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ANDERSON COOPER 360 DEGREES

Blame Game Erupts in Washington Over North Korean Nuclear Program; Interview With New Mexico Governor Bill Richardson; Explosions Rock Baghdad

Aired October 10, 2006 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Good evening again, everyone.
New fears tonight of a second North Korean nuclear test, and new threats from Kim Jong Il. The atomic shockwaves just keep on coming.

(BEGIN VIDEOTAPE)

ANNOUNCER: First, the explosion; now, a warning: Mess with us, and we will launch a nuclear missile. Is Kim Jong Il completely losing it? Can the United States stop it?

Baghdad explodes -- a gigantic blast, a city already torn by dozens and dozens of murders, more in one day than a month in New York.

More Foley fallout.

STEPHEN JONES, ATTORNEY FOR JORDAN EDMUND: Jordan answered all of their questions, relying upon his memory, as it exists.

ANNOUNCER: The young page tells his story.

New allegations of a cover-up, and fresh evidence that instant messages could do lasting damages to Republicans this fall.

And they think they're striking it lotto lucky. Instead, they're getting conned out of millions. What's going on? Would you believe, blame Canada? But we're "Keeping Them Honest."

(END VIDEOTAPE)

ANNOUNCER: Across the country and around the world, this is ANDERSON COOPER 360.

Reporting tonight from the CNN studios in New York, here's Anderson Cooper.

COOPER: And good evening, again.

We begin with nuclear jitters. The ground shook again in Northeast Asia. It turns out it was an earthquake, not a nuclear test. But, earlier tonight, it triggered a wave of speculation that North Korea was at it again. You got to hand it to the North Koreans. After their test over the weekend, they may or may not have a fully working nuclear weapon, but they sure have the swagger. Tonight, all the angles on Pyongyang's new threat to launch a nuclear missile. Against whom, the government spokesman didn't say, but it certainly raises the stakes.

The latest as well tonight on how the world is handling it -- growing evidence that even the Chinese may now be willing to get tough, or at least get tougher on their ally -- more, too, on the blame game in Washington. And there's plenty of blame -- Republican John McCain pointing a finger back at President Bill Clinton today for the mess.

We start, however, at one of the strangest and scariest places on the planet, with or without nuclear weapons.

Here's CNN's Dan Rivers on the border between North and South Korea.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT (voice-over): Measuring underground blasts from hundreds of miles away is not easy, but more than a day after North Korea's test, there is still confusion as to what really happened, whether the blast could have been a nuclear device that didn't perform up to expectations.

Now the question, will there be a second test?

CHON JAE HONG, NORTH KOREAN AMBASSADOR TO AUSTRALIA: It would depend on national interest and security of our nation.

RIVERS: And why did they test in the first place?

CHON: We are under extreme threat of United States, of the nuclear war.

RIVERS: Kim Jong Il's regime is notoriously secretive, but this is what unnamed North Korean officials have told the South Korean news agency Yonhap: "We hope the situation will be resolved before an unfortunate incident of us firing a nuclear missile comes."

Meanwhile, a South Korean newspaper, "Hankyoreh," quotes an official saying the test was "an expression of our intention to face the United States across the negotiating table."

In the past, this is where crucial talks between the north and south have taken place, Panmunjom, right in the heart of the demilitarized zone that divides North and South Korea.

I took a tour of this sensitive border area, now the focus of a global crisis.

(on camera): You get a real feeling of the proximity of the North Koreans right here. It's just over there. You can see where those mountains are. That is North Korea. That's how close these two opposing armies are. And this is what they have been like for the last 50 years, facing each other off through the razor wire. (voice-over): You can just make out North Korean villages on the other side, cut off from the outside world.

Only a handful of roads cross the border. This river crossing heading north has been named Unification Bridge.

(on camera): Obviously, the -- the army not particularly happy about us filming here. And it has raised tensions, and very sensitive here.

So, we will have to -- to get out the way. But you can see, this is as far as most people are allowed to go.

(voice-over): Next stop, a section of fence that has become the focal point for a nation.

People in South Korea are angry and anxious about the tests. Their country is reconsidering its so-called sunshine policy of engagement with its northern neighbor, with China signaling it may back sanctions. As this crisis deepens, the barrier that divides the two Koreas seems greater than ever.

(END VIDEOTAPE)

COOPER: Well, Dan Rivers is back from the demilitarized zone. He's now in Seoul, South Korea.

You know, Dan, this earthquake certainly a sign of the nervousness that exists in the area. People thought it was a second nuclear test -- a lot of expectations about a second test by North Korea.

How would we know if -- if a second test is indeed conducted?

RIVERS: Well, I think we would know within minutes.

There is a very sophisticated network of monitoring around the world that would pick up any sort of nuclear test. This morning, we have been talking to the South Korean Geological Association. They say they can pick up any blast in North Korea that's more than five tons. And that's tiny. So, any nuclear blast in North Korea, they would pick it but.

As well as that, there is the Comprehensive Nuclear Test Ban Treaty Organization, which has more than 300 monitoring stations around the world. They include seismological stations, stations that can pick up radiation, stations that are listening under the sea for acoustic sounds under the sea, and stations that can pick up infrasound, low waves through the sound in the atmosphere -- so, plenty of ways that they could see if -- if there was another test -- Anderson.

COOPER: Let's -- let's hope so.

Dan, appreciate it. Thanks very much, Dan Rivers, from Seoul.

Back in Washington, strong reaction to North Korea's threat to fire off a nuclear missile.

Here's Secretary of State Rice in "THE SITUATION ROOM" today with Wolf Blitzer.

(BEGIN VIDEO CLIP, "THE SITUATION ROOM")

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: Well, I -- I think the North Koreans know that firing a nuclear missile, shall we say, would not be good for North Korean security.

WOLF BLITZER, CNN ANCHOR: They have heard that. For years, they have been hearing that.

(CROSSTALK)

BLITZER: And they're still moving forward.

RICE: Well, the North Koreans are not confused about what it would mean to launch a nuclear attack against the United States, one of our allies or somebody in the neighborhood. They're not confused about that.

BLITZER: Did they conduct a nuclear test?

RICE: Well, we're still trying to evaluate what really happened here. And I think it will take a little while to evaluate it. But we have to take the claim seriously, because it's a political claim.

BLITZER: If you're Kim Jong Il or Mahmoud Ahmadinejad, for that matter, the leader of Iran, the only real guarantee you have that the United States or other countries are not going to overthrow you or invade you or do to them what the U.S. and its coalition partners did to Saddam Hussein is a nuclear weapon.

RICE: Oh, Wolf, I think we shouldn't even allow them such an excuse.

BLITZER: That's what they believe.

RICE: Well, let's be very clear. Iraq was sui generis. Iraq had been under 12 years of sanctions for its weapons program.

It was at the conclusion of a war that Iraq had launched against its neighbors. That was a very special situation.

The president has said -- and, in fact, the joint statement which we signed with the other parties, the six parties, on September 19 of last year, tells the North Koreans that there is no intention to invade or attack them.

So, they have that guarantee.

BLITZER: They don't believe it, though.

RICE: Well, I don't know what more they want. The United States of America doesn't have any intention to attack North Korea or -- or to invade North Korea.

BLITZER: So, the military option is not really practical?

RICE: The president never takes any of his options off the table. But the United States, somehow, in a provocative way, trying to invade North Korea? It's just not the case.

(END VIDEO CLIP)

COOPER: Well, that's not all she said. Secretary Rice took a poke at the Clinton administration, as well. And, today, she was not the only one doing that.

More on the blame game from CNN's Suzanne Malveaux.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): For decades, the United States has tried to dissuade North Korea from becoming a nuclear state, using threats, sanctions and sweet talk. But North Korea's apparent nuclear test Sunday proved the U.S. has failed.

Secretary of State Condoleezza Rice, with CNN's Wolf Blitzer, says, don't blame us.

(BEGIN VIDEO CLIP, "THE SITUATION ROOM")

CONDOLEEZZA RICE, SECRETARY OF STATE: North Korea has been persistent and had been consistent in pursuing that nuclear weapons program for decades. Now, it's going to have to be stopped. No one has been able to reverse this program over decades.

(END VIDEO CLIP)

MALVEAUX: In fact, the White House spin now is:

TONY SNOW, WHITE HOUSE PRESS SECRETARY: The accountability lies in North Korea, not in Washington.

MALVEAUX: The fight over how North Korea morphed into a potential nuclear state has erupted along partisan lines. Republican Senator John McCain blasted the Clinton administration for offering North Korea incentives to abandon its nuclear ambitions, which ultimately failed.

SEN. JOHN MCCAIN (R), ARIZONA: We had a carrots-and-no-sticks policy that only encouraged bad behavior. When one carrot didn't work, we offered another. Now we are facing the consequences of the failed Clinton administration policies.

MALVEAUX: Clinton's former assistant defense secretary fired back.

ASHTON CARTER, FORMER ASSISTANT DEFENSE SECRETARY: The fact of the matter is that, through the 1990s, North Korea didn't make any nuclear weapons.

MALVEAUX: The current U.S. negotiator says the North Korea problem is an old one.

CHRISTOPHER HILL, ASSISTANT SECRETARY OF STATE: This just didn't happen last year or to the -- during the Clinton administration. This happened way back in the 1970s, when they first put that ramshackle nuclear reactor together.

MALVEAUX: Which is why some nuclear weapons experts say the failure to prevent North Korea from pursuing a nuclear bomb can be attributed to all the recent administrations.

JOHN WOLFSTHAL, FELLOW, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: I would argue that either consistent confrontation or consistent diplomacy could have succeeded, but that the oscillation between engagement, between carrots and sticks, I think, has ultimately led to -- or contributed to the failure of American policy.

MALVEAUX: At the heart of American policy, American credibility -- analysts say, because the U.S. continues to move the red line, North Korea no longer takes its threats seriously.

WOLFSTHAL: Time and again, the Bush administration has said that a nuclear North Korea is unacceptable. And yet time and time again, when North Korea demonstrates that capability, we show that in fact it is acceptable. We are living with it today.

MALVEAUX (on camera): For now, the Bush administration is defining success as simply being able to rally North Korea's neighbors to possibly impose tougher sanctions against the regime.

Suzanne Malveaux, CNN, the White House.

(END VIDEOTAPE)

COOPER: Among those neighbors, China probably has the most clout, as well as the most at stake, if North Korea goes under. It's why China has traditionally opposed U.N. sanctions.

Today, however, Beijing signaled a change -- China's U.N. ambassador saying his government now supports some kind of punitive action against Pyongyang. Exactly what kind, we don't know.

Joining us now to talk about the diplomatic maneuvering, as well as all the finger-pointing going on, is Bill Richardson, governor of New Mexico and U.N. ambassador during the Clinton administration.

Governor Richardson, thanks for being with us.

Well, what about it? Senator John McCain says, basically, you guys in the Clinton administration threw a bunch of carrots at these guys, a whole bushel of carrots, and they pulled the wool over your eyes.

GOV. BILL RICHARDSON (D), NEW MEXICO: Well, that is so absurd. But we shouldn't concentrate on the blame game. The reality is, is, had we not had the agreed framework with North Korea on nuclear weapons, they would maybe have 50 nuclear weapons today. For eight years they didn't enrich uranium.

But, you know, this finger-pointing is just absurd. Let's focus on a major crisis which is occurring in the Korean Peninsula. They're detonating nuclear weapons. They're shooting missiles. And there's no diplomacy. You cannot have a successful effort without a carrot- and-stick policy.

Now, there is a framework a year-and-a-half ago that was negotiated by the six-party countries. In exchange for North Korea not building their nuclear weapons, and dismantling their nuclear weapons, North Korea will not be attacked by the six-party countries and the United States. That's a simple deal that has been on the table.

Let's get there. And you get there by, I believe, direct talks, face-to-face negotiation, the United States and North Korea, and the six-party talks applying pressure, and the United Nations having significant sanctions, military technology, perhaps a naval blockade, so they don't continue having more nuclear weapons development, financial transactions.

COOPER: A couple things, though.

RICHARDSON: That's what I would do. I mean, this...

(CROSSTALK)

COOPER: Republicans, though, are saying, look, this isn't ancient history. This isn't just a blame game, that -- that it matters what happened in the Clinton administration, because they say, you know, a lot of Democrats are calling now for direct talks, as you just have.

And, yet, they say those direct kind of communications that occurred under the Clinton administration were -- were part of the problem, that it angered our -- our -- you know, it angered China. It angered Japan. We sort of circumvented that process and rewarded North Korea for bad behavior.

RICHARDSON: Well, that is so absurd, because, today, China and South Korea is saying to the United States: Hey, talk to them directly. Do it within the six-party talks. Do it outside of the six-party talks.

You know, this finger-pointing is -- is why voters are so upset about what's happening in the Congress and Washington. Let's fix the problem. The problem is a nuclear...

COOPER: Does direct -- does direct -- does direct talks, however, reward them for the behavior that they have had? That's what some Republicans are saying now. You know, you -- yes, you can talk to them directly in a little side meeting as part of these, you know, group talks, but to have one-on-one, bilateral talks is essentially just rewarding them for -- for -- for the games they have been playing thus far.

RICHARDSON: Well, look what's happening right now. North Korea is detonating nuclear weapons. They're having nuclear missiles fired. They're not in the six-party talks. Japan is threatening to have increased military budgets.

That is not a good situation caused by the current policy of this administration. But having direct talks is not a concession. Having direct talks is -- you can deliver a very tough message by having direct talks.

Right now, with nobody talking to the North Koreans, they don't know who speaks for them -- don't know who speaks for the United States. Is it China? We have outsourced our foreign policy to China? Then, China doesn't want to do anything.

So, direct, tough talks at a good, strong level -- Assistant Secretary Chris Hill has negotiated with them. He's good. Set up a framework for returning to that deal that I outlined that the six- party countries came up with about a year-and-a-half ago. And at least you reduce tensions.

You're not going to resolve this problem. But, right now, what we have, Anderson, is American troops, 37,000, on the Korean Peninsula, missiles of the North Koreans pointed at South Korea. You have got a million-and-a-half troops. They're detonating nuclear weapons.

This situation is not doing very well. So, I would shift gears, instead of blaming.

COOPER: Governor Richardson, appreciate your perspective. Thank you.

RICHARDSON: Thank you.

COOPER: Since Sunday, North Korea has been bragging about its nuclear test, but does it really have anything to brag about? The explosion was weak, by all measures, coming up, why U.S. officials believe North Korea may have botched the test.

Also, in Baghdad, huge explosions at an ammunitions dump on a U.S. base today -- there, you see the explosions for yourselves. What was behind them? We will look at that.

And she was told she was a lottery winner. It turned out she lost a lot of money, the victim of an international scam costing thousands of Americans millions of dollars -- what you need to know to protect yourself, when 360 continues.

(COMMERCIAL BREAK)

COOPER: Well, the power of nuclear weapons is measured in kilotons. And, by that measurement, North Korea's alleged nuclear test over the weekend was, well, tiny. Here's the "Raw Data."

The explosion was apparently less than 1 kiloton. That's just a fraction of the power the bombs the United States dropped on Hiroshima and Nagasaki. They were between 10 and 20 kilotons.

Modern nuclear weapons are capable of producing blasts between 100 and 500 kilotons.

Small perhaps, but not if you're the one killed by it -- U.S. officials now believe that North Korea actually intended to produce a much bigger blast. Instead, they say, something went wrong.

With that, here's CNN's Jamie McIntyre.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): While the intelligence is not yet conclusive, the United States believes North Korea did in fact test a nuclear device in a northeast mountain tunnel Monday, and that something went wrong, resulting in a much smaller-than-expected blast, according to a government official with access to classified U.S. intelligence.

The official tells CNN that North Korea informed China before the test it intended to conduct a test in the 4-kiloton range. But, based on seismic monitoring, the U.S. puts the actual yield at only one-half a kiloton, or 500 tons. In fact, some evidence indicates it may have been as small as 200 tons. That strongly suggests at least a partial failure.

A North Korean diplomat is quoted in a South Korean paper as admitting the test was on a smaller scale than expected, but insisting it was still a success.

PETER ZIMMERMAN, KING'S COLLEGE, LONDON: You don't tell your people, by the way, the Dear Leader's nuclear experts goofed, and we really didn't get the yield we wanted. You tell everybody that, whatever you got, that's what you wanted to get.

MCINTYRE: The U.S. cautions, it has not yet confirmed it was a nuclear blast. Air samples collected by specially equipped U.S. Air Force plans flying out of Japan will help provide that answer, looking for telltale signs of any radioactivity.

But Pentagon sources say the U.S. military has only a limited role to play in responding to the North Korean test. There are, sources say, no plans for military action, because there are no good targets that could set back North Korea's nuclear program, without sparking all-out war on the Korean Peninsula, something that would risk an estimated one million casualties.

Stiff sanctions, like the ones now being discussed by the United Nations Security Council, appear to be the only real option.

ASHTON CARTER, FORMER CLINTON ASSISTANT DEFENSE SECRETARY: They really do need to be made to feel the consequences of this last action, if we are going to have any chance of turning this situation around.

MCINTYRE (on camera): Meanwhile, another U.S. official warns, North Korea could conduct a second test, even though there are no signs of any preparations at another test site. The official told CNN, "I wouldn't say we expect it, but it would not come as a total surprise."

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COOPER: Well, assuming the worst for a moment, that North Korea perfects a nuclear device, turns it into a weapon, and deploys it on missiles, where would it stand in the ranking of nuclear powers? We also wanted to look at what else there may be to worry about, beyond simple numbers.

So, we asked Tom Foreman to give us some perspective.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Take a look at North Korea's neighbor, South Korea, of course, Japan over here, but, also, some of the big nuclear powers in the world, Russia, up north, with about 20,000 nukes, China down here, with only about 400, but the capability of producing a whole lot more quickly.

Across Europe, you find the other big players in the nuclear stage, France, with about 350, the United Kingdom, with about 200 nuclear warheads, and the United States, with 10,000 nuclear warheads and an extraordinary capability, through the military, to deliver them to wherever the United States might want to put them.

Then, you come to the next layer of nuclear nations. Israel is one of those. Israel always refuses to either confirm or deny its nuclear capability, but intelligence analysts say they probably have 100 to 200 nuclear warheads there.

And the most recent arrivals, Pakistan over here, with about 30 to 50, or at least the capability of making that many, India, about the same, 40 to 90.

And now you come to the tier of the wannabe nations, the third tier. That includes places like Libya, Iraq, Iran, nations that have made noise, have tried to develop such weapons. In some cases, they have given it up. In other cases, they're still being watched very closely. That's where North Korea fits.

But here's the big difference. This is what worries people. North Korea is a very poor country of about 23 million people. And we do know this historically: North Korea sells its weapons systems. That's the big worry for the entire world, that you will have a supplier, a company that can make it, willing to sell to the highest bidder.

(END VIDEOTAPE) COOPER: That was CNN's Tom Foreman.

We're going to have more on North Korea in the next hour on 360, including Kim Jong Il, his military, and the chance his country can actually change from within, perhaps violently so.

We move to Iraq now, where explosions shook the night and lit up the sky. Coming up, we are going to take you to Baghdad for the latest on the inferno and the blast that capped off one of the bloodiest days on record. Hard to believe it is getting worse there.

Plus, the Foley fallout -- new evidence in the page scandal, and a fresh look at the political impact -- that and more when 360 continues.

(COMMERCIAL BREAK)

COOPER: "America's Most Wanted"'s John Walsh joins us to talk about Mark Foley.

And a fire, an explosion at an ammo dump on a U.S. base in Baghdad -- a live report next on 360.

(COMMERCIAL BREAK)

COOPER: It is terrible to say, but it seems every day is more violent than the previous one in Iraq these days. More than 100 bodies have been found dumped throughout Baghdad over the past two days alone, more than 100 bodies. More than a dozen were killed in bombings today alone.

Of course, it's not just Iraqis who are dying. So far this month, in just 10 days, 32 U.S. troops have been killed in Iraq. And, as if that weren't enough, today's violence was capped off by a massive explosion, several explosions, that rocked the night in Baghdad.

CNN's Arwa Damon is there. She joins us now.

Arwa, what happened?

ARWA DAMON, CNN CORRESPONDENT: Well, Anderson, it's actually quite simple, and it was incredibly frightening.

What happened is that a fire began at a U.S. military base in southern Baghdad. It's called FOB Falcon. The cause of what exactly started the fire, unknown, but what happened afterwards is that the fire spread. And, according to the U.S. military, an ammunition holding area caught fire, igniting tank rounds, artillery rounds, small-arms-fire ammunition.

And, Anderson, the explosions were enormous. Our location right here, this roof I'm standing on, is about four miles away from this base. And each explosion shook this building. And this continued for three hours. It caused panic throughout the capital. Within minutes after it started, we had people phoning us from literally almost every single neighborhood here, calling in, saying that they were coming under attack. These are Iraqi civilians who were sitting at home, and just feeling their windows shudder.

The -- the U.S. military right now says that it is investigating the cause of the fire. They say that their emergency teams responded immediately, and were able to keep the fire and the explosions contained to the base, that they evacuated all military and civilian personnel from that location.

But this is in a fairly crowded, populated area. You can only imagine what Iraqis living right near that base were going through, what their children were going through, a very difficult time here -- Anderson.

COOPER: Arwa, you know, 100 bodies in the last two days alone, Iraqis found in Baghdad. You hear those numbers, it -- it almost just -- you know, kind of your -- your eyes glaze over. It becomes almost statistics.

But, when you think about that, 100 bodies in two days, that is an extraordinary amount of civilians being killed. Who -- who are these people getting killed? Why are they getting killed? What -- what's going on?

DAMON: Well, Anderson, every single person you speak with really has a different story, but it all, more or less, starts the same, be it a Sunni or a Shia.

One day, for the most part, they will arrive home, and there will be a threat waiting for them on their doorstep, telling them to leave their location. If they do leave their location, they sometimes survive. If they don't, they are found dead.

If you will remember, we reported recently on the story of a 53- year-old woman who received a threat. And she was later down, gunned down in front of her house. And you hear these stories repeating themselves time and time and time again. Like you just said, over 100 bodies in two days, and that is just in Baghdad -- Anderson.

COOPER: Sectarian killings.

Arwa, appreciate it. Thank you.

Back home, the war in Iraq is taking a toll on Republicans. So is the fallout over the Foley scandal. And both could have a big impact on the elections. That story is coming up.

Also tonight: the lure of easy money. A victim of a scam tells her story. Her dream come true was actually a nightmare -- the Canadian lotto con job.

We're "Keeping Them Honest," ahead.

(COMMERCIAL BREAK) COOPER: The midterm elections are just 28 days away, of course, and while Mark Foley is far from Congress, his name is not. The scandal over Foley's relationship with male pages could cost the Republicans control of the House and Senate. Only time, of course, is going to tell if that actually happens.

Tonight, though, are new developments, however, and new accusations in a politically charged mess that simply will not go away.

CNN's Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CORRESPONDENT (voice-over): In Oklahoma City, Jordan Edmund, a former page who may have received sexually explicit instant messages from Mark Foley, told his story to the FBI.

STEPHEN JONES, EDMUNDS ATTORNEY: Jordan answered all of their questions relying upon his memory as it exists.

BASH: In Illinois, House Speaker Dennis Hastert told reporters he doesn't think his aides tried to hide Foley's inappropriate contact with pages but said if anyone did, they'll be fired.

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: They'll be under oath, and we'll find out. If they did cover something up, then they should not continue their -- to have their jobs.

BASH: Some GOP officials and lawmakers blame Hastert's staff for bungling the Foley matter, allegedly not informing the speaker about a questionable e-mail aides knew about at least a year ago.

HASTERT: You know, in 20/20 hindsight probably you could do everything a little bit better.

BASH: Meanwhile, another Republican lawmaker, Jim Kolbe, admitted he passed along but did not follow up on a complaint from a former page about Mark Foley five or six years ago.

Kolbe said the former page contacted his office about an e-mail from Foley that made him, quote, "uncomfortable."

The Arizona Republican statement said he was recommended informing the House clerk Jeff Trandahl and Foley's office. But Kolbe did not confront Foley himself.

"I assumed the e-mail contact ceased, since the former page never raised the issue again with my office," Kolbe said.

Kolbe was a page in 1958. He made a point of noting his affinity for the program and desire to make it a meaningful experience for the pages. "I visit with pages at the back of the chamber to explain politics and parliamentary procedures on the House floor," Kolbe said.

In another development, Jeff Trandahl, the former House clerk Kolbe informed years ago about a Foley e-mail, issued his first public statement, promising to cooperate with the FBI and House Ethics Committee investigations.

Trandahl is critical to the "who knew what when" of the Foley scandal. CNN is told he observed and heard about Foley's troubling behavior towards pages for years.

(on camera) Sources say Trandahl brought his concerns several times to former Foley chief of staff Kirk Fordham, the Republican who said he tried to get top GOP aides to intervene about Foley's behavior. Kirk Fordham is expected to testify before the House Ethics Committee this Thursday.

Dana Bash, CNN, Capitol Hill.

(END VIDEOTAPE)

COOPER: Well, the scandal has already led to two resignations, including Foley's, and there are calls for Dennis Hastert to step down. Facing the heat, as well, one of the most powerful Republicans in the House, Tom Reynolds. He's up for re-election. In his past, well, it's already coming back to haunt him.

CNN's Mary Snow investigates.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT: Call it the Foley factor.

TOM REYNOLDS (R), NEW YORK: Looking back, more should have been done, and for that I am sorry.

SNOW: A $200,000 ad of contrition by Congressman Tom Reynolds is being countered by his opponent, Democrat Jack Davis, who's charging a Republican cover-up.

UNIDENTIFIED FEMALE: Reynolds says he did nothing wrong, but when it comes to protecting kids, isn't it wrong to do nothing?

SNOW: And there could be more ads like that to come. Davis' camp says it set aside $400,000 for commercials in the campaign's final week. The tide was turned with Davis now taking a lead over Reynolds, a four-time Republican incumbent and the chair of the National Republican Congressional Committee.

Reynolds was thrust into the spotlight last week. He answered questions about his actions upon first learning last spring of an overly friendly e-mail change between Mark Foley and a former teenage page.

REYNOLDS: I did what most people would do in a workplace. I heard something. I took it to my supervisor.

SNOW: Since then a local poll shows a double-digit lead, but Reynolds, who was once ahead, is now trailing. Reporter Bob McCarthy has covered Reynolds for 25 years and says he's never been on the defense.

ROBERT MCCARTHY, "BUFFALO NEWS": Things have gotten very serious for him in the last 10 days, but I don't -- I also think there's no question that this was a very serious race even before the Foley affair.

SNOW: Davis is an independent businessman who's pledged from the outset to fund his own campaign against the longtime congressman who's come to be known as Mr. Clout.

For now, Reynolds is keeping a low profile, waiting for the dust to settle to return to issues like the economy, but even if Davis doesn't keep the Foley factor alive, observers predict somebody else will.

(END VIDEOTAPE)

COOPER: Well, there's the political and the personal. For John Walsh, this story is personal and passionate. The host of "America's Most Wanted" once counted Mark Foley as a friend and an ally in the fight against adults who prey on children. Not anymore.

(BEGIN VIDEO CLIP)

MARK FOLEY, HOST, "AMERICA'S MOST WANTED": I never dreamed it, Anderson, and I think lots of people on both sides of the aisle in the House and the Senate had a lot of respect for Mark Foley. I had worked with him for almost 10 years.

And when his staff called me and said, "These e-mails are going to come out," they were completely flabbergasted, heartbroken. And I thought maybe in the beginning, maybe it's a political trick. It's an election year.

And then when the salacious e-mails came out, I said, you know, "How could this guy be the chairman of the Missing and Exploited Child Conference Caucus in the House and live this double life?"

I mean, I always say, whether it's a priest, a rabbi, whether it's the pope or a congressman, you have to be held accountable for what you did.

(END VIDEO CLIP)

COOPER: I sat down with John Walsh earlier tonight. Tonight we're going to have the complete interview in the next hour on 360.

Coming up now, it's been an October full of surprises in Washington. Certainly, Democrats want to seize the moment, turning the Republicans' misfortune into their own gain. We're going to ask an expert if the balance of power will shift.

And later, staring each other down. Enemies face to face, always on guard, always ready for the next war. We'll take you along the Korea Demilitarized Zone when 360 continues.

(COMMERCIAL BREAK)

COOPER: It may be SO time for the GOP, at least that's what the Democrats are heaping for. The governing party, of course, finding itself losing support in the war on Iraq and the Foley scandal. The question is will today's problems lead to much bigger problems come next month.

Joining me for more is John Mercurio, the senior editor of "National Journal's Hot Line".

John, good to see you.

It's hard for me to tell this Foley scandal what impact it's actually going to have when people go to the polls come midterm elections.

JOHN MERCURIO, SENIOR EDITOR, "NATIONAL JOURNAL'S HOT LINE": Yes, I mean, it's really interesting. There are polls out this week that show that everyone is paying attention to the story, and everybody thinks that it's extremely important and reflects badly on the House Republican leadership.

It doesn't so much, though, change the actual head to head in terms of who planned to vote Democratic and who planned to vote Republican. Democrats lead by about 10 to 12 points on that question.

The important number, though, to look at is the intensity of the likely voters, and that is where Democrats are really happy, because that's where their voters are showing a lot of intensity.

Republicans, especially conservatives, Christian conservatives, white evangelical Christians, are showing a lot of disillusionment, I think, with the Republican leadership in the House right now.

COOPER: Disillusionment that won't make them vote Democratic but just means -- mean they'll stay at home?

MERCURIO: That's exactly right. I think -- unlikely you'll see a lot of these people vote for Democrats, but right, they're going to stay home. And this is a base of support coalition that the Bush/Cheney ticket in the House and Senate Republicans in 2004 relied heavily on to win to do so well that year.

COOPER: Clearly, conservative voters, the Republicans are concerned about losing them. Are there other voting blocs at risk because of the Foley scandal?

MERCURIO: Absolutely. I mean, I think you're talking about Christian conservatives. Sort of other group that I think they're worried about suburban mom. I mean, moms all over the country, I think, and fathers are concerned about this scandal.

But I think we're seeing a dramatic decrease in support for Republicans among women who have children who live in suburban districts. And those are the targeted districts that a lot of Republicans are struggling in: districts in Connecticut, districts in New York, Pennsylvania, that Republican incumbents are running scared in.

COOPER: You know, certainly this is music to Democrats' ears. I'm wondering, though, you know, three weeks from now, is anyone really going to be paying attention to Mark Foley? Is this just something that's in the news, you know, certainly the last seven days?

MERCURIO: Right.

COOPER: But things fade quickly. I remember, you know, gas prices were supposedly the things that were going to get everyone to the polls. Gas prices are down. No one is even talking about it.

MERCURIO: You know, I was thinking that a couple days ago that this whole Foley scandal was likely to fade, that we were going to be back to focusing on sort of larger, more substantive issues of the war in Iraq and the global war on terror.

Over the past couple of days, though, I really do think this scandal is hitting home. It's a visceral reaction we're seeing from a lot of voters. And you're going to see throughout the next couple of weeks a lot of sort of news developments.

Kirk Fordham, Mark Foley's former chief of staff, testifying before the ethics committee on Thursday. Those sorts of news developments are going to keep this scandal in the headline, and it's going to keep it on the minds of voters.

You know, I think, though, it's important to mention that I don't think that the scandal has a dramatic impact nationwide. We're talking about a handful of districts, though that it's giving Democrats a lot of hope in. Six to seven districts, I think, that Democrats are now favored in that they weren't before the scandal. But that could be enough, though, to take back the House for them.

COOPER: And I guess the fact that the scandal continues and the investigations continue, new information is still coming out in sort of drips and drabs and keeps the story alive.

MERCURIO: What it also tells us -- what it also tells us about politics is that anything can happen. Any story can surface on any given day.

COOPER: It sure can. John, appreciate it. John Mercurio, thanks.

Coming up, a Canadian lotto scam. We're "Keeping Them Honest" on that. Americans losing millions of dollars. A look at how to protect yourself. First Erica Hill of Headline News joins us with the "360 Bulletin" -- Erica.

ERICA HILL, HEADLINE NEWS ANCHOR: Anderson, last week on 360 while reporting from Africa you brought us the stories of pain and suffering caused by the violence in Darfur.

Well, today, Nigeria's president urged Sudan to accept the U.N.'s assistance in that troubled region. Nigeria's president says the U.N. should step in, because African Union troops are overwhelmed, and genocide is developing in Darfur. So far 200,000 people in Sudan have died in fighting, famine and disease.

In Southern California, customs officials say five people trying to sneak into the U.S. from Mexico got trapped in a narrow tunnel. Firefighters used jackhammers. And the largest of the group, a man weighing nearly 200 pounds, got stuck trying to climb out of a storm drain. The tunnel, which is only about two feet across, is part of the San Diego storm drainage system.

Louisiana's governor is proposing a $1 billion plan to ease the pain of insurance rate increases after hurricanes Katrina and Rita. Under the plan, homeowners would get refund checks to cover the 15 percent hike.

Now, the plan requires approval from the Louisiana legislature, also a change in the state constitution and, of course, there is some concern over the cost.

Speaking of money, a mixed estimate on the price of home heating bills for you this winter. The Energy Department says families use natural gas will pay an average of $119 less this year. That's compared to last winter, a decrease of about 13 percent. But when it comes to fuel oil, well, you're expected to see an increase there, up $91 or six percent, Anderson.

COOPER: Erica, thanks.

Check out "The Shot" today. Just when you think you've seen all the silly competitions the human mind can think of, check this out. That's right -- da, da, da, da -- the Seventh Annual North American Wife Carrying Championship.

In case you're wondering, John Farra is the winner of it, carried his wife, Tess, through a 278-yard course, which included a water trough and log hurdles in just one minute and six seconds.

Wow. Former Olympian says he trained for the big event by running up a ski slope with 80 pounds of mortar mix on his back. Interesting choice. All the hard work paid off. He took home the equivalent of his 110-pound wife's weight in beer, which we hear is, at 360, roughly calculates to be about six cases of beer, 146 12-ounce cans of beer, in case you're wondering. He also won $550 five times his weight in cash or $550. Congratulations.

Speaking of winning, how would you -- how would like this. You've been told you just won the lottery and you didn't even buy a ticket. Tell you about the international lottery scam where the winner actually loses. We're "Keeping Them Honest" next on 360.

(COMMERCIAL BREAK)

COOPER: A new scam to warn you about. No doubt you've at some point received a notice in the mail or on the phone telling you you've won money. More often than not, there's a catch. Well, a lottery scan now being run out of Canada has more than just a catch. Tonight we're "Keeping Them Honest. CNN's Randi Kaye investigates.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Come here, Bubba.

RANDI KAYE, CNN CORRESPONDENT (voice-over): Brandi Walstrom, pregnant with her third child, was delighted to open a letter from Canada a few weeks ago.

BRANDI WALSTROM, SCAM VICTIM: I couldn't believe it. There's a check in the mail for $4,000. Oh, my goodness. I'm like, we can go pay bills and stuff.

KAYE: And there was more to come.

WALSTROM: Wee!

KAYE: The letter said she had won $100,000 in a lottery. First, she had to call a phone number somewhere near Toronto. Walstrom was told to deposit her check.

WALSTROM: It looks almost like a paycheck.

KAYE: Then wire money to pay Canadian taxes. Never mind she didn't remember entering a lottery in Canada.

WALSTROM: But then again it was like three years ago, so I don't remember my left foot from three years ago, basically.

KAYE: The Colorado wife put the check in her bank account and wired $2,500 to Canada.

WALSTROM: No, no, no.

KAYE: The next day she learned the check was counterfeit.

WALSTROM: No.

I was freaking out. I was freaking out because I had gotten -- I was like what do you mean it bounced?

KAYE: It's a scam: Canadian con men tricking Americans into cashing bad checks for them and sending back the money, tens of millions of dollars every year.

We went looking for the address on the letter Brandi Walstrom got. It's somebody's house here behind this cemetery in North Toronto.

DET. GARY BRENNAN, TORONTO POLICE: So these people just pick an address out from anywhere.

KAYE: The phone number she called can't be traced. It's a prepaid cell phone. BRENNAN: Once you look back into who actually owns the phone, it's a ghost. It's a shadow; there's nothing there.

KAYE: What are the chances of ever finding who's behind the scam?

BRENNAN: Like nailing JELL-O to a wall. Every time you hit it, it moves.

KAYE: Brandi Walstrom is left only with her bank the lost money.

WALSTROM: I have to pinch pennies just to buy diapers for my son. Food, it all goes to them. My husband goes without lunch, because we have to pay this back.

KAYE (on camera): Have you beaten yourself up about it?

WALSTROM: Oh, yes, I feel really, really stupid, because I'm, like, ashamed to tell people what happened.

KAYE (voice-over): She's not alone.

LAUREEN FRANCE, FEDERAL TRADE COMMISSION: These are sweepstakes and lottery schemes.

KAYE: This box is full of mailings to just one person. Americans do report $30 million lost to these scams each year, but investigators say that's only a fraction of the real total lost.

FRANCE: It can easily be ten times that. Easily.

KAYE: That would be $300 million each of the last three years.

(on camera) So given that, is this a billion dollar business for these people?

BRENNAN: Close to it, yes.

KAYE: A billion dollars.

BRENNAN: Yes.

KAYE: Until now the con men have been using fake lottery names, but see this? The Ontario Lottery is real, and crooks are using its letterhead.

The checks are getting better. This is written on a real bank account with real signatures. Someone stole an original check and cloned it.

FRANCE: And it's easy these days if you've got, you know, a good computer and a scanner and know a little bit about how these things work, it's not hard to create a counterfeit check that will pass muster.

KAYE: The check Brandi Walstrom got had the address of an escrow firm here in Baltimore. The manager told us one old check was copied and used to scam people out of $700,000 in two months.

(on camera) Two things to help you tell when these letters are fake: in Canada there are no Canadian taxes to pay on lottery winnings or any other fees. And if you win big, you have to collect in person, here in Canada.

(voice-over) For Brandi Walstrom an expensive lesson.

WALSTROM: It's going to hurt forever until we get caught up.

KAYE: Randi Kaye, CNN, Toronto.

(END VIDEOTAPE)

COOPER: Well, a different kind of game coming up: the high stakes nuclear showdown with North Korea. What makes Kim Jong-Il tick? And can he be pushed or tempted, or both, to give up his nuclear ambitions? What happens if he can't? We'll look at that.

Later, a look at the real nuclear superpowers around the world but also why even a small nuclear power can cause big global problems, even a nuclear 9/11.

And on a much lighter note, fashion emergencies for world leaders who know how to create a crisis. What is the deal with this guy's wardrobe? And the other -- well, potentates around? We'll look at that coming up on 360. Stay with us.

(COMMERCIAL BREAK)

COOPER: With the ground still hot from its nuclear test, North Korea cranks up the pressure yet again.

(BEGIN VIDEOTAPE)

ANNOUNCER: The explosion, now the fallout. North Korea fires back with new threats they're now ready to fire a nuclear missile. Is it all just talk or a prelude to conflict?

Plus, the face-off along the DMZ, where you can see the hate in their eyes.

Fooled by Foley. He teamed up with him to get a new child safety law approved. Now he's outraged by the steamy e-mails and text messages. Tonight, John Walsh on the scandal.

WALSH: How could this guy be the chairman of the Missing and Exploited Child Caucus in the House and live this double life?

ANNOUNCER: And how you can protect your child online.

Across the country and around the world, this is ANDERSON COOPER 360. Reporting from the CNN studios in New York, here's Anderson Cooper.

(END VIDEOTAPE) 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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