Iraq's New Government Takes Another Step Aimed at Stopping the Violence; Return of the Missing U.S. Marine
Aired July 15, 2004 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Good evening everyone. Welcome to NEWSNIGHT. I'm Wolf Blitzer sitting in tonight for Aaron Brown. Iraq's new government today took another step aimed at stopping the violence. This is something ordinary Iraqis badly want and in announcing the creation of a powerful internal security service, Iraq's interim prime minister Ayad Allawi seems to be listening by giving the people what they want. Rarely, however, does that come without a cost. Increasing security often means decreasing freedom. Will it mean that in Iraq? The answer may not be known for months, perhaps even years. Right now, however, Iraqis seem willing, even desperate to make the tradeoff. Given the violence there you really can't blame them, indeed yet another bombing today.CNN's Michael Holmes is in Baghdad, Michael a headline please.
MICHAEL HOLMES, CNN CORRESPONDENT: Wolf, on a day when the Iraqi interim prime minister said there was more security there was also more bombs, more deaths and, as you said, the announcement of a new Iraqi intelligence service -- Wolf.
BLITZER: All right, Michael, we'll get back to you.On to the Pentagon and the return of the missing U.S. Marine, not exactly a storybook homecoming though. CNN's Jamie McIntyre has the watch tonight -- Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, to judge from the Marine Corps' public statements you would think that the return of Corporal Hassoun is just a routine repatriation, as they call it, of a former hostage but what the Marine Corps isn't saying is they still suspect he might have been a deserter.
BLITZER: All right. Up next the Martha Stewart case. She's about to find out what price she is going to have to pay. So is her company. So are the shareholders, all of them watching very closely. Our Financial Correspondent Allan Chernoff is working the story for us, Allan a headline from you.
ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: On the eve of Martha Stewart's sentencing her company is continuing to suffer. Advertisers are fleeing "Martha Stewart Living" magazine -- Wolf.
BLITZER: All right, we'll get back to you. Finally, the campaign trail and CNN's Kelly Wallace, who spoke just a short time ago with John Kerry's running mate John Edwards, Kelly your headline.
KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Wolf, in his first CNN interview since being named John Kerry's running mate, John Edwards talked about adjusting to his new role, whether he regrets his vote on Iraq and whether he made any deal with John Kerry not to run against him in 2008 if team Kerry-Edwards is not victorious this year -- Wolf.
BLITZER: All right, Kelly, we'll get back to you. In fact, we'll get back to all of our reporters.Also ahead on NEWSNIGHT tonight, it's the vote John Kerry won't have trouble receiving but it will be the vote he'll have trouble increasing.And it's being called the worst wildfire ever in Carson City, Nevada, as 12 homes have already burned and hundreds of others are threatened.Plus, a terrible cycle of violence in Gaza that never seems to end. Tonight we'll take a look at where it begins, all that and more in the hour ahead.But we begin once again tonight in Baghdad. For months now the story there and in the rest of Iraq has been security or perhaps more appropriately the lack of security. The young interim government began working on the problem almost the instant it took over just about two weeks ago. It took another important step today and so did the insurgents.Again from Baghdad, here's CNN's Michael Holmes.
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HOLMES (voice-over): Taking the fight to the insurgents that was the message from Iraq's interim government Thursday.
AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER (through translator): We are determined to bring down all the hurdles that lay in the way of our democratic march and our freedom.HOLMES: Part of the plan the formation of a internal intelligence agency, the General Security Directorate, its job to infiltrate the insurgency, gather information, help wipe it out.(on camera): Mention an intelligence service in this country and many people think back to the bad old days of Saddam Hussein when his domestic spies would show up in the dead of night and take away husbands, brothers and sons never to be seen again but on the streets of Baghdad today we found some optimism for the new service.
UNIDENTIFIED MALE (through translator): I wish they had taken the step from the beginning because our people have been hit hard by looting and kidnapping.
HOLMES: The interim government is going out of its way to say there will be strict oversight and those accepted into the agency would have to have, in the words of the interior minister, clean hands.Allawi also said he'd be trying to seal his country's porous borders from foreign fighters, adding that security in Iraq had improved despite another day of violence and death.A car bombing thwarted in Karbala when the vehicle was spotted but the bombers blew themselves up and no one else.But northwest of Baghdad in Haditha (ph), another car bomb killed ten Iraqis and wounded 30, a massive bomb apparently directed at a local police station.And, in Kirkuk, mortars apparently aimed at a police station fell on a house instead killing five members of a single family, including three children.Another pipeline attack, too, south of Kirkuk a common tactic by insurgents as they work to destabilize the country's economy.Prime Minister Allawi said he will visit a number of Mid East neighbors, including Kuwait and later Iran. He also plans to go to Europe and Pakistan all looking for training assistance, money and troops from some countries to help tackle the insurgency he says is doomed to fail.
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HOLMES: And, Wolf, while the prime minister says he's going to be hitting the insurgents head on with things like that intelligence agency that he's setting up, it was, as we said, another violent day.And some bad news too on the hostage front. Perhaps a body fished out of the Tigress River, a headless body in the town of Beji (ph), that's north of Baghdad. The body had its hands bound and was wearing an orange jumpsuit. It is feared it is the body of one of those two Bulgarian hostages being held. There is DNA and fingerprint testing underway now to confirm the identity of that body, however, diplomatic sources here are telling us they fear it is indeed the Bulgarian hostage who Al- Jazeera said they had a videotape showing him being executed -- Wolf.
BLITZER: All right, CNN's Michael Holmes reporting from Baghdad with that. Michael thank you very much.An update now on the Filipino truck driver being held hostage in Iraq. A tape of his surfaced today. On it, Angelo de la Cruz tells his family, "Wait for me. I'm coming back to you." His captors say they'll let him go only when the last of 51 Filipino troops and police officers leave Iraq. Yesterday, the Philippine government announced the pullout is underway. Just months ago the government released a statement saying the entire contingent would be out of the country shortly. The Marine who showed up on another hostage tape is back on American soil tonight but not back home and not home free. He's in Virginia to answer questions about his disappearance and the mystery that surrounds it.From the Pentagon tonight, CNN's Jamie McIntyre.
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MCINTYRE (voice-over): Smiling and looking relaxed Corporal Wassef Ali Hassoun arrived at the Quantico Marine Base giving no hint of someone facing serious questions about whether he's a deserter. The Marines suspect Hassoun left his post in Iraq voluntarily last month with the intention of deserting and joining relatives in Lebanon.But publicly, the Marine Corps is playing it by the book, insisting that Corporal Hassoun is simply going through the normal repatriation process for any former hostage.
LT. COL. DAVID LAPAN, U.S. MARINE CORPS SPOKESMAN: Repatriation is the process of decompression, debriefing and integration of individuals who have been captured or detained. The length of this process can vary from weeks to months depending on the circumstances of the individual case.
MCINTYRE: The spokesman said Hassoun arrived tired but healthy and in good spirits. Otherwise, the Marines are saying little publicly about what explanation Hassoun has offered for his disappearance from Iraq June 19th and his reappearance in Lebanon July 7th when he turned himself over to U.S. Embassy officials.Sources say Hassoun insists he was abducted but in a brief statement issued in Germany, he made no mention of that, simply thanking the hospital staff and saying he was excited about going home but Hassoun won't be going anywhere anytime soon, not until maybe investigators determine if he should be subject to any military discipline.LAPAN: Corporal Hassoun will remain at Quantico until the repatriation team decides that he is able to return to full duty.
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MCINTYRE: So far, Corporal Hassoun has not been formally accused of any wrongdoing. He hasn't asked for a military attorney nor has he been assigned one, something that would be a necessary step if any charges against him are contemplated -- Wolf.
BLITZER: What are they saying, Jamie, at the Pentagon in the corridors there? How extraordinary, how unusual is this particular case?
MCINTYRE: Well, it is unusual and I have to say a lot of people who have uninformed opinion, that is they don't have any specific information, are very suspicious about the circumstances under which he departed Iraq and ended up in Lebanon.But people here have been careful to try to avoid speculating and wait for the investigation to determine the facts but there clearly was a previous position to believe that he had deserted and, unless he has a very good explanation for what happened to him, he may well face some sort of disciplinary procedure.
BLITZER: Jamie McIntyre with that information from the Pentagon. Jamie thanks very much.An update now, a welcome one, for the American soldier accused of cowardice in Iraq. Today the Army dropped its case against George Andreas Pogani (ph). He was initially charged with cowardice after suffering a panic attack on his second day in Iraq. The charge was later reduced to dereliction of duty.The decision to drop all charges came after doctors last month diagnosed him with a symptom consistent with side effects of the drug Lariam, which is given to prevent malaria. Those side effects include vertigo, hallucinations and panic attacks.The president today made impersonating someone else even more of a crime than it already is. He signed a bill making identity theft in connection with terrorism and a number of other offenses punishable by mandatory prison time. Also today the president chose his dad to lead the American delegation to the 2004 Olympics in Athens. In addition, he named his mom and twin daughters to the delegation, which also includes the owner of the San Diego Chargers and tennis champion Chris Evert.One item not on the president's agenda was a visit to the NAACP's convention today in Philadelphia. He hasn't spoken to the organization since the 2000 election campaign when it ran an ad that portrayed the president as unsympathetic to the dragging death of an African American in Texas.Today, Dan Bartlett, the White House Communications Director, tried to separate the group from the members. "The president," he said, "has many friends who belong to the NAACP and respects their proud history of championing civil rights. However" he went on to say "the current leadership of the NAACP has clearly cross the line in partisanship and civility making it impossible to have a constructive dialogue." Bottom line, no appearance by the president. He will address the Urban League next week.His opponent, on the other hand, did speak today in Philadelphia, the story now from CNN's Candy Crowley.
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UNIDENTIFIED MALE: The Honorable John F. Kerry, give him a big hand.
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): He had them at hello but when President Bush declined an invitation from the NAACP it just got better.
SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: The president may be too busy to speak to you now but I got news for you. He's going to have plenty of time after November 2nd.
CROWLEY: Nine of ten African American voters in 2000 voted for Al Gore, meaning John Kerry's task is not winning the black vote but getting more blacks to vote. For that few words work better than Florida 2000.
KERRY: Don't tell us that the strongest democracy on earth, that a million disenfranchised African Americans and the most tainted election in American history is the best that we can do.
CROWLEY: Kerry's speech came as his campaign unveiled a $2 million ad buy targeted at the minority community.
UNIDENTIFIED MALE: Can he really make a difference for me and my family?
UNIDENTIFIED FEMALE: Learn about John Kerry's plan to expand access to health care to nearly all Americans, especially our children.
CROWLEY: That giant yawn you hear is the Congressional Black Caucus greatly under whelmed by the ad.
REP. JOHN KEWIS (D), GEORGIA: The ads need to be personal. They need to be warm and almost emotional to reach the very heart, to reach the very soul and gut of the African American voters. You got to inspire, not just those who are going to go out and vote but we got to get more of them to go out and vote.
CROWLEY: Black leaders say it would have been nice to be consulted on the ads before they aired but give camp Kerry high marks for listening now.
REP. ELIJAH CUMMINGS (D), MARYLAND: Kerry cannot win without the African American vote. We know that and he knows that.
CROWLEY: Yes, he does.
KERRY: Over the next three and a half months we need you to do what nobody in America does better register voters, talk to voters, talk to your neighbors and get people to the polls.
CROWLEY: New ads are being developed.Candy Crowley, CNN, Washington.
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BLITZER: Ahead on NEWSNIGHT, Martha Stewart's in trouble no matter what the outcome of her sentencing tomorrow.And later, two guys not in trouble, instead they're on the rise. Imagine wanting to go to work every day.Around the world this is NEWSNIGHT.
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BLITZER: The summer breezes mean one thing to most of us and something else entirely to a lot of people out west. They mean fire season is here spelling destruction for thousands of acres of tinder dry forest and a whole lot of grief for the people living nearby, from Carson City, Nevada tonight, CNN's Ted Rowlands.
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TED ROWLANDS, CNN CORRESPONDENT (voice-over): The fire which started early Wednesday morning has now consumed more than 10,000 acres. At least 20 homes have burned. People say as the flames approached they took what they could and got out. This woman lost her home.
NORMA JEAN BEST, LOST HER HOME: Well, I'm not mad. I'm very sad but I don't know.
ROWLANDS: Hundreds of firefighters from around the region have been called in to help (unintelligible) blaze but they say the weather conditions are making their job very difficult.
SCOTT HUNTLEY, FIRE INFORMATION OFFICE: The weather is very dry. The humidity is very low so we're not getting any breaks in this fire. There are some breaks though because we did save a lot of homes last night.
ROWLANDS: A late afternoon wind shift forced the closure of Highway 395, the main road into and through Carson City. Dozens of people forced out of their homes, some of them crying, sat with packed cars watching the flames move closer.
MATTHEW MURDOCK, EVACUEE: We got like a carload. We didn't really think that it was going to get that bad, so we just took a few things. We probably could have taken a few more things now that we know.
DAVID BRUKETTA, EVACUEE: It's hard. It's emotional. You know it's just my house, my life is back there but, you know, I got my kids and my family and that's the important thing.
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ROWLANDS: Well, investigators don't know if it was intentional or not. They say they are sure that this fire was set by an individual or group of individuals, possibly a group of teenagers in the area. Tonight, Wolf, this fire is zero percent contained. The hope is that Mother Nature will help some 900 firefighters that have come here to Carson City to battle this blaze overnight -- Wolf.
BLITZER: I know you don't have any scientific evidence and haven't done a complete survey but based on what you've heard do most of the people who are leaving or fleeing have insurance for their homes and their possessions?
ROWLANDS: Yes, by and large the people that we've talked to do have insurance but it's those items that, of course, that are unreplaceable are the ones that really hit home and the sight of seeing your house burn or thinking that your house may be burning is, as you can imagine, very emotional for these folks that have been evacuated.
BLITZER: I can only imagine. Thanks very much, Ted Rowlands reporting on the story for us.Once upon a time it would have been impossible to imagine the name Martha Stewart followed by the word sentencing. Tomorrow, however, that is what will happen in federal court in New York City, another chapter in the stunning story of the singular rise and fall and, make no mistake, fall is the word, especially where her various enterprises are concerned.CNN's Allan Chernoff has that story.
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CHERNOFF (voice-over): Martha Stewart's business empire has turned into a shrinking, money losing operation since her indictment and conviction. The business rose on Martha Stewart's image of perfection. Now it's fallen.
T.K. MCKAY, MORNINGSTAR: As long as her reputation is damaged in any way it's going to have a direct impact on the long term prospects of this business.
CHERNOFF: Most troubled, the magazine that is the heart of Martha Stewart Living Omnimedia. Advertisers have been fleeing. Ad pages in "Martha Stewart Living" plummeted 42 percent during the first half of the year, compared to the same period last year and ad revenue has collapsed 52 percent, the worst performance of any major publication. The company has cut circulation promised to advertisers by 20 percent down to 1.8 million.
BRENDA WHITE, MEDIA DIRECTOR, STARCOM USA: The view from a buyer's perspective is, is that there is some cause for concern with the fact that a lot of advertisers have pulled out.
CHERNOFF: The company has put Martha Stewart syndicated television program on hiatus for the coming season and cut its staff. Martha Stewart Living merchandise sales have held up but the company will be getting smaller royalty payments from Kmart under a new contract.Martha Stewart Living Omnimedia declined to speak on camera. A spokesperson said: "People are focused on doing what we love to do and producing the products we know our customers love. It's business as usual." But increasingly it's business without Martha Stewart. Her replacement as chief executive Sharon Patrick is engineering a subtle re-branding. Beginning in September the flagship magazine will show a redesigned cover to emphasize the title "Living" de- emphasizing Martha Stewart's name. "Everyday Food" magazine dropped its subtitle, "From the Kitchens of Martha Stewart Living."
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BLITZER: This is a story that still needs some chewing over, so Allan Chernoff is going to join us now live in New York, along with our legal analyst Jeffrey Toobin, gentlemen, thanks very much for sticking around.Jeffrey, first of all, is there any doubt whatsoever that she's going to be going to jail?J
EFFREY TOOBIN, CNN LEGAL ANALYST: I would say there's almost no doubt. The sentencing guidelines are not ironclad when it comes to a case like this but based on what I've been able to determine, it's almost certain that she will -- her sentencing range will be between ten and 16 months, although some of that sentence might be served in house arrest, so some prison time is virtually a certainty.
BLITZER: What about that whole issue of that FBI analyst who is now accused of having lied about some of the evidence in this case? I thought that was going to reopen the case potentially.
TOOBIN: Well, there were two post trial motions that were actually very serious. There was the FBI agent who is now under indictment for perjury in the case -- I'm sorry, not FBI, it was Secret Service. And then there was the juror who apparently lied during voir dire.Judge Cederbaum has rejected both of those claims for a new trial, so Martha Stewart's only hope is to win on appeal because Judge Cederbaum has rejected them and they are not a bar to sentencing at this point.
BLITZER: Allan, she's been selling off a lot of her stock lately. I assume she's still making a lot of money on that.
CHERNOFF: Certainly. Chief executives get their stock usually at a pretty good price and Martha Stewart has been trying to get her financial house in order. She is also selling an apartment on the west side of Manhattan, so before she anticipates, she's expecting of course to go to prison, so she wants to have everything in place.
BLITZER: And in these months that have just gone by she has not exactly been invisible. She's been very much out there. What is her strategy if you will?
CHERNOFF: Very hard to say exactly but among celebrities heading to prison very often there is an attempt to basically make a statement by saying, not only am I out here but I am coming back. So, she has very much been in all the Hamptons parties, very much in the public eye, appearing in the gossip pages.
TOOBIN: And, Wolf, I actually think what she's doing is entirely appropriate. She is not changing her life. She is living. She's a businesswoman with an active social life. What would be inappropriate I think is if she suddenly started volunteering at homeless shelters, which would be a transparent attempt to curry favor. Martha Stewart is who she is and there's no point in pretending otherwise.
BLITZER: But, Allan, on the other side -- now, Jeffrey, let me ask you this question. On the other side, if she were showing some remorse and being apologetic wouldn't that potentially influence the judge?
TOOBIN: You know that's a very interesting question because she has the opportunity to make a statement tomorrow. What is she going to say? If she apologizes she potentially jeopardizes her appeal because her appeal is based on the fact that she's innocent.But if she's defiant that's certainly not going to help her get a lower sentence, so she's got to thread a needle if she says anything at all. I think, you know, living her life in an honest way is probably just the best thing she can do.
BLITZER: Allan, the stock, the value of the stock, what's the word on the street? If she does go to jail let's say for a year or in a halfway house for a year and a half or some sort of incarceration, what's going to happen to that stock?
CHERNOFF: Well, no way to be sure but the stock right now is trading just about $1 above where it was following Martha Stewart's indictment, pretty much the lowest level. It's at $8.00 and change. The investors are really anticipating there are not going to be any earnings coming out of this company for some time. The business clearly is in a serious decline but we should also note it is in absolutely no danger of collapse. There is lots of cash on the books and no debt whatsoever. That's very important.
TOOBIN: But there's also another issue about sentencing is that, you know, she is likely to get bail pending appeal and this appeal probably won't be decided until early 2005. That means if she serves a year it won't be until 2006 until she can get her business going. She'll be close to 65 years old at that point. It's just very hard to see how the calendar stacks up in her favor.
BLITZER: We're going to have complete coverage starting around 10:00 a.m. tomorrow morning here on CNN, all these developments. Jeffrey Toobin, Allan Chernoff thanks to both of you for helping us better understand these nuances, appreciate it.Coming up on NEWSNIGHT, an interview with John Edwards, he sits down with our Kelly Wallace.And, is Dick Cheney bad for President Bush, rumors swirling here in Washington.From NEWSNIGHT, this is CNN.
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BLITZER: The country has gotten to know North Carolina Senator John Edwards pretty well, at least up on the podium stump kind of speech. Throwing your hat into the ring for the presidential nomination at first and now as a campaigner for the Kerry-Edwards ticket gives you the chance to do exactly that to stand at the microphone and address large crowds.Today, though, CNN's Kelly Wallace had the opportunity to listen to John Edwards in a slightly different way -- Kelly.
WALLACE: Wolf, yes. Wolf, John Edwards telling us it's been a bit of an adjustment moving from presidential candidate in the spring to vice presidential candidate now but in this his first CNN interview since he was named John Kerry's running mate, he says it's all been a very, very easy transition.Of course the two Senators have a lot in common. They both voted for the Iraqi war resolution giving President Bush the authority to go to war with Iraq. So, I asked Senator Edwards, knowing what he knows now, with reports of faulty pre-war intelligence on Iraq, if he regrets the vote he cast.
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EDWARDS: I believe that the president should have been given the authority that he was given. I also believe it's a very good thing that Saddam is gone. I think it's good for America, good for that region of the world.
WALLACE: So you don't regret your vote then?
EDWARDS: I think at the time it was the right thing to do to give the president that authority. I think if we had given that authority to John Kerry, we'd be in a very different place, because he would have built the coalition to be successful, instead of us doing it alone with just the British. And, second, he would have had a serious plan to win the peace, which this president didn't have.
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WALLACE: We also asked the senator, who was doing a front porch tour earlier today in New Orleans, if he gave John Kerry any assurances that he would not run against him in 2008 if team Kerry- Edwards is not victorious in November.The senator, refusing to answer that question specifically, but he seemed to indicate he has no plans to run against John Kerry anytime soon.
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EDWARDS: First of all, I am completely loyal to John Kerry, period. And that includes now. It includes in the future, and I am 110 percent about -- Elizabeth and I, my wife and I both -- about making sure he's the next president.
WALLACE: So it sounds like that means future...
EDWARDS: I am loyal to John Kerry 100 percent.
(END VIDEO CLIP)
WALLACE: And as for the role he will play, he says primarily touting his boss, he says, trying to let voters learn a bit more about John Kerry. He acknowledges, or says, that he thinks voters still aren't very familiar with John Kerry, despite months of campaigning and millions of dollars spent on advertising.He also says he's mainly going to be putting forward a positive message, but he seemed to indicate he will be willing to play the part of attack dog, contrasting the Kerry-Edwards approach with the Bush- Cheney approach, when necessary.Tonight, though, Wolf, it was all positive, all the time, for John Edwards here in Houston. He raised a little more than $500,000 for the Democratic Party and the Kerry campaign, and tomorrow he heads to Los Angeles to meet with some Hispanic voters.
BLITZER: All right. Kelly Wallace, good work. Thanks very much.Let's get a little bit more analysis now on what all of these political developments mean. Joining us to chat a little bit about the political tidbits, juicy and otherwise, of the day, Richard Wolffe of "Newsweek" magazine.Richard, thanks very much for joining us.All of a sudden, 24 hours later, 48 hours later, Senator Hillary Rodham Clinton will, after all, be a primetime speaker at the Democratic Convention in Boston. What happened?
RICAHRD WOLFFE, "NEWSWEEK" MAGAZINE: What happened was she mobilized her base. She's too big a character to say no to. But, you know, this is a mixed blessing for her. The spot she's got is introducing her husband. And, as you know, she's been working her heart out to try and establish her own reputation over the last few years. So to be there umbilically-linked to her husband, not the best place for her.
BLITZER: That will be Monday night, the first night of the convention in Boston.We woke up this morning, we saw this, I must say, a little strange story on the front page of the New York Times reporting these rumors that Dick Cheney might be dumped, that the new doctor might be coming in to say his heart isn't necessarily as robust as it should be. You read that story. What was your reaction?
WOLFFE: Well, I can't believe it's summer already and we're running that kind of thing.But, you know, this is what people are talking about. It's been running for a while. My gut feeling is there is no chance on earth that the president would dump Dick Cheney. They like each other. They admire each other. He values his counsel. It's not just a sign of desperation if he were to do that, but it's just not in the character of the president to do that right now. So I take them at their word. I think it's ridiculous.
BLITZER: All right. Bush-Cheney. That's -- you heard it right here, not going to change.The president's decision not to attend this meeting of the NAACP, on the one hand, you can't blame him, the leadership of the NAACP has made it clear they're not going to support him.
WOLFFE: Right. But, you know, this is a big difference from four years ago. If you remember, George Bush ran as a different kind of Republican. And one of the building blocks for being a different kind of Republican was attending the NAACP and talking about race in a way that other Republicans hadn't.I think this is a problem for him, not because of the NAACP, but because of this profile, his appeal to swing voters, moderate voters, so it's not a good place, not a happy place for him to be in right now.
BLITZER: Speaking of profile, the twins, the daughters, Barbara and Jenna Bush, they have a much higher profile already, and it's about to get even higher.
WOLFFE: Yes. Very interesting, the human side of President. Interesting timing, too. It looks a bit like "me-too-ism," after all those glowing pictures of the Edwards family. But, you and I know, the lead times on those Vogue pictures put it well in advance of where we are now, so good planning, good timing, and the daughters look great.
BLITZER: Since I haven't been photographed in "Vogue" magazine, I don't really know much about the lead time of that, but I can only assume it's many, many months.
WOLFFE: Yes. Especially if you have a ball gown.
BLITZER: All right. Thanks very much, Richard, for that. Richard Wolffe, of "Newsweek" magazine.One more political tidbit, this one concerning the anti-war billboard a liberal group wanted to put up in New York's Times Square, where it would be seen by delegates to the Republican convention at the end of August. After being threatened with a lawsuit, Clear Channel Media, which owns the space that would accommodate the billboard, has said it will allow the sign to go up after all. One change though: There will be a dove, not a cartoon bomb, alongside the message, and I'm quoting now, "Democracy is best taught by example not by war."Still to come on NEWSNIGHT, part two in our missile defense series "On Land and At Sea."And, still later, the child fighters of the intifada. A break, first.This is NEWSNIGHT on CNN.
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BLITZER: And our deepest condolences to their families. Last night on this program, David Ensor gave us a fascinating look at a very large, very expensive new part of the nation's defense: The new anti-missile system taking shape in Alaska, Texas and around the country.Critics call it a "boondoggle." The Bush administration calls it "essential." Either way, it amounts to billions of your tax dollars at work, year in and year out, for as far as the eye can see.Last night, David showed us the radar. Tonight, he shows us the rest.
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DAVID ENSOR, CNN CORRESPONDENT: On a remote Alaskan base, new underground silos in place for the nation's first-ever defense against attack by enemy missiles. Tests so far have shown the system can track a missile...
UNIDENTIFIED MALE: Liftoff is confirmed. ENSOR: ... launch an interceptor capable of traveling at eight kilometers a second, and sometimes, more often than not, knock out the missile in space.
LIEUTENANT GENERAL RONALD KADISH, FORMER DIRECTOR, MISSILE DEFENSE AGENCY: We do not choose to be vulnerable against someone like North Korea or Iran who are trying to get weapons of mass destruction.
ENSOR: The system will use radars positioned around the world on land and at sea to track enemy missiles, and, eventually, about 20 interceptor missiles tipped with sophisticated kill vehicles to stop them. This is just the ground-based portion of a multilayered missile defense system, which will eventually include space-based and sea- launched intercepts. A total projected price tag over the next five years: $53 billion. The cost of the giant radar that will sit atop a massive floating platform that can deploy at sea is, in itself, $815 million. President Bush is likely to point to it as a major accomplishment of his administration when the first missile defense capability comes online, which is expected to be towards the end of September. But critics charge that billions have been wasted, deploying a program that they say is undertested and, they say, that 9/11 showed will not address the main national security dangers to this country. U.S.
SENATOR CARL LEVIN: Even the CIA says that a missile attack is not a likely threat. Terrorists aren't going to use a missile because you know where it comes from. Terrorists will use a truck or a human being or a ship.
ENSOR: Advocates counter that the nation must protect against terrorists and rogue states with missiles at the same time.
U.S. SENATOR WAYNE ALLARD: It takes a combination of both. And I -- that's my position. I think that we need to do both.
ENSOR: But critics also charge President Bush is rushing to deploy a system that may not work, that the tests so far have not been in real-world conditions.
LEVIN: It's got a beacon, in effect, on it. So it tells you, "Here I am, come and get me." Well, that's not what any potential enemy missile is going to be doing. So you have unrealistic tests.
KADISH: The implication is that somehow we're cheating on the test. And I reject that out of hand.
ENSOR: The program's outgoing director, General Kadish, says now is the right time to get a rudimentary system deployed.
KADISH: We've tested it enough to know that we can make it work. We have confidence in it working. We need now to put it in place where we would actually use to it to gain more experience.
ENSOR: And by the end of September, the beginnings of a missile defense system will be in place. Skeptics warn it could be a multibillion dollar bust. But Bush administration officials say they believe something is better than nothing. David Ensor, CNN, Corpus Christi, Texas.
(END VIDEOTAPE)
BLITZER: Ahead on NEWSNIGHT, it's a dangerous game of cat and mouse in the Middle East, one that all too often these boys lose. And later, a great place to work, one where the music is always playing and Wednesdays mean pot luck. No wonder they're on the rise.
(COMMERCIAL BREAK)
BLITZER: In luckier parts of the world, children can play dare and double dare and other games that make them feel fearless without actually risking anything at all. At the end of the day, they go home to bed and dreams of bravery. But the northern part of the Gaza Strip is not one of those lucky parts of the world. In that troubled place, child's play is not play, not for Israeli kids, who pay with their lives far too often, and not for Palestinian kids, either. The risks for both are only too real. Here's a report from CNN's John Vause.
(BEGIN VIDEOTAPE)
JOHN VAUSE, CNN CORRESPONDENT: They're mostly young boys, armed on this day only with rocks and a child's bravado. All day long, they move slowly closer to the Israeli tanks, throw their stones, ducking for cover or running away when the Israelis fire back with heavy caliber machine guns. And so it goes. We saw young Ahmed (ph) and about 20 others here throwing stones two days in a row. "It was just for fun," he told me. Ambulance crews are never far away.
MOHAMED ABED-ELAZIZE, MEDIC (THROUGH TRANSLATOR): Even if we wanted to stop them from coming, we wouldn't be able to do so.
VAUSE: And then it happens. One of the boys is shot, rushed to a nearby hospital. A bullet has smashed the pelvis of 13-year-old Muhammad abu Taha (ph). A major artery has been hit. He's losing blood. His condition, serious. His friends wait outside. Muhammad (ph), they say, was not throwing stones. Regardless, his doctor says he's seen this so many times before.
DR. RIAD ADASSI, MEDIC: They go there and they know that they're going to face death. That's the
(UNINTELLIGIBLE)
VAUSE: Muhammad's distraught mother tells me she had no idea her son was with the boys who were throwing stones at the tanks. If she'd known, she says, she would have stopped him. Muhammad survives, but his wounds will last a lifetime.
DR. JAMAL EL-SADAA, MEDIC: He will suffer all his life from limping and he will suffer from pain. I don't think he will run as usually a child runs.
VAUSE: So why can't parents here just keep their children inside, away from the tanks and the gunfire?
DR. EYAD SARRAJ, CHILD PSYCHIATRIST: This is a form of rebellion, against not only the Israelis, but sometimes against the role of the father. Many children have seen their fathers beaten, they have seen children killed when the father is so helpless, unable to protect them.
VAUSE: Israel says it only fires warning shots at the stone throwing children. But the rules of engagement change when anyone, regardless of age, approaches a tank or armored vehicle. In the past, young teens have been recruited as suicide bombers or used as human shields. Now, Israeli soldiers are under strict orders to stop them from even getting close.
MAJOR SHARON FEINGOLD, ISRAELI ARMY: Such a young child who can climb such a vehicle can easily hurl a hand grenade inside that vehicle and kill all of the crew that is inside that vehicle.
VAUSE: Here, it's never far from the front door to the front lines, and in almost four years of fighting, the Palestinian Authority says in Gaza alone, more than 300 children have been killed. But for many young boys in Gaza, this is a way to prove they're men. But often they just die as children. John Vause, CNN, Gaza.
(END VIDEOTAPE)
BLITZER: What a tragedy. We'll be right back.
(COMMERCIAL BREAK)
BLITZER: Time now for another installment in the NEWSNIGHT series called "On the Rise," stories about young entrepreneurs making their way in the world, their way up. Tonight a tip of the hat to the Gutelius brothers, a tip of the hat they make themselves, among other items of cool gear.
(BEGIN VIDEOTAPE)
LUKE GUTELIUS, MAAX CLOTHING: Hey. This is my brother Jeb.
JEB GUTELIUS, MAAX CLOTHING: This is my brother Luke. Welcome to our company Maax. Come on in.
L. GUTELIUS: The name of our company is called Maax. We design and make clothes.
J. GUTELIUS: We started the company four and half a years ago and we sold visors. And that's the only thing we sold. And it was a great first year. And the people who bought visors also wanted to buy hats, belts, T-shirts from us.
(UNKNOWN): White T-shirt. Not for long.
L. GUTELIUS: Our company is named after my college football coach, Coach Maxwell. Six months after I graduated, he passed away. So it's a tribute to not only coach Maxwell, but to these great people who make a difference. That looks great.
J. GUTELIUS: The easiest way to describe our design philosophy, if there is a philosophy, is stuff that we like to wear. If we like colors that look good together, then chances are someone else is going to like the colors.
L. GUTELIUS: These are many of the inks we use. It's like being six years old and mixing paints together. And that's what they do.
J. GUTELIUS: We started the company in my parents' garage and that was down in Duxbury, Massachusetts. And that garage, as you can kind of see here, this is the Blue Fish River. We put the fish on everything just to remind us where it started. And remind us that we've got 17 people upstairs who we all work for and work with.
UNIDENTIFIED PERSON: Guys, this looks good today.
UNIDENTIFIED PERSON: Rumor has it the lasagna is quite good.
UNIDENTIFIED PERSON: Yes, it was delicious.
UNIDENTIFIED PERSON: I'd love to eat. Do you have a plate?
L. GUTELIUS: Every other Wednesday, we have a lunch party. The reason they began was, because for two years, every day Jeb and I ate mac and cheese and Ramen noodles. So we came up with this idea that we'd have a party every other Wednesday and all the employees would cook food.
J. GUTELIUS: We like having music playing all the time and having friends work with us. So it's a fun place to work. We have a dog that runs around. The atmosphere is fun, it's young and loud a lot of the time.
UNIDENTIFIED MALE: We're doing a golf tournament. And I was wondering if I could talk to you about visors or hats for that.
L. GUTELIUS: We sell our stuff in our store in Nantucket. And we have a store here in Manchester. We also sell online at bluefishriver.com. We sell to boutique stores. We have been in business for four-and-a-half years. I think we've been profitable now for two.
J. GUTELIUS: That's where our bottom line is. We have fun here. It's casual, but more than anything, again, it's the people.
L. GUTELIUS: We always wanted the whole idea of kind of working together and working with our friends. I don't think when we started we realized that it was going to be 24 hours a day. It turned out to be pretty cool.
(END VIDEOTAPE)
BLITZER: Hats off to the Gutelius brothers. Good work. We'll take a quick break. We'll be right back.
(COMMERCIAL BREAK)
BLITZER: Before we go tonight, Heidi Collins with a preview of what's coming up on "AMERICAN MORNING."HEIDI COLLINS, CNN CORRESPONDENT: Thank you, Wolf.Tomorrow on "AMERICAN MORNING," the final part in our series on lying. Finally, it's time to cut through all the deception. We'll hear from an expert who can tell us several surefire ways to tell when someone is lying. All you have to do is follow the directions and you'll know when it's happening to you.That's CNN tomorrow, 7 a.m. Honest.Wolf?
BLITZER: All right. Thanks very much, Heidi. We'll be watching.And that's it for NEWSNIGHT tonight. I'm Wolf Blitzer in Washington, sitting in for Aaron Brown. I'll be back tomorrow at both noon and 5 p.m. Eastern. Until then, thanks very much for watching.
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WOLF BLITZER, CNN ANCHOR: Good evening everyone. Welcome to NEWSNIGHT. I'm Wolf Blitzer sitting in tonight for Aaron Brown. Iraq's new government today took another step aimed at stopping the violence. This is something ordinary Iraqis badly want and in announcing the creation of a powerful internal security service, Iraq's interim prime minister Ayad Allawi seems to be listening by giving the people what they want. Rarely, however, does that come without a cost. Increasing security often means decreasing freedom. Will it mean that in Iraq? The answer may not be known for months, perhaps even years. Right now, however, Iraqis seem willing, even desperate to make the tradeoff. Given the violence there you really can't blame them, indeed yet another bombing today.CNN's Michael Holmes is in Baghdad, Michael a headline please.
MICHAEL HOLMES, CNN CORRESPONDENT: Wolf, on a day when the Iraqi interim prime minister said there was more security there was also more bombs, more deaths and, as you said, the announcement of a new Iraqi intelligence service -- Wolf.
BLITZER: All right, Michael, we'll get back to you.On to the Pentagon and the return of the missing U.S. Marine, not exactly a storybook homecoming though. CNN's Jamie McIntyre has the watch tonight -- Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Wolf, to judge from the Marine Corps' public statements you would think that the return of Corporal Hassoun is just a routine repatriation, as they call it, of a former hostage but what the Marine Corps isn't saying is they still suspect he might have been a deserter.
BLITZER: All right. Up next the Martha Stewart case. She's about to find out what price she is going to have to pay. So is her company. So are the shareholders, all of them watching very closely. Our Financial Correspondent Allan Chernoff is working the story for us, Allan a headline from you.
ALLAN CHERNOFF, CNN FINANCIAL CORRESPONDENT: On the eve of Martha Stewart's sentencing her company is continuing to suffer. Advertisers are fleeing "Martha Stewart Living" magazine -- Wolf.
BLITZER: All right, we'll get back to you. Finally, the campaign trail and CNN's Kelly Wallace, who spoke just a short time ago with John Kerry's running mate John Edwards, Kelly your headline.
KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Wolf, in his first CNN interview since being named John Kerry's running mate, John Edwards talked about adjusting to his new role, whether he regrets his vote on Iraq and whether he made any deal with John Kerry not to run against him in 2008 if team Kerry-Edwards is not victorious this year -- Wolf.
BLITZER: All right, Kelly, we'll get back to you. In fact, we'll get back to all of our reporters.Also ahead on NEWSNIGHT tonight, it's the vote John Kerry won't have trouble receiving but it will be the vote he'll have trouble increasing.And it's being called the worst wildfire ever in Carson City, Nevada, as 12 homes have already burned and hundreds of others are threatened.Plus, a terrible cycle of violence in Gaza that never seems to end. Tonight we'll take a look at where it begins, all that and more in the hour ahead.But we begin once again tonight in Baghdad. For months now the story there and in the rest of Iraq has been security or perhaps more appropriately the lack of security. The young interim government began working on the problem almost the instant it took over just about two weeks ago. It took another important step today and so did the insurgents.Again from Baghdad, here's CNN's Michael Holmes.
(BEGIN VIDEOTAPE)
HOLMES (voice-over): Taking the fight to the insurgents that was the message from Iraq's interim government Thursday.
AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER (through translator): We are determined to bring down all the hurdles that lay in the way of our democratic march and our freedom.HOLMES: Part of the plan the formation of a internal intelligence agency, the General Security Directorate, its job to infiltrate the insurgency, gather information, help wipe it out.(on camera): Mention an intelligence service in this country and many people think back to the bad old days of Saddam Hussein when his domestic spies would show up in the dead of night and take away husbands, brothers and sons never to be seen again but on the streets of Baghdad today we found some optimism for the new service.
UNIDENTIFIED MALE (through translator): I wish they had taken the step from the beginning because our people have been hit hard by looting and kidnapping.
HOLMES: The interim government is going out of its way to say there will be strict oversight and those accepted into the agency would have to have, in the words of the interior minister, clean hands.Allawi also said he'd be trying to seal his country's porous borders from foreign fighters, adding that security in Iraq had improved despite another day of violence and death.A car bombing thwarted in Karbala when the vehicle was spotted but the bombers blew themselves up and no one else.But northwest of Baghdad in Haditha (ph), another car bomb killed ten Iraqis and wounded 30, a massive bomb apparently directed at a local police station.And, in Kirkuk, mortars apparently aimed at a police station fell on a house instead killing five members of a single family, including three children.Another pipeline attack, too, south of Kirkuk a common tactic by insurgents as they work to destabilize the country's economy.Prime Minister Allawi said he will visit a number of Mid East neighbors, including Kuwait and later Iran. He also plans to go to Europe and Pakistan all looking for training assistance, money and troops from some countries to help tackle the insurgency he says is doomed to fail.
(END VIDEOTAPE)
HOLMES: And, Wolf, while the prime minister says he's going to be hitting the insurgents head on with things like that intelligence agency that he's setting up, it was, as we said, another violent day.And some bad news too on the hostage front. Perhaps a body fished out of the Tigress River, a headless body in the town of Beji (ph), that's north of Baghdad. The body had its hands bound and was wearing an orange jumpsuit. It is feared it is the body of one of those two Bulgarian hostages being held. There is DNA and fingerprint testing underway now to confirm the identity of that body, however, diplomatic sources here are telling us they fear it is indeed the Bulgarian hostage who Al- Jazeera said they had a videotape showing him being executed -- Wolf.
BLITZER: All right, CNN's Michael Holmes reporting from Baghdad with that. Michael thank you very much.An update now on the Filipino truck driver being held hostage in Iraq. A tape of his surfaced today. On it, Angelo de la Cruz tells his family, "Wait for me. I'm coming back to you." His captors say they'll let him go only when the last of 51 Filipino troops and police officers leave Iraq. Yesterday, the Philippine government announced the pullout is underway. Just months ago the government released a statement saying the entire contingent would be out of the country shortly. The Marine who showed up on another hostage tape is back on American soil tonight but not back home and not home free. He's in Virginia to answer questions about his disappearance and the mystery that surrounds it.From the Pentagon tonight, CNN's Jamie McIntyre.
(BEGIN VIDEOTAPE)
MCINTYRE (voice-over): Smiling and looking relaxed Corporal Wassef Ali Hassoun arrived at the Quantico Marine Base giving no hint of someone facing serious questions about whether he's a deserter. The Marines suspect Hassoun left his post in Iraq voluntarily last month with the intention of deserting and joining relatives in Lebanon.But publicly, the Marine Corps is playing it by the book, insisting that Corporal Hassoun is simply going through the normal repatriation process for any former hostage.
LT. COL. DAVID LAPAN, U.S. MARINE CORPS SPOKESMAN: Repatriation is the process of decompression, debriefing and integration of individuals who have been captured or detained. The length of this process can vary from weeks to months depending on the circumstances of the individual case.
MCINTYRE: The spokesman said Hassoun arrived tired but healthy and in good spirits. Otherwise, the Marines are saying little publicly about what explanation Hassoun has offered for his disappearance from Iraq June 19th and his reappearance in Lebanon July 7th when he turned himself over to U.S. Embassy officials.Sources say Hassoun insists he was abducted but in a brief statement issued in Germany, he made no mention of that, simply thanking the hospital staff and saying he was excited about going home but Hassoun won't be going anywhere anytime soon, not until maybe investigators determine if he should be subject to any military discipline.LAPAN: Corporal Hassoun will remain at Quantico until the repatriation team decides that he is able to return to full duty.
(END VIDEOTAPE)
MCINTYRE: So far, Corporal Hassoun has not been formally accused of any wrongdoing. He hasn't asked for a military attorney nor has he been assigned one, something that would be a necessary step if any charges against him are contemplated -- Wolf.
BLITZER: What are they saying, Jamie, at the Pentagon in the corridors there? How extraordinary, how unusual is this particular case?
MCINTYRE: Well, it is unusual and I have to say a lot of people who have uninformed opinion, that is they don't have any specific information, are very suspicious about the circumstances under which he departed Iraq and ended up in Lebanon.But people here have been careful to try to avoid speculating and wait for the investigation to determine the facts but there clearly was a previous position to believe that he had deserted and, unless he has a very good explanation for what happened to him, he may well face some sort of disciplinary procedure.
BLITZER: Jamie McIntyre with that information from the Pentagon. Jamie thanks very much.An update now, a welcome one, for the American soldier accused of cowardice in Iraq. Today the Army dropped its case against George Andreas Pogani (ph). He was initially charged with cowardice after suffering a panic attack on his second day in Iraq. The charge was later reduced to dereliction of duty.The decision to drop all charges came after doctors last month diagnosed him with a symptom consistent with side effects of the drug Lariam, which is given to prevent malaria. Those side effects include vertigo, hallucinations and panic attacks.The president today made impersonating someone else even more of a crime than it already is. He signed a bill making identity theft in connection with terrorism and a number of other offenses punishable by mandatory prison time. Also today the president chose his dad to lead the American delegation to the 2004 Olympics in Athens. In addition, he named his mom and twin daughters to the delegation, which also includes the owner of the San Diego Chargers and tennis champion Chris Evert.One item not on the president's agenda was a visit to the NAACP's convention today in Philadelphia. He hasn't spoken to the organization since the 2000 election campaign when it ran an ad that portrayed the president as unsympathetic to the dragging death of an African American in Texas.Today, Dan Bartlett, the White House Communications Director, tried to separate the group from the members. "The president," he said, "has many friends who belong to the NAACP and respects their proud history of championing civil rights. However" he went on to say "the current leadership of the NAACP has clearly cross the line in partisanship and civility making it impossible to have a constructive dialogue." Bottom line, no appearance by the president. He will address the Urban League next week.His opponent, on the other hand, did speak today in Philadelphia, the story now from CNN's Candy Crowley.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The Honorable John F. Kerry, give him a big hand.
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): He had them at hello but when President Bush declined an invitation from the NAACP it just got better.
SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: The president may be too busy to speak to you now but I got news for you. He's going to have plenty of time after November 2nd.
CROWLEY: Nine of ten African American voters in 2000 voted for Al Gore, meaning John Kerry's task is not winning the black vote but getting more blacks to vote. For that few words work better than Florida 2000.
KERRY: Don't tell us that the strongest democracy on earth, that a million disenfranchised African Americans and the most tainted election in American history is the best that we can do.
CROWLEY: Kerry's speech came as his campaign unveiled a $2 million ad buy targeted at the minority community.
UNIDENTIFIED MALE: Can he really make a difference for me and my family?
UNIDENTIFIED FEMALE: Learn about John Kerry's plan to expand access to health care to nearly all Americans, especially our children.
CROWLEY: That giant yawn you hear is the Congressional Black Caucus greatly under whelmed by the ad.
REP. JOHN KEWIS (D), GEORGIA: The ads need to be personal. They need to be warm and almost emotional to reach the very heart, to reach the very soul and gut of the African American voters. You got to inspire, not just those who are going to go out and vote but we got to get more of them to go out and vote.
CROWLEY: Black leaders say it would have been nice to be consulted on the ads before they aired but give camp Kerry high marks for listening now.
REP. ELIJAH CUMMINGS (D), MARYLAND: Kerry cannot win without the African American vote. We know that and he knows that.
CROWLEY: Yes, he does.
KERRY: Over the next three and a half months we need you to do what nobody in America does better register voters, talk to voters, talk to your neighbors and get people to the polls.
CROWLEY: New ads are being developed.Candy Crowley, CNN, Washington.
(END VIDEOTAPE)
BLITZER: Ahead on NEWSNIGHT, Martha Stewart's in trouble no matter what the outcome of her sentencing tomorrow.And later, two guys not in trouble, instead they're on the rise. Imagine wanting to go to work every day.Around the world this is NEWSNIGHT.
(COMMERCIAL BREAK)
BLITZER: The summer breezes mean one thing to most of us and something else entirely to a lot of people out west. They mean fire season is here spelling destruction for thousands of acres of tinder dry forest and a whole lot of grief for the people living nearby, from Carson City, Nevada tonight, CNN's Ted Rowlands.
(BEGIN VIDEOTAPE)
TED ROWLANDS, CNN CORRESPONDENT (voice-over): The fire which started early Wednesday morning has now consumed more than 10,000 acres. At least 20 homes have burned. People say as the flames approached they took what they could and got out. This woman lost her home.
NORMA JEAN BEST, LOST HER HOME: Well, I'm not mad. I'm very sad but I don't know.
ROWLANDS: Hundreds of firefighters from around the region have been called in to help (unintelligible) blaze but they say the weather conditions are making their job very difficult.
SCOTT HUNTLEY, FIRE INFORMATION OFFICE: The weather is very dry. The humidity is very low so we're not getting any breaks in this fire. There are some breaks though because we did save a lot of homes last night.
ROWLANDS: A late afternoon wind shift forced the closure of Highway 395, the main road into and through Carson City. Dozens of people forced out of their homes, some of them crying, sat with packed cars watching the flames move closer.
MATTHEW MURDOCK, EVACUEE: We got like a carload. We didn't really think that it was going to get that bad, so we just took a few things. We probably could have taken a few more things now that we know.
DAVID BRUKETTA, EVACUEE: It's hard. It's emotional. You know it's just my house, my life is back there but, you know, I got my kids and my family and that's the important thing.
(END VIDEOTAPE)
ROWLANDS: Well, investigators don't know if it was intentional or not. They say they are sure that this fire was set by an individual or group of individuals, possibly a group of teenagers in the area. Tonight, Wolf, this fire is zero percent contained. The hope is that Mother Nature will help some 900 firefighters that have come here to Carson City to battle this blaze overnight -- Wolf.
BLITZER: I know you don't have any scientific evidence and haven't done a complete survey but based on what you've heard do most of the people who are leaving or fleeing have insurance for their homes and their possessions?
ROWLANDS: Yes, by and large the people that we've talked to do have insurance but it's those items that, of course, that are unreplaceable are the ones that really hit home and the sight of seeing your house burn or thinking that your house may be burning is, as you can imagine, very emotional for these folks that have been evacuated.
BLITZER: I can only imagine. Thanks very much, Ted Rowlands reporting on the story for us.Once upon a time it would have been impossible to imagine the name Martha Stewart followed by the word sentencing. Tomorrow, however, that is what will happen in federal court in New York City, another chapter in the stunning story of the singular rise and fall and, make no mistake, fall is the word, especially where her various enterprises are concerned.CNN's Allan Chernoff has that story.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Martha Stewart's business empire has turned into a shrinking, money losing operation since her indictment and conviction. The business rose on Martha Stewart's image of perfection. Now it's fallen.
T.K. MCKAY, MORNINGSTAR: As long as her reputation is damaged in any way it's going to have a direct impact on the long term prospects of this business.
CHERNOFF: Most troubled, the magazine that is the heart of Martha Stewart Living Omnimedia. Advertisers have been fleeing. Ad pages in "Martha Stewart Living" plummeted 42 percent during the first half of the year, compared to the same period last year and ad revenue has collapsed 52 percent, the worst performance of any major publication. The company has cut circulation promised to advertisers by 20 percent down to 1.8 million.
BRENDA WHITE, MEDIA DIRECTOR, STARCOM USA: The view from a buyer's perspective is, is that there is some cause for concern with the fact that a lot of advertisers have pulled out.
CHERNOFF: The company has put Martha Stewart syndicated television program on hiatus for the coming season and cut its staff. Martha Stewart Living merchandise sales have held up but the company will be getting smaller royalty payments from Kmart under a new contract.Martha Stewart Living Omnimedia declined to speak on camera. A spokesperson said: "People are focused on doing what we love to do and producing the products we know our customers love. It's business as usual." But increasingly it's business without Martha Stewart. Her replacement as chief executive Sharon Patrick is engineering a subtle re-branding. Beginning in September the flagship magazine will show a redesigned cover to emphasize the title "Living" de- emphasizing Martha Stewart's name. "Everyday Food" magazine dropped its subtitle, "From the Kitchens of Martha Stewart Living."
(END VIDEOTAPE)
BLITZER: This is a story that still needs some chewing over, so Allan Chernoff is going to join us now live in New York, along with our legal analyst Jeffrey Toobin, gentlemen, thanks very much for sticking around.Jeffrey, first of all, is there any doubt whatsoever that she's going to be going to jail?J
EFFREY TOOBIN, CNN LEGAL ANALYST: I would say there's almost no doubt. The sentencing guidelines are not ironclad when it comes to a case like this but based on what I've been able to determine, it's almost certain that she will -- her sentencing range will be between ten and 16 months, although some of that sentence might be served in house arrest, so some prison time is virtually a certainty.
BLITZER: What about that whole issue of that FBI analyst who is now accused of having lied about some of the evidence in this case? I thought that was going to reopen the case potentially.
TOOBIN: Well, there were two post trial motions that were actually very serious. There was the FBI agent who is now under indictment for perjury in the case -- I'm sorry, not FBI, it was Secret Service. And then there was the juror who apparently lied during voir dire.Judge Cederbaum has rejected both of those claims for a new trial, so Martha Stewart's only hope is to win on appeal because Judge Cederbaum has rejected them and they are not a bar to sentencing at this point.
BLITZER: Allan, she's been selling off a lot of her stock lately. I assume she's still making a lot of money on that.
CHERNOFF: Certainly. Chief executives get their stock usually at a pretty good price and Martha Stewart has been trying to get her financial house in order. She is also selling an apartment on the west side of Manhattan, so before she anticipates, she's expecting of course to go to prison, so she wants to have everything in place.
BLITZER: And in these months that have just gone by she has not exactly been invisible. She's been very much out there. What is her strategy if you will?
CHERNOFF: Very hard to say exactly but among celebrities heading to prison very often there is an attempt to basically make a statement by saying, not only am I out here but I am coming back. So, she has very much been in all the Hamptons parties, very much in the public eye, appearing in the gossip pages.
TOOBIN: And, Wolf, I actually think what she's doing is entirely appropriate. She is not changing her life. She is living. She's a businesswoman with an active social life. What would be inappropriate I think is if she suddenly started volunteering at homeless shelters, which would be a transparent attempt to curry favor. Martha Stewart is who she is and there's no point in pretending otherwise.
BLITZER: But, Allan, on the other side -- now, Jeffrey, let me ask you this question. On the other side, if she were showing some remorse and being apologetic wouldn't that potentially influence the judge?
TOOBIN: You know that's a very interesting question because she has the opportunity to make a statement tomorrow. What is she going to say? If she apologizes she potentially jeopardizes her appeal because her appeal is based on the fact that she's innocent.But if she's defiant that's certainly not going to help her get a lower sentence, so she's got to thread a needle if she says anything at all. I think, you know, living her life in an honest way is probably just the best thing she can do.
BLITZER: Allan, the stock, the value of the stock, what's the word on the street? If she does go to jail let's say for a year or in a halfway house for a year and a half or some sort of incarceration, what's going to happen to that stock?
CHERNOFF: Well, no way to be sure but the stock right now is trading just about $1 above where it was following Martha Stewart's indictment, pretty much the lowest level. It's at $8.00 and change. The investors are really anticipating there are not going to be any earnings coming out of this company for some time. The business clearly is in a serious decline but we should also note it is in absolutely no danger of collapse. There is lots of cash on the books and no debt whatsoever. That's very important.
TOOBIN: But there's also another issue about sentencing is that, you know, she is likely to get bail pending appeal and this appeal probably won't be decided until early 2005. That means if she serves a year it won't be until 2006 until she can get her business going. She'll be close to 65 years old at that point. It's just very hard to see how the calendar stacks up in her favor.
BLITZER: We're going to have complete coverage starting around 10:00 a.m. tomorrow morning here on CNN, all these developments. Jeffrey Toobin, Allan Chernoff thanks to both of you for helping us better understand these nuances, appreciate it.Coming up on NEWSNIGHT, an interview with John Edwards, he sits down with our Kelly Wallace.And, is Dick Cheney bad for President Bush, rumors swirling here in Washington.From NEWSNIGHT, this is CNN.
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BLITZER: The country has gotten to know North Carolina Senator John Edwards pretty well, at least up on the podium stump kind of speech. Throwing your hat into the ring for the presidential nomination at first and now as a campaigner for the Kerry-Edwards ticket gives you the chance to do exactly that to stand at the microphone and address large crowds.Today, though, CNN's Kelly Wallace had the opportunity to listen to John Edwards in a slightly different way -- Kelly.
WALLACE: Wolf, yes. Wolf, John Edwards telling us it's been a bit of an adjustment moving from presidential candidate in the spring to vice presidential candidate now but in this his first CNN interview since he was named John Kerry's running mate, he says it's all been a very, very easy transition.Of course the two Senators have a lot in common. They both voted for the Iraqi war resolution giving President Bush the authority to go to war with Iraq. So, I asked Senator Edwards, knowing what he knows now, with reports of faulty pre-war intelligence on Iraq, if he regrets the vote he cast.
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EDWARDS: I believe that the president should have been given the authority that he was given. I also believe it's a very good thing that Saddam is gone. I think it's good for America, good for that region of the world.
WALLACE: So you don't regret your vote then?
EDWARDS: I think at the time it was the right thing to do to give the president that authority. I think if we had given that authority to John Kerry, we'd be in a very different place, because he would have built the coalition to be successful, instead of us doing it alone with just the British. And, second, he would have had a serious plan to win the peace, which this president didn't have.
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WALLACE: We also asked the senator, who was doing a front porch tour earlier today in New Orleans, if he gave John Kerry any assurances that he would not run against him in 2008 if team Kerry- Edwards is not victorious in November.The senator, refusing to answer that question specifically, but he seemed to indicate he has no plans to run against John Kerry anytime soon.
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EDWARDS: First of all, I am completely loyal to John Kerry, period. And that includes now. It includes in the future, and I am 110 percent about -- Elizabeth and I, my wife and I both -- about making sure he's the next president.
WALLACE: So it sounds like that means future...
EDWARDS: I am loyal to John Kerry 100 percent.
(END VIDEO CLIP)
WALLACE: And as for the role he will play, he says primarily touting his boss, he says, trying to let voters learn a bit more about John Kerry. He acknowledges, or says, that he thinks voters still aren't very familiar with John Kerry, despite months of campaigning and millions of dollars spent on advertising.He also says he's mainly going to be putting forward a positive message, but he seemed to indicate he will be willing to play the part of attack dog, contrasting the Kerry-Edwards approach with the Bush- Cheney approach, when necessary.Tonight, though, Wolf, it was all positive, all the time, for John Edwards here in Houston. He raised a little more than $500,000 for the Democratic Party and the Kerry campaign, and tomorrow he heads to Los Angeles to meet with some Hispanic voters.
BLITZER: All right. Kelly Wallace, good work. Thanks very much.Let's get a little bit more analysis now on what all of these political developments mean. Joining us to chat a little bit about the political tidbits, juicy and otherwise, of the day, Richard Wolffe of "Newsweek" magazine.Richard, thanks very much for joining us.All of a sudden, 24 hours later, 48 hours later, Senator Hillary Rodham Clinton will, after all, be a primetime speaker at the Democratic Convention in Boston. What happened?
RICAHRD WOLFFE, "NEWSWEEK" MAGAZINE: What happened was she mobilized her base. She's too big a character to say no to. But, you know, this is a mixed blessing for her. The spot she's got is introducing her husband. And, as you know, she's been working her heart out to try and establish her own reputation over the last few years. So to be there umbilically-linked to her husband, not the best place for her.
BLITZER: That will be Monday night, the first night of the convention in Boston.We woke up this morning, we saw this, I must say, a little strange story on the front page of the New York Times reporting these rumors that Dick Cheney might be dumped, that the new doctor might be coming in to say his heart isn't necessarily as robust as it should be. You read that story. What was your reaction?
WOLFFE: Well, I can't believe it's summer already and we're running that kind of thing.But, you know, this is what people are talking about. It's been running for a while. My gut feeling is there is no chance on earth that the president would dump Dick Cheney. They like each other. They admire each other. He values his counsel. It's not just a sign of desperation if he were to do that, but it's just not in the character of the president to do that right now. So I take them at their word. I think it's ridiculous.
BLITZER: All right. Bush-Cheney. That's -- you heard it right here, not going to change.The president's decision not to attend this meeting of the NAACP, on the one hand, you can't blame him, the leadership of the NAACP has made it clear they're not going to support him.
WOLFFE: Right. But, you know, this is a big difference from four years ago. If you remember, George Bush ran as a different kind of Republican. And one of the building blocks for being a different kind of Republican was attending the NAACP and talking about race in a way that other Republicans hadn't.I think this is a problem for him, not because of the NAACP, but because of this profile, his appeal to swing voters, moderate voters, so it's not a good place, not a happy place for him to be in right now.
BLITZER: Speaking of profile, the twins, the daughters, Barbara and Jenna Bush, they have a much higher profile already, and it's about to get even higher.
WOLFFE: Yes. Very interesting, the human side of President. Interesting timing, too. It looks a bit like "me-too-ism," after all those glowing pictures of the Edwards family. But, you and I know, the lead times on those Vogue pictures put it well in advance of where we are now, so good planning, good timing, and the daughters look great.
BLITZER: Since I haven't been photographed in "Vogue" magazine, I don't really know much about the lead time of that, but I can only assume it's many, many months.
WOLFFE: Yes. Especially if you have a ball gown.
BLITZER: All right. Thanks very much, Richard, for that. Richard Wolffe, of "Newsweek" magazine.One more political tidbit, this one concerning the anti-war billboard a liberal group wanted to put up in New York's Times Square, where it would be seen by delegates to the Republican convention at the end of August. After being threatened with a lawsuit, Clear Channel Media, which owns the space that would accommodate the billboard, has said it will allow the sign to go up after all. One change though: There will be a dove, not a cartoon bomb, alongside the message, and I'm quoting now, "Democracy is best taught by example not by war."Still to come on NEWSNIGHT, part two in our missile defense series "On Land and At Sea."And, still later, the child fighters of the intifada. A break, first.This is NEWSNIGHT on CNN.
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BLITZER: And our deepest condolences to their families. Last night on this program, David Ensor gave us a fascinating look at a very large, very expensive new part of the nation's defense: The new anti-missile system taking shape in Alaska, Texas and around the country.Critics call it a "boondoggle." The Bush administration calls it "essential." Either way, it amounts to billions of your tax dollars at work, year in and year out, for as far as the eye can see.Last night, David showed us the radar. Tonight, he shows us the rest.
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DAVID ENSOR, CNN CORRESPONDENT: On a remote Alaskan base, new underground silos in place for the nation's first-ever defense against attack by enemy missiles. Tests so far have shown the system can track a missile...
UNIDENTIFIED MALE: Liftoff is confirmed. ENSOR: ... launch an interceptor capable of traveling at eight kilometers a second, and sometimes, more often than not, knock out the missile in space.
LIEUTENANT GENERAL RONALD KADISH, FORMER DIRECTOR, MISSILE DEFENSE AGENCY: We do not choose to be vulnerable against someone like North Korea or Iran who are trying to get weapons of mass destruction.
ENSOR: The system will use radars positioned around the world on land and at sea to track enemy missiles, and, eventually, about 20 interceptor missiles tipped with sophisticated kill vehicles to stop them. This is just the ground-based portion of a multilayered missile defense system, which will eventually include space-based and sea- launched intercepts. A total projected price tag over the next five years: $53 billion. The cost of the giant radar that will sit atop a massive floating platform that can deploy at sea is, in itself, $815 million. President Bush is likely to point to it as a major accomplishment of his administration when the first missile defense capability comes online, which is expected to be towards the end of September. But critics charge that billions have been wasted, deploying a program that they say is undertested and, they say, that 9/11 showed will not address the main national security dangers to this country. U.S.
SENATOR CARL LEVIN: Even the CIA says that a missile attack is not a likely threat. Terrorists aren't going to use a missile because you know where it comes from. Terrorists will use a truck or a human being or a ship.
ENSOR: Advocates counter that the nation must protect against terrorists and rogue states with missiles at the same time.
U.S. SENATOR WAYNE ALLARD: It takes a combination of both. And I -- that's my position. I think that we need to do both.
ENSOR: But critics also charge President Bush is rushing to deploy a system that may not work, that the tests so far have not been in real-world conditions.
LEVIN: It's got a beacon, in effect, on it. So it tells you, "Here I am, come and get me." Well, that's not what any potential enemy missile is going to be doing. So you have unrealistic tests.
KADISH: The implication is that somehow we're cheating on the test. And I reject that out of hand.
ENSOR: The program's outgoing director, General Kadish, says now is the right time to get a rudimentary system deployed.
KADISH: We've tested it enough to know that we can make it work. We have confidence in it working. We need now to put it in place where we would actually use to it to gain more experience.
ENSOR: And by the end of September, the beginnings of a missile defense system will be in place. Skeptics warn it could be a multibillion dollar bust. But Bush administration officials say they believe something is better than nothing. David Ensor, CNN, Corpus Christi, Texas.
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BLITZER: Ahead on NEWSNIGHT, it's a dangerous game of cat and mouse in the Middle East, one that all too often these boys lose. And later, a great place to work, one where the music is always playing and Wednesdays mean pot luck. No wonder they're on the rise.
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BLITZER: In luckier parts of the world, children can play dare and double dare and other games that make them feel fearless without actually risking anything at all. At the end of the day, they go home to bed and dreams of bravery. But the northern part of the Gaza Strip is not one of those lucky parts of the world. In that troubled place, child's play is not play, not for Israeli kids, who pay with their lives far too often, and not for Palestinian kids, either. The risks for both are only too real. Here's a report from CNN's John Vause.
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JOHN VAUSE, CNN CORRESPONDENT: They're mostly young boys, armed on this day only with rocks and a child's bravado. All day long, they move slowly closer to the Israeli tanks, throw their stones, ducking for cover or running away when the Israelis fire back with heavy caliber machine guns. And so it goes. We saw young Ahmed (ph) and about 20 others here throwing stones two days in a row. "It was just for fun," he told me. Ambulance crews are never far away.
MOHAMED ABED-ELAZIZE, MEDIC (THROUGH TRANSLATOR): Even if we wanted to stop them from coming, we wouldn't be able to do so.
VAUSE: And then it happens. One of the boys is shot, rushed to a nearby hospital. A bullet has smashed the pelvis of 13-year-old Muhammad abu Taha (ph). A major artery has been hit. He's losing blood. His condition, serious. His friends wait outside. Muhammad (ph), they say, was not throwing stones. Regardless, his doctor says he's seen this so many times before.
DR. RIAD ADASSI, MEDIC: They go there and they know that they're going to face death. That's the
(UNINTELLIGIBLE)
VAUSE: Muhammad's distraught mother tells me she had no idea her son was with the boys who were throwing stones at the tanks. If she'd known, she says, she would have stopped him. Muhammad survives, but his wounds will last a lifetime.
DR. JAMAL EL-SADAA, MEDIC: He will suffer all his life from limping and he will suffer from pain. I don't think he will run as usually a child runs.
VAUSE: So why can't parents here just keep their children inside, away from the tanks and the gunfire?
DR. EYAD SARRAJ, CHILD PSYCHIATRIST: This is a form of rebellion, against not only the Israelis, but sometimes against the role of the father. Many children have seen their fathers beaten, they have seen children killed when the father is so helpless, unable to protect them.
VAUSE: Israel says it only fires warning shots at the stone throwing children. But the rules of engagement change when anyone, regardless of age, approaches a tank or armored vehicle. In the past, young teens have been recruited as suicide bombers or used as human shields. Now, Israeli soldiers are under strict orders to stop them from even getting close.
MAJOR SHARON FEINGOLD, ISRAELI ARMY: Such a young child who can climb such a vehicle can easily hurl a hand grenade inside that vehicle and kill all of the crew that is inside that vehicle.
VAUSE: Here, it's never far from the front door to the front lines, and in almost four years of fighting, the Palestinian Authority says in Gaza alone, more than 300 children have been killed. But for many young boys in Gaza, this is a way to prove they're men. But often they just die as children. John Vause, CNN, Gaza.
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BLITZER: What a tragedy. We'll be right back.
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BLITZER: Time now for another installment in the NEWSNIGHT series called "On the Rise," stories about young entrepreneurs making their way in the world, their way up. Tonight a tip of the hat to the Gutelius brothers, a tip of the hat they make themselves, among other items of cool gear.
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LUKE GUTELIUS, MAAX CLOTHING: Hey. This is my brother Jeb.
JEB GUTELIUS, MAAX CLOTHING: This is my brother Luke. Welcome to our company Maax. Come on in.
L. GUTELIUS: The name of our company is called Maax. We design and make clothes.
J. GUTELIUS: We started the company four and half a years ago and we sold visors. And that's the only thing we sold. And it was a great first year. And the people who bought visors also wanted to buy hats, belts, T-shirts from us.
(UNKNOWN): White T-shirt. Not for long.
L. GUTELIUS: Our company is named after my college football coach, Coach Maxwell. Six months after I graduated, he passed away. So it's a tribute to not only coach Maxwell, but to these great people who make a difference. That looks great.
J. GUTELIUS: The easiest way to describe our design philosophy, if there is a philosophy, is stuff that we like to wear. If we like colors that look good together, then chances are someone else is going to like the colors.
L. GUTELIUS: These are many of the inks we use. It's like being six years old and mixing paints together. And that's what they do.
J. GUTELIUS: We started the company in my parents' garage and that was down in Duxbury, Massachusetts. And that garage, as you can kind of see here, this is the Blue Fish River. We put the fish on everything just to remind us where it started. And remind us that we've got 17 people upstairs who we all work for and work with.
UNIDENTIFIED PERSON: Guys, this looks good today.
UNIDENTIFIED PERSON: Rumor has it the lasagna is quite good.
UNIDENTIFIED PERSON: Yes, it was delicious.
UNIDENTIFIED PERSON: I'd love to eat. Do you have a plate?
L. GUTELIUS: Every other Wednesday, we have a lunch party. The reason they began was, because for two years, every day Jeb and I ate mac and cheese and Ramen noodles. So we came up with this idea that we'd have a party every other Wednesday and all the employees would cook food.
J. GUTELIUS: We like having music playing all the time and having friends work with us. So it's a fun place to work. We have a dog that runs around. The atmosphere is fun, it's young and loud a lot of the time.
UNIDENTIFIED MALE: We're doing a golf tournament. And I was wondering if I could talk to you about visors or hats for that.
L. GUTELIUS: We sell our stuff in our store in Nantucket. And we have a store here in Manchester. We also sell online at bluefishriver.com. We sell to boutique stores. We have been in business for four-and-a-half years. I think we've been profitable now for two.
J. GUTELIUS: That's where our bottom line is. We have fun here. It's casual, but more than anything, again, it's the people.
L. GUTELIUS: We always wanted the whole idea of kind of working together and working with our friends. I don't think when we started we realized that it was going to be 24 hours a day. It turned out to be pretty cool.
(END VIDEOTAPE)
BLITZER: Hats off to the Gutelius brothers. Good work. We'll take a quick break. We'll be right back.
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BLITZER: Before we go tonight, Heidi Collins with a preview of what's coming up on "AMERICAN MORNING."HEIDI COLLINS, CNN CORRESPONDENT: Thank you, Wolf.Tomorrow on "AMERICAN MORNING," the final part in our series on lying. Finally, it's time to cut through all the deception. We'll hear from an expert who can tell us several surefire ways to tell when someone is lying. All you have to do is follow the directions and you'll know when it's happening to you.That's CNN tomorrow, 7 a.m. Honest.Wolf?
BLITZER: All right. Thanks very much, Heidi. We'll be watching.And that's it for NEWSNIGHT tonight. I'm Wolf Blitzer in Washington, sitting in for Aaron Brown. I'll be back tomorrow at both noon and 5 p.m. Eastern. Until then, thanks very much for watching.
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