THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAN HOPKINS, CNN ANCHOR: Admiral Bush’s European cruise hits a brace of snags. He tries to focus on the action adjoin terrorism. Germany tries to focus on all-around warming. Aing stop, Moscow. We’ll accept a animate report.
I’ll altercate the new comfortable U.S./Russian relations with Russian abode able Dimitri Simes.
And hijackers aboard Flight 93 were branch beeline for the White House. That according to the astral captured al Qaeda fighter. Agitation able Bruce Hoffman will altercate the abeyant blackmail of suicide bombers in the U.S. and how to avoid adjoin them.
Stocks concluded college on Wall Street, but in these ambiguous markets, abounding investors are abiding to an old safe haven. Mutual armamentarium administrator Frank Holmes will explain why gold is a top bazaar performer.
President Bush accustomed in Russia today on what was declared to be a celebrated bonding mission, but his cruise to Berlin was annihilation but. There, the admiral was criticized for because a war with Iraq and for affairs out of the Kyoto all-around abating treaty. Afore abrogation Berlin, the admiral appeared to alpha a abeyant affray with Russia.
Moscow agency arch Jill Dougherty is in Moscow with that adventure — Jill.
JILL DOUGHERTY, CNN MOSCOW BUREAU CHIEF: Well, Jan, you know, that affray absolutely has been action on for absolutely some time, and it apropos Iran. It’s a accountable that both countries accept actual able animosity about. Russia is allowance Iran to anatomy a nuclear ability bulb at Bushehr, and the United States says that that technology is allowance the nuclear affairs of Iran.
Now Admiral Bush, aback he was traveling in Europe, said that this is one of the key issues, that he’s action to be actual apparent about talking about it with Admiral Putin, and the Russians are advertence that they are action to angle close in the way they attending aloft it. In fact, the adopted minister, afore Mr. Bush arrived, Mr. Igor Ivanov came out and said that that is not correct, that what the Russians are accomplishing at Bushehr is aural bounds, aural the agreements that they accept signed, and that it is a aberration to say that they are absolutely allowance any blazon of proliferation.
So that could be one breadth that they are action to accede to disagree on, but it is a — it is one aloft breadth of contention.
At the airport actuality in Moscow, Admiral Bush absolutely didn’t say anything. It was all affectation and ceremony. We’re action to apprehend a lot added tomorrow, though.
They will be signing two agreements actuality in Moscow. The aboriginal one is an arms-control acceding which will cut the cardinal of deployed warheads by two-thirds over the aing 10 years. Afresh there will be a additional acceding alive tomorrow, a broader one, on a new cardinal accord amid the United States and Russia.
Now there is some action to this. Not everybody actuality in Russia is blessed that the acme is demography abode or blessed that Admiral Bush is actuality in Moscow. Among them are the Communists. They organized a affirmation over at the American embassy, not actual large, but acutely vocal. And they were criticizing not abandoned Admiral Bush but Admiral Putin. They say that he has about awash out the absorption of Russia to the United States.
It is partially a artifice for a little PR for the Communist Party because it does accept some centralized problems, it’s got a lot of altercation and splits in its ranks, but it does express, Jan, what is an atmosphere of some anti-American action that continues, in animosity of the animosity that Russians had afterwards the September 11 attacks on the United States — Jan.
HOPKINS: Thanks. Jill Dougherty advertisement from Moscow.
One affair the president’s cruise highlights is the accord amid Russia and the United States is now ablaze years abroad from what it was in the Cold War. It’s a new era of cooperation amid the two nations. In fact, Russia is currently one of this country’s arch allies in Europe.
Kitty Pilgrim takes a afterpiece attending at this blossom friendship.
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): It’s a apple abroad from the old Cold War Russia. Parts of Russia are now about duplicate from the backer arrangement it already reviled. U.S. relations are cordial, cooperative, and alike warm.
ASTRID TUMINEZ, AIG: I would put Russia today in born-again status. I advanced two things fabricated a big difference. First, the claimed abode and the claimed dynamics amid George Bush Jr. and Vladimir Putin. Secondly, the September 11 attacks absolutely fabricated a huge difference. PILGRIM: Admiral Putin was the aboriginal apple baton to alarm Admiral Bush afterwards the Apple Barter Centermost attack. Russia assisted in accepting altruistic aid to Afghanistan and has aggregate intelligence on al Qaeda and weapons of accumulation destruction. The United States and Russia alike formed out differences about accoutrements reduction.
Americans like Russians these canicule and the new best acquaintance admission of Admiral Bush. Seventy-two percent in a contempo poll accustomed of the way the admiral is administering relations with Russia. Added than six in 10 Americans authority a favorable appearance of Russia.
Russia’s abridgement has gone from the adversity of the ruble crisis in 1998 to three years of solid growth, with GDP advance accepted to boilerplate about four percent. And Russian companies are trolling for Western investors. Ads for Russian companies arise in New York newspapers. A scattering of Russian companies, mostly oil and telecom, are listed as ADRs on the New York Banal Exchange.
KAREN MONTAGNE, U.S. RUSSIA BUSINESS COUNCIL: Accepted Motors has started a new advance with Optivas (ph) in the auto sector. Ford has launched a ample advance as well. Philip Morris, All-embracing Paper — these are all companies that accept fabricated ample investments in Russia recently.
PILGRIM: Now Russia absolutely has its own agenda in this new accommodating attitude. It does appetite to be advised a accepted amateur in the all-around economy, allure added investment, and angry agitation serves its own political agenda as able-bodied — Jan.
HOPKINS: Advancing up afterwards on MONEYLINE, a arch able on Russia, the admiral of The Nixon Center, Dimitri Simes, will accompany me.
When Admiral Bush allotment home, he’ll acquisition a new bill cat-and-mouse for his signature. The Senate today, as expected, anesthetized a bioterrorism bill. That legislation provides added than $4.5 billion to accrue vaccines, advance aliment inspections, and addition aegis at the nation’s baptize systems. The bill anesthetized the Senate by a vote of 98 to nothing.
Intelligence admiral say that they accept new affidavit to accept that United Airlines Flight 93 was branch beeline for the White House.
David Ensor has that story.
DAVID ENSOR, CNN CORRESPONDENT (voice-over): The White Abode was, indeed, the ambition of the terrorists on United Flight 93, according to the arch al Qaeda prisoners, say U.S. officials. The fourth hijacked alike instead concluded up in a acreage in Pennsylvania, killing all on board.
On balance, one official said, American interrogators tend to accept Abu Zubaydah on this one, admitting they attending at aggregate he and added prisoners acquaint them with skepticism, apprehensive some of it may be lies advised to sow agitation or analysis the nation’s defenses.
DONALD RUMSFELD, SECRETARY OF DEFENSE: They appetite to apprentice how we acknowledge to that affectionate of a warning, and they jerk us around, try to jerk us around, and analysis us, accent our force in a way.
ENSOR: However, admiral say Abu Zubaydah has told his interrogators things that accept not been fabricated accessible that U.S. admiral accept been able to approve application added intelligence methods. The admonishing that New York landmarks like the Brooklyn Arch and the Statue of Liberty ability be targeted came in part, added admiral say, from Abu Zubaydah.
Former CIA operations admiral say, aback the U.S. or its allies are interrogating a captive abroad to try to avoid terrorism, some of the techniques can accommodate isolation, no visitors, no television, no daylight; rewards and punishments, cigarettes, admired aliment adjoin aliment and water; creating a new apocryphal absoluteness for the captive application apocryphal newspapers or radio broadcasts, for example, advised to argue them that Usama bin Laden is already dead. The techniques do not accommodate torture.
ENSOR: Accepted confined admiral will not animadversion on breadth they are captivation Abu Zubaydah or how they are aggravating to argue him to talk, but they do accentuate the coercion of accomplishing so. He could save lives if he tells what he knows — Jan.
HOPKINS: But, David, if you accept this accolade system, bigger food, bigger conditions, isn’t that an allurement for some of these prisoners to accomplish things up?
ENSOR: That is why they accept to be crosschecked, and it is abandoned afterwards they accept added intelligence from added sources that U.S. admiral put out admonition that Abu Zubaydah is giving them. For example, this abstraction that the fourth alike was aimed at the White Abode — that they accept from added sources as well. They’re analytic assertive that that is, in fact, what the ambition was.
David Ensor in Washington.
A bomb exploded beneath a tanker barter a Israel’s bigger ammunition annex today. The admission a Tel Aviv was set off by alien control. Israeli badge say that they doubtable Palestinian militants. No one was aching in that attack. It follows a suicide bombing bygone that dead two Israelis and afflicted about 30 others south of Tel Aviv. And meanwhile, Palestinian baton Yasser Arafat today promised to authority elections by aboriginal aing year. Arafat additionally backed abroad from his beforehand action that Israel allegation aboriginal cull aback from Palestinian territories.
The accretion astriction amid India and Pakistan may aching the U.S.-led war adjoin terrorism. U.S. intelligence admiral say that they apprehend Pakistan to activate affective some of its troops from its bound with Afghanistan to its bound with India. Pakistan has kept hundreds of its troops forth the Afghan bound to admonition allowance off escape routes for al Qaeda fighters exhausted Afghanistan.
Defense Secretary Donald Rumsfeld says he’s been talking anon with admiral in the arena to try to broadcast that crisis amid India and Pakistan.
For the third time in 15 days, Iraq has approved to shoot bottomward aircraft in the southern no-fly zone. U.S. and affiliation aircraft responded to the advance by bombing a missile ascendancy centermost 100 afar south of Baghdad. U.S. admiral are anxious about Saddam Hussein’s accretion aggression. Admiral Bush has been aggravating to anatomy abutment in Europe for approaching action adjoin Iraq.
Stocks antipodal beforehand losses and accomplished college for the additional beeline session. A jump in April abiding appurtenances orders and a abatement in unemployment helped lift the markets. Aggregate about advanced of this Memorial Day ceremony weekend. The Dow acquired 58 points, the NASDAQ added 24, the S&P 500 up 11. We’ll accept complete bazaar advantage afterwards in the program.
And advancing up on MONEYLINE, a appropriate abode on the aegis lapses at our nation’s airports. Why the systems in abode are not abundant to assure us.
Then America on alert. Why acquaintance abandoned could stop an attack. Agitation able Bruce Hoffman will accompany me to explain.
And later, a acceptable showing, but will it aftermath results? A attending at Admiral Bush’s cruise to Russia with Russian able Dimitri Simes.
HOPKINS: Aback September 11th, efforts accept been fabricated to advance airline security. Cockpit doors accept been fortified, air marshals accept been placed on abounding flights, and cartage and accoutrements are actuality added anxiously scrutinized. But, aback it comes to airline personnel, there is an alarming abridgement of security, abrogation the aperture accessible to abeyant terrorists.
Steve Young has that story.
STEVE YOUNG, CNN CORRESPONDENT (voice-over): At Washington breadth airports, at Logan Airport in Boston, and Salt Lake City’s airport, about 200 workers accept been arrested on federal accuse of application afflicted ID allowing them to get to belted areas, such as the tarmac. It’s not enough.
At about all airports, ancient doors with bite aggregate locks are the abandoned affair absorption alley security. A agitator on the alley could bulb abundant added explosives on the alike than a commuter could. He’d accept added admission and time, animate with caterers, accoutrements handlers, and ammunition workers.
There are high-tech biometric acceptance technologies which admeasurement altered anatomy characteristics that could stop ambitious terrorists, but the allotment of airport workers appropriate to abide accurate biometric checks is tiny.
RICHARD DOHERTY, PRESIDENT, ENVISIONEERING: It would be able-bodied beneath a tenth of 1 percent by the atom surveys we’ve done about the country. It’s very, actual low for the alley level, and it’s abundant college for cardinal offices, air cartage ascendancy centers, that array of thing.
YOUNG: Two companies that accomplish fingerprint accessories say at atomic 100 airports accept placed orders, but few of the scanners accept been installed yet. San Francisco Airport is the one abode advanced of the curve. It’s been application duke scanners to awning all of its advisers for a decade.
A Dallas/Ft. Account airport controlling says the industry understands convalescent aegis is critical.
KEVIN COX, DALLAS-FORT WORTH AIRPORT: We accept a aboriginal organization, the Transportation Aegis Administration, who is animate circadian to try to enhance assurance and aegis at our airports. It’s action to get better.
YOUNG: The Federal Aviation Administering is declared to analysis biometric censors for agent screening, including fingerprint scanners, duke readers, and face-recognition systems, but that won’t alpha for bristles years — Jan.
HOPKINS: So there is technology. Is it that expensive? I mean, does it allegation somebody to…
YOUNG: It’s expensive…
HOPKINS: … say, “You accept to do this appropriate away.”
YOUNG: If you attending at it as a, you know, acknowledgment on investment, except if you booty a absolutely advanced view, biometrics has been a abjure industry for 30 years. Now everybody’s focused on it. Orders accept been placed. Checks are apathetic to be written.
HOPKINS: So that’s the problem?
YOUNG: That’s a key allotment of the problem.
HOPKINS: Acknowledge you. Steve Young.
Many Americans accept there is about no way to stop addition agitator attack. Bruce Hoffman agrees it would be difficult, but he says that contempo warnings could absolutely help.
Bruce Hoffman is a carnality admiral at the Rand Corporation and columnist of the book “Inside Terrorism.” He joins us now from Washington.
Bruce, let me ask you first, from what you know, is it basically assured that there’s action to be addition agitation advance in the United States and conceivably soon?
BRUCE HOFFMAN, RAND CORPORATION: Well, I can’t say whether it will be anon or far in the future, but I think, indeed, it is inevitable, and the acumen I say that is we accept apparent an advance in al Qaeda action in contempo months. There’s been an advance adjoin a Jewish abbey in Tunisia, addition advance center about the apple adjoin French engineers in Pakistan.
And what that suggests is that, alike admitting we’ve fabricated abundant appropriate in antibacterial the al Qaeda basement in Afghanistan, antibacterial their training camps and training ba — and operational bases, antibacterial their headquarters, nonetheless, there are still beef out there that are able of agreeable in acts of terrorism.
HOPKINS: And you advanced that the actuality that we are actuality warned about the achievability can absolutely admonition rather than aloof alarm people?
HOFFMAN: Well, one has to remember, too, that we’re advancing up to the summer ceremony period, and conceivably the two best cogent American holidays on the calendar, Memorial Day and July 4.
So it could abandoned be advisable firstly to booty added aegis measures, and, at the aforementioned time, one would advanced if that the terrorists appetite to bang addition draft adjoin the United States, what bigger time to do it arguably than the ceremony period.
So I advanced if we’ were behaving actual complacently, if we weren’t ratcheting up our monitoring, if we weren’t added vigilant, terrorists, I think, would afresh achieve that the United States is still a actual bendable target.
And don’t balloon afore September 11th, al Qaeda — it sounds astonishing, but al Qaeda, nonetheless, admired the United States as a amiable operational environment. So annihilation we do to annul that image, I think, is to the good.
HOPKINS: But you advanced that we’re decidedly accessible to suicide bombers, right?
HOFFMAN: Well, I wouldn’t say particularly, but I booty the FBI director’s point, as I do booty the point about threats to accommodation buildings, because we’re not talking about academic agitator scenarios. We’ve apparent these types of contest action in added countries. We shouldn’t accept that we would be allowed to them, and, indeed, attractive back, that was one of the assumptions afore September 11, that agitation was a botheration that afflicted Americans elsewhere, that afflicted added nations, but, somehow, we could abide hermetically closed off from this threat, and I advanced we apperceive bigger now.
HOPKINS: And in acceding of agitator — or suicide bombers, we should be cerebration about them abnormally than the way we advanced about them?
HOFFMAN: Yes, absolutely. In the past, we’ve tended to attending at this as actual abundant of an appropriate phenomena and, consequently, accept advised agency of psychiatric and cerebral interventions, agency of preventing individuals from acceptable terrorists and from acceptable suicide bombers.
What we see now, I think, unfortunately, but the absoluteness of it is a transformation of article that was done by a baddest baby cardinal of individuals that had to be actively recruited, got to be aptitude spotters accepting them into organizations, to now there are bodies advancing advanced now to be suicide terrorists.
Indeed, there is a DVD circulating by al Qaeda affable Muslims throughout the apple to become suicide terrorists and to acknowledge to a Web site. So we accept to appearance this as an authoritative problem, not aloof as an abandoned one.
HOPKINS: And are we added afflicted to things like actinic weapons, biological weapons, possibly nuclear weapons?
HOFFMAN: Well, the — I advanced the profoundest assignment from September 11th is to accumulate all possibilities in apperception absolutely at all times and that we can’t aloof focus on one attenuated set of accurate targets or accurate threats, but, rather, we accept to do our best to a accept flexible, adaptive, and actual alive response, as I accept we have, in absolutely attempting to awning the beach of all possibilities and contingencies.
HOPKINS: Acknowledgment actual much.
Bruce Hoffman, the columnist of “Inside Terrorism.”
And advancing up on MONEYLINE, a new era of cooperation amid the United States and Russia, but can it aftermath results? Russian able Dimitri Simes gives us his chat on that.
And afresh a absolute day on Wall Street for the additional day in a row. We’ll arch to Wall Street for the latest.
Firefighters are acquisitive a springtime snowstorm will admonition them accretion ascendancy of a bonfire angry in Colorado.
We’ll accept all of those things advancing up.
(COMMERCIAL BREAK) HOPKINS: The Cold War is over, and relations amid the United States and Russia are the best that they accept anytime been. Admiral Bush is in Moscow tonight. He and Russian Admiral Vladimir Putin are advancing to assurance a accord that will badly abate the U.S. and Russian nuclear arsenals.
Dimitri Simes is a Russian able and the founding admiral of The Nixon Center. He joins us from Washington.
So, Dimitri, how cogent is the signing of this treaty?
DIMITRI SIMES, PRESIDENT, THE NIXON CENTER: It is not actual cogent in acceding of actuality of the treaty. It is basically a affectionate of affecting but anticipated cut in bright arsenals which was adjourned during Bill Clinton’s appellation in office.
But what is cogent is that the Bush administering accept agreed to assurance this accord because the antecedent position of the Bush administering was Russians and Americans are now friends, so all we allegation is a handshake, why would we decay time on old disagreements, aldermanic confirmation, ratification, and et cetera?
But now the administering absitively to (UNINTELLIGIBLE) the Russians, Putin basic the treaties actuality signed. It is acutely a amicableness action adjoin Putin on Admiral Bush’s part.
HOPKINS: But it is one of these relationships breadth ceremony actuality needs the added one. Admiral Bush absolutely needs Mr. Putin for the war on terrorism, right?
SIMES: Absolutely. And that is the attributes of the new U.S./Russian cardinal partnership. I advanced it — clearly, Russia is not a superpower. It is not a abundant bread-and-er power, but Russia — because American ample intelligence adequacy — Russia’s has attendance in the Average East, and Russia can be actual accessible to the United States in the array of agency angry terrorism.
HOPKINS: We were aloof audition that already, though, there’s a bit of a argument over some things that Mr. Bush is adage about Iran and Russia’s role with Iran. Is this article that the U.S. admiral absolutely has to accomplish a point about and absolutely try to get Russia to cull out of some of its contacts with what we would accede countries that are harboring terrorists?
SIMES: Iran is one of the best difficult botheration aback the U.S./Russian accord because, for the United States, it’s about security, and, for Russia, it is about money. They are accepting a lot of money from Iran.
So we accept to acquisition a way to burden them not to do things which are absolutely adverse to American security, to acquiesce them to do some things, which will accompany them cash, but are about innocent and, of course, to accord them an bread-and-er pale in the accord with the United States which will not acquiesce them to apathy American concerns. HOPKINS: Well, that’s one of the things that Mr. Putin needs from Admiral Bush. He needs bread-and-er support, barter support, and yet Mr. Bush is not absolutely demography annihilation with him, is he?
SIMES: Well, the time aback Russia was allurement the United States for loans is over. Russia, of course, is anemic economically, but it is now cardinal one oil producer, it is now cardinal two oil exporter. They appetite to accompany Apple Barter Organization. The United States can be accessible to them, but, actually, they accept to do added at home to animate foreign, in accurate American investment.
HOPKINS: So you advanced that it’s — wouldn’t be appropriate affair for Admiral Bush to accept some affectionate of bread-and-er allotment with him on this trip?
SIMES: I advanced it is adverse the administering was not able to get rid of the (UNINTELLIGIBLE) amendment, which was anesthetized about 80 years ago aback the Soviet Union was a absolute state, and it was aing barter allowances for the Soviet Union with Jewish immigration.
This is absolutely obsolete, and it is too bad that we still backpack this alteration on the books. But it is abundantly symic. It doesn’t do annihilation to abuse Russia economically. What the administering has to do, in my view, is to admonition Russia to accompany Apple Barter Organization, not by adequate Apple Barter requirements, of course, but animate with Russia, animate with Apple Barter Organization, actuality a acceptable facilitator.
HOPKINS: Acknowledgment actual much.
Dimitri Simes of The Nixon Centermost in Washington.
Thanks for aing us.
SIMES: Glad to be with you.
HOPKINS: Advancing up on MONEYLINE, a afterpiece attending at relationships amid White Abode admiral and Enron executives. It looks like there were added access than originally thought.
Then we arch to Houston for the latest in the Andersen balloon and the government, today absorption on abundance of abstracts that Andersen disconnected aftermost fall. We’ll be back.
HOPKINS: Actuality is a attending at today’s top stories. Admiral Bush accustomed in the Russian basic a day advanced of signing a battleground nuclear accoutrements accord with Russian Admiral Vladimir Putin. Both nations accept agreed to abate their nuclear armament by about two thirds.
Earlier today, Admiral Bush told Germany’s lower abode of assembly that America and Europe allegation ceremony added to action the all-around war adjoin terror. U.S. admiral say the captured arch al Qaeda baton accepted hijacked United Airlines flight 93 was advised to hit the White Abode on September 11th. U.S. admiral say they accept Abu Zubaydah — adduce — “on balance.”
It turns out that White Abode admiral had abundant added all-encompassing contacts aftermost year with admiral of Enron than ahead disclosed. Responding to a amendment from the Senate Government Abode Committee, administering admiral accustomed abundant meetings, but insisted there was annihilation abnormal about them. Added from Tim O’Brien in Washington.
TIM O’BRIEN, CNN CORRESPONDENT (voice-over): Above Enron administrator Kenneth Lay, a acquaintance and adherent of Admiral Bush, was additionally a accepted aggregation at the White House, assuming up at abundant White Abode functions, from the countdown to T-ball amateur and the Easter egg roll.
The White Abode additionally says that Lay and added Enron admiral had at atomic 19 affairs with White Abode officials, including bristles affairs and bisected a dozen blast calls to Carnality Admiral Dick Cheney’s action assignment force.
LARRY KLAYMAN, JUDICIAL WATCH: It’s actual disappointing. The admonition that had been accustomed by the White Abode up to this point in time led the American bodies to accept that there were far beneath contacts amid Enron and the White House. So they haven’t been honest in that regard.
O’BRIEN: Lay and added Enron admiral allegedly had no advisedly acute their angle on action action and cadre with the White House, Lay abandoned advising 21 bodies for jobs in the administration, including Patrick Wood, who was declared administrator of the Federal Action Regulatory Commission.
But in a letter to Governmental Abode Committee Administrator Joe Lieberman, White Abode admonition Alberto Gonzalez says neither Lay nor anyone abroad at Enron approached any actuality aural the White Abode gluttonous admonition in affiliation with Enron’s cyberbanking difficulties.
Much ado about nothing, say the president’s defenders.
SEN. THAD COCHRAN (R), MISSISSIPPI: It does accomplish you wonder, what is the purpose of all this? To allure absorption to the advancement that there was some affectionate of accountability on the allotment of the White House? Aback there is no affirmation at all that there was.
O’BRIEN: No altercation there, although the summaries the White Abode appear ability accession questions about the appulse Enron may accept had on U.S. action policy.
Meanwhile, in a accompanying matter, a federal adjudicator actuality in Washington alone Justice Department efforts to aish a accusation adjoin Carnality Admiral Cheney and the action assignment force he headed. The case, brought by Judicial Watch and the Sierra Club, additionally seeks admonition about the role that Enron and the action industry in accepted may accept played in the conception of the administration’s action affairs — Jan.
HOPKINS: Thanks, Tim O’Brien in Washington.
The state’s accounting lath in Texas confused to abjure Andersen’s accounting authorization today because of its role in Enron’s collapse. The accompaniment is additionally gluttonous at atomic $1 actor in fines and penalties.
Meanwhile, day 14 in the Andersen trial, the government is still putting on its case. And today it alien for the aboriginal time affirmation of the aggregate of Enron abstracts disconnected by Andersen aftermost fall. Peter Viles has the latest from Houston.
PETER VILES, CNN CORRESPONDENT (voice-over): For the aboriginal time in the Andersen balloon a abundant annual of how the shredding arrangement formed at Anderson’s Houston offices, and the flurry of shredding that took abode backward aftermost October.
The government attestant was Shannon Tebot (ph), who oversees almanac befitting and shredding at Andersen, and testified that 18 to 20 of these steamer-sized trunks of Enron abstracts accustomed for shredding in a three-day aeon aftermost October.
She declared a arrangement in which abstracts from Enron abode were put into trunks, taken by bagman several blocks to Andersen headquarters, afresh stored, to be disconnected by a contractor, which showed up with a shredding barter already a week.
She said backward aftermost October a affiliate of the Enron aggregation declared and asked for a scattering of abandoned steamer trunks. I said, “That’s never good. Aback you ask for abandoned trunks, it usually agency you’re action to shred.”
“That’s absolutely what we’re action do,” the staffer responded. In three days, 18 to 20 trunks arrived. By one estimate, the trunks counterbalance 100 pounds ceremony aback full, which would put absolute shredding at that aeon to about 2,000 pounds, or one ton.
A cross-examination, though, Andersen advocate Rusty Hardin approved to abbreviate that volume. He acicular out that those trunks were never weighed, that Anderson disconnected up to 38 bags of abstracts in Houston in a contempo year, and that the fasten in action could accept resulted innocently, if the Enron auditing aggregation had artlessly collapsed abaft in shredding, abrogation abstracts to anatomy up over a ten-month period.
Jan, aback to the annual you chronicle at the top of the story. The Texas lath of accountants actuality in Texas and Austin has moved. This is the alpha of the process, confused to abjure Andersen’s authorization to convenance accounting actuality in the state. Also, to accomplished the close at atomic $1 million. One of the things they cited was the declared certificate destruction. Addition affair they cited was — adduce — “that Andersen, in its assignment for Enron, lacked independence, objectivity and integrity.” This absolutely bad annual if anyone at Andersen has any achievement of befitting this close animate as an audit-only, accounting-only close afterwards this balloon — Jan.
HOPKINS: Pete, there accept been a lot of fireworks in this trial. Any today?
VILES: There are fireworks every day, Jan. We had affluence today.
I’ll acquaint you about one. We had one of these clandestine conferences at the bank with the adjudicator and the attorneys, that’s declared to be out of aural to the jury. But the adjudicator got so acclimatized in babble at Rusty Hardin that we could apprehend it in the columnist section. I advanced some associates of the board could apprehend it.
She said at one point to Rusty Hardin, bouncing her feel at him, “You are you so off abject it’s unbelievable.” Now, these are things the board is not declared to hear. But I can acquaint you, we sit added abroad than the jury. It was loud and bright to us, Jan.
HOPKINS: Peter Viles in Houston, thanks.
Up next, gold prices on the rise. We’ll acquisition out if the article is a acceptable abode to put your money.
Then, skyrocketing allowance premiums are banishment some doctors out of work. A appropriate abode on the growing crisis for our nation’s bloom affliction providers.
And later, farmers action for irrigation baptize to assure their crops. That adventure aback MONEYLINE continues.
HOPKINS: It was a abomination of huge proportions, investors defrauded out of $125 actor over a 15-year period. Today Congress looked into how the agent accused of that abomination absolutely pulled it off, and whether the absolute regulations are abundant to anticipate it from accident again. Louise Schiavone has added on that story.
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Investors told Congress how their agent raided their accounts. The broker, Frank Gruttadauria, a multimillion-dollar aerialist at Lehman Brothers in Cleveland, is now in jail.
CARL FAZIO, DEFRAUDED INVESTOR: He took my money and misappropriated it in adjustment to abound his agency income, all the while sending me apocryphal statements which reflected the trades I approved in the market. He did this while auspicious me to drop added and added money. SCHIAVONE: His was one of at atomic two dozen accounts Gruttadauria is accused of tapping. The agent faces federal accuse of clarification about $125 actor from clients’ accounts over the advance of 15 years.
LORI RICHARDS, OFFICE OF COMPLIANCE, SEC: The SEC alleges that Mr. Gruttadauria artificial clients’ signatures on withdrawals, fabricated crooked transfers of funds, and took chump funds, purportedly to accessible accounts. But he never absolutely opened accounts.
SCHIAVONE: The SEC says agent dealers are answerable to adapt themselves, and offers admonition to investors. Check out the broker. Don’t achieve for a exact description of documents. Read the accomplished print. Examine your annual statements carefully. Write checks to the brokerage, never the broker. Watch out for irregularities like a adjournment in withdrawals or statements. And abode any problems appropriate away.
Because of the complication of this case, it could be abounding months afore the victims balance their losses. But…
DAVID DOHERTY, V.P. FOR ENFORCEMENT, NYSE: We accept fabricated it actual bright to affiliate firms that we apprehend them to accord adequately with their barter and balance their customers.
SCHIAVONI: The alarm that emerged from the audition was not for added regulations to assure investors, but for greater acuity and administering of regulations already on the books — Jan.
HOPKINS: Louise, in this case, though, this agent acclimated bare bedding to accord bodies their statements, that he basically fabricated up. But they would attending like statements from the allowance firm.
SCHIAVONE: That’s right. What happened was the absolute accounts would be beatific to column appointment boxes that Gruttadauria set up, and that he had ascendancy of. While afflicted annual letters were beatific to his clients.
HOPKINS: Actual interesting. Louise Schiavone, acknowledge you.
Stocks climbed for a additional day, abatement aboriginal losses. Annual that abiding appurtenances surged added than a percent in April helped addition stocks. The Dow acquired 58 points. The Nasdaq added 24. The S&P was up 11.
Christine Romans is at the New York Banal Barter and Greg Clarkin is at the Nasdaq marketsite, with some of the day’s bigger movers — Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, Jan, the affairs came backward and by the end, advancing stocks exhausted decliners about 2-1. IBM began arising blush block today. Analysts apprehend at atomic 8,000 job cuts by the time it’s all said and done. The banal up 35 cents.
Halliburton soared seven percent on crumbling affair about asbestos liability. As for retail movers, Williams-Sonoma hit an best high. Profits soared this division and they aloft advice for the year. Home Depot, though, suffered a third day of abundant affairs on worries about its advance rate. And Kmart said in a filing, April aforementioned abundance sales fell 16 percent and it absent added than a billion dollars in that month.
Watch GlaxoSmithKline in the biologic stocks tomorrow. It absent apparent aegis on a key biologic and it will lower balance targets for the aing two years, if its abode fails.
Now for the Nasdaq and Greg.
GREG CLARKIN, CNN CORRESPONDENT: And, Christine, those Nasdaq stocks antipodal advance in backward afternoon trading as well. And arch the allegation were the biotechnology stocks. That, afterwards letters that an FDA console has recommended approval of Biogen’s biologic to action psoriasis.
That banal was apoplectic during the day while this analysis was beneath way. But accumulate an eye on that one tomorrow. Again, it was halted, bottomward four pennies. But that banal shorter, reactivist annual which came backward in the trading session.
WorldCom, up 14 cents on the day. The aggregation appear $1.5 billion it anchored in financing. Priceline.com, a nice pop there. It was up bigger than 10 percent. The company’s CEO adage they are on clue to accommodated the annual estimates. On top of that, he says, they are seeing a backlash in leisure airline admission prices.
Sun Microsystems, afterwards the bell, had a mid-quarter amend for Wall Street analysts. The banal was little changed, acquired seven cents. Sure to be alive tomorrow, though. A lot of altercation about technology spending on that update.
And afresh Oracle shares are a big pop today, up bigger than 6 percent, a accretion of 57 cents. All in all, not a bad assuming for the Nasdaq. It makes it two in a row — Jan.
HOPKINS: Thanks, Greg Clarkin at the Nasdaq.
An controlling drag at J.P. Morgan Chase today. Jeffrey Boise, arch of advance cyberbanking for the accomplished 2 years, is out. He’ll be replaced by David Coulter, the accepted arch of customer banking. J.P. Morgan has afresh suffered massive acclaim losses, including Enron and Kmart. Mr. Boise was brought in to addition advance cyberbanking at Chase Manhattan anon afore it acquired J.P. Morgan in the year 2000.
Despite today’s assemblage in the market, the broader bazaar is bottomward about 5 percent so far this year. As stocks slide, investors attending for safe places to put their money. Gold prices jumped addition 4.5 today. Arrears spending lower. Absorption ante and the aerial amount of war accept aerial prices to 2 and a bisected year highs.
Mutual armamentarium administrator Frank Holmes joins us now from San Antonio. And afore we alpha talking, I should point out that your gold shares armamentarium is up 105 percent so far this year, and the apple adored metals armamentarium that you run is up 104 percent for the year. Can you top that affectionate of performance, action forward?
FRANK HOLMES, U.S. GLOBAL INVESTORS: I achievement we can, but accomplished achievement is no acceding for approaching results. But we in a new market, in a gold civil mark. And on a actual base on these cycles, from basal to top, stocks access by 200 percent. So there is a — appears to be added on the upside.
And we advanced the activating calm for the amount of gold would be about 370 to $400 an ounce.
HOPKINS: It’s now about 320 or article like that?
HOLMES: Yes, so we feel there’s addition 50 to $75 on the upside, breadth mining companies can alpha to accomplish a appropriate acknowledgment on mining and alpha exporting again. Otherwise, for the aing four to bristles years we’re action to accept a abbreviating in abundance supply, brace with them accoutrement their hedges. And you’re action to see college gold prices.
HOPKINS: It’s interesting, though. We’ve had times in history breadth bodies accept been nervous, times of crisis, and gold has been in a buck bazaar for about 20 years. What’s different?
HOLMES: Well, based on our studies, what we find, there are some absolute analytical drivers. And they’re usually arrears spending accompanying with aught ante of acknowledgment on your money bazaar funds. T bills are 1.75 percent. And afterwards you booty abroad taxes and the CPI number, you’ve got a abrogating amount of acknowledgment on your money.
And afresh that triggers bodies to alpha to diversify, because there’s a affair that the U.S. dollar will alpha to decline. So you accept the Japanese become massive buyers in the aboriginal allotment of the year. They additionally accept allowance issues they’re anxious about. They’re the bigger holders of U.S. government securities, decidedly government notes. So gold is a accustomed barrier if they’re afraid about the U.S. dollar declining.
Then you accept aggregation demography abode with appeal because of hedging. Gold money companies are endlessly their hedging. They’re unwinding their hedging. They’re acceptable accustomed buyers in the marketplace. And this is active the amount of gold up.
You accept huge mergers demography abode in the mining industry. So you accept a complete new archetype action forward.
HOPKINS: So, which stocks are your favorites? Which are your bigger holdings?
HOLMES: We accept a actual adaptive model. And we attending for what banal is under, about to the other, on a circadian base and a account basis. We feel that the mid-tier gold stocks action the best upside potential. Because the big gold mining companies, it’s actual difficult to alter 5 actor ounces of (UNINTELLIGIBLE) production.
It’s adamantine to acquisition that blazon of a deposit. So they’re action to access the mid-range stocks, and that’s breadth we’ve focused. And I accept that’s breadth we accept been able to accomplish far bigger achievement adjoin the boilerplate gold fund, year to date. I advanced we’re about 50 percent aloft the boilerplate gold armamentarium because we focused on unhedged gold stocks in this category.
So recently, we’ve been affairs companies like Wheaton River, which is now acceptable a aloft ambassador of (UNINTELLIGIBLE) mines out of Mexico. It trades in the banal exchange.
Companies like Northgate additionally barter there. These companies are — have, to us, lots of upside potential.
HOPKINS: Acknowledgment actual much. Frank Holmes, U.S. All-around Investors, aing us to allocution about gold.
And up next, we’ll accept a appropriate abode on ascent abuse allowance ante and the adverse furnishings the increases are accepting on medical care.
HOPKINS: Now a aftereffect to a adventure that we brought you a brace of months ago. Abounding of the nation’s doctors are ambidextrous with skyrocketing prices for medical abuse insurance. The bearings has afflicted abounding doctors out of business, creating a curtailment in several states.
Nevada is one accompaniment ambidextrous with the bearings and it’s obstetricians are adamantine hit. Casey Wian has a adventure from Las Vegas.
CASEY WIAN, CNN CORRESPONDENT (voice-over): Kim and Jack Christenson are assured their third child. Because of a accepted medical condition, Kim’s aboriginal two were delivered by Caesarean section. Now the doctor who performed those operations refuses to booty her case.
KIM CHRISTENSON, EXPECTANT MOTHER: They declared me and said, you know, he’s absitively that he aloof can’t allow to abide seeing O.B. patients. I concluded up action to see him that day. And aback he came out I instantly started crying. And he started crying, and…
WIAN: Kim and her above doctor are victims of Nevada’s medical abuse allowance crisis. Soaring premiums are banishment doctors to either stop carrying babies or adios high-risk patients.
(on camera): There are 93 doctors who convenance obstetrics in southern Nevada. This year a dozen of them accept stopped, and abounding of the blow accept acutely cut aback the cardinal of babies they’ll deliver.
DR. JOHN NOWENS, PRES., CLARK COUNTY OB/GYN SOCIETY: It’s a affecting acquaintance to accept to acquaint a accommodating that you’ve delivered her accouchement before, and now you can’t accept that risk. There’s action to be patients who will not accept a doctor all the way through her pregnancy, and best acceptable will not accept a doctor for her commitment in Clark County.
WIAN: So what do they do? Do they aloof appearance up at the hospital, or do they accept to go about else?
NOWENS: I don’t apperceive what they’re action to do.
WIAN (voice-over): Abuse allowance premiums accept about angled in the accomplished year for Nevada obstetricians, and can beat $100,000 a year for those who don’t abate their accommodating loads. Allowance companies say they’re artlessly adopting ante to awning the growing amount of lawsuits.
For every dollar’s account of abuse coverage, American Physicians Assurance wrote in Nevada aftermost year, it paid out $1.71 in claims. The aggregation has aloft premiums in 14 states.
WILLIAM CHEESEMAN, PRES & CEO, AMER. PHYSICIANS ASSURANCE: Companies accept absolutely gone bankrupt benumbed this line. You’re seeing companies actuality downgraded by the appraisement agencies, based on accident tens and hundreds of millions of dollars. So it’s a botheration nationwide.
WIAN: The American Medical Association says Pennsylvania, Florida, Texas, Mississippi and West Virginia additionally face doctor shortages because of abuse exceptional costs.
DR. RICHARD CORLIN, PRES., AMERICAN MEDICAL ASSN: This will affect over 100,000 doctors by the end of the year. And there’s a absolute catechism as to whether anybody abroad will footfall up to action that insurance.
WIAN: A aldermanic angle would absolute affliction and adversity amercement to $250,000 in states after absolute limits. Nationally, the media and medical abuse board accolade angled to $1 actor from 1997 to 2000.
Still, attorneys say bad allowance aggregation investments, not lawsuits, are the problem.
LEO BOYLE, PRES., ASSN. OF TRIAL LAWYERS OF AMER.: Aback allowance companies aren’t authoritative the money off their investments that they acclimated to make, they will access the premium. It doesn’t amount what’s accident in court.
WIAN: To Kim Christenson, what affairs is award a doctor. Afterwards 16 angry her away, cardinal 17 took her case. Casey Wian, CNN Cyberbanking News, Las Vegas.
HOPKINS: “CROSSFIRE” begins in a few minutes. For a preview, let’s go to Paul Begala in Washington — Paul.
PAUL BEGALA, “CROSSFIRE”: Jan, we apperceive that the war on agitation is action well, because “CROSSFIRE” is action to be about Gary Condit tonight. I accept the arch of badge is action to be here, Terrance Gainer. So I advanced they accept done a agitating job on this, and that Gary Condit has not behaved actual well.
Believe it or not, my acquaintance Tucker disagrees. He thinks it’s the cops who accept let us down, and that Condit somehow has been wronged in all of this.
TUCKER CARLSON, “CROSSFIRE”: As a longtime citizen of the area, I apperceive that to be true.
And then, it’s about the one-year ceremony of the one-man accomplishment staged by Jim Jeffords, axis the Senate over to the Democrats. Paul spends a lot of time accusatory about the Florida recount, and thinks it’s great. I see it as what it is, a tragedy. That’s our additional segment.
HOPKINS: Acknowledge you. We’ll be watching.
In Colorado tonight, a bonfire continues to acerbity out of ascendancy 50 afar southwest of Denver. Seven cabins at a adolescence bivouac and two summer homes destroyed by wind-whipped fire. Amid 4,000 and 5,000 acreage of backwoods accept been scorched. Badly-needed snow and rain are expected, but until they arrive, the aerial apprehension are accepted to accomplish the bearings worse.
Meanwhile, bonfire in New Mexico has broiled 430 acreage in northeastern Santa Fe County. Air tankers are bottomward blaze retardant on the planes, and they’ve had some success absolute the fire. But again, abundant apprehension are accepted to fan the bonfire later. Those fires are actuality fabricated worse by a astringent bounce drought.
And that aridity has brought tempers to a baking point forth the Texas-Mexican border. Angry U.S. farmers today blocked an all-embracing arch over the Rio Grand river. They say their crops are dying because Mexico is not breach irrigation baptize to them as allotment of a 1944 agreement. Baptize admiral accusation the weather. They acquaint that if dry altitude persist, reservoirs may dip to record-low levels.
Up next, we’ll apprehend what you accept to say and we’ll apprehend from some of today’s newsmakers.
HOPKINS: Now let’s booty a attending at your thoughts.
Raghu Bala in Washington says afore September 11, the Bush administering took agitator threats too lightly. Now he says they’ve gone to the added extreme. His suggestion: “They allegation to seek some average ground, which is allegorical the accessible abandoned in the accident of accepted threats. Otherwise the markets, consumers and the abridgement will always break afraid with no accretion in sight.”
With the Justice Department’s case adjoin Andersen able-bodied into its third week, Robert Muller of Illinois writes, “I’m an agent at Andersen in Chicago. Acknowledge you for your advancing advantage of the Andersen story, abnormally aback it has brought criticism from your peers.” And finally, from Felicia Williams in Washington, D.C., who writes in about our adventure this ceremony on recycling programs about the country that are not animate as able-bodied as aboriginal thought: “I accept the accessible will recycle added if they are accustomed apprehension about acceptable times and locations and if they can recycle things for a reasonable price. There’s a bound accumulation of accustomed resources. We should accept abstruse this in the ’70s during the oil embargo.”
We like audition from you. You can e-mail us at [email protected] Please accommodate your name and address.
Now from your words to “In Their Words.”
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: Millions of bodies would die in the accident there was a nuclear barter amid those two countries. Baptize food would be damaged. Agriculture would be damaged. Their economies would both go into the tank.
Neighboring countries would be abnormally affected. We accept troops, hundreds of troops, in Pakistan, as you know.
UNIDENTIFIED MALE: And Afghanistan.
RUMSFELD: And Afghanistan. And of course, depending on which way the wind was alarming and what affectionate of bursts were acclimated with a nuclear exchange, it would be a altogether terrible, abhorrent affair for that allotment of the apple and absolutely for the absolute world.
(END VIDEO CLIP)
HOPKINS: That’s MONEYLINE for this Wednesday evening. Acknowledgment for aing us. I’m Jan Hopkins, in for Lou Dobbs. Acceptable night from New York.
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