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'New York Times' Guilty of Treason?; Old Glory Becomes Burning Issue in Congress; Israeli Troops Move Into Gaza to Rescue Captured Soldier

Aired June 27, 2006 - 20:00   ET


PAULA ZAHN, CNN ANCHOR: And good evening. Thanks so much for joining us tonight.
We're staying with this hour's breaking news story. Just a short time ago, Israeli troops and tanks crossed the border into southern Gaza. They are trying to rescue an Israeli soldier who was kidnapped by Palestinian militants on Sunday.

We are trying to make contact with John Vause, who we are hoping to have join us on the telephone from Gaza.

But we should explain what we know so far, the Israeli troops entered southern Gaza. Planes attacked two bridges and a power station. We're told that it has knocked out electricity in most of the coastal strip this early Wednesday morning, their time, and, of course, stepping up the pressure on Palestinian militants holding captive that 19-year-old soldier that they have gone in to rescue.

We now have made contact with John Vause.

John, what else do we know?

JOHN VAUSE, CNN CORRESPONDENT: Well, Paula, we know that this all began within the last few minutes. Israeli troops have been moving across the border, concentrated in the southern part of the Gaza Strip, around the town of Rafah, near the border with Egypt.

Thousands of Israeli soldiers have been stationed along the border with Gaza, on standby, awaiting orders from the Israeli prime minister to move in. We know that they're taking up positions around the town of Rafah. Israeli intelligence believes that the 19-year-old corporal, Gilad Shalit, is being held in the southern part of Gaza, quite possibly in a town called Khan Yunus, not far from Rafah.

We know that a number of bridges have been hit by airstrikes. Also, that power station, as you mentioned, Paula, has been hit in an airstrike as well, knocking out a lot of power. But, still, there is power to the -- to Gaza City, which is coming actually from Israel, Paula.

ZAHN: Give us a sense of the back-story here, because we know that there have been intense negotiations going on between the U.N. and Arab leaders -- Condoleezza Rice, the secretary of state here, urging Israel to give diplomacy a chance. And -- and, yet, we see these strikes. VAUSE: Well, the Israelis have made it perfectly clear that time was running out.

And they have demanded the return of the Israeli corporal ever since he was taken in that morning -- Sunday morning raid from his Israeli military outpost by Palestinian militants. And they said they would not wait forever. That is why the Israeli troops are now moving in. They were not -- Israel was not part of any negotiations.

They would not negotiate with the hostage-takers. What we have seen is a team of mediators, led mostly by the Egyptians, who have been on the ground here, dealing with the various Palestinian factions, trying to secure the release of this Israeli corporal.

It seems that the main sticking point in trying to secure his release has not been from the Palestinian militants within Gaza, but, rather, from the Hamas leadership, which is based outside of Gaza in Damascus, in Syria. Khaled Meshaal, in particular, apparently took a very hard-line stance against releasing this Israeli soldier, apparently highlighting a split within Hamas itself -- Paula.

ZAHN: John Vause, appreciate the update.

And, once again, just to remind the audience of why Israel says it is striking those bridges, apparently, that's where they feel that this kidnapped soldier would be being sent from one part of the bridge to the other. And they hope that knocking down that bridge would sort of cut the -- Gaza into two and make it a little bit easier for them to retrieve the soldier.

As more details become available, we will bring them to you.

John Vause, again, thanks for that late report.

We turn now to the "Security Watch" here tonight. Is one of the country's leading newspapers guilty of treason? The controversy is growing over the revelation in "The New York Times" that the government has been secretly combing through millions of bank records to catch terrorists.

Republicans are feasting on this, throwing words like disgraceful, offensive and treasonous at "The Times" for tearing the lid off this secret anti-terrorist program. The Bush administration says it is essential to fighting the war on terror.

We now get the very latest tonight from White House correspondent Ed Henry, part of the best political team on TV.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice over): Republicans stepped up their barrage on "The New York Times" for publishing details of a once-secret program tracking the banking transactions of terrorists.

SEN. PAT ROBERTS (R-KS), SENATE INTELLIGENCE COMMITTEE CHAIRMAN: If another attack occurs because of this information going out and giving the terrorists at least a leg up in regards to what they know and not know and changing their method of operations, if that attack comes the people who have written these stories and the people who have made their decisions should look in the mirror.

HENRY (voice over): From the president on down, Republicans have been reading from the same script.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The disclosure of this program is disgraceful.



HENRY: They're teeing off on news stories that reported questions about the legality of a Bush administration program that uses an international database to review the banking transactions of thousands of Americans.

The story was also reported by "The Los Angeles Times" and "Wall Street Journal," but the attacks have focused on "The New York Times."

The chance to beat up on a newspaper with a liberal reputation is too good to resist for an administration struggling to keep its conservative base happy.

CHENEY: "The New York Times" has now made it more difficult for us to prevent attacks in the future. Publishing this highly classified information about our sources and methods for collecting intelligence will enable the terrorists to look for ways to defeat our efforts.

HENRY: But White House Press Secretary Tony Snow was less certain than the vice president when pressed Tuesday on what evidence there is the leak has compromised terror probes.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: None of those things have had time to proceed. So, we really don't have any basis right now for knowing exactly how it has influenced things.

HENRY: Snow did charge, "The New York Times" endangered lives by bucking a tradition of media organizations agreeing to keep government secrets at a time of war.

But "Times" executive editor Bill Keller defended the decision to publish, writing, "I think it would be arrogant for us to preempt the work of Congress and the courts by deciding these programs are perfectly legal and abuse-proof, based entirely on the word of the government."

(on camera): But, unlike the NSA domestic surveillance program, very few Democrats have raised questions about the banking program. Republicans are confident they're on solid legal ground, which is why they're firing away at "The Times." And if they score political points with conservatives along the way, so much the better.

Ed Henry, CNN, the White House.


ZAHN: And now I'm going turn to a member of Congress who says "The Times" ought to face criminal charges for revealing this secret program, Representative Peter King, a New York Republican who is chairman of the Homeland Security Committee.

Thanks so much for joining us tonight.

KING: Thank you, Paula.

I wanted to start off by reading a short sentence from the Espionage Act of 1917. And it basically says, it makes it a crime for a person to convey information with intent to interfere with the operation or success of the armed forces of the United States or to promote the success of its enemies.

We just heard what Tony Snow had to say. He said it is not clear what the impact of printing this story was. Are you saying that "The New York Times" intended to compromise the security of our nation by printing this story?

KING: Paula, what I'm saying is, they had to know that this would compromise the security of the United States.

The administration laid out the case why it would do that, and they went ahead. To me, this was a reckless disregard of the security of the United States. And I believe that fits within the Espionage Act of 1917. And that's why I'm calling on the attorney general to begin an investigation and prosecution of "The New York Times," including its reporters who worked on the case, the editors who worked on the case, and Sulzberger, the publisher.

ZAHN: Why not the sources?

KING: Oh, the sources as well. Obviously, we should go after the sources. What they have done here is absolutely reprehensible. And, in going after the sources, one way to get them is to put the reporters in before the grand jury from "The New York Times," and, if they don't reveal those sources, to cite them for contempt.

I think there's a lot of things we can do here. For instance, I don't know why any American who cares about the security of the country would continue to advertise in "The New York Times" or why anyone would want to hold stock in "The New York Times." I mean, what they have done here is absolutely disgraceful.

ZAHN: But, Representative King, you heard Tony Snow. And -- and he said that, right now, there is no way to measure what the impact of this story has been and whether it, in his -- fact, has compromised the the -- investigation.

KING: Well, it is too soon to know the exact extent. But you have to know, when you reveal secrets in time of war, that it is going to have a significant effect. Now, it will take time to know exactly how significant it is going to be. Are we going to lose tens of lives, or hundreds of lives, or thousands of lives?

But it has definitely compromised America. Just as you -- if you give secrets to an enemy, you don't exactly know how long it's going to take, but common sense shows that, when you compromise such an important program, which has been so successful in tracking down terrorists, then, it has to work against the United States. If nothing else, we have alerted the enemy. We have let them know exactly what we're doing, and they can adjust their methods.

ZAHN: You say we have alerted the enemy. Are you telling me tonight that leaders of these terrorist organizations had no idea that their financial transactions were being monitored?

KING: Oh, they knew we were trying to do it. And they knew we were somewhat successful. And they certainly knew we do a very good job in the United States.

But they did not -- my understanding, they did not have any real knowledge of the full extent of what we were capable of doing. They guessed we might be able to do it, but they didn't know the full extent of it. They didn't know that we had this agreement with SWIFT, which literally involves millions and millions of transactions.

And they were guessing they were -- and they thought we might, but now that we have laid it out for them. They know exactly what we have. I would much rather have kept them guessing.

ZAHN: Representative King, just a real brief answer to this.

Out of all of the classified information that has ever been passed along to reporters, there has never been one single prosecution under this Espionage Act that we were both talking about. Very quickly, in closing, are you really confident you're going successfully prosecute someone here?

KING: I'm confident the attorney general should do it. Whether he does or not is up to him. But I think the time has come to put an end to this.

"The New York Times," they're serial offenders. They're recidivists. They have done it before. They're doing it again. We have a war ahead of us which is going to go for many years. We can't afford the risk of American lives because of the arrogance and the left-wing agenda of "The New York Times."

ZAHN: Representative Peter King, thank you so much for your time.

KING: Thank you, Paula.

ZAHN: A characterization that I'm sure some of our guests to come will dispute. So, we are going to dig deeper now into the legal and ethical questions in this story.

Joining me now, senior legal analyst Jeffrey Toobin and Howard Kurtz, who covers the media for "The Washington Post" and also hosts CNN's "RELIABLE SOURCES."

Good to see the two of you.

You have just heard what Representative King had to say. He would like to see the attorney general forcefully prosecute this case. Is there any evidence that "The New York Times" broke any law here, Jeffrey?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: I think there is no way you could or you should prosecute "The New York Times" for espionage.

ZAHN: Why not?

TOOBIN: Because espionage, as the -- as the statute you read said, requires an intent to help our enemies. There is no intent to help our enemies here. There is an intent to inform the public.

And, in this country, it is the private sector, not the government, that decides what gets published. Now, the question about whether "The New York Times" should have done this is a hard question. But whether it was a crime is an easy question. It wasn't.

ZAHN: So, Howie Kurtz, take a stab at that. Should "The New York Times" have gone ahead with this story, when the administration repeatedly asked them not to print it?

HOWARD KURTZ, CNN CONTRIBUTOR: This is a much closer call, Paula, than the other "Times" scoop last December about the domestic surveillance program, which -- and I think a lot of the pent-up frustration and anger that we just heard from Congressman King, which we hear from conservative commentators and people in the White House, is because of that story.

And, so, now, because that story was harder to defend, because, arguably, the domestic eavesdropping story -- program was -- was not entirely legal, they hadn't gotten court warrants, I think this story, which most people was, why should it be revealed about the -- the banking capabilities and -- and scrutiny that the government has, this has given the critic of "The Times" -- and there are many -- an opening to go after that paper.

TOOBIN: One problem that the -- the government has here is, they haven't really explained very well what the harm is.

They say, well, the banks won't cooperate. Well, the banks have to cooperate. They -- they're under legal obligation to cooperate. And -- and they're saying, well, we're advising the terrorists of what our plans are. You know, our government officials have held press conferences talking about how we're monitoring the transactions of -- of terrorists, the financial transactions. So, the fact that "The New York Times" says we're doing this hardly seems to add much to what the terrorists already know.

ZAHN: So, how much of this, Howard, potentially is payback time for "The New York Times" for going with the NSA story that you just referenced a minute ago?

KURTZ: And not just that. It has a liberal editorial page that was against the war, and a lot -- and there is a lot of political payback here. It is not an entire coincidence that, with the midterm elections coming up, Republicans see some benefit in beating up on the most visible national liberal newspaper. That plays very well with their base.

But, on the legal question, I -- an Espionage Act prosecution may be unlikely. But what is not entirely unlikely is another Judith Miller situation, where there's a leak investigation. Reporters are asked to testify. They refuse to disclose their confidential sources. And then they face the very difficult choice for any journalist of having to go to jail in order to protect those sources.

ZAHN: I need a 10-second thought from you. If you had been the lawyers advising "The New York Times," would you have told them not to go with this story?

TOOBIN: Boy, that's hard in 10 seconds.

But I -- I probably would have said publish the story. But I think Howie is right. I think we are going to see more reporters in the grand jury. And what we have learned is that, in federal court, reporters have no privilege to avoid testifying. So, we may see more reporters in jail.

ZAHN: Jeffrey and Howard Kurtz, thank you both.


ZAHN: Jeffrey does have a last name. That would be Toobin.


ZAHN: Appreciate both of your perspectives tonight.

We move now on to our countdown of the top 10 stories on, about 17 million of you logging on to our Web site today.

At number 10 -- supermodel Naomi Campbell -- you remember her -- she makes an appearance again in a New York courtroom. Her lawyers are trying to work out a plea deal in her cell phone assault case. Prosecutors have yet to present that case to a grand jury.

Boy, wouldn't Jeffrey Toobin love to be in the middle of that one, right? TOOBIN: No. Nothing better than a good cell phone assault case, I will tell you.


ZAHN: Number nine -- rival Palestinian factions Hamas and Fatah have agreed to an agreement to establish a Palestinian state alongside Israel. Both sides say the accord will be signed a little bit later on this summer.

Numbers eight and seven when we come back, plus, patriotism vs. free speech, an issue that has been simmering since Vietnam, suddenly, it boils over once again.


ZAHN (voice-over): Old Glory becomes a burning issue. And senators choose sides for a controversial election-year vote. Is it really time to change the Constitution?

And the "Eye Opener" -- the confession. For the first time, a former priest and convicted pedophile speaks out in an explosive new film about the families he victimized and the church he betrayed. So, why is he a free man tonight?

All that and much more when we come back.



ZAHN: Welcome back.

Here is what's happening at this moment.

We are going to recap a story now that is breaking in the Middle East right now. Israeli tanks and troops are crossing the border into southern Gaza in a campaign to bring back an Israeli soldier kidnapped by Palestinian militants on Sunday. The Israelis had warned the Palestinian Authority of an extended military campaign if the soldier wasn't released.

Attorneys for indicted former White House aide Lewis Libby are asking a judge for more time to request highly sensitive presidential briefing notes for Libby's defense. Libby is charged with lying to investigators looking into the leak of CIA operative Valerie Plame's name to the news media.

And the U.S. is urging Libya to finish compensating families for the 1988 bombing of Pan Am 103 over Lockerbie, Scotland. Libya is about to be removed from the USS -- U.S. terrorist list, but had hinted that it no longer had a legal responsibility to the families, who were to be paid $10 million each.

Now, a week from tonight, all of us will be getting ready for Fourth of July fireworks. But, tonight, all of the fireworks were in the U.S. Senate. Less than two hours ago, a constitutional amendment to protect the U.S. flag failed by a single vote.

Congressional correspondent Dana Bash joins me now with more on that very passionate debate -- Dana.


Well, you know, it was a cliffhanger until the very end. As you said, the Senate came very, very close, in fact, closer than they ever have before, to actually amending the Constitution, 66 votes in favor. But that was just one vote short of the two-thirds majority needed for that amendment. And it capped two days of debate about the stars and stripes, freedom of speech, and politics.


BASH (voice-over): Senators pushing the flag desecration amendment used the pre-Fourth of July, election-year debate to argue changing the Constitution was necessary and, in this case, the ultimate sign of patriotism.

SEN. JOHN CORNYN (R), TEXAS: The American flag is a monument, a symbol, of our freedom, our country and our way of life. Why in the world would we refuse to protect it against desecration?

BASH: Opponents pledged their allegiance to the flag, too, but said changing the Constitution goes too far.

SEN. ROBERT BYRD (D), WEST VIRGINIA: I believe that amending the Constitution to prohibit the flag desecration flies in the face, the very face of First Amendment right, like freedom of speech.

BASH: But supporters have been pushing to amend the Constitution since 1989, to overcome Supreme Court rulings that laws banning flag desecration violate the First Amendment.

SEN. ORRIN HATCH (R), UTAH: It just says we're going to return this issue back to the Congress, where it should have been to begin with. And it says these exact words: The Congress shall have power to prohibit the physical desecration of the flag of the United States. Does that mean the Congress has to? No. Will the Congress? I hope so.

BASH: Democrats asked, where do you draw the line?

SEN. FRANK LAUTENBERG (D), NEW JERSEY: There he is, Kid Rock, with his head through the flag. Is that a desecration? It was such a desecration that he was invited to address the Republican Convention. And they partied with him, and they loved him. What constitutes desecration?


BASH: Now, Democrats, even those who voted for this amendment, say that Republicans bringing it up now, four months before Election Day, are doing it just because of crass political reasons. They also say that Republicans, this is another example of the fact that their priorities are perhaps misguided. But, Paula, supporters of this amendment, especially Republicans, the Republican leader in the Senate, insists that this is all about values, and that is why it deserved a place on the Senate floor for debate -- Paula.

ZAHN: Something else that is being widely debated.

Dana Bash, thank you so much. Appreciate the update.

And, in just a minute, an incredible view of abuse, through the eyes of an abuser himself -- in his own words, a former Catholic priest tells how he preyed on children in California for two decades.

And, then, a little bit later on: the medical facts behind today's stern new warning from the U.S. surgeon general: Are we doing enough to protect ourselves from other people's smoke? You might be pretty darn shocked by the results of this latest study.

First, though, number eight on our countdown -- the seven-member crew of shuttle Discovery arrived at Kennedy Space Center this morning to get ready for this weekend's launch. Discovery is scheduled to lift off on Saturday.

Number seven -- in Clinton, Missouri, crews are cleaning up after a three-story building housing an Elks Lodge collapsed. It happened last night. The lodge's president was killed. Nine other people were trapped and had to be rescued. Right now, the cause of the collapse is unknown -- numbers six and five straight ahead.

Please stay with us.


ZAHN: Keep on sticking around with us tonight. We have more breaking news -- this story out of Las Vegas.

Police say two officers have been involved in a shooting at a checkpoint inside the city's airport.

Our own Dan Simon happened to be at McCarran Airport. He joins me now on the phone from Las Vegas with the very latest.

Do we have any idea exactly what happened here?

DAN SIMON, CNN CORRESPONDENT: Well, Paula, these -- the reports I'm getting now are unconfirmed.

What we're hearing is that a man may have gotten a knife through security and then took a woman and a child hostage. At some point, police got involved and actually shot this man. We know that one man has been shot by a police officer. That has been confirmed.

What has not been confirmed is exactly what happened. Did somebody get a knife through security and take somebody hostage at a -- at a store? That's where we're hearing this occurred. Police are about to give us a news conference in the next few minutes. At this point, it doesn't look like travel has really been disrupted to any degree. There is a portion that has been cordoned off here at the airport. But I'm looking at passengers going through security right now. And planes are taking off on time. But this does -- at least -- at least a few minutes ago, this may have been a pretty tense situation, as we're hearing that a police officer actually fired on a suspect, and that suspect was shot and is down -- Paula.

ZAHN: Well, we know there are a lot of details to nail down here, Dan. As soon as you get them, we will come back to you live.

Once again, our own Dan Simon at McCarran Airport in Las Vegas, where it has been confirmed that two officers have shot someone who apparently was involved in some kind of incident beyond a checkpoint at the airport. Initial reports suggested that he might have been carrying a knife -- that is something we certainly haven't been able to confirm -- also, a report that he had taken, perhaps, a woman and child hostage -- all of this very much in the very beginning stages of reporting.

And we will try to confirm all this information for you throughout this hour.

We are going to take a short break. We will be right back.


ZAHN: Now we move on to a very chilling story. He was an abusive priest who preyed on children in California for two decades. His story, as told in his own words, is a subject of a documentary making its debut this week at the Los Angeles Film Festival. The movie is a disturbing view of abuse through the eyes of the abuser himself, former priest Oliver O'Grady.

Here is investigative correspondent Drew Griffin with tonight's "Eye Opener."


DREW GRIFFIN, CNN INVESTIGATIVE REPORTER (voice-over): The film is not just a horrific story, but also the confession of former priest Oliver O'Grady.

OLIVER O'GRADY, FORMER PRIEST: I want to promise myself that this is going to be the most honest confession of my life and in doing that, I need to make the long journey backwards to understand what I did, to acknowledge that, in some way to make reparation for it.

GRIFFIN: In "Deliver Us From Evil," filmmaker and former CNN freelance producer Amy Berg travels to Ireland and is granted unlimited access to this convicted child molester, who for nearly two decades was shuttled from parish to parish in northern California's Catholic Church. And during those two decades, O'Grady claims in this film the church knew about the abuse and did little to stop it.

O'GRADY: Basically what I want to say to them is, you know, it should not have happened. It should not have happened.

GRIFFIN: The story tracks the lives then and now ...

UNIDENTIFIED FEMALE: I need to acknowledge to you face to face that I have molested you sexually for many ...

GRIFFIN: ...of O'Grady's child victims, their formerly trusting parents, and the church hierarchy.

UNIDENTIFIED FEMALE: I was so excited to meet somebody from home.

GRIFFIN: Maria and Bob Jyono welcomed Father O'Grady into their home when the priest was new to California. Their daughter Ann (ph) was only 5.

O'GRADY: Ann Jyono -- little Ann was one of the first people I met there.

GRIFFIN: Throughout the film, O'Grady deflects blame from himself, instead points blames at others for allowing him to abuse. He blames the church for not stopping him. He even blames the parents like the Jyonos, for allowing him so close to their daughter.

O'GRADY: I was often invited to sleep over there, perhaps that's where some of the problems began in that -- in Ann's situation.

GRIFFIN: The Jyonos would learn, only years later, after their beloved priest was arrested, that their daughter Ann may have been his first victim.

BOB JYONO, FATHER OF ABUSE VICTIM: Had the Bible in his hand and saying his morning prayers, good morning, all.

MARIA JYONO, MOTHER OF ABUSE VICTIM: In there in the nighttime, molesting Ann.

B. JYONO: And during the night he's molesting my daughter. Raping her, not molesting, raping her! At 5 years old! God's sakes! How can that happen? But that's what he did.

GRIFFIN: Records have now shown church officials knew about alleged molestation by Oliver O'Grady as far back as 1976. At one point, when O'Grady was being investigated for abuse in 1984, church officials did not tell police about prior abuse allegations.

In this deposition, then Monsignor James Cane (ph), one of O'Grady's superiors, explained he did not see how a 1976 allegation and a 1984 allegation were connected.

UNIDENTIFIED FEMALE: I knew the one in '76 took place but didn't put the two together. One was a girl, it was inappropriate touching. The other was a boy. I just didn't hook them up on my own mind.

GRIFFIN: In 1984, the bishop of Stockton was Roger Mahony, who would later become the cardinal of Los Angeles. It was during this time O'Grady was moved for a second time to a remote parish in San Andreas, California, where the abuse of children allegedly continued.

O'GRADY: I visited with the bishop. And we had a conference and I had mentioned that perhaps I should need some counseling to get an understanding of this. And the bishop kind of at that time said, OK, go ahead and do that.

GRIFFIN: In February of 2004, Cardinal Roger Mahony issued a report to his faithful on more than seven decades of clergy abuse in Los Angeles. Mahony said he did not fully understand the nature of pedophilia. He did not believe offenders, once confronted, would offend again. He admits that was a mistake.

O'GRADY: I should been removed and attended to.

AMY BERG, DOCUMENTARY FILMMAKER: This is the first time we have ever heard it straight from the mouth of a pedophile. And I think that's what is different this time. And I think that it just shows how deep the level of corruption was and how sick it is to get inside the mind of a pedophile.

GRIFFIN: Some of the most chilling scenes show O'Grady as he freely walks the streets of Dublin, Ireland. At one point the former priest views an art display near little children. Here he peers over the fence of a children's playground. O'Grady says he has even contemplated how the church could detect abusive priests like himself. Listen as he pretends to do his own interrogation.

O'GRADY: And as I said, do you feel aroused when you see women? I would say no. Do you see aroused to see men? No. Do you feel aroused to see children? I say, well, maybe. How about children who are in swimsuits. I said yes. How about children in underwear? I say, yes, you know. How about if you saw children naked, and I said, yes.

GRIFFIN: The film's debut comes at a critical time during current criminal investigations into sexual abuse by two Southern California priests, and the alleged cover-up within the highest ranks of the Archdiocese of Los Angeles. Criminal prosecutors are also trying to determine if Mahony or other church officials tried to hide knowledge about abusive priests.

But the prosecutors say they have been stymied by the cardinal's refusal to hand over what he told CNN in this 2004 interview was a privileged and private correspondence between accused priests and their bishop.

CARDINAL ROGER MAHONY, LOS ANGELES DIOCESE: But there are a lot of privileged communications in the state of California, one of them is reporters, and news media of sources. That's the very highly protected protection that you have.

There are between husband and wife testifying against each other, there are a whole list of them. Those are protected communications. And so a priest talking to his bishop is a protected communication.

GRIFFIN: For three-and-a-half years, the archdiocese has tried to argue those private papers are privileged, eventually taking the case to the U.S. Supreme Court where the archdiocese lost earlier this year. Now those documents are in the hands of prosecutor Bill Hodgman.

BILL HODGMAN, ASST. DISTRICT ATTORNEY: In essence, these documents are from the personnel files and the secret files of certain target priests.

GRIFFIN: Prosecutor Hodgman is now reviewing the personnel files of two of priests under investigation. He says his job all along has been to seek the truth about priest abuse, and whether there was a cover-up by the Archdiocese of Los Angeles.

HODGMAN: I think the community here, the parishioners, and the public, all deserve to know the truth about who knew what and when and what they did or didn't do about it.

GRIFFIN: We asked the Archdiocese of Los Angeles to respond to the documentary's allegations. After screening the film, archdiocese spokesman Tod Tamberg provided this written response. He writes, "This film is primarily based on anti-church assertions by plaintiffs' attorneys who stand to gain financially and on the self-serving comments of former priest O'Grady, a sick, twisted monster and, like most molesters, a master manipulator." He manipulated his victims. He manipulated his superiors in the church. He manipulated his counselors, and now," Tamberg writes, "with his sly, feline grins and winks, he has manipulated the filmmakers."

In 1993, 17 years after he first admitted abusing children, Oliver O'Grady was arrested and sentenced to prison for abusing two young boys. He tells filmmaker Berg he abused many more children than that, both boys and girls but can't remember how many. O'Grady served seven years, was deported to Ireland, where he now walks the streets a free man.

He says he thinks about his victims, and says someday he hopes they will forgive him.

O'GRADY: I don't people to hug me when I leave. I don't expect people -- I hope they might shake hands with me.

GRIFFIN: Drew Griffin, CNN, Los Angeles.


ZAHN: So in case you're wondering why Oliver O'Grady is now a free man in Ireland, it's because he's never been convicted of breaking the law there.

Another note, the Los Angeles archdiocese also describes the film as an obvious anti-church hit piece. The archdiocese went on to assert that the movie was produced with the assistance of Drew Griffin, who just reported that story. The film does contain material purchased from CNN archives. But neither the reporter, nor any other CNN staffer provided assistance with the production. Still ahead, the U.S. surgeon general startling new warning about what you're probably breathing every day when it comes to secondhand smoke.

But first, let's take a quick biz break.


ZAHN: The U.S. surgeon general had a very stern warning for all of us today. Are you breathing someone else's smoke? You might be shocked how little it takes to pose a real danger.

No. 6 now on our countdown. An emotional day at Andrea Yates' murder trial in Houston. She even broke down and sobbed at one point when some of the evidence was being shown. We will have much more on what happened in court today in just a few minutes with our own little round table.

No. 5, "The View" is looking for another co-host. Star Jones Reynolds today announced she's leaving the show next month. Kind of knew that for awhile, didn't we? Reynolds is one of the show's original co-hosts. Numbers four and three when we come back.


ZAHN: Welcome back, here's what's happening at this moment. We have two breaking news stories going on right now in the Middle East tonight. Israeli troops have launched a military campaign across the border and into Gaza. Tanks and troops are taking part in the mission to bring back a young Israeli corporal kidnapped on Sunday by Palestinian militants.

Also tonight, a shooting at the Las Vegas Airport. Our own Dan Simon happened to be there, says it is being reported that a man with a knife was shot by a police officer inside a store in a secure area of the airport and that the man may have been trying to take a hostage at the time.

Now onto our nightly look at gas prices all over the country, our "Crude Awakenings." The state's with today's highest prices are in red, the lowest are in green. The average today for unleaded regular, $2.87 per gallon. And our graph shows the trend in gasoline prices. A little spike just in time for the holiday, what do you know?

There was incredible drama in a Texas courtroom today. Andrea Yates sobbed and shook as prosecutors in her murder trial played a videotape of the crime scene. It was from June 20th, 2001, Yates had summoned police to her home near Houston, her clothes still wet, she told an officer "I just killed my children."

She had drowned them in a bathtub, four boys, and a baby girl, ages seven years through six months. Yates said she did it because she was possessed by Satan and hadn't been a good mother.

Now a jury rejected her insanity defense and convicted her of murder in 2002. She was sentenced to life in prison. Well, now they're doing that all over again because her conviction was thrown out on a technicality. T.V. cameras will not be allowed until closing arguments.

And the trial is the focus of tonight's "Outside the Law" segment. I am joined by former prosecutor Wendy Murphy and former defense attorney Jami Floyd of Court TV. Glad to have both of you with us tonight.

So the prosecution sort of did this differently than they did in the past, where they front loaded this with all of this emotional evidence. You just heard about the graphic videotape showing this horrible scene with the bathtub filled with her oldest son, the other children laid out on the bed.

The jury heard the 911 call. They also saw the pajamas that each one of these children wore on the last day of their lives, the day they were murdered. So Wendy, you gotta believe this is going to pack the same emotional impact it did with the first jury. How is it going to play?

WENDY MURPHY, FORMER PROSECUTOR: Yes, I mean the prosecution has really gone out full guns and they believe that she was not insane and they're out to prove it. I'll tell you, there's nothing more powerful than that kind of evidence and under the doctrine of primacy and recency, you know the jury's going to remember that which it hears first in the trial and that which it hears at the very end.

I mean, the only good thing is Andrea Yates was crying. She was emotional at sort of appropriate moments. And the jury's also going to hear that that's not how she reacted when the police arrived, that she was stoic and empty in terms of emotion. That could end up working to her theatrical advantage. But at the end of the day, it's going to be very difficult for the jury to forget that this case is ultimately about the brutal murder of five defenseless very little kids.

ZAHN: So in the end, Jami, is that what the defense has got to do? Just embrace these bad facts, right at the beginning here?

JAMI FLOYD, FORMER DEFENSE ATTORNEY: That's exactly right. I agree with Wendy on that primacy and recency theory of trying a case and it works for both sides. I think what Parnham has to do, that's the lead defense attorney, he has to take on those horrible facts directly. He can't try and distance himself. Not that he tried terribly to distance himself the first time, but he's got to do more.

He's got to embrace them. He's got to say, "Yes, these are the horrible facts. These are the pajamas, this is the bathtub, this was the scene and that demonstrates, ladies and gentlemen, that this woman was insane." What you have seen at the beginning of this case and he should say at the end is the ultimate act of insanity. So I think there is no choice but for the defense to embrace the horrific facts that the jury has before it.

ZAHN: And of course the challenge for the jury, Wendy, is making that determination whether she knew right from wrong and how seriously they take any pre-existing mental illness and how that might have even been made worse by post-partum -- they're not calling it depression, they are calling it...

FLOYD: Psychotic disorder.

ZAHN: ... psychosis.

MURPHY: Yes, I mean Paula, I don't think there's any question that the jury is going to believe she was seriously mentally ill. That's not necessarily enough to prove insanity. And one of the funny things about the defense position is that they're really saying, although it is true that we have to prove that she couldn't figure out right from wrong, because that's the legal definition of insanity, we want you to think that the best evidence of that is the fact that when the police got there, she said, I killed my kids. I mean, she called 911. She didn't call her therapist, she didn't call a spaceship. She called the police. She said, I did this wrong thing.

And the bottom line is, the defense is going to have to argue that the evidence that objectively proves she did know right from wrong, right at the moment she did it, somehow proves that she didn't. And it's a rather absurd position for the defense to take.

ZAHN: Jami, you get the last word, 10 seconds.

FLOYD: I think the defense is going to pull it out this time, Paula. It's a different jury pool. This jury pool understands the insanity defense in the way the first one did not.

ZAHN: All right you two, we've got to leave it there, and we will be visiting you throughout the duration of this case. Jami Floyd, Wendy Murphy.

Right now, though, we have to quickly break away to some breaking news out of Las Vegas. Dan Simon, one of our reporters, is standing by. He happened to be at the airport when the story came down, a shooting inside a secure area of the Las Vegas airport. Dan, what have you got?

DAN SIMON, CNN CORRESPONDENT: Well, Paula, details at this point are somewhat sketchy, but we just had some preliminary information from police. They tell us that at about 4:30 local time, a little more than an hour ago, a man who is described to be about 25 years of age, took a 4-year-old boy hostage. This happened in an unsecured area. He then wandered into a secure area, into sort of that exit way where air traffic leaves and the terminal. Police officers who were on routine patrol spotted what was happening. They then (inaudible) this man, as he had a knife to the child's neck. At that point, the man released the boy, and then, according to police, the man showed aggressive behavior with that knife toward the officers. The officers, two of them, each fired a round, so two shots were fired. The suspect went down.

We don't know his condition. He was taken to a local hospital, and again, we don't know his condition. We also don't know the relationship, if there is any relationship between that 4-year-old boy and the suspect, Paula.

ZAHN: Yes.

SIMON: Still trying to gather some details.

ZAHN: Critical thing to bring up.

Dan Simon, thanks so much. We'll come back to you when you have got new information for us. Thanks so much for the update.

And just ahead, we've got some very important health news for you, a brand new warning about the dangers of secondhand smoke.


ZAHN: In tonight's "Vital Signs," a brand new warning about just how dangerous it is just being around other people who smoke. For the first time, the U.S. surgeon general says the evidence that secondhand smoke kills is indisputable, and he calls for restricting smoking in public places and at work.

Medical correspondent Elizabeth Cohen has tonight's "Vital Signs."


ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT (voice-over): Susan Richardson has inoperable lung cancer, but she never smoked. So how did she get it? She thinks she might know. Her dad smoked while she was growing up.

SUSAN RICHARDSON, LUNG CANCER PATIENT: I just remember taking family trips in the car, and my brother and I saying please, roll down the window, or my dad coming to help me with my homework and kind of having that smoker smell.

COHEN: And now a new report from the surgeon general says you don't even have to be exposed to smoke day after day like Susan was to get sick. It says that being in a smoky place for just a few minutes increases your chances of getting not just lung cancer, but a long list of illnesses, from asthma to heart disease.

DR. RICHARD CARMONA, U.S. SURGEON GENERAL: Science has proven that there is no, I repeat no, risk-free level of exposure to secondhand smoke.

Let me say that again. There is no safe level exposure to secondhand smoke. Breathing secondhand smoke for even a short time can damage cells and set the cancer process in motion.

COHEN: And if you think you're OK in an area like this, the surgeon general says you're wrong. The new report says the concentrations of nicotine in nonsmoking sections of restaurants persists at high levels.

And it is not just in public places. Unbelievably, nearly one out of four children has been exposed to secondhand smoke in their own homes.

Anti-smoking advocates are hoping this new report makes a difference.

MATTHEW MYERS, CAMPAIGN FOR TOBACCO-FREE KIDS: This report leads to only one conclusion, and that is it is literally legislative malpractice not to enact comprehensive smoke-free laws quickly.

COHEN: He and others want the rest of the country to be like California, where there is no smoking in any public places. Arkansas has gone even further. Starting next month, it will be illegal for parents to smoke with children under age 6 in the car.

Of course, back in the '60s and '70s, when Susan Richardson was growing up, the dangers of secondhand smoke were not yet known. Now, public health authorities say there is no excuse, no reason for anyone to expose themselves or their children to secondhand smoke.

Elizabeth Cohen, CNN, Atlanta.


ZAHN: Now, number four on our countdown. Author J.K. Rowling hints Harry Potter may not survive the last installment of the series. Say it ain't so.

Number three, a search under way for a maintenance worker who is missing after an explosion this morning at a motel in Breaman (ph), Georgia.


ZAHN: We're back with number two in our countdown. A mystery solved in Tucson, Arizona. Police say an empty U.S. Army casket that was discovered in the desert had simply been thrown away.

Number one, Rush Limbaugh under investigation after getting caught at a Florida airport with a bottle of Viagra. His lawyer says Limbaugh had a prescription, but the name wasn't on the bottle for privacy reasons.

And that wraps it up for all of us here tonight. Thanks so much for being with us. We will be back same time, same place tomorrow night. Hope you'll join us then. Until then, have a great night. "LARRY KING LIVE" starts in just about three and a half seconds. Good night.


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