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ANDERSON COOPER 360 DEGREES

Libya Inside the Uprising; Writer Says Gadhafi Sentenced Him to Die; U.S. Putting Pressure on Gadhafi; Galliano Fired over Anti- Semitic Remarks; Sitting on Success

Aired March 1, 2011 - 23:00   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, everyone.

We begin tonight with breaking news: a new report tonight that Libyan opposition leaders may ask for airstrikes under U.N. Security Council sanctions carried out by Western air forces. Today, the U.S. government went on record saying Gadhafi has to go.

Tonight, the question is, will these opposition forces actually ask for outside help to make that happen? It appears right now there is something of a stalemate on the ground, Tripoli still firmly under Gadhafi's control.

We'll talk to a man hiding in his home tonight who says he was stabbed by Libyan police. He described the streets as frighteningly quiet. The second largest city, Benghazi, is controlled by the opposition, as are two other cities.

The Libyan government continues to claim that there is no real uprising against Gadhafi. They continue to claim that a few dozen terrorists in each city are holding the populations of those cities hostage, and they continue to claim they have never fired on Libyan civilians. They say they have only killed armed protesters, foreigners who were attacking government forces.

Tonight, some new videos to show you that seem to show all those government claims are false. This first video was taken Sunday in Tripoli, reportedly near the market. It appears to show protesters armed only with rocks and sticks being shot.

(BEGIN VIDEO CLIP)

(CRACKDOWN OF PROTESTERS IN LIBYA)

(END VIDEO CLIP)

COOPER: To regroup and try to move forward -- take a look at that truck -- they start to use that truck as cover, moving forward towards the people who are shooting at them. Again, they seem to only have rocks and sticks, no guns that we can see.

Remember, the regime denies this is happening, denies that any Libyan civilians have been shot.

Another new piece of video -- again, we can't confirm where the video was taken, but it also appears to show protesters being fired upon. Now, some of the protesters have rocks and sticks, perhaps knives as well, but no guns that we can see. And then armed men drive by in a pickup shooting wildly.

Remember, several callers in the past week have described these pickup trucks filled with gunmen. The callers said they were mercenaries. This is the first time we have actually seen video purporting to show them.

As for Gadhafi's claim that al Qaeda has drugged the Libyan youth and are holding the citizens of Benghazi and Mizrata hostage, new video certainly seems to dispel that notion. Take a look, a very large anti-government rally in protester-controlled territory.

Do these look like hostages to you? Do they sound like hostages? Now, increasingly people are fleeing Libya on both Libya's eastern and western borders, a sea of people.

This is video from the west, from the border with Tunisia. Look at all those people. About 150,000 people are said to have fled the country, this from a country of just six million people. We are going to have a live report from that border.

And we'll talk with a man in Tripoli who says he was unarmed and stabbed by Libyan police.

First, though, the breaking news being reported in "The New York Times."

Joining me now: foreign affairs correspondent Jill Dougherty in Washington; Ben Wedeman in Benghazi; Nic Robertson in Tripoli; also in Washington, Professor Fouad Ajami of Johns Hopkins University School of Advanced International Studies and the Hoover Institution.

Jill, first of all, what are you hearing about this report, this possible request coming from a group calling themselves the Revolutionary Council?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You know, we have no confirmation of that, Anderson. It's obviously coming from the ground or at least people who are, you know, directly in touch with those groups.

But you'd have to say that here at the State Department and -- and in other places of the U.S. government, there is not a lot of appetite at all. There seems to be no plan for any -- certainly any ground action, any military action.

I mean, as far as they are going, they are moving the ships in. We already know that the Kearsarge, that amphibious assault ship, and also another ship going into the region. They continue, the military continues to say that it's for humanitarian purposes. But obviously it's sending a message that more could be sent in. And those could be used for any type of purpose.

Then you also have this issue of the no-fly zone. That is under consideration. But, again, here at the State Department and other places, they are saying it's problematical.

COOPER: Right.

DOUGHERTY: Very few people support it, you know. It's -- it's an issue. We've talked about that. But it's -- it's not easy to do that.

COOPER: Ben -- Ben, you're in Benghazi, where the opposition is in control of the city. It's the second largest city in Libya, this request coming from a group calling themselves the Revolutionary Council. The opposition, though, seems -- I mean how -- how organized is it really? Do -- do we really know who's in control? Because we're hearing from the U.S. government, from U.S. government sources saying they're not sure who to deal with. They're not really sure who's leading in Benghazi.

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, Anderson, you have to keep in mind that there is no one leader, in fact, no specific leadership here in Benghazi.

There are a group of people who meet in the courthouse, which is really the nerve center for the opposition here in Benghazi. But they have not come up with a solid single position, whether it's on the question of foreign intervention or the no-fly zone.

Just a few days ago, the city council of Benghazi met to discuss the question of foreign involvement, possible military invention -- intervention in Libya, and they voted almost unanimously against it. You do hear lots of individual Libyans voicing support for some sort of strike against Moammar Gadhafi.

In fact, one man today said he would like to see a cruise missile launched on his palace. But there is no position, there is no one single group that is speaking with one voice, making that kind of demand, perhaps individuals, but not as a -- not as a single voice -- Anderson.

COOPER: Nic Robertson in Tripoli right now, does it seem like there is a stalemate to you? Because it seems as if Gadhafi has sort of -- you know, organizing himself in Tripoli, holding onto Tripoli and then you obviously have the second largest city, Benghazi, in opposition- controlled hands.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Certainly, you get the sense that there's a standoff at the moment.

The towns just to the west and just to the east, Zawiya, the oil- refining town 40 minutes' drive to the west, and Mizrata, about 100 miles -- 100 miles away to the east of the city, both have strong anti-government factions controlling parts, if not all, of those cities.

And a government -- a senior government official told me that how the -- how the government deals with those in the coming days is going to be very, very important. There's psychological pressure, because they surround the city.

And there's also, if the government can negotiate with the rebels in those towns, as they say they are, then it bodes better they say for negotiating some kind of agreements across the country.

I spoke to Seif al-Gadhafi yet today, and he told me -- when I asked him, how are those negotiations going, he said chaotic. And I said, well, what do you mean? And I was told that he meant that -- that the opposition leadership is split, is divided, and the government here doesn't really know who to deal with and -- and -- and who's got the real authority.

So -- so the -- the negotiations are just not really happening. And there's -- and if you're going to defeat the regime, you need to do it here in Tripoli. And it doesn't seem that the forces in Benghazi are able to come and do that either. So, yes, it does. It's feeling like a standoff.

COOPER: Fouad, from your view -- vantage point, does it look like a stalemate at this point?

FOUAD AJAMI, PROFESSOR OF MIDDLE EASTERN STUDIES, JOHNS HOPKINS SCHOOL OF ADVANCED INTERNATIONAL STUDIES: Well, absolutely. We have now entered week of this war, if you will, this contest between the government in Benghazi -- I call it actually -- in my view, this is a provisional government of the free Libya and the government of Moammar Gadhafi in Tripoli.

And the standoff is easy to understand. Moammar Gadhafi is not a nation-builder. In his bunker -- he is content to remain in his bunker because that's what he really cares about, his power, his bunker, his privileges.

And the people of Benghazi, I think they are growing impatient. They have gone out. They have established their primacy in Benghazi, but the world hasn't come -- come to the rescue. And now the people in Benghazi are talking about asking for airstrikes against Moammar Gadhafi's installations, against his -- his bunker in -- in -- in Tripoli.

It gives us a sense of the frustration in Benghazi and of this standoff. Libya is a house divided. It's a tale of two cities and a tale of two republics.

COOPER: Ben, though, from my understanding, the people I've talked to on the phone in Tripoli, and we talk to them every day, I haven't heard anyone saying, we want foreign intervention on the ground. Do you -- you don't hear that in Benghazi, do you?

WEDEMAN: Well, we hear -- we hear so much from so many people here.

But you do hear that. But the people down at the courthouse, where the sort of decisions are made, no, nobody wants foreign boots on the ground. Many are in favor of a no-fly zone, which is something that would prevent the sort of air raid we saw yesterday just outside of here. But they -- they -- on the question of airstrikes, they're very divided. There doesn't seem to be a single position. Many Libyans say they want to do this by themselves. They want to conduct this revolution and overthrow Moammar Gadhafi without any sort of foreign hand in it.

It would certainly be a change from Tunisia, from Egypt, where they were revolutions made at home -- Anderson.

COOPER: Nic, in terms of the situation in the streets, a little bit later on in the program, I talk to a man who says he was stabbed by Libyan police days ago and is now basically in hiding in his home.

And I have talked to a lot of people who say they are simply afraid to go outside. Do you hear that from people? Or -- or -- I mean, are people able to talk to you freely?

ROBERTSON: Some people feel that they can. Other people, I think, are afraid to talk to us freely. And -- and we have talked to people who have been part of the anti-government protests here, who have told us that they've gone out, that they managed a week-and-a-half ago to get to Green Square, this square popular with Gadhafi supporters in the center of the city.

They thought they were -- they thought they were on the verge of overthrowing the government and then they were beaten back. And now one man I talked to was literally shaking because he thought that he was perhaps being listened to by government officials and -- and he was very afraid in what he was telling me.

But he came to me and said, look, I know who you are, and I want to tell you what's going on. So some people are -- are telling us; they're trying to overcome their fears. But he told me that he felt that the opposition was sort of losing its momentum in the capital, because it was being crushed down.

When you're in the center of city, I mean that some of the cafes are beginning to open up. There are more -- there's more traffic, more people around. But you go to some of the neighborhoods and the streets are empty. But even those places where we have seen clashes, you go to them now, you can see the remnants of barricades, remnants of burnt tires, remnants of graffiti.

But during the day, they look for the most part, apart from the closed stores, like there's some kind of normality there.

COOPER: Yes.

ROBERTSON: But there is a -- there is a real sense of fear about what's going to happen. People -- people are afraid, afraid possibly of intervention, too, they tell us.

COOPER: Fouad, Ben, Nic, thanks for your time.

Nic and Ben, stay safe.

A quick reminder: The live chat is up and running at AC360.com.

Up next, you're going to hear a man who says he is hiding in Tripoli, in a home, wounded he says by a policeman, still speaking out against the regime.

Also, the people voting with their feet, imagine if the entire population of Los Angeles got up and left all at once. We'll take you where it's happening in Libya, where the grip of the Gadhafi regime is gone.

(BEGIN VIDEO CLIP)

ROBERTSON: Almost wherever we go now, whenever the cameras come out, you can almost guarantee that there will be a crowd, a spontaneous crowd that appears to gather showing their support for Moammar Gadhafi.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COOPER: A quick update on the breaking news, "The New York Times" reporting that opposition leaders in liberated Benghazi may ask for Western airstrikes on regime targets.

The idea would be to ask for U.N. Security Council approval to make it seem less like direct foreign intervention, which many Libyans say they neither want nor need. One possible reason to ask for help, Moammar Gadhafi's hold on Tripoli seems to be getting tighter and tougher to shake.

Earlier tonight, I spoke with a witness to it all. He's a protester, a Libyan in Tripoli. Now, if you believe Gadhafi, the man you're about to hear does not exist, because Gadhafi and his sons claim the only people against them are members of al Qaeda or drug-crazed kids given pills by Americans or terrorists.

This man does not sound to us like a member of al Qaeda or a drugged- up teenager. You can judge for yourself, however. To us, he sounds like so many of the other Libyans we have spoken to in hiding, a man who says he's simply had enough.

(BEGIN VIDEOTAPE)

COOPER: What is the situation right now in Tripoli?

UNIDENTIFIED MALE: At this very moment, it's very, very quiet. It's unusually quiet. It's frightening quiet.

COOPER: The government now is saying, well, look, the streets are calm. Things are normal here.

Is anything normal in Tripoli?

UNIDENTIFIED MALE: They are forcing it to become normal. It's not normal. We know it's not normal. If you walk on the streets in the morning, if you are not a resident here or not a native, you -- you may not notice this.

But we all know that it's not normal. The killing that took place will not go away in a couple of days like this. There are mixed feelings. There are feelings of fear. People are scared and mixed feelings.

You -- you just cannot -- you just cannot believe what's happening here. Things that are happening here in Tripoli now, this -- this has never came across our minds. I'm sure it never came across Gadhafi's mind neither. What's happening here is -- is something new, totally new.

COOPER: Gadhafi and his son and his regime are saying the only people who have been killed have been protesters and -- and security forces, members of the army, not civilians. Have you seen civilians being killed?

UNIDENTIFIED MALE: Oh, yes, absolutely. Yes. I've seen --

(CROSS TALK)

COOPER: I understand you were stabbed the other day.

UNIDENTIFIED MALE: I was stabbed about two weeks ago. And that was before -- before more killing was happening on the streets. It was just the protesters trying to -- to make the police make way for them.

I was trying to mediate between them, both parties. I mean, when we lose any of them, it's a loss to all of us. So, I was trying to calm things down. Suddenly, three policemen attacked me, beating me with (INAUDIBLE) wood sticks, and one of them stabbed me. That's right.

COOPER: So you're saying you were stabbed by a Libyan police officer?

(CROSS TALK)

UNIDENTIFIED MALE: It was a Libyan policeman, yes.

COOPER: Again, the -- the -- Gadhafi and his son are saying it's only armed protesters who have been -- have been hurt and that -- it's only the armed protesters. Is that true?

UNIDENTIFIED MALE: That is not true by any means. Both Gadhafi and his son are misleading the world.

Listen, listen, Gadhafi is a very, very, very crazy man. I don't know if in psychology there is a -- there is a term for it. I think they should put a new name for this. They call it Gadhafism or whatever.

The man is totally out of his mind. He thinks he's going to rule the world. We all know this is not going to happen. He has led this country into disaster after disaster. Nothing here is -- is going well. Education is so bad. Health services are even worse. And the payment, the -- the salaries are -- are so terrible.

And we can't take this any longer. And this -- this has been going on for a long time, and the promises, and nobody fulfill their promises, not Gadhafi, not his sons, nada.

COOPER: Are -- are protesters now too scared to go on the streets?

UNIDENTIFIED MALE: Well, protesters, last Friday, they -- they were willing to die. The situation was -- and I -- I haven't seen anything or heard or read in the news or -- or heard in the news of nothing like this before.

COOPER: So why haven't there been protests over the last few days? Is Gadhafi winning?

UNIDENTIFIED MALE: Temporarily, yes. Temporarily, yes.

He's -- he's -- at the moment, Tripoli is under siege by tanks, heavy artillery and missiles -- missiles and rocket units. These -- these -- these units are capable of destroying one square kilometer each.

Now, we don't know when he's going to use it, any second now, can be any time now.

COOPER: So you're saying he's winning right now. What will change that?

UNIDENTIFIED MALE: If he stays in power, more killing is going to happen. So it's the same result both ways. So we're going to go out again and again and again. This man will not stay there. And once we get more guns under our hands, we will go again and again and again.

This is a revolution to the last man. He's not staying. I tell you, he's not staying, man.

COOPER: Thank you very much for talking to us. Stay safe.

UNIDENTIFIED MALE: Thank you.

(END VIDEOTAPE)

COOPER: Well, he's one of many tonight who cannot even open their front door and step on to the street.

Many who can, especially foreign nationals who had been working in Libya have been flooding out of the country into Egypt and Tunisia, nearly 150,000 people, according to the U.N.

Still ahead tonight: another firsthand account of Gadhafi's brutality and fear tactics. You're going to hear from a man who says the Libyan leader once tried to execute him, then years later, gave him a hug, just recently. He joins us next.

(COMMERCIAL BREAK)

COOPER: Well, Gadhafi made a number of startling statements yesterday, statements that fly in the face of facts. Here's some of what he said to ABC's Christiane Amanpour.

(BEGIN VIDEO CLIP) MOAMMAR GADHAFI, LIBYAN DICTATOR: They love me, all my people love me. They love me, all.

CHRISTIANE AMANPOUR, ABC NEWS: But if they do love you --

(CROSS TALK)

GADHAFI: They -- they will die to -- to protect me and my -- my people. No, no, no.

(CROSS TALK)

AMANPOUR: If -- if you say they do love you. Then why are they capturing Benghazi and they say they're against you there? Why are they --

GADHAFI: It is al Qaeda, it is al Qaeda, it is al Qaeda. Not my people. It's al Qaeda --

(CROSS TALK)

AMANPOUR: Al Qaeda.

GADHAFI: -- al Qaeda, al Qaeda. Yes.

UNIDENTIFIED MALE: Al Qaeda, al Qaeda.

GADHAFI: They came from outside.

(END VIDEO CLIP)

COOPER: Well, what Gadhafi said in that interview compelled my next guest to write a blog post for the "Daily Beast" today, describing how Gadhafi once tried to have him executed, forcing him to flee his homeland.

He says he was declared as an enemy of the state, and yet recently, he says Gadhafi gave him a hug when he saw him in the United States.

Fadel al Ameen is a journalist, writer and Middle East-North Africa expert who's worked for the U.S. State Department. He joins me now.

You say -- I mean, Gadhafi said that he would never kill Libyans. His son, Seif, says the same thing, as well. But years ago you were at the university in Tripoli, and they had public hangings of students on campus, correct?

FADEL AL-AMEEN, JOURNALIST: That's correct. That's correct.

COOPER: Why -- why were they hanging students?

AL-AMEEN: Well, because they -- they rejected some of his ideas or some of his orders. They felt that these -- that they rebelled against him in a very small way by not submitting to his wishes.

COOPER: And you were -- you had -- you were out of the country at the time, but you were declared an enemy of the state. What -- how did that come about?

AL-AMEEN: Well, because I think once you reject the commands of the leader, once you ask for changes, once you fight for democracy and openness. And -- and if you don't submit your will to the will of the leader and of the revolution, of the country at that time, he represents the country. He's the country. Then you are an enemy of the state, an enemy of the regime. And once you are an enemy of the regime, you are -- you are not supposed to live.

COOPER: Your daughter and your wife visited to visit relatives recently, and I understand your daughter was actually held captive?

AL-AMEEN: Yes. What happened is they -- as she was entering the country, they decide to withhold her passport. They let the mom go, but they said, "You have -- you have no problem. You can come in. You can go inside the country. You can leave whenever you want, whenever you feel that you want to leave, but she cannot leave." They left her -- they kept her passport for over three weeks.

COOPER: When -- when we see Gadhafi being interviewed, and he says these things like -- you know, that there are no demonstrations against him, that everybody loves him. You wonder how has he managed to stay in power if he appears to be delusional or fooling himself? Can you explain how he's been able to hold onto power?

AL-AMEEN: Fear. I think that's -- that's the bottom line. Fear that he is so brutal that he's willing to use whatever is necessary.

We have to remember that in the early -- in the mid-'80s, he used to broadcast executions on live TV during the month of Ramadan, which is the holy month of the people, of the Muslims. He used to -- and whoever he killed, he'd throw in the main square, what he called right now the Green Square, for the people to see. So sheer fear was the -- is the way that he dealt with the people -- with Libyan people.

COOPER: What do you make of the public relations campaign that Gadhafi and his son Seif have been undertaking over the last couple of days, inviting foreign journalists into Tripoli, essentially saying, "Look, things are normal here. You know, there are no protests"?

AL-AMEEN: Well, if things are normal and there are no protests and there's a government and there's a regime, why only him and his own children are talking to the media? I haven't seen a minister. I haven't seen any public official. Where are they? It's just the family running the show.

COOPER: And what does that tell you?

AL-AMEEN: It tells me that there is no -- there is no regime. It's just him, and he is trying to mislead the people, that there is something going on. I think there is only whatever -- a remnant of a regime trying to hold on to whatever is left, which is the control over Tripoli.

And that's why the people of Tripoli are living in fear and in anticipation of what kind of response they may receive once they come out and protest again, especially. There are scheduled protests coming on Friday, and the response will be -- will be very strong, I'm sure.

COOPER: Do you worry that -- do you believe Gadhafi can hold on in Tripoli? Because it does seem like he's consolidated his control and things seem calm enough that Seif seems to be giving a lot of press conferences.

AL-AMEEN: Well, I think -- I think he may use -- look at what happened in Zawiya. He encircled -- encircled the city, what I just heard a couple of hours ago, that he -- they cannot even get baby food. He may cut the rations. He may -- he may do whatever is necessary to starve the people. And he may do the same thing to Tripoli.

I think it's -- he will use whatever means necessary for him to stay in power and to control the city. And if he cannot, my feeling is that he may fade away into a remote area and start running a campaign of terror.

COOPER: You saw him when he visited New York. Does he -- I mean is he delusional? You know people from the outside watch him speak -- I mean his speaking style is rambling and at times incoherent. Is that how he appears to you?

AL-AMEEN: I think -- I think it's a mix. I think he's -- right now he's more tired, and I think he's more not in much of control, I think. But what is driving him right now is the survival instinct. He wants to survive.

All his life he was looking at Libya and whoever is in Libya. He demands Libyans to be loyal to him, not him to be loyal to the country.

COOPER: Fadel Al-Ameen.

The -- the blog post on "The Daily Beast" is great. You should read it.

Thank you very much for joining us.

Still ahead: breaking news tonight, a report that the Libyan opposition or some members of it are thinking about asking for U.N. air strikes against Gadhafi's military targets. That's next.

Also, the United States is considering cutting diplomatic ties with Libya, according to a senior U.S. official. We'll talk with to Dougherty at the State Department. And Isha Sesay is following some other stories for us tonight -- Isha.

ISHA SESAY, CNN CORRESPONDENT: Anderson, designer John Galliano has long been known as one of fashion's bad boys, but tonight his career is in tatters after video showing him in a drunken anti-Semitic rant surfaced online. Now, when we come back, we're going to play the shocking video for our viewers, and I'll have all the details. That and more just ahead.

(COMMERCIAL BREAK)

COOPER: Breaking news tonight. A report that members of the opposition in Libya may ask for U.N. air strikes against the Gadhafi regime's military targets; that according to a report in "The New York Times".

Now, the report claims the opposition in Libya doesn't want foreign intervention but says U.N. involvement somehow wouldn't count as foreign intervention. The notion is reportedly still being debated by some opposition forces and it is, of course, anyone's guess what the U.N. Security Council would actually do with that request, if it ever came.

Meanwhile, the Obama administration is considering whether to cut off diplomatic ties with Libya, according to a U.S. senior official. We're going to have more on that in a moment.

But another potentially important development in the region to tell you about in Yemen. Some really surprising and fiery comments from Yemen's president, blaming the United States and Israel for uprising in his country and throughout the region; during a speech at a university today, Yemen's president lashed out at President Obama. Listen.

(BEGIN VIDEO CLIP)

ALI ABDULLAH SALEH, PRESIDENT OF YEMEN (through translator): There is a control room working for the media, and you know where it is: in Tel Aviv. A control room in Tel Aviv to destabilize the Arab world. A control room in Tel Aviv. It is managed from the White House, all of it. Let no one lie to another.

Every day we hear Obama's statements: "Egypt, don't do this. Tunisia, don't do that." It is not your business in Egypt. It is not your business in Oman. It is not your business in Palestine. Are you the president of the United States of America or the president of the Arab world?

(END VIDEO CLIP)

COOPER: Now, those comments from Yemen's president were actually edited out when that speech aired again later on Yemen state-run television at the request of his advisers. State Department spokesman P.J. Crowley said there is no conspiracy at play, and Yemen's president knows better.

Joining us from Washington: Steven Hadley, former national security adviser under President George W. Bush; he's the senior advisor for international affairs at the United States Institute of Peace.

And in Irvine, California, former CIA officer Robert Baer, TIME.com's intelligence columnist and co-author of "The Company We Keep".

Steven, so you have Secretary Clinton -- is saying it's important for the Libyans to win their own freedom. You think, though, the U.S. could be doing more?

STEVEN HADLEY, FORMER SECURITY ADVISOR: I do. I think, between what they've done, the sanctions are good. They've put negative pressure on the regime, and you should consider about the no-fly zone. But I think there's more room for more active diplomacy.

I'd like to see them, for example, being forthright, have the President on the record saying that -- that Gadhafi has forfeited his right to rule, that the United States and the West looks forward to working with the Libyan people to build a productive, democratic, prosperous post-Gadhafi Libya. And that all elements of the society need to turn against Gadhafi and try to become part, and will be given an opportunity to be part of that new Libya, with the implication that if they don't, they will not.

And you can accompany this with private messages, making it very clear that if the military and the like continue to hold to Gadhafi, there may be no room for them in the new Libya.

And if you then were to talk about suspending relations and maybe even recognizing the government that's emerging in Benghazi, that would be a diplomatic package that might put -- ratchet up the pressure and actually do what we need to do, which is to get this guy to leave.

COOPER: Bob Baer, from your perspective, how is the Obama administration playing this, and how many options do they really have on the ground in Tripoli? How much assets do they really have?

BOB BAER, CO-AUTHOR, "THE COMPANY WE KEPT": They don't have particularly good access, of course, to the Gadhafi regime. No one is -- no one is talking to Washington from the inner circle.

Gadhafi is increasingly isolated. He's increasingly talking about retreating to the desert if he has to, to Sabha (ph), where he will conduct a guerrilla warfare, drag Libya into complete chaos. And he's ready to do it. I believe it.

The quicker we get rid of this man, the better. I mean, this is truly the first failed Arab state in a very, very long time. And it -- this is a contagion that could spread to other Arab states.

So the administration is in a really tough position. If it intervenes, it's going to look like American Imperialism. If it doesn't do anything, it could get a lot worse.

COOPER: Steven, do you buy that Gadhafi would go to the desert. I mean, followed by all of his sons who, from the look of them, haven't spent a lot of time in the desert over the years?

HADLEY: It's possible. I think that it's an unattractive option for him and if, in fact, you could get his military and other groups to turn against the regime, he may not have that option.

COOPER: But how likely is that? I mean, how much contact do you think the U.S. really has, besides maybe e-mail addresses, of, you know, people within the regime, but intelligence contact, real-time intelligence contact with him?

HADLEY: Well, that's certainly -- that's one of the reasons why you do a lot of this publicly, so that everyone can hear it. And in the -- even in Libya in the communication age, I think you will find that there are ways to get messages to the army, to the military. We did it in terms of Iraq.

And the reason it's so urgent is that the things -- the no-fly zone are directed against the humanitarian crisis, the killings are going on. Those won't stop as long as Gadhafi is in power. So as Bob Baer says, the objective needs to be getting rid of Gadhafi.

What I would like to see is a lot more energetic diplomacy along that end, while we look at these other military options. But they're problematic.

You know, people have to fight and win their own freedom. They want to fight and win their own freedom. And if we start getting involved militarily in some way, it makes that more complicated.

COOPER: Right. It completely --

HADLEY: There's more we can do diplomatically. That's what we should be doing now.

COOPER: Right. It does seem, Bob, military involvement from outside changes the dynamic and allows Gadhafi to have a different conversation with the world than he's currently having.

In terms of intelligence terms, I've heard you say that Libya is sort of a black hole. What do you mean?

BAER: It's a black hole because it was very, very difficult to collect intelligence, and we tried very hard over the years, since really going back to '69, and the Libyan exiles weren't particularly reliable. We haven't had an embassy there for that long. It's a totalitarian state. People are afraid to talk. Contacts with Libya intelligence were through one man who wasn't particularly reliable.

And then you had this inner circle, you know, among his sons, it's a question of -- I think they're demented, all of them. They appear to be that way.

So getting inside Gadhafi's head has never been easy, and there's never been a military that the CIA could penetrate and figure out what's going on, because Gadhafi eviscerated it. So we are dealing with very much in a black -- in a black hole, and a very unpredictable man who is tired and is getting worse by the day.

COOPER: So Bob, if you're saying the idea of him retreating to the desert and sort of fomenting, you know, a civil war or some sort of insurgency, what resources does he have, really, though? If he doesn't have ongoing access to oil money, because the oil is in Benghazi, and in the East, how much of a force does he have?

BAER: He doesn't have much of a force. If there was an army, it would be easily defeatable in Tripoli; it could be taken in a couple of days. But what he's planning on doing -- and this is Gadhafi, this is what he's saying and what he does is something else but he's saying that he's going to take these Toyota land cruisers, turn them into technicals, take some artillery, set off car bombs to really push Libya over the edge.

And he thinks that ultimately he will win, because the Libyans will look at him and say, "Look, we miss Gadhafi. There was a certain amount of stability. And we want him back." He even is delusional enough to think the west would take him back.

COOPER: Steven, how likely do you think some sort of civil war or insurgency, you know, ordered from the desert is?

HADLEY: He can -- he can try it. I don't think it's particularly attractive option. It seems to me that once he moves out of Tripoli, once he moves out of that base, he's particularly vulnerable. He's really lost the game at that point.

And if we were then to become energetically engaged with the post- Gadhafi regime, to help them try to use that oil revenue to start rebuilding the country, and make some real progress and start delivering progress to the people.

My guess is that his support would shrink.

COOPER: Steven Hadley, Bob Baer. Guys, appreciate your expertise. Thanks very much.

Still ahead tonight, tear gas fired on protesters in Iran.

Plus, James Arthur Ray, remember him, the sort of self-described guru behind the deadly sweat lodge ceremony in Arizona? And he faces a judge today.

And also the anti-Semitic rant that is getting the designer of one of the world's top fashion houses fired. We'll show you the video. It's pretty unbelievable. Next.

(COMMERCIAL BREAK)

COOPER: Let's get an update from Isha, who joins us with the "360 News & Business Bulletin -- Isha.

SESAY: Anderson, protesters in Iran clashed with police in several cities today. The demonstrators are calling for the release of two opposition leaders and clashing with security forces. There were reports of tear gas being fired on crowds. Iran has denied the opposition leaders have been imprisoned.

Opening arguments began today in the trial of self-help author and speaker James Arthur Ray. He's charged with three counts of reckless manslaughter in the death of three people at a sweat lodge in Arizona. If convicted, he could face up to ten years in prison on each count.

On Capitol Hill, the House passed a bill to prevent a government shutdown after Friday. The legislation would extend funding for the federal government by another two weeks until March 18, while cutting $4 billion from current spending levels. It still needs to clear the Senate.

A spokesman for former Arkansas governor Mike Huckabee is calling it a misstatement. His boss suggested in a radio interview that President Barack Obama's childhood in Kenya shaped his world view. Mr. Obama, in fact, grew up in Hawaii and Indonesia and didn't visit Kenya until he was in his 20s.

And Anderson, Christian Dior is firing John Galliano over anti-Semitic comments videotaped in a Paris restaurant. We're going to show you that video, but a warning: the words are offensive.

(BEGIN VIDEO CLIP)

JOHN GALLIANO, DESIGNER: I love Hitler. People like you would be dead today. Your mothers, your forefathers would be (EXPLETIVE DELETED) gassed and (EXPLETIVE DELETED) dead.

UNIDENTIFIED FEMALE: Oh, my God.

(END VIDEO CLIP)

COOPER: Unbelievable.

SESAY: Absolutely unbelievable.

And I should tell you that -- that Galliano has filed a defamation suit against that couple that, I assume, videotaped that.

COOPER: Well, actually, I think he filed defamation against this other couple who have alleged he made anti-Semitic comments, and this is a video from weeks before the most recent incident.

SESAY: That's right. There are two incidents at stake here. It is this video that led to Dior firing him.

COOPER: Right.

SESAY: But --

COOPER: Previously they had suspended him based on --

SESAY: That's right.

COOPER: -- another encounter in which he allegedly said anti-Semitic things as well.

SESAY: At the same restaurant.

COOPER: At the exact same restaurant. Yes, it's shocking.

Up next, literally sitting on success, we'll take you inside the chair company that's building up America by reinventing itself and attracting some famous people as clients. (COMMERCIAL BREAK)

COOPER: Tonight's "Building up America" report, a company founded in 1944 to create lightweight nearly indestructible chairs for the Navy. But when the Navy didn't need those chairs anymore, the business was failing until it transformed itself into a modern sheet company attracting some big name stars.

Here's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): In rural Pennsylvania, this is the sound of success. Aluminum chairs being shaped, tempered, polished. But a few years back, it was the sound of trouble for CEO Gregg Buchbinder.

(on camera): This company was ready to go out of business.

GREGG BUCHBINDER, CEO: Right, right. The company was really on its last legs.

FOREMAN (voice-over): The Emeco Company started in World War II, making tough, lightweight chairs for military ships. And for 40 years, that kept Emeco afloat. But in the 1990s, the big contracts were drying up, and Buchbinder, the new owner, was struggling to keep the doors open.

Then one day a sales person slammed down a phone in a dispute over a small order.

BUCHBINDER: And I asked her, "Who was that"? And she said oh, somebody, Giorgio Armani. And at that point I realized there's something more significant here than just a chair that was for the government.

FOREMAN: He discovered that top designers were buying the chairs second hand. They adored the clean lines and excellent craftsmanship.

(on camera): It signaled a turning point in this.

BUCHBINDER: Absolutely. Big turning point for us.

FOREMAN (voice-over): Aiming at this new market, Emeco developed new styles, some selling for a few hundred dollars, some for thousands. On the factory floor, Dennis Tangent preached the old gospel.

(on camera): What you're selling here is fine American craftsmanship.

DENNIS TANGENT, EMECO: That's all it is. And it's preached every day. And everybody here is an inspector. And everybody, my whole crew, is very concerned about the quality of that item. It's not a chair; it's a work of art.

FOREMAN (voice-over): And sales soared.

ALEV LARSSON, INTERNATIONAL SALES DIRECTOR, EMECO: Currently we have pretty much settled distribution in 30 different countries.

FOREMAN (on camera): Thirty countries?

LARSSON: Yes. Thirty different countries.

FOREMAN: That's much bigger than it used to be.

LARSSON: Definitely much bigger than I thought it would be, too.

FOREMAN (voice-over): From 15 employees a decade ago, today Emeco has 70 in the factory alone.

BUCHBINDER: It's grown.

FOREMAN: Not a bad build up from helping everyone else sit down on the job.

Tom Foreman, CNN, Hanover, Pennsylvania.

(END VIDEOTAPE)

COOPER: That's it for 360. Thanks for watching.

"PIERS MORGAN:" starts now.

I'll see you tomorrow night.