Friday, December 12, 2003

Bush Tries to Quiet Halliburton Controversy; Environmentalists Accuse Administration of Hypocrisy; Should Morning-After Pill Be Available Without Prescription?

Bush Tries to Quiet Halliburton Controversy; Environmentalists Accuse Administration of Hypocrisy; Should Morning-After Pill Be Available Without Prescription?
Aired December 12, 2003 - 22:00 ET

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

AARON BROWN, CNN ANCHOR: Good evening again.Life it seems is full of contradictions large and small. Take Iraq. It has the second largest pool of oil in the Middle East and you can't buy a gallon of gas in Baghdad. Actually you can but not easily as we'll show you in a few minutes.But when you can it's a steal, four cents a gallon or so. The price of gas in a place that has a sea of oil is the focus of a couple of stories tonight and is the starting point for the whip.Jamie McIntyre first away from his normal digs at the Pentagon I see, Jamie a headline from you.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, President Bush today tried to quiet the controversy over Halliburton saying if the company had overcharged the U.S. government the money would have to be repaid. Defense Secretary Rumsfeld called it just a disagreement not really an overpayment but the president's critics knowing a winning issue when they see one are turning up the heat -- Aaron.

BROWN: Jamie, thank you.Next, to the White House CNN's Suzanne Malveaux, Suzanne a headline from you tonight.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, questions about conflict of interest. First of course it was Vice President Dick Cheney and Halliburton but now as the former Secretary of State James Baker the president's special envoy, Mr. Bush today saying he is standing by his men.

BROWN: Suzanne, thank you.Now to questions of what's in the air and what's in your food and what is the government doing about it, CNN's Kelly Wallace with that tonight, Kelly a headline from you.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Aaron, environmentalists accuse the administration of being hypocritical, on the one hand warning about mercury levels in tuna and then on the other hand not doing enough to stop mercury from being emitted into the air. The EPA says environmentalists have their facts wrong that this White House is doing more than has been done before.

BROWN: Kelly, thank you.Finally the debate over making a contraceptive pill available over the counter, CNN's Christy Feig is working that story for us, Christy a headline.

CHRISTY FEIG, CNN CORRESPONDENT: Well, getting the morning after pill could soon be as buying aspirin and it's igniting a contentious debate. We'll tell you why, Aaron.BROWN: Christy, thank you. We'll get back to you and the rest shortly.Also coming up tonight so I've just now figured out how my cell phone works and now they're talking about phones through the Internet. We'll try to explain that in terms we can all understand.Segment 7 tonight the dying hobby of model railroading or is it really dying? It depends on which hobby store owner you ask.And we'll end the week with an encore from the rooster and his papers and we hear he's got a few special ones tonight, yes he does, all that and more in the hour ahead.We begin tonight with what the Secretary of Defense Rumsfeld is calling a disagreement. Others less friendly to the administration are calling it a disgrace. A cynic might say it is simply business as usual. Whatever it is the question of whether a subsidiary of Halliburton overcharged the Pentagon $61 million for fuel remains topic A tonight for many reasons.We begin with CNN's Jamie McIntyre.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): President Bush tackled the Halliburton flap head-on insisting the company formerly headed by his vice president would be held to the letter of the law.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If there's an overcharge like we think there is we expect that money to be repaid.

MCINTYRE: Defense Secretary Rumsfeld downplayed the findings of his own auditors even more insisting it wasn't really an overpayment for fuel imported into Iraq just a disagreement over charges by a Kuwaiti subcontractor.

DONALD RUMSFELD, DEFENSE SECRETARY: There was no overpayment to any company and, in fact, there is a fairly normal process going on where they submit bills from their subcontractors and for their own. It gets discussed and debated. We've got auditors that crawl all over these things.

MCINTYRE: Halliburton's current president vigorously defended its transactions with the U.S. government and insisted the company was being criticized for doing a high risk, low profit thankless job.A statement said: "Halliburton has repeatedly tried to transfer the fuel delivery mission to a local supplier because it is dangerous for our people. So far, no one has been able to find a replacement for Halliburton."Congressional critics, including Democrats John Dingell and Henry Waxman, argued they not Pentagon auditors were the first to blow the whistle on the high price the U.S. was paying for Kuwaiti gas.

(END VIDEOTAPE)

MCINTYRE: The White House insists that the Pentagon investigation will answer any questions about whether there was impropriety on the part of Halliburton and if it turns out that the Kuwaiti subcontractor did overcharge Halliburton by $61 million the Pentagon points out that during the combat phase in Iraq the Kuwaiti government provided the U.S. $300 million worth of gasoline for free -- Aaron.

BROWN: That's an interesting defense. I'm not sure it's exactly the issue but we'll let them sort that out. In trying to figure this out today it is not clear to me, maybe it is to you, it is not clear to me how in this scenario where Halliburton's paying $2.00 plus for a gallon of gas and selling it for four, six, 15 cents, how it is profiting from this deal. Is that clear to you?

MCINTYRE: Well, one of the things that the auditors determined was that Halliburton had not profited any more from the deal than they would have if they had bought the gas at a lower price. They got a fixed percentage of the contract with a ceiling and they didn't profit anymore.But what happened was the U.S. taxpayers paid perhaps $61 million more than they would have because they sell the gas in Iraq at a subsidized lower price, as you've noted. So, if anybody lost money it was the U.S. taxpayers and if anybody got that $61 million it was the Kuwaiti subcontractor.

BROWN: Jamie, thank you, Jamie McIntyre tonight.With all kinds of numbers flying around about who's paying how much for a gallon of gas in Iraq here's the reality. Except for the military there's hardly a drop to be had at any price in a country that used to be swimming in it.Here's CNN's Satinder Bindra.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN CORRESPONDENT (voice-over): Mohammed Odali (ph) begs for gasoline in a country that has the world's second largest oil reserves. The irony irritates Odali and as he goes from car to car his temper finally explodes."I blame Bush and the American administration" he says "because they are benefiting from the wealth of the Iraqi people."Millions of Iraqis are just as angry and gas hungry as Odali. This line for gasoline in Baghdad stretches for five kilometers, about three miles. Many motorists say it takes eight hours to fill up even if the price is still incredibly cheap by world standards about one U.S. cent a liter, slightly less than four cents a gallon.This man who gives his name as only Mohammed is so fed up he says he's quit driving.

UNIDENTIFIED MALE: We are feeling that we are humiliated in our country and humiliated in our places and humiliated in our homes.

BINDRA: With electricity in short supply, Iraq's aging oil refineries are struggling. The ongoing insurgency is another cause for concern.

DATHAT AL-KHASHAB, OIL REFINERY MANAGER: The main reason for the crude is not coming to the refineries are sabotage on pipelines and this sabotage is continuous.

BINDRA: What's also continuing to irritate Iraqis is a thriving black market. Some traders are selling stranded motorists gas at prices 15 times higher than those at the gas station. These costs are escalating tensions.Gunshots have been fired. Some gas stations are now guarded by U.S. Marines and just this week two U.S. soldiers corralling traffic near gas stations were shot dead. To cope with the shortage, Iraqi is now rationing gas.

BINDRA (on camera): Drivers can buy only 50 liters or 13 gallons of gas in one go. Iraq is also importing four million liters or approximately one million gallons of fuel from Turkey.(voice-over): Coalition forces are warning black marketers they face lengthy jail terms but Mohammed Odali is unimpressed. After hours of begging, a fellow Iraqi gives him some gas for free. Odali realizes he's been lucky. Tomorrow, he says, he'll have to be back in line again.Satinder Bindra, CNN, Baghdad.

(END VIDEOTAPE)

BROWN: On now to the White House and the Bush administration's newest troubleshooter. He's also the oldest, James Baker is. His mission involves persuading other countries to forgive Iraqi debt and few would doubt his influence in that regard or his clout. But both may also have a lot to do with the connections he's made since leaving public life and those connections are raising a few eyebrows.We turn to CNN's Suzanne Malveaux at the White House for the latest.

MALVEAUX: Well, Aaron, it was a bit of a dust-up that began with the "New York Times" editorial that said James Baker has to sever all of his ties to the private sector, otherwise it will be a conflict of interest in his new job to try to get these countries to forgive Iraqi debt.Now, President Bush today said that he did not read this "New York Times" piece but in his words he said he didn't mean to diss the "New York Times" but he is fully standing behind his man.

(BEGIN VIDEO CLIP)

BUSH: Jim Baker is a man of high integrity. He's a man of enormous experience and it makes sense for him to serve our country on an important mission and that mission is to encourage countries to forgive debt so the Iraqi people can more easily grow a nation that is prosperous and peaceful.

(END VIDEO CLIP)

MALVEAUX: Baker is a partner in a Houston law firm. One of its clients is Halliburton and Baker is a senior counselor to the Carlyle Group. This is an investment group that does business around the world, including in the Middle East and with the Saudi royal family.And the White House Counsel Office however says it is satisfied that Baker has complied with the law that there is no conflict of interest. Baker is considered a special government employee, a temporary volunteer unpaid position and as such he is not required to sever all his ties to the private sector but this is what Baker has done.He has filed a financial disclosure form, agreed to forego any earnings from clients with connections to Iraqi debt and has resigned from the board of EDS, a company with government contracts.Now, Monday Baker is going to be traveling to Europe. He's going to be meeting with the leaders of France, Russia, Germany, Italy and the United Kingdom. The administration believes if it's anybody who can go ahead and make a deal in forgiving Iraqi debt it is Baker -- Aaron.

BROWN: This is a fascinating moment and a fascinating negotiation. Other than the good will of the administration and perhaps what is morally right, you might argue that, what is it that Mr. Baker has to offer?

MALVEAUX: Well, Mr. Baker actually, I mean he's, as you know, a very powerful political player here. What he has to offer from the administration, of course, not only his diplomatic ties and international experience but there is a possibility that there is some wiggle room here. It is all very murky who's going to get on this list for these prime contracts and perhaps, you know, people who are already on that list. There is a possibility the administration signaling that if they forgive Iraqi debt they may be able to be eligible for some of those contracts. 

BROWN: Well, we'll watch the trip next week. Thank you, Suzanne, Suzanne Malveaux at the White House.On now to politics and fish, the two collided this week when a federal panel for the first time recommended that pregnant women, nursing mothers and young children should be warned to limit the amount of tuna they eat to avoid exposure to unsafe levels of mercury. OK, but given what we heard about mercury earlier this month we are a bit confused.Here's CNN's Kelly Wallace.

(BEGIN VIDEOTAPE)

WALLACE (voice-over): The concerns about mercury in tuna came just a week after we learned the Bush administration is backing a controversial new plan to deal with the amount of mercury in the air.Instead of supporting mandatory cuts in emissions by power plants the EPA wants a market-based approach allowing the plants to buy and sell rights to emit mercury. Environmentalists say there is a glaring contradiction here.

DDR. LINDA GREER, NATIONAL RESOURCES DEFENSE COUNCIL: Well, it's incredibly hypocritical. On the one hand the government is acknowledging the problem of mercury in food and then on the other hand last week they're failing to do anything about it.WALLACE: The new EPA administrator disagrees.

MICHAEL LEAVITT, ADMINISTRATOR OF EPA: Those who would suggest that we're somehow rolling back the standard misstate the truth. This is the first time we have ever regulated mercury coming from power plants. This is the first time in the country's history that we've done it.

WALLACE: Leavitt said his plan would cut mercury emissions by 70 percent in 15 years. Environmentalists say the Bush administration is weakening Clean Air Act requirements which call for nearly wiping out mercury emissions in four years.Both sides do agree on this that there is a direct connection between the mercury that is emitted into the air by power plants and the mercury we find in tuna and other fish we eat.

DR. PHILIP LANDRIGAN, MOUNT SINAI SCHOOL OF MEDICINE: That mercury is vaporized. It goes up the power plant stack. It goes into the atmosphere, travels a certain distance through the atmosphere, comes down eventually into the lakes and rivers and into the ocean, gets into the food chain in the sea and accumulates in the fish.

WALLACE: So, the debate centers on how to reduce the mercury in the air and how quickly. With environmentalists arguing the Bush White House is putting industry interests ahead of public health and the EPA saying its incentive-based plan modeled after the one used to reduce acid rain has a proven track record and will not place an additional financial burden on energy companies.

(END VIDEOTAPE)

WALLACE: And the issue will take center stage Monday. That is when the EPA faces a court-issued deadline stemming from the Clinton years to release a public proposal to regulate mercury. It will release its market-based idea as well as a rule calling for mandatory cuts in emissions. Both of those ideas will then be open to public comment for a year so, Aaron, you can bet we'll be hearing a lot about both in the months ahead.

BROWN: We should be able -- I mean some things are opinion and we'll let those go but some things are factual and there is a factual question that seems to be in dispute. Who's right here? Are the environmentalists right when they say the previous plan would have eliminated 90 percent of mercury in the air in four years? Or, is the administration right saying that they will, in fact, do more to reduce the amount of mercury than the Clinton proposal, the Clinton era proposal?

WALLACE: Well, we haven't had regulations before so we don't really know the answer. That's part of it. So the administration would say by providing incentives to industry and preventing increased costs on utility companies you will be encouraging them to go ahead and cut their emissions of mercury but environmentalists say unless there's a mandatory regulation requiring its companies to do it you're not going to see anyone doing anything. That's what I know.BROWN: Thank you and that's all I ever ask is what you know. I don't want anything else. One more note before we go to break in this segment. Shoshanna Johnson, the Army private, who spent 22 days, I'll bet it seemed longer, as a prisoner of war in Iraq after being shot in an ambush was discharged from the Army today. Ms. Johnson was traveling in the same convoy as Jessica Lynch, later was shown in an Iraqi video being questioned by her captors. Her father accused the military of unfair treatment when his daughter was offered a smaller disability check than Ms. Lynch.Ms. Johnson, the first black female POW in American history said in a statement today she does not regret her five years in the military. She joined because she wanted to learn to be a chef.Ahead on NEWSNIGHT, the morning after pill, will approval to sell it over the counter create a new sexual revolution?And later, we'll visit two shops keeping the dying hobby of model railroading alive, competitors in more ways than one.From New York this is NEWSNIGHT.

(COMMERCIAL BREAK) 

BROWN: Once again a tiny pill has become ensnared in the politics of birth control and abortion. You may have heard it called the Morning After pill. Its brand name Plan B, for when Plan A, contraception, fails or fails to be used.The FDA has already approved it as safe. Doctors prescribe it. Some states even allow pharmacists to sell it without prescription. So far so good but next week the FDA will consider whether to allow Plan B to become the first emergency contraceptive sold over the counter nationwide and that, of course, has set off a whole lot of controversy.Here's CNN's Christy Feig.

(BEGIN VIDEOTAPE)

FEIG (voice-over): Within 72 hours of unprotected sex a woman can take two pills 12 hours apart and she has a good chance of preventing an unwanted pregnancy. The drug is called Plan B and works by keeping a fertilized egg from implanting in the wall of the uterus. It's available now without prescription in five states and it's reviving the abortion debate.

FLORIA FELDT, PRESIDENT, PLANNED PARENTHOOD: Scientifically and medically pregnancy occurs at the time of implantation.

WENDY WRIGHT, CONCERNED WOMEN FOR AMERICA: The fact that something is getting implanted shows that there is a pregnancy that already exists.

FEIG: If the egg is already attached to the wall of the uterus, which happens from seven to nine days after the egg is fertilized, Plan B will not have any effect but opponents have more concerns. Plan B contains a high dose of the hormone found in traditional birth control pills which can cause blood clots in certain people.

WRIGHT: If this is over the counter it would be a high dose of this drug so it's likely to cause all kinds of unknown problems and women are more likely to use it repeatedly.FEIG: Those who want the pill available over the counter disagree.

FELDT: All of the evidence indicates that women use emergency contraception very responsibly and the fact that they have it, all of the studies have shown so far, that because women have access to emergency contraception does not mean that they use it regularly.FEIG: Emergency contraceptives like Plan B are already sold without prescription in about 30 countries throughout the world.

(END VIDEOTAPE)

FEIG: Now, the morning after pill has been available by prescription since 1998 and its use is increasing slightly. Last year a survey found six percent of women of childbearing years use the pill, up from two percent in 2000 -- Aaron.

BROWN: And to what degree, if any, have there been complications from its use?

FEIG: Well you haven't seen a lot of that. What you have seen studies coming in on these places, it's available in other countries, about 30 other countries use this as we mentioned and the reports that you see coming in look more at things like STDs are there an increase in STDs because that would imply that people weren't using other protection.You do see in some cases that goes up a little bit. There has not been a lot of reports that we were able to find that people were having massive problems with blood clots and the people who are in favor of this going over the counter say that's not really a problem with this pill because you're not using it long term like you do when you're using it as birth control.

BROWN: Christy, thank you. STDs for those who don't know are sexually transmitted diseases. Thank you very much.A lot of contention over this contingency plan, a lot of questions too. We turn now to Dr. Camelia Davtyan, Director of Women's Health at UCLA's comprehensive Cal Health Program, nice to have you with us.On the question of side effects, anything you want to add there? Do we know much about repeated use and whether or not that causes additional problems?

DR. CAMELIA DAVTYAN, UCLA: We don't know that much about repeated use but if you think of how many prescriptions have been written in the United States for this medication and how many people have been using this being dispensed by pharmacies here in California and other four states, without reported serious side effects, in my opinion I think it's pretty safe to be approved for availability over the counter.As far as the blood clots, which is a side effect that has been discussed a lot in the media, we have to remember that Plan B only contains the hormone progesterone and not the estrogen and such it is not prone to cause blood clots. So, that's important to keep in mind.

BROWN: There is this and there probably will always be this debate over at what point it is a pregnancy, at what point what we're really talking about is an abortion. From a medical standpoint is it a pregnancy?

DAVTYAN: From a medical standpoint pregnancy begins with implantation. That's what we teach our medical students and what we learned in medical school and Plan B would work before implantation. It is not effective after implantation. In my opinion it is a contraceptive method and not an abortive method.

BROWN: And so this is -- from a medical and a scientific point of view this is really a political debate or a moral debate I guess on how you perceive the beginning of life?

DAVTYAN: Well, if you look at which agencies are supporting the over the counter availability like the American College of Obstetricians/Gynecologists, American Academy of Family Practitioners, American Academy of Pediatrics, you kind of get the message that the major medical groups are supporting that from a medical standpoint.

BROWN: Let's set these controversies aside for a minute or two and talk about a couple of other things. One of the things and we talked about this in our morning call today, a suggestion one of our colleagues made that it would have a pretty dramatic effect on the way women behave and use contraceptives or don't use contraceptives. Do we know much about that?

DAVTYAN: I don't think there has been many studies done as far as if this would change the contraceptive behavior. I doubt that women would stop using condoms because most women use condoms to protect from sexually transmitted diseases.On the other hand, given the fact that this medication has a good safety profile I don't think it's really that important to worry about that and if you think of when the pill was first introduced in the '60s there were worries about women maybe stopping having children or fertility decreasing tremendously. That really hasn't happened.I think most women are very responsible about the way that they use contraception and there's only a minority of women who might be prone to using something without knowing what it does and what the side effects are.

BROWN: So you think this idea that women might, women who are on the pill for example might come off the pill because of whatever concerns they have about the pill and just rely on this are perhaps overblown?

DAVTYAN: I think they are perhaps overblown because in my experience even the younger women or teenagers they usually ask questions about side effects and how a medication works.

BROWN: And I suppose if you -- politically this question cuts both ways but I'm not offering it up politically. Is there -- how do we think this would affect or might affect or do we know anything about how it might affect the behavior of young men and women, teenagers for example?

DAVTYAN: I don't think we know that much scientifically but the question of teen pregnancy in this country is still a very important social problem so I think the availability of a method that would not require a visit to the physician or a prescription for a physician would definitely be a very important choice that the teenager would have in order to prevent unwanted pregnancy.

BROWN: Because kids are reluctant to -- kids are reluctant to go to doctors.

DAVTYAN: They really are. They're reluctant to go to doctors. They're reluctant to talk to their parents sometimes and we need to remember that there are three million unwanted pregnancies in this country every year.

BROWN: Dr. Davtyan good to have you with us tonight, nice job. Thank you.

DAVTYAN: Thank you very much, Aaron.

BROWN: Thank you.Later on the program, morning papers, a very special Friday edition of morning papers I must say.Up next we update the story of the boy who got in trouble for saying that his mom is gay, that and more.This is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: A quick look now at some of the other stories that made news from around the country and around the world today. It begins in Hammond, Indiana. David Maust was in court today arraigned for the murder of a teenager. He pleaded innocent though police say he confessed to strangling the boy, wrapping him in plastic and burying him in concrete beneath his house. Coincidentally, two other bodies have been discovered also wrapped in plastic and covered in concrete. And Mr. Maust already has a history. He killed a boy 22 years ago, pleaded guilty then and served 18 years in prison. Goodness. The school board in Louisiana -- Lafayette, Louisiana -- says it won't apologize for punishing a boy who told a classmate that his mother, his own mother, was gay. The boy says the school board -- was disciplined for misbehaving, not for using the G-word, this despite a report from his teacher which clearly states otherwise. A lawyer for the ACLU called the board's decision last night revisionist history. No further comment from the board. Emily Dickinson was wrong. Hope is not the thing with feathers. Canada's new prime minister is. Paul Martin assumed his post today, the ceremonies including a native purification ritual by way of an eagle feather. And even though "The New York Times" will still refer to him as Mr. Jagger, you can call to him Sir Mick. He was knighted today. His band mate, plain old Keith Richards, called it ludicrous, a paltry honor, he says. Hey, it's only rock 'n' roll. Sir Mick and his drummer, Mr. Watts, are said to be pretty savvy indeed. So this "MONEYLINE Roundup" is dedicated to them tonight. Sony and Bertelsmann have finalized an agreement to merge their music divisions. The new outfit, Sony BMG, would become the second largest record company in the world, subject to approval from regulators in both the United States and in Europe. Regulators in Canada have OKed music downloading for personal use, but not uploading. The country's copyright board also imposed a tax of up to $25 on iPods and other iPod-like devices. But experts say the board's decision doesn't go far enough toward establishing once and for all a clear set of rules about buying and selling and trading copyrighted music online. Producer prices fell in November by 0.3 percent. Wall Street expected them to rise a tad. That's another bit of economic jargon that we occasionally throw in here on the program. But jargon on not, it kept the rally going. All major indexes were up today. So were all major indices. Man, this segment. Still to come on NEWSNIGHT: phoning over the Internet. Why are so many companies rushing to do it and what does it mean to you? Around the world, this is NEWSNIGHT. 

(COMMERCIAL BREAK) 

BROWN: I am of the belief -- and I may be wrong here, but I am of the belief that one of the few things in life you can count on is the phone. Even in a blackout, the phone works, unless, of course, you have one of those wireless phones. And then you're out of luck. I am also of the belief that phones are more reliable than, well, let's say cable. Cable goes out sometimes. The phone works. Given these two beliefs, I'm left wondering why it is that cable companies, including our sister company, Time Warner Cable, are racing to get into the phone business or, more importantly, why I should make the switch. Here's CNN's Daniel Sieberg. 

(BEGIN VIDEOTAPE) 

DANIEL SIEBERG, CNN TECHNOLOGY CORRESPONDENT (voice-over): It's called voice-over Internet protocol, voice-over I.P., or VoIP, for short. 

UNIDENTIFIED FEMALE: Basically, voice-over I.P. is just taking voice and putting it over your data line. Why would someone want it? Right now, the compelling reason for both consumer and business is cost. It's just, frankly,, cheaper than getting a traditional phone line. 

SIEBERG: Some cable TV companies, including CNN sister company Time Warner Cable, have already announced plans for voice-over I.P. service. And AT&T already offers has VoIP for some business customers. But now, by the end of March, AT&T plans to extend that service to residential customers in the top 100 markets in the United States. And AT&T hasn't said how much it will charge, but you can already find the technology cheap, even free, over the Internet through small companies such as Skype. 

UNIDENTIFIED MALE: There are several hundreds millions of users on the broadband Internet. And I believe that, in the next few years, as the broadband penetration continues to double every 1.5 years, something like that, more and more people will be starting to use the Internet to make phone calls. 

SIEBERG: Analysts say VoIP reliability is comparable to cell phone technology. You might get some dropped calls and sound may not be as good as with a land line. And if your home loses power, so does your phone. And it's not necessarily easy to install. 

UNIDENTIFIED FEMALE: One of the most difficult things is going to be trying to figure out exactly how do you connect to it. So will the cable operator give you a box to do that? And, right now, there is additional hardware for a majority of these services. In some cases, it's software but then you have to download the software or load a disk. So, really, it's going to be a bit of an installation challenge for those that aren't very tech-savvy at the moment. 

SIEBERG: But AT&T's initiative could mark the beginning of a wide-scale shift in the way we make phone calls. 

UNIDENTIFIED FEMALE: AT&T saying they're going to do voice-over I.P. is a big validation of VoIP in the marketplace. Daniel Sieberg, CNN, Washington.

(END VIDEOTAPE) 

BROWN: Because, of course, some of us here at NEWSNIGHT are not too proud to admit that VoIP and broadband are not words that come up in everyday conversations very often, unless we're faking it, which is why we've asked Omar Wasow, the executive director of BlackPlanet.com, to help make sense of this. It's good to see you.

OMAR WASOW, EXECUTIVE DIRECTOR, BLACKPLANET.COM: Good to see you.

BROWN: Why is it cheaper?WASOW: Well, there are two main reasons why it's cheaper. One is that's it's radically more efficient to use the Internet to transmit voice calls than the older technology, which is really decades old. The second reason is that there are an enormous number of taxes that exist on the traditional phone calls that are not a part of an Internet call. 

BROWN: Yet.

WASOW: So you take those two together -- not yet at least, yes. So you take those two together and you can actually save a lot of money. 

BROWN: That was actually my next question. Is it a lot of money or are we talking a buck or two or five a month? Because you are giving up the reliability of a conventional phone. 

WASOW: Now it is not quite as reliable as a conventional phone. Over the next decade, you will see this technology become the standard and traditional phone technology will essentially fade away. 

BROWN: But how do you -- you need power. The telephone, the normal, regular telephone in your house has its own power. 

WASOW: And that certainly is a dramatic difference when there is a blackout or when there is some kind of crisis. 

BROWN: Well, that could never happen here, a big blackout. 

(LAUGHTER) 

WASOW: Right. That's just a thing of the past. It's obsolete. 

(CROSSTALK) 

BROWN: Can't happen. 

WASOW: It certainly can happen. And, certainly, we've seen other kind of crises in New York City where having reliable phone calls matter. But it does make a difference. You asked about the pricing. You're talking about $50 to $70 for an unlimited calling package for local and long distance in, say, the United States. And you're talking online from a company like Vonage $35 for an unlimited calling. And you're going to see those prices come down even more. So we're just at the beginning of this very dramatic compression on local, long distance, international calls, in part, again, because a lot of what the additional fees are, especially for something like international calls, are taxes. And so you're just going to cut through all of that. 

BROWN: A couple more 101 calls. Then I want to get beyond that. Maybe this is best asked of a psychiatrist. But do you think -- forget 20-somethings and 30-somethings. Let's talk about 50-somethings here. Are we culturally comfortable enough with technology these days? We all have computers. But are we comfortable with it that we would put our phone line through it? WASOW: Well, the Internet was once something, like was described in the package before, that took a lot of technical expertise to connect to. You really needed to know all kinds of esoteric, obscure, arcane things. And now it's one of those things where it's relatively straightforward. You can buy a computer that, out of the box, connects you to the Internet. That's what's going to happen with voice-over I.P. or this sort of Internet telephony. It's a little bit complicated now. It is going to get to the point where, you take a regular telephone, you plug it into a box and, boom, you're on. So we're in this transition area now, but it is really going to be fairly dramatic soon.

BROWN: And is that literally a regular telephone? Could I take the regular telephone that is in my house and, if I had the right boxes, and just plug it into there instead? 

WASOW: Take your regular telephone and plug it in. And that's a big evolution on what it used to be, which is where you had to wear a headset and sit in front of your computer. 

BROWN: And you can only talk to other people who are connected, right?

WASOW: Exactly. 

BROWN: OK.Looking out there, if this is in fact the future, is it just the future for making a phone call or is this the beginning of yet another revolution that may or may not actually play out? 

WASOW: There are a lot of other things besides cost and besides making a phone call that are the kind of features you can wrap around. So what we are looking at here is that, eventually, you'll see phones that have the kind of intelligence and capacity of a regular P.C. now. And when you put that intelligence in the phone, there are all sorts of new features, so that your phone can become like an ATM. You can do all sorts of things that you might have done on a computer. Plus, you can also do other kinds of things with phone call, like, I'm going to visit relatives for a week. I can have my phone, all my calls just route over to another location, because, on the Internet, that kind of fixed geographic capacity is no longer -- it's -- you're no longer constrained by being in a specific location. You can route those phone calls anywhere. 

BROWN: How long before you think this is really sort of the norm? 

WASOW: I think, over the next decade, you're going to see the old-line technology become -- it's so much more expensive and it's so much less efficient that it will become obsolete. 

BROWN: Now, just finally, you're young. You're hip. You know all of this. Do you have this as your phone?

WASOW: I don't.

BROWN: Oh, OK.

(LAUGHTER) 

WASOW: I use a conventional telephone. But give it a few years. And, I mean, the thing really to appreciate here is that, at some point, nobody will talk about voice-over I.P. It will just become the norm. 

BROWN: The phone.But you have not rushed out to do this yet? 

WASOW: I have not rushed out to do this yet.

BROWN: Will you call me when you do on whatever device you're calling me on? 

(CROSSTALK) 

BROWN: And then I'll wait two years and do it. 

(CROSSTALK) 

WASOW: It's a deal. 

BROWN: Good to see you.

WASOW: Likewise.

BROWN: Thanks for coming in.Ahead on NEWSNIGHT: train-spotting and the one block in Manhattan where the hobby of model railroading is being kept alive, if only barely. On CNN, this is NEWSNIGHT. 

(COMMERCIAL BREAK) 

BROWN: I didn't know that prime number had been lost. In the miracle on 34th Street, it was Gimbel's and Macy's and a little girl who wouldn't believe. This Christmas, the miracle on 45th street is Ralph and Allan and little boys, young and old, who still do. Here's NEWSNIGHT's Beth Nissen. 

(BEGIN VIDEOTAPE) 

BETH NISSEN, CNN CORRESPONDENT (voice-over): For half-a-century, for the half of American children with XY chromosomes, a Lionel train was a top Christmas wish, and more. It was a bonding experience, a rite of passage that could make a boy feel like a man and a man feel like a boy. Model trains still make lots of grown men feel like boys. 

UNIDENTIFIED MALE: I'm 50. Mentally, I'm still 16. 

NISSEN: But it's been years since the Santa's-lap crowd had the words Lionel or HO Gauge on their Christmas lists. 

RALPH ISRAEL, MANAGER, MANHATTAN TRAIN AND HOBBY: Now it's mostly an adult hobby. I would say the most typical customers is probably somebody my age who is 50-ish. 

ALLAN SPITZ, OPERATOR, THE RED CABOOSE HOBBY: The joke is, you go to a convention and every year the average age is one year older. 

NISSEN: Not that there's anything wrong with that, although, on West 45th Street in Manhattan, in two rival hobby shops across the street from each other, you will find two trains of thought on whether the aging of the average model train enthusiast signals the demise of the hobby. At the Red Caboose Hobby Shop, a cave-like basement store with model trains crammed floor to ceiling between narrow gauge aisles, the operator, Allan Spitz, says model railroading is losing steam. Sales of model planes are still good, he says, but sales of tank cars have tanked. Sales of flat cars are flat. 

SPITZ: Unfortunately the patterns of business are declining, as times grow older and so do the people. There's no great influx of people playing with trains. 

NISSEN: Although there is a constant influx of new, remarkably realistic product, from New York City's subway cars so authentic, they come with their own graffiti, to brass reproductions of Union Pacific engines in exact turn-of-the-century detail. 

SPITZ: An engine like that with a 

(UNINTELLIGIBLE), I would ask $1,500 for. 

NISSEN: Model trains and train accessories are so expensive. Most items are now mass produced in China, which has brought the cost down. But the hobby can still be pricey. 

SPITZ: We have a Conrail electric there.

NISSEN: But the hobby can still be pricey.

KENNETH HARRIS, MODEL RAILROAD HOBBYIST: I probably spend about $2,000 a year on the hobby, between magazines, locomotive and car purchases, buildings, track. 

NISSEN: Harris spends much of that at Manhattan Train and Hobby, the cherry second-floor store just across the street from the Red Caboose run by Ralph Israel. Unlike Spitz, Israel believes model trains are still chugging alone. Customers may be graying, he says, but they are loyal, devoted. Many have been building layouts and collecting trains for decades. 

RICHARD LAMPETER, TRAIN MODEL HOBBYIST: I've been a model railroader for over 30 years. I started when I was a teenager. 

NISSEN: Richard Lampeter, now an engineer -- no, not the train kind, the blueprint kind -- still remembers his first train. 

LAMPETER: And it was on a four-by-eight board. And it was a number of used locomotive and trains. And we put it together in the basement. And that's how I got kind of hooked. 

NISSEN: 'Tis the season for hooking new potential enthusiasts. Many shops' sales now are to customers who want trains to run around Christmas trees. 

UNIDENTIFIED MALE: This one here is $179. 

NISSEN: Enthusiasts also welcome Christmas as an excuse to give trains as presents, introduce others to their pastime. 

HARRIS: You give a gift and they will get attracted. And that's what we need more of in this hobby, is to really get younger people into the hobby, because that's what will make it grow. 

NISSEN: Israel thinks -- well, he hopes -- that it's just a matter of time before the GameBoy generation is engaged by the small gauge, realizes just how interactive model trains are. Many are now computer-controlled, with chips that mimic the sounds of pistons, wheels on tracks. 

ISRAEL: The world is the world. The world changes. And we have to change with it. And, hopefully, there will always be people that want to do these kinds of things. 

NISSEN: Hopefully, there will. Beth Nissen, CNN, New York. 

(END VIDEOTAPE) 

BROWN: The only thing unchanging is morning papers, after the break. 

(COMMERCIAL BREAK) 

(ROOSTER CROWING) 

BROWN: Oh, what a two and half minutes we have planned for you. We don't really plan this. Time to check morning papers from around the country and around the world. And this being Friday, we may throw in a surprise or two. But here's a normal start to things, "The Hartford Courant" of Hartford, Connecticut. A very good story on the front page. "Gifts, Lies Admitted, An Apology From Governor John G. Rowland," who, it turns out, had top state officials doing work on his residence and lied about it. Front page. Should be. "San Antonio Express-News." That would be San Antonio, Texas. I have some friends from Texas in tonight. "Parents Worried Sick By Flu. They're Changing Kids' Habits to Avoid Others at Favorite Playgrounds." Hmm. That's interesting. Also, they put the Halliburton story on the front page. "Bush Says Uncle Sam Will Not Be Fleeced." "The Atlanta Journal-Constitution." I find this a very interesting front-page story. And then there is a reason for it. "Trade Deficit Tops $41 Billion." That would, in my thinking, not normally make the front page of the newspaper, but look down below. "Doubt About Summit Boost. G8 Meeting" -- leaders of the G8 countries coming to Savannah -- "G8 Meeting Might or Might Not Produce a Windfall For Coastal Georgia." So they're starting to talk a bit about the economy and international trade and all of that. Give me the whale, if you will. Keiko, the whale who was "Free Willy" has died. This just came in. This will be on the front page of some papers tomorrow. And we wanted to get that in before we went.Now, how are we doing on time, David? 

UNIDENTIFIED MALE: Forty-five. BROWN: Just exactly the right amount of time. This being Friday, you don't get necessarily all the great papers. And sometimes you miss a good story. So we went out and bought a couple of more. "The Weekly" -- that's "The Weekly World News." Did you know this? Had you heard this on television today? I don't know. I hadn't. "Alien Army Heads For Earth." And, actually, I can't tell you this, but it will tell you where and when they're going to land. So you might want to run out and pick that up. And this in the news-you-can-use category. If you're ever arrested, try and look better than Glen Campbell when they take the mug shot, OK? Give me one more quick shot of that. And we'll check the weather. Thank you.The weather in Chicago is somewhere, isn't it? Sure it is. It's "hearty" tomorrow in "The Chicago Sun-Times." "Indiana Suspect Says, 'I'll Be My Own Lawyer.'" That's morning papers for the day and for the week. We'll update the top story and preview Monday after the break. 

(COMMERCIAL BREAK) 

BROWN: Very quickly, recap of our top story, the president saying today Halliburton should repay the government if it overcharged for gasoline delivered to Iraq. Pentagon auditors believe it did by $61 million. Coming up on the program on Monday, it isn't just our own romance with photography. We'll look at "TIME" magazine's pictures of the year. Good for us. That's Monday right here on NEWSNIGHT.Have a wonderful weekend."LOU DOBBS TONIGHT" is next.Good night for all of us. 

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.comEnvironmentalists Accuse Administration of Hypocrisy; Should Morning- After Pill Be Available Without Prescription?>

Thursday, December 11, 2003

White House Restricts Iraq Reconstruction Contract To Noncoalition Members; Pentagon Believe Halliburton Overcharged For Gas In Iraq; Rockets Fired At U.S. Green Zone In Baghdad

White House Restricts Iraq Reconstruction Contract To Noncoalition Members; Pentagon Believe Halliburton Overcharged For Gas In Iraq; Rockets Fired At U.S. Green Zone In Baghdad
Aired December 11, 2003 - 22:00 ET

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

AARON BROWN, CNN ANCHOR: Good evening again everyone.We should call our top two stories tonight your tax dollars at work. In one the administration may be softening its position on awarding contracts to companies from countries that did not support the war in Iraq. We'll let John King explain the details.But it's now beginning to feel a bit like a negotiation is going on. At stake, billions of your tax dollars and who should profit from Iraqi reconstruction. Your tax dollars have already been awarded to Halliburton and today the giant Texas company was slapped around a bit by the Pentagon.It seems the Pentagon believes Halliburton may be overcharging for gas, trying to overcharge for food services but not to worry. It was only a few tens of millions of dollars. It would be easier to be outraged if all this came as some sort of surprise but, as they say, tens of millions close enough for government work.We start things off at the White House, our Senior White House Correspondent with the watch, John King, John a headline.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Aaron, the president defended his policy about reconstruction contracts today saying it makes sense to him that those who shed the blood in the war should get the money from these major contracts but there was a hint of compromise, the president's spokesman saying if those war opponents now are willing to forgive Iraq's huge international debts "perhaps the circumstances could change" -- Aaron.

BROWN: John, thank you. We'll get to you at the top tonight. On to the Pentagon and questions about the cost of a gallon of gas in Iraq, Jamie McIntyre there for us, Jamie the headline.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, those Pentagon auditors are taking a look at what Halliburton paid for gas that it imported into Iraq and passed on to U.S. taxpayers. They think the overcharge is about $61 million but they say it wasn't Halliburton that might have gotten the extra money but a Kuwaiti company.

BROWN: Jamie, thank you.Next to Baghdad, explosions in the night, Nic Robertson with the duty, Nic a headline.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Aaron, the first attack on -- the first missile attack on coalition headquarters in over a month had coalition officials diving for cover while earlier in the day the third suicide attack against a U.S. base killed one soldier and injured 14 others. That's the third suicide attack in three days -- Aaron.

BROWN: Nic, thank you.And finally to Massachusetts, one of 50 states and by my counting that's all of them now hit with the flu, CNN's Dan Lothian covering developments there, Dan a headline.

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: Well, Aaron, the CDC says the flu outbreak is spreading. Now an 18-year-old college has died and there's a shortage of the flu vaccine. It may not be a pretty picture but the federal government says it's not an epidemic -- Aaron.

BROWN: Dan, thank you. We'll get back to you and the rest shortly.Also ahead on the program tonight, terror of a homegrown variety, a Texas man with a huge arsenal, including the making of a cyanide bomb.Later, desperate measures and sometimes deadly consequences children trying to sneak into this country from Mexico to join their families.And, of course, a visit from the rooster ends the evening, a check of your paper, well maybe not literally your paper but tomorrow morning's papers just the same, all that and more in the hour ahead.We begin tonight with the cost of doing business in Iraq. Agree or disagree with the policy in the first place the choice of who rebuilds Iraq and how comes with certain benefits but it also comes with a price tag in dollars and diplomacy, both spotlighted today.The diplomatic side first and CNN's John King.

(BEGIN VIDEOTAPE)

KING (voice-over): The president says he doesn't understand all the fuss.

BUSH: It's very simple. Our people risk their lives. Coalition, friendly coalition folks "risk their lives" and therefore the contracting is going to reflect that and that's what the U.S. taxpayers expect.

KING: But the decision to steer nearly $20 billion in Iraq reconstruction money to companies from the United States and key war allies reopened the diplomatic divide between Washington and major war opponents like France, Russia, and Germany.

KOFI ANNAN, U.N. SECRETARY-GENERAL: I would not characterize the decision taken yesterday as unifying.

KING: The president's political opponents call it more failed diplomacy.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: I think it borders on the stupid. It is counterproductive. It is the exact opposite of what we should be doing in order to bring other countries into the table.

KING: But at this year-end cabinet meeting Mr. Bush not only defended the policy but scoffed when asked about French and German suggestions his approach violates international law.

BUSH: International law, I better call my lawyer.

KING: Still, the timing is awkward to say the least. The dust- up comes just as special Bush envoy James Baker heads to Paris, Moscow and Berlin asking leaders to forgive or at least reduce huge Iraqi debts from the days of Saddam Hussein.

IVO DAALDER, BROOKINGS INSTITUTION: If I were Mr. Baker I would have gone into the Oval Office and told the president I'm going back to Houston until you find a way to cooperate with these guys.

KING: Canada also is excluded from major contracts, though Prime Minister Jean Chretien says Mr. Bush told him Thursday that was a mistake.

JEAN CHRETIEN, CANADIAN PRIME MINISTER: He was telling me to basically not to worry.KING: The White House says Mr. Bush made no promises but did note Canada's pledge to offer money for Iraq's reconstruction.

(END VIDEOTAPE)

KING: Slashing Iraq's $120 billion international debt is now the most urgent White House focus and perhaps now a bargaining chip in this bitter contract dispute. The White House today suggesting that if those war opponents are willing to forgive or at least reduce Iraq's big debt perhaps, Aaron, things could change the contract rules among them.

BROWN: Has Mr. -- because I would really like to hear that conversation, has Mr. Baker weighed in at all on this?

KING: We have not heard from him publicly at all. He did meet with the president earlier this week about his coming mission to those key capitals overseas. Whether he raised the issue of the timing of this contract dispute and whether it perhaps, as some would say, complicated his already delicate diplomacy he hasn't said so publicly and, in fact, at the request of the White House at the Baker Institute all people say they are told to talk to us not at all. 

BROWN: And there was a story this morning that the president personally was fuming at the timing of the release of the Pentagon memo on all of this, confirm, reject, what do you know?

KING: A little bit in the middle, fuming became awkward by the end of the day. The White House approved this policy. They knew it was in the works. They knew the Pentagon was about to release it. They're not exactly thrilled with the timing because it does complicate Secretary Baker's diplomacy, does exacerbate some of the tensions. They wish it wasn't so or in your face, some aides would say, but they say the president can't be fuming about it because he authorized it. It is his policy. The Pentagon, of course, answers to the White House.

BROWN: John, thank you very much, Senior White House Correspondent John King tonight.On to the price of gas now in Baghdad, about 15 cents a gallon, 15 cents a gallon when it's available which isn't all that often conditions being what they are.The job of fixing Iraq's oil infrastructure falls to Halliburton, the company Vice President Cheney once ran. Halliburton got this contract without having to bid on it. Under the terms of the deal a subsidiary of the company is shipping gas in from Kuwait for an average price of around $2.64 a gallon, which even if they checked the oil and do the windshield sounds a little bit steep and the auditors at the Pentagon agree.Here's CNN's Jamie McIntyre.

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): The Pentagon says it was a routine review that turned up the potential overcharge by a Halliburton subsidiary, awarded a no-bid contract in March to rebuild Iraq's oil industry.Pentagon auditors concluded Kellogg, Brown and Root potentially overcharged the U.S. government $61 million for gas from Kuwait imported into Iraq but there is no allegation Halliburton unduly profited from the overpriced gas.The audit questions if Halliburton paid above market rates to a Kuwaiti subcontractor, $2.27 per gallon compared to another supplier who got gas at $1.18 per gallon from Turkey.Halliburton argues the higher cost was due to having to negotiate a short term contract at a time when there weren't enough trucks in Kuwait to deliver the fuel. Trucks had to be brought in and shipping in a war zone pushed up transportation and security costs as well.A statement from the company insisted those costs were pass- through costs and that Halliburton only recovers a few cents on the dollar. Congressional critics who accuse the company of price gouging don't believe it.

SEN. RON WYDEN (D), OREGON: There have been indications for some months now that taxpayers' interests aren't protected. I'm glad that the Defense Department is finally coming to ask some tough questions but I think they should have been raising these issues many months ago.

MCINTYRE: The Pentagon's comptroller Dov Zakheim insists his auditors have been hard-nosed saying in a statement: "Contractor improprieties and/or contract mischarging will neither be condoned nor allowed to continue."

(END VIDEOTAPE)

MCINTYRE: Now those auditors found another potential overcharge from Halliburton, $67 million too much for dining halls in Iraq but they say that appears to be a billing error and are willing to say it might have been an honest mistake. Needless to say they're not paying that bill.Democratic presidential hopefuls were quick to jump on the issue. Howard Dean called Halliburton a special interest contributor that is overcharging U.S. taxpayers while Dick Gephardt called Halliburton the former employer of Dick Cheney, which he said is bilking the taxpayers -- Aaron.BROWN: Well whatever it is they're doing or however it is it came to pass is there going to be an attempt to try and recover any of this money?

MCINTYRE: Absolutely. That's what's going on now is essentially there's a review of the contract. Halliburton will have to come back and try to justify this extra $61 million. If the U.S. government doesn't believe it's legitimate they will disallow it and Halliburton will be forced to eat the money. They could possibly go back to the Kuwaiti company that sold them the gas and try to get it from them but that seems unlikely.

BROWN: Jamie, thank you, Jamie McIntyre at the Pentagon tonight.There's certainly no arguing Halliburton's assertion that there is a war going on in Iraq. We had more proof of that tonight. We go back to CNN's Nic Robertson in Baghdad -- Nic.

ROBERTSON: Aaron, it was a little after midnight, four explosions were heard in the center of the city. Smoke was then seen to be rising from the Green Zone. This is the coalition's headquarters, the sprawling former presidential palace compound in the center of Baghdad.Shortly after the impact sirens sounded. According to sources within the compound when the explosions were heard people dived for cover under tables. According to coalition officials, however, they say there were no injuries. They report that two missiles struck within the vicinity of the Green Zone and they say that one building within that zone was damaged slightly.This is the first attack in over a month of this type against the Green Zone. A little over a month ago there were several nights of mortar attacks against the base. It is heavily fortified but this missile attack the first in over a month.A little earlier in the day it was the third suicide bombing in three days against U.S. troops. The 82nd Airborne's headquarters in Ramadi was the target. Suicide bombers detonated their vehicle full of explosives right outside the gates killing one soldier. Fourteen others were wounded. We understand 11 of those soldiers have been returned to duty, three of them still receiving medical treatment -- Aaron.

BROWN: Correct me on something here if I'm wrong that this is the second day in a row or maybe the second time in three days that American bases have been targeted.

ROBERTSON: Indeed. In terms of suicide bombings there was a suicide bombing at Mosul two days ago, a suicide bombing in Baquba two days ago and then this suicide bombing today in Ramadi. In terms of the coalition headquarters this was a direct attack but it's the first one on the coalition's headquarters in just over a month -- Aaron.

BROWN: Nic, thank you very much, Nic Robertson in Baghdad this morning.One other incident in Baghdad sadly involves two friends of this program. Michael Weisskopf, Senior Correspondent for "Time" magazine and photographer James Nachtwey they were wounded along with two soldiers when a grenade was thrown into the Humvee they were riding in. Both are said to be in stable condition, both awaiting transfer out of the region to a military hospital in Landstuhl, Germany. They have and we'll acknowledge a bias here, they're friends, to doing remarkable work in Iraq. These are some of Nachtwey's recent photographs. They say it about as well as anything we've seen just what it feels like to be a soldier or a child or a grandmother in Iraq these days.The view is personal as is all the best war photography up close something we talked with Nachtwey about the last time he was on the program.

(BEGIN VIDEOTAPE)

BROWN: Mostly it seems to me you shoot a lot of wars. You've been in a lot of bad places. What is it about war that you find attractive to work in?

JAMES NACHTWEY, PHOTOJOURNALIST: I think it's the -- it's an area that needs the most understanding and needs the most awareness and it needs public opinion to come to bear and that's why I photographed many conflicts but also other critical social issues.

(END VIDEOTAPE) 

BROWN: He is a quintessential war photographer. Again he and Michael Weisskopf injured today in Iraq while on assignment for "Time" magazine.Ahead on NEWSNIGHT, questions about the conviction of some members of an alleged terror sleeper cell in Detroit. Also terror of the homegrown kind, a Texas man with an arsenal that included a cyanide bomb.And later the flu continues to spread and not just little kids and old people.This is NEWSNIGHT from New York.

(COMMERCIAL BREAK)

BROWN: Lucky breaks have cracked many a criminal case and here is one of them, a counterterrorism case in this country that has been part of the president's daily intelligence briefings we're told.A man in a Texas town has now pleaded guilty to possessing a dangerous chemical weapon the question were he and his common law wife homegrown terrorists plotting a deadly attack in this country and were they working alone?Here's CNN's Ed Lavandera.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN DALLAS BUREAU CHIEF (voice-over): In northeast Texas, the town of Tyler was an ideal hiding place for William Krar. He and his common law wife worked out of this storage facility just outside of town. Teresa Staples owns the space. She thought the couple made money selling odds and ends.

TERESA STAPLES, STORAGE OWNER: And they worked her most of the day but what we saw them unloading was clothing, swimsuits, garden tools.

LAVANDERA: So, when authorities showed up last April and searched Krar's storage unit what was found shocked everyone.

BRIT FEATHERSTON, ASST. U.S. ATTORNEY: This was a huge, absolutely a huge arsenal of military-style weapons.

LAVANDERA: There were hundreds of weapons. The inventory list of what was found is extensive but the most startling discovery was the combination of high grade sodium cyanide, acid and gunpowder. Mixed together it becomes a lethal chemical bomb capable of killing everyone inside a 30,000-square-foot building. Authorities suspect Krar might have been part of a criminal scheme to violently attack the U.S. government.

FEATHERSTON: We have yet to figure out the actual destination of any of the bombs or any of the devices. You know I don't think you possess these weapons for a defensive reason.

LAVANDERA (on camera): Federal authorities admit that they might never have caught on to William Krar had it not been for a case of a mistaken delivery. According to this affidavit, Krar sent a package to New Jersey full of fake IDs. Well the box never made it to the right person. Instead, it ended up in Staten Island, New York where someone else opened up the package and found a note inside that said "hope this package gets to you OK. We would hate to have this fall into the wrong hands." Well that person called police.(voice-over): The man who was supposed to get that package in New Jersey has been arrested and so has Krar's common law wife. Court records suggest these three were White supremacists and associated with anti-government groups. Krar's attorney says there's no proof the 60-year-old man was part of a sinister conspiracy and that he owned many of the weapons legally.

TONDA CURRY, KRAR'S ATTORNEY: I don't believe they will ever find any plot to do anything destructive, terroristic or anything like that to the United States.

LAVANDERA: Authorities aren't so sure. One of the documents Krar was found traveling with was this paper with instructions on how to elude authorities.

FEATHERSTON: You don't know what's going through these peoples' minds. We wish we did know what was going through their minds because that would probably make all of us feel a little bit better.

LAVANDERA: Krar has pleaded guilty to possessing a chemical weapon but as he sits in this Tyler jail he's not talking and his intentions are still a mystery.Ed Lavandera CNN, Tyler, Texas.

(END VIDEOTAPE)

BROWN: There is a basic rule of American justice, a simple rule at that. If the prosecution has evidence the accused is innocent or might be innocent it must give the accused that evidence. It can't hide it. In the first post 9/11 terror case to reach a jury the government broke that rule and now a judge must decide what, if anything, should be done about it; reporting for us tonight CNN's Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): They were described as a terrorist sleeper cell in the government's first post 9/11 terror trial. Two of the men were found guilty in June of terrorism-related charges mostly due to testimony from this man, Yousef Hmimssa who lived in this house with some of the defendants. Defense attorneys say those convictions should be reversed. Because of a gag order the attorney general would not discuss the case specifically.

JOHN ASHCROFT, ATTORNEY GENERAL: There are always going to be circumstances that will result in inquiry and discussion in the process of adjudication and those should rightfully be decided in the courts.

ARENA: At issue a letter the prosecution did not turn over to the defense until last month well after the trial. It was written by an imprisoned drug gang leader who says that he was in the jail cell next to Hmimssa. In it the gang leader claims that Hmimssa told him that he "lied to the FBI how he fooled the Secret Service agent on his case." Sources say justice officials are very concerned about what the judge will decide and say they admit the prosecution made a mistake.

PAUL BUTLER, GEORGE WASHINGTON UNIVERSITY: It the government has information that leads to a belief that the defendants might be innocent there's an obligation that it share that information with the defendant. The government didn't do that here and that may mean a new trial is in order.ARENA: The lead prosecutor in the case who has since been replaced testified before a Senate subcommittee this past September and had this to say about Hmimssa's testimony.

RICHARD CONVERTINO, ASSISTANT U.S. ATTORNEY: The information that Mr. Hmimssa told us had to most definitely be corroborated and accepted by the jury in order to be believable to a point where they would vote to convict the defendants.

ARENA (on camera): Sources say the government will argue the suggestion Hmimssa lied was never corroborated and so therefore the convictions should stand.Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

BROWN: Coming up on NEWSNIGHT the spreading illness as the flu outbreak spreads. Is it really that bad and how much do you need to worry about it? Take a break first, around the world this is NEWSNIGHT.

(COMMERCIAL BREAK)

BROWN: Officially it's not an epidemic yet but the flu season, which started early and is spreading and it is nasty. Today the CDC said the flu has now hit all 50 states. In almost half the country the outbreak is what the CDC considers widespread and the worst, we are told, is not over. The very young and the very old are among the most vulnerable when it comes to flu but we were reminded today they are not the only ones at risk.Here's CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): America's flu outbreak now on campus in Worcester, Massachusetts with fatal consequences. Eighteen-year-old freshman Jeffery Donohue, seemingly healthy, woke up in his dorm room with a cough and in a matter of days was dead.

PETER CHIULLI, FRESHMAN: I mean he looked sick but I didn't think it was that bad.

LOTHIAN: Across the country, and especially out west, now 24 state with widespread problems. Health officials say the so-called Fujian (ph) strain representing three-quarters of all cases has been linked to the deaths of 13 children. The CDC says cause for concern but no reason to panic.

DR. JULIE GERBERDING, CDC DIRECTOR: (AUDIO GAP).

LOTHIAN: In Colorado people lined up to get the flu shot, like Olivia Ramirez (ph) getting added protection for her newborn baby but the vaccine is in short supply. That's why the federal government has bought an extra 250,000 doses. Along with that the CDC is dispensing advice.

GERBERDING: There are some very specific steps that we can all take this year. One of those is to be sure that we stay home when we're sick because this will help reduce transmission of any respiratory illness that we might have to others.

LOTHIAN: Back on campus at Worcester State College students get guidance from the school's website.

LARRY TONY LOPEZ, STUDENT GOVERNMENT LEADER: You kind of get a little bit more nervous but I mean you can get sick just from going to the mall.

LOTHIAN: Donohue's death has not yet been linked to the Fujian strain but a new reality here, the notion that just the elderly, young, or chronically ill are at risk now dispelled by the death of an 18-year-old.

CHIULLI: He was a great kid. He made everyone laugh. I mean a fun-loving kid and he just didn't deserve it. That's for sure.

(END VIDEOTAPE)

LOTHIAN: According to the CDC, each year some 36,000 Americans die from complications of the flu and as we've been mentioning while those at highest risk are those who are old or very young or those who have medical problems the CDC says it is not unprecedented to see a healthy teenager also die -- Aaron.BROWN: What did he did, I mean this actually quite literally, what did he die of, the flu itself I don't think kills you, does it? 

LOTHIAN: No, it doesn't. It's usually some sort of complication that occurs from the flu and that is one of the questions that we did pose to medical officials there in Worcester today and they said it's still too early. They're conducting tests but don't have those conclusions yet.

BROWN: Dan, thank you very much, Dan Lothian.As Dan mentioned, literally 30,000-plus people every year die from the flu and so there is a need here it seems to us to try and put some context in what's going on.So joining us from Baltimore tonight, Dr. Kevin Ferentz who's an associate professor at the Department of Family Medicine, the University of Maryland Medical School and, as I said, he's in Baltimore.Answer if you can, not specifically about this young man in Massachusetts, but when flu kills what is it that kills?

DR. KEVIN FERENTZ, UNIVERSITY OF MARYLAND MEDICAL SCHOOL: It usually is a secondary infection. Very often when people get influenza they'll go on to get pneumonia and that's probably the main reason why people would die of the flu.

BROWN: And pneumonia still kills. You can't knock that down with the eight gazillion antibiotics that are out there?

FERENTZ: Well, unfortunately there are some bacteria that are still resistant to antibiotics and, of course, the flu is a virus and sometimes the pneumonia that occurs is actually a viral pneumonia. It just becomes an overwhelming pneumonia.

BROWN: Do you have a feel for I guess how big, let me just do this really simply, how big a deal do we have here because sometimes we, media, newspapers, television get caught up in a story. People are talking about it. We start talking about it. It all sort of explodes on us. Are we in the midst of something unusually bad?

FERENTZ: Well, it sure doesn't look like that to me. I mean what I've been reading and I was on the CDC website today it really doesn't look yet like this is anything terribly out of the ordinary. What's different is it's early. It's an early flu season but we don't know how long it's going to last. We don't know how severe it's going to be. There doesn't appear to be anything strange about this virus that's going to make it a much worse flu season. So, there's a lot of unknowns but there really is no cause for panic at this point.

BROWN: What determines the length of the flu season?

FERENTZ: It's kind of unknown. That's one of the great unknowns out there. Every year is different, Aaron.

BROWN: And so, the fact that this one started in, I guess early December, late November, whatever it was, is just circumstance. Why is it that, every year, it seems to be a different strain of flu? 

FERENTZ: Because the flu virus mutates every year. It changes. And we have to try to predict in America what virus is going to hit us. And we base that upon what flus have been around the world the year before. Sometimes they get it right. In fact, most years, they get it right. This year, the virus was a little bit different. So this particular strain was not in the flu vaccine this year. But the strain that's going around is very similar to one of the strains that was in the vaccine. And even though it may not be 100 percent effective, it really should still decrease the effects of the flu. 

BROWN: Somewhere along the way, I believed I knew that flu shots were for the elderly and for the very young, but not for, let's say, a healthy 55-year-old. Did something change? 

FERENTZ: Well, the flu shots are primarily for people at risk of dying from influenza. And that's still very much people over 65 and the very young, kids from six months to 2 years of age. And while the recommendation is for people 50 and over to get the flu shot, as well as little kids, women who are going to be in their second or third trimester of pregnancy should get a flu shot in the flu season and then anybody with medical conditions that would put them at increased risk of dying of the flu, so younger people with heart disease, younger people with lung disease. So kids with asthma should get a flu shot, people with diabetes. 

BROWN: A couple of quick other things. 

FERENTZ: Sure.BROWN: We heard that, if you feel like you have it, you shouldn't be going to work or going to school. And we'll set that aside for tonight. 

FERENTZ: Yes. 

BROWN: What other things can you do or should you do if you feel the flu coming on? 

FERENTZ: Basically, rest, stay in bed, all the things that your mother told you about. Drink plenty of fluids and try not to expose yourself to other people when you're coughing. And wash your hands a lot, because we tend to cough or sneeze into our hands. And then we'll shake hands with someone. They'll rub their nose. They'll rub their eye. And you can transmit the flu virus that way. But it is mostly sort of quarantining yourself. 

BROWN: And just -- do you have any -- in looking at the CDC stuff that is out there and just, I guess, intuitively, do you have a feel for whether this is peaking or is it there's just not enough data to know?

FERENTZ: It is kind of too early to know. I did read one report about a county in Connecticut that got hit very badly last week. And now 85 percent of the kids from one high school that were out are now back at school. So it would seem that, in that location, maybe it is peaking. So it really is too early to say, but, again, the panic is totally unwarranted. 

BROWN: As it generally is in life. Thank you, Doc. Nice job tonight. 

FERENTZ: Thank you. BROWN: Appreciate it very much. 

FERENTZ: My pleasure. BROWN: A few quick business notes before we go to break. We'll start with the markets today, because it took a couple tries, but the Dow Jones industrials finally did it today, closing above the 10000 mark for the first time in a year and a half. It was a rally across the board, as they say downtown, the Dow up eight-tenths of a percent, the Nasdaq up nearly 2 percent. And the S&P rose about 1 percent, which also sets an 18-month high. Another hopeful note: Mortgage rates broke a string of gains and fell for the week, a sign that the market, at least, believes interest rates will remain low for a while. And one more item. In case you're wondering, gray is the new green. According to DuPont Automotive's yearly service of car colors, dark gray is moving up in popularity, compared to last year. Green -- go figure -- has fallen off the charts. And silver remains the king of car colors. Still to come on NEWSNIGHT: Is the Bush administration changing its tune on immigration? Also tonight, the story of some children willing to risk it all to get into this country. This is NEWSNIGHT. 

(COMMERCIAL BREAK) 

BROWN: Whatever else Cabinet secretaries do, it can be argued, the one thing they never should do is make news, at least not by getting beyond the message of the administration they serve, certainly not by wading into an issue, immigration in this case, that also happens to be a political mine field. In Miami, Tom Ridge, the secretary of homeland security, made some news. Here's CNN's Susan Candiotti. 

(BEGIN VIDEOTAPE) 

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): An administration official tells CNN the White House was not happy when Homeland Security Secretary Tom Ridge said it was time to grant not citizenship, but some kind of legal status to up to 12 million illegal aliens. 

TOM RIDGE, HOMELAND SECURITY SECRETARY: Sooner rather than later, we need to deal with the reality that these men, women and families are here, many contributing -- most contributing to their community, paying taxes, paying into Social Security. And we have to legalize their status.

CANDIOTTI: At a White House briefing, a spokesman was quick to point out, Ridge was not talking about a blanket amnesty. 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: This is a matter that really is under review at this point. We continue to look at it. There's some proposals that have been put forth by members of Congress. 

CANDIOTTI: Ridge made the comments at a town hall Tuesday meeting in Miami. (on camera): What irked the White House, according to an administration official, was Ridge's timing. The administration is still formulating a policy and wants to be the one to front it, especially with the reelection campaign about to kick into high gear. (voice-over): It could be a hot issue next year, especially among a much-sought after Hispanic voting bloc and pressure from Mexico to ease immigration restrictions. 

K.B. FORBES, CONSEJO DE LATINOS UNIDOS: There are no policies. It is blowing in the wind. And the Bush administration has been, see no evil, speak no evil, hear no evil. 

CANDIOTTI: Republican Congressman Tom Tancredo chairs an immigration reform caucus. 

REP. TOM TANCREDO (R), COLORADO: This just drives me crazy, this idea that, oh, we've got 13 million people in here; the best way to actually deal with it is to just say that they all are legal and to essentially abandon the border. It's ridiculous. 

CANDIOTTI: While no one is talking about abandoning the border, what policy the Bush administration policy may have in mind remains to seen, one sure to cause a stir on the campaign trail, especially in key border states.Susan Candiotti, CNN, Miami. 

(END VIDEOTAPE) 

BROWN: Behind every policy debate, of course, are people. And tonight, a look tonight at some of the children caught in this one. Many are traveling alone, trying to reach mothers and fathers, sisters and brothers already in this country. Smuggling kids across the border has become a big business to some, and a growing business. But many kids separated from their families do not make it across. We visited a shelter on the border, the Mexican side, one of many, where the children who get caught wait in limbo, planning their next step. 

(BEGIN VIDEOTAPE) 

BROWN (voice-over): They wait in line to call their loved ones, the lucky ones, who have already made it to the other side. These boys desperately want to go to Alabama and Oklahoma, where their brothers are. 

UNIDENTIFIED MALE (through translator): Because I want to work and I am poor. I want to work. My father is poor.

BROWN: Caught this time, they say they'll keep on trying until they make it. 

UNIDENTIFIED MALE (through translator): Twice, I tried to cross into the U.S. and didn't make it. Immigration got me and sent me back. I'll try to cross again.

BROWN: For now, they wait at this shelter in Nogales, Mexico, where minors stay if they're caught crossing the border, more than 1,000 already this year. 

FERNANDO GUERRERO, SHELTER DIRECTOR (through translator): It has increased a lot. We're talking about four years ago 22, 23, 30 kids per month. Now we have 150 to 200 per month. 

BROWN: The Border Patrol around Tucson has arrested more than 13,000 children this year alone. Many are traveling without their parents, their lives placed in the hands of smugglers who are charging up to $2,000 a head. And those family members who have made it and are now working in the U.S. often foot the bill. 

ANDY ADAME, TUCSON BORDER PATROL: As it becomes harder to cross the border, we see that a lot of parents are crossing by themselves, but are sending for their children, instead of returning themselves into Mexico to cross them. And that's where they fall into many dangers. 

BROWN: A record 150 people have died in Arizona this year, six of them children. This is Lileana (ph). She is 5 and there is only one place in the world she wants to be. 

UNIDENTIFIED FEMALE (through translator): The other side with my mom. 

BROWN: Her parents made it to Los Angeles and then paid a smuggler to take Lileana across the desert, traveling with a group she had never met. Lileana says she was scared, but she also says she wants to try again, hopefully with someone she knows. 

UNIDENTIFIED FEMALE (through translator): I'll go there with my uncle.

BROWN: Shelter director Fernando Guerrero is frustrated over what he sees as a resolving door of children willing to try the deadly trek again and again. 

GUERRERO (through translator): Definitely, most of the times, when they try to cross again, we will see them here. We see them here three or even four times. 

BROWN: That's because the dangers of the desert mean little to these children. All they know is that a dusty road and another try are all that separates them from a brother or a job or a family or a mother. 

(END VIDEOTAPE) 

BROWN: After the break, we'll talk with James Ziglar, the former head of the Immigration Service. This is NEWSNIGHT. 

(COMMERCIAL BREAK) 

BROWN: Segment seven continues. More on the knotty question of immigration and national security and politics. And they're all in play here. James Ziglar is the former commissioner of the Immigration and Naturalization Service. Currently, he's a visiting professor at George Washington University School of Law. Good to have you with us. Maybe this is just frighteningly simplistic, but why does the country have to deal with this? You've got these people in the country. They're clearly here. They're working. By and large, they're working. Why do we have to change their status into anything? 

JAMES ZIGLAR, FORMER INS COMMISSIONER: Well, the reality is that you have somewhere between eight and 11 million people who are here in undocumented status, i.e., they're illegal.That fact alone indicates to me that you've got a problem with your immigration system, as well as with your enforcement. The reason we need to deal with it is because what we have in front of us are 11 million people, let's say, that we don't know who they are officially, also that we have an underground that necessarily engages in fraud and that sort of thing, and is frankly subject to blackmail, extortion and that sort of thing. And we're creating an underclass in this country which has its own set of cultural, social problems, something that the president recognized in his efforts prior to September 11 to work out an arrangement with President Fox. 

BROWN: I was going to say, the president, because, I assume, or at least in part, because he was the governor of a border state, seemed pretty sensitive to trying to fashion some sort of deal. And then, bang, 9/11 came and the whole political landscape, if not the national security landscape, changed. 

ZIGLAR: Well, that's true. I believe that the president still is very sensitive to this issue. And I think he has a very practical, realistic point of view on it. Obviously, the politics of it make it difficult at this point to be out there out front on it. But I do believe that the president is committed in the long term to fixing this problem and to bringing some justice into it. 

BROWN: Talk about what a fix might look like. 

ZIGLAR: Well, I don't think there is going to be one big fix.What I think is that we're going to see incremental changes coming along. For example, Senator Craig, Senator Hagel, Senator Kennedy, Congressman Berman have proposed some changes to fix the agricultural worker area. Congressman Flake, Congressman Kolbe and Senator McCain have another proposal that is a bit wider, but that would grant some sort of legal status to people who are here, but not give them an advantage over people who have come here legally. It would create, in a sense, a punishment, but yet it would give them a legal status and it would ultimately give them a path to being here permanently, if they live by the rules. 

BROWN: The punishment being what exactly? They're not being sent back. They're allowed to keep working and living in this society. What's the punishment? 

ZIGLAR: Well, the punishment would in that case, in that bill, would be a fine that they would have to pay. Plus, they would have to get at the back of the line in order to get a permanent legal status. So those people who came in legally would go to the front of the line. Those people that came here illegally would pay that fine and would get at the back of the line, if you will. 

BROWN: Do you think this is a case where the government or people within the government, everybody sort of recognizes this is a problem, and then, in some respects, is pretty far ahead of the population in terms of the issue itself?

ZIGLAR: Oh, I'm not sure that that's the case. I think there are elements in the population that are very interested in this. And some have very strong views. I think the population in general, probably, in the aggregate, they say, well, this is a really bad thing and I don't want to be part of it. But when they get right down to it and they see what generally is the impact in their community, they have a somewhat different view of it. The fact is that these folks are part and parcel of our social fabric,. They're certainly part of our labor force and a critical part of our labor force. And, frankly, if you were to try to remove eight to 11 million people out of our labor force, we would have a tremendous economic problem. 

BROWN: Yes.In the end, do you think that the politics surrounding particularly the Hispanic vote in the country will drive a solution? 

ZIGLAR: Oh, I think the politics are important.But I think that it's much more than that. I think the social issues that we have, the underclass, the underground, the security issue and not knowing who's here, I think that's a much bigger driver. The politics are important. They always are important. But I don't think that will be the driver for it. 

BROWN: Mr. Ziglar, good to have you with us tonight. Thank you for your time. 

ZIGLAR: Thank you very much. 

BROWN: Thank you. We'll check morning papers after the break.

(COMMERCIAL BREAK) 

(ROOSTER CROWING) 

BROWN: I am so not ready to do this segment, but I'm trying, ladies and gentlemen. OK. Time to check morning papers from around the country and around the hemisphere, OK?We'll begin with "USA Today." If you're traveling, you'll find this under your doorstep or whatever you call it in a hotel. I guess you wouldn't call it a doorstep, but maybe you do. It is Friday tomorrow. And they lead with sports. "This Year's Heisman May Make Fans Gasp." Well, it will me, since I haven't followed this at all. "Saturday's Ceremony Ushers in More Debate and Suspense Than Usual. Winner Might Produce a First or Just Controversy." And there are four finalists, including Eli Manning, is the one guy I had actually heard of in this group. Also, I like this story. "Push is on For a Larger Military. Congress Moves After Years of Downsizing." I guess, when you have got two wars going, you have got to think about that. The flu made the front page of "USA Today" as well.Speaking of in the hemisphere, "The Ottawa Sun." "Au Revoir." Jean Chretien's final day in officer, the prime minister of Canada leaving office. I remember going up to Canada to do the story a long time ago now, it seems like, when he was swept into power. That doesn't sound quite right. He was elected. "The Boston Herald."It sounded like it was a takeover."Flu Fever. Virus Spreads Quickly Across the State and the Nation." That's the way they lead, but I like this story. "The Dynamic Duo." Simon are Garfunkel are like 62 now, I think, both of them, playing up in Boston. They've been touring the country, and something like $50 million worth of tickets sold. But I didn't get to see them. Paul Simon is one of my heroes in life. "Richmond Times-Dispatch" leads with the flu. "Flu Widespread in Two Dozen States." That's their lead. But this story is the one that caught my eye. "Two Men Charged Under Spam Law. Virginia Calls it the Nation's First Felony Case Over Junk E-Mail." Does anybody get any real e-mail any more or is it all junk? You know, all those funny letters. What is that about? "The Philadelphia Inquirer." "Insurers to Cover Nasal Flu Vaccine." That's their lead on the flu. "Bush Defends Policy on Iraq Contracts." "'Men and women from our country risked their lives,'" he said. Another official said of the decision, 'It was a train wreck.'" I guess the administration is of two minds on that. Thirty seconds, is that what you said?

UNIDENTIFIED MALE: Yes. 

BROWN: Thank you. 

UNIDENTIFIED MALE: "Miami Herald." "Six Cubans Guilty of Hijacking." This case was extensively followed in the Miami area, as you would imagine. "Protest Violence Paralyzes Much of Haiti." Is there a sadder place in this hemisphere than Haiti? Maybe there is, but I can't think of it.Ten seconds and I can't find the you know what. Here we go. "The Chicago Sun-Times." The weather tomorrow, "refrigerator." Going to be cold. "Bad Guy Gacy Type Charged in Three Deaths" is the lead story. That's "The Sun-Times."We'll wrap up the day, the top story, and preview tomorrow after the break. 

(COMMERCIAL BREAK)

BROWN: Before we go, a quick recap of our top story, the diplomatic dust-up over barring countries that opposed the war from getting contracts to rebuild Iraq. A few small signs today there might be some give in the White House position. And a Pentagon audit says a subsidiary of Halliburton may have overbilled the U.S. government to the tune of $61 million for gasoline trucked into Iraq. Tomorrow on this program, the government warns us about mercury in tuna, yet intends to relax the standards for mercury emissions from power plants. How can that be? That and more tomorrow on NEWSNIGHT. "LOU DOBBS TONIGHT" is next.Good night for all of us. END

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