enron 401k and had to get a part time job. She's not destitute, she says, but almost retired and now counting on Social Security.

KARLEN: There are things I had planned for the grandkids.

BASH: Nydra and Larry share psychological scars of losing retirement money in Enron. But they differ on whether younger workers should be able to invest some Social Security in the private sector.

Larry worries about market swings.

MOORE: Right now I'm operating on about half of what I expected to. And it would be a lot less than that if Social Security hadn't been constant.

BASH: Nydra likes the president's idea.

KARLEN: If you look at the market over the whole, based on, you know, 50 years, you're going see a huge difference between that and what you get from Social Security.

BASH: The stock market does yield an average 10 percent return. The Social Security trust fund about 1/10 of that. But Larry asks what if the market tanks at the wrong time?

MOORE: If you're at an age where five years from now I'll be retiring, and the market begins one of its long downward slumps, you have to have some mechanism in place.

BASH: Neither see an imminent Social Security crisis, but both want the issue addressed. Larry says he and his wife would be willing to help some.

MOORE: A small increase in contributions would probably be acceptable.

BASH: But Nydra does not want her kids paying more.

KARLEN: Will we take 20 percent, 30 percent when there's only two workers for every retiree? So I would like these people now to get interested in investing.

BASH: What about the younger generation the president keeps talking about saving Social Security for? We ask the 35-year-old manager here at Vidlak's.

ERIK LINHARDT, MANAGER, VIDLAK'S: Most people are running in the stock market now anyway in addition to Social Security. And if Social Security is not going to be there, which I don't think it will be, then I think it is -- you know, 50/50 either way.

BASH: And either way, perhaps the president's second biggest term challenge.


ZAHN: And today, the Fed chairman, Alan Greenspan, weighed in on the idea of private accounts for Social Security. He likes them on one hand. But he urged a go slow approach.

Time to check in with Larry King to find out what's happening at the top of the hour.

We know you're happening at the top of the hour. Who are you hosting tonight?

LARRY KING, HOST, "LARRY KING LIVE": I'm happening. You look lovely, Paula. I like the look.

ZAHN: Thank you.

KING: Nice frame of the face. Nice. Black looks nice. Everything good, good. Nice, nice.

ZAHN: Thank you, Larry.

KING: "Will & Grace," the show has won 12 Emmys. It's in its seventh year. Become part of the nomenclature of American comedy. The cast of "Will & Grace" our special guests tonight with your phone calls. And a lot of clips, too. Should be a lot of fun, Paula. ZAHN: I don't have the time to call in tonight, Larry, but I want to know how much of their performances are improvised. Because I hear that they have a script, but they're so good at what they do that a lot of it ends up being stuff they make up along the way.

KING: I'll ask you, OK, guys? OK. I'll ask them.

ZAHN: Thanks, Lar.

KING: I'll ask them.

ZAHN: And that means you have permission to ask a question on my show tomorrow night, too. Get ready.

KING: OK, but I'll credit you. It will be a Paula question.

ZAHN: OK, good.

KING: Good.

ZAHN: I'll try to study tonight. Thanks, Larry. Have a good show. See you at top of the hour.

KING: Bye.

ZAHN: We're going to take a short break here. What's more fun than the Super Bowl of dog shows? How about a day behind the scenes?


UNIDENTIFIED MALE: You know what they say, you know, the bigger the hair, the closer to God you are. So he's real close to God.


ZAHN: And believe me, there's so much spray in that head that hair is never coming down. Next, barking, brushing and the battle for best in show.


ZAHN: Well, a dog may be man's best friend, but a dog's best friend just might be his hairdresser. At least when the canine creme de la creme get together at Madison Square Garden for the annual Westminster Dog Show.

I got a peek behind the scenes.


UNIDENTIFIED FEMALE: This is the Westminster Kennel Club. It is the Rolls Royce of dog shows.

UNIDENTIFIED FEMALE: His father was a Westminster winner in 1999.

UNIDENTIFIED MALE: This is champion hello talks, no secrets (ph). We call her Carlee.

UNIDENTIFIED MALE: May we have the hound group in the ring, please?

ZAHN (voice-over): It's become so popular that five years ago the film "Best in Show" spoofed Westminster.

FRED WILLARD, COMEDIAN: Are all judges that thorough? I mean, she looks at the teeth.

UNIDENTIFIED MALE: It's very important that all the attributes are examined: teeth, eyes, ears.


ZAHN: Art imitating life.

UNIDENTIFIED MALE: It is not in here. You left it at the hotel. You go back and you get her Busy Bee. Go to the hotel and get Busy Bee! Run! Run!

ZAHN (on camera): How does what happens out there compare to what you saw in the movie?

UNIDENTIFIED FEMALE: It reminds me so much of what I see here at Westminster. I think they're a little out of the box, if you ask me. But that's fine.

ZAHN (voice-over): I spent some time with Alan Waterman, a real life dog handler and groomer and champion Shinda Janelle Machene (ph), otherwise known as machine, a toy poodle.

(on camera) Those of us aren't familiar with a show cut, what are you doing to him?

UNIDENTIFIED MALE: We're just making him exaggerated and pretty. And this is all done for show. But originally, this trim was a working trim.

ZAHN (voice-over): Machine will be modeling the most unusual cut when he's in the ring.

(on camera) How many hours have you been doing this today?

UNIDENTIFIED MALE: About two hours.

ZAHN: And is that a normal...

UNIDENTIFIED MALE: That's about normal. Yes.

ZAHN (voice-over): Is that really a dog?

UNIDENTIFIED MALE: These are kidney patches. These are to keep the kidneys warm when they're in the water. The pompon is used as a rudder. When they're swimming, it's out behind them. They use it as a rudder. And we shave all of this so they can move easily in the water. And these bracelets, the pompons on their legs are to keep their joints warm.

ZAHN (on camera): So everything I see as a flotation device...


ZAHN: Is actually there for a medical reason?


ZAHN: In addition to a show reason.

UNIDENTIFIED MALE: We just exaggerate it now for show.

ZAHN: Is there hair spray in this? Or this will stick up? It wouldn't stay like that?


ZAHN: So he's defying gravity with a little help?

UNIDENTIFIED MALE: Yes. Yes. You know what they say, you know. The bigger the hair, the closer to God you are. So he's real close to God.

ZAHN (voice-over): The clock is ticking. Only a few minutes to show time. Backstage is a symphony of scissors, blowers, and sprays. Alan puts on the final touches. The competition looks on.

UNIDENTIFIED MALE: It's tough. It's tough. We have the No. 1 dog all breeds right there. And we have to compete with him.

ZAHN: Nerves run high.

(on camera) Now, Alan, even though you're a veteran of these shows, do you still get nervous?

UNIDENTIFIED MALE: Oh, yes. We always get nervous.

ZAHN: So how are you feeling right now?

UNIDENTIFIED MALE: We're nervous. We're, you know, anticipating the win or the loss. But you know, we all go in there looking really good.

ZAHN: Well, good luck.


ZAHN: We'll be rooting for you, Machine.


ZAHN (voice-over): In the ring, the competition is stiff. They all look the same to me.

(on camera) So how did you do, Alan?

UNIDENTIFIED MALE: Didn't do so well today.

ZAHN: No. What happened?

UNIDENTIFIED MALE: Who knows? Those were some nice dogs.

ZAHN: Yes.

(voice-over) If you thought Machine had a lot of work done, take a look at this. This is the doggy spa at the Hotel Pennsylvania. Jerry Grinick (ph) is the doggy concierge. Yes, that's right.

(on camera) So you can walk in here as a dog. You get your exercise. You get your hair done.

UNIDENTIFIED MALE: We have a canine loo in the back, his and hers, sectioned off. We have the tubs. They get bathed. There's a Jacuzzi tub in there. We also have a doctor's corner that we introduced this year which includes an animal communicator, a canine and person masseuse team, someone -- a veterinarian on staff, as well as someone that gives acupuncture.

ZAHN (voice-over): Many of the dogs that compete at Westminster get their pregame warm-up in the spa.

UNIDENTIFIED FEMALE: Has to be in good condition running around that ring.

ZAHN: Some owners are trying to better communicate with their dogs.

UNIDENTIFIED MALE: What would you like to say to Beatrice right now?

ZAHN: But this is reality.

(on camera) You also have little jackets for him, don't you?

UNIDENTIFIED FEMALE: I do. I do. A lot of them.

ZAHN: And he loves changing, changing the jackets.

(voice-over) How about a relaxing massage before the big event, best in show?

UNIDENTIFIED MALE: Ladies and gentlemen, introducing the seven group winners competing for best in show.

ZAHN: No matter what the outcome, owners, handlers and breeders are just happy to have made it this far.


ZAHN: I think we could all use a day or two at the doggy spa.

When it was all over, best in show went to Carlee, a German Shorthaired Pointer. Look. Since then she's been busy doing the talk shows. But next, at only 5 years old, she'll head to retirement, where her owners hope she'll give them more prize-winning pups.

When we come back, after the tragedy of the tsunami, an emotional reunion, mother and child finally together.


ZAHN: Before we let you go tonight, we wanted to share with you a story with a very happy ending. It's all about Baby 81, the boy found alive in Sri Lanka. That after the tsunami destroyed almost everything. And tonight he's finally back in his mother's arms.

Here's Satinder Bindra.


SATINDER BINDRA, CNN CORRESPONDENT (voice-over): The moment an entire nation has been waiting for. A court official hands over Baby 81 to his parents, ending a seven weeklong saga of separation and suffering.

"I went without food and sleep for days," says mother Jenita Jeyarajah. "Now I'm very happy."

Earlier in the day the Jeyarajahs' 4-month-old son was brought into a packed courtroom escorted by police. Baby 81 slept through the lengthy court proceedings. But the world has been watching his parents go through weeks of emotional turmoil to be reunited with him.

To show their appreciation and as an offering to the gods, the entire Jeyarajah family smashes 101 coconuts at this temple.

Later the Jeyarajahs take their son, Abilass, to his old home, which was completely destroyed by the tsunami. Here he's changed out of his hospital clothes, and many family members, including his grandmother, break down.

Over the next few days the family says they won't be doing much. We'll not be celebrating, because he says, 30,000 people have lost their lives. All that matters to the Jeyarajahs is that Abilass is home. And all they want to do, they say, is raise him as a normal child.

Satinder Bindra, CNN, Kalmunai, eastern Sri Lanka.


ZAHN: Finally a good story out of that region.

We want to thank you all for joining us. Tomorrow night, why it is so easy to buy a gun that is so powerful. The critics say it could actually take down an airliner. Please join us tomorrow night. "LARRY KING LIVE" is next. He will have the entire cast of "Will & Grace." Thanks for joining us tonight. Good night.


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