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CNN LIVE EVENT/SPECIAL

Live From the Headlines: Laci Peterson's Family Speaks Out; Smart's Kidnappers Face Mental Competency Hearing; Does U.S. Plan to Keep Bases on Iraqi Soil?

Aired April 21, 2003 - 19:00   ET

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

(BEGIN VIDEOTAPE)
ANNOUNCER: The family of Laci Peterson speaks out, just hours after Scott Peterson appears in court on double murder charges. Tonight, famed defense attorney Robert Shapiro weighs in on what Scott Peterson's lawyers have ahead.

The couple alleged to be Elizabeth Smart's kidnappers now face a hearing on their mental competency to stand trial for the crime. Were the self-styled prophet and his wife legally insane?

And permanent military bases on Iraqi soil?

DONALD RUMSFELD, DEFENSE SECRETARY: The impression that's left around the world is that we plan to occupy the country, we plan to use their bases over the long period of time and it's flat false.

ANNOUNCER: Could such a plan upset the balance of power in the Middle East?

LIVE FROM THE HEADLINES with Paula Zahn in New York.

(END VIDEOTAPE)

PAULA ZAHN, CNN ANCHOR: And good evening on this Monday, April 21. From the CNN Broadcast Center in New York. I'm Paula Zahn.

(INTERRUPTED BY LIVE EVENT)

ZAHN: You've been listening to District Attorney Jim Brazelton describe the double murder count that Mr. Peterson now faces. Jeffrey Toobin still with us. And I would like for you to react, first of all, to some of the new information we learned today. The special pretrial hearing set up for May 19, but there was also some news that came out of the arraignment today. What have we learned?

JEFFREY TOOBIN, CNN LEGAL ANALYST: Well, the most important thing we learned is that the government came forward and said that they believe that the murder took place in the Peterson family home. Of course, the body was recovered 80 miles away near where Scott said he was fishing on the day of the murder, but the government's theory now is that the murder took place at the home and the body was apparently moved, they say, presumably by Scott Peterson himself, to the -- to the Bay Area, where it was discovered. ZAHN: There are so many things to talk about. Now, Scott Peterson claimed that he couldn't afford to have his own attorney. He was given a court-appointed attorney.

TOOBIN: That was another development today, where he said he was too poor to have a lawyer.

ZAHN: Do you buy it?

TOOBIN: Surprising a lot of people. Well, I probably do buy it, actually. Defense attorneys are very expensive. He has had one for a while. He has probably gone through most of his savings. He was a middle class guy but he didn't have probably a lot of assets to his name. I think he probably is out of money, and this is going to be an incredibly long and expensive defense. There is no way he can subsidize this himself.

ZAHN: We have seen government officials tell a number of reporters that they believe this case is a slam dunk case. Let's talk about what we don't think there are out there. No eyewitnesses. That is your understanding, right?

TOOBIN: Correct.

ZAHN: No murder weapon found.

TOOBIN: Correct.

ZAHN: No cause of death determined yet.

TOOBIN: That's right. I mean, this Scott Peterson for a long time has been convicted around every water cooler in America. Everybody wants to blame the husband, and there may be good reason to blame the husband, but in terms of specific evidence that can be presented in court, evidence that is known to us now -- obviously the Modesto Police Department and prosecutors may know much more than is public, but based on what is public, this is not a slam dunk case. There are a lot of gaps there, and it will be up to the government to produce physical, tangible evidence, other than simply motive, to prove that he -- that he killed his wife.

ZAHN: Jeff, you and I are standing by. We're going to bring Rusty Dornin now into our conversation, who was in the courtroom when this arraignment happened. Rusty, set the scene for us a little bit earlier today. And describe to us what you saw.

RUSTY DORNIN, CNN CORRESPONDENT: Well, it was very emotional in that courtroom. The courtroom was packed. You could have heard a pin drop, Paula, when Scott Peterson walked in. He was clean shaven, still sporting the new blond colored hair. He was shackled, he was handcuffed. He sat down. The judge did address him, told him the counts against him, asked him what his plea was, and he replied in a very clear and very loud voice, "I am not guilty." That's when she (ph) did ask him, "are you in a position to hire an attorney?" And that's when he did say no. But right before the proceedings started, the families had come in, Scott Peterson's parents came in and sat in the front row, very quietly sitting there, and then Sharon Rocha came in, sort of by herself initially and sat down, and right after she sat down, Jackie Peterson, Scott's mother, got up and came over and leaned over her and gave her a hug -- very strong hug and said, "I'm sorry." We couldn't hear what Sharon Rocha said back. Jackie Peterson sat down. But as soon as Scott Peterson walked into that courtroom, that's when Sharon Rocha broke down in tears. She was comforted by her husband, Ron Grantski.

Very emotional day. And I have to say, that was one of the most excruciatingly painful press conferences, just, you know, having been with this family from the beginning, talking to them, even when Scott used to come into the volunteer center, speaking with Sharon, speaking with Scott, with the Petersons, and all the hope that those two families had in the beginning that this whole story would turn out a lot differently than it has -- Paula.

ZAHN: And Rusty, what was the reaction when the bombshell was dropped by the prosecution team that it is their belief that Laci Peterson was murdered in her own home?

DORNIN: Well, the way it was dropped was that it simply was on the arrest warrant -- excuse me, the arrest report, and it's all typed in, pre-typed in. It just says "location of offense," and it said 523 Covena Avenue. They didn't particularly drop it anywhere. They didn't mention it, they didn't include it in the counts. It was just listed on the typical arrest report that you have. So -- and they listed the time of death as they thought was between -- sometime between the 23rd of December and the morning of the 24th.

ZAHN: And, Rusty, I understand you just had a conversation with the man who at one time represented Scott Peterson. What did he tell you about today's turn of events?

DORNIN: Well, one of our crews -- Kirk McAllister was in the courtroom. He had been retained by Scott Peterson early on, and then it seemed to -- that relationship seemed to fall apart somewhat after Scott had given several network and other local television interviews. He was in the courtroom, though, during the proceedings, and afterwards speaking to reporters, did say that he felt that the Modesto Police made sort of a rush to judgment, that this case was not nearly as solid, that they really should not perhaps have gone forward with this arrest, that it was not a very strong case to prosecute.

He also made some interesting comments about Scott Peterson's look. There has been a lot of talk about the fact that he dyed his hair and he grew a goatee, and that sort of saying that perhaps he had done that because he was planning to flee. Kirk McAllister, his former attorney, said that has nothing to do with it, and really there is a very laughable excuse why Scott Peterson adopted this very different look, but he would not go into the details of that.

ZAHN: Rusty Dornin, thank you very much for the update. Let's get a final thought from Jeffrey Toobin about some of the legal issues involved here. We heard the district attorney talk about the discussions that have to take place among committee members where the death penalty will be sought, but it is clear, he said, that this man has been charged with two counts or murder. Now, what is the legal issue involved in the state of California when you're talking about the fetus, the unborn child, baby Connor?

TOOBIN: This is a very unusual legal issue that's in this case. The -- California is one of about two dozen states that specifically makes it a crime to murder a fetus. This is actually been very much caught up in abortion politics in recent years, where pro-life forces have tried to put these criminal laws on the books to try to create the principle that a fetus is a person like a baby that has been born.

He is being charged with that -- with that offense. The California Supreme Court has never really said whether that is constitutional. Fortunately, not many cases come up. But his death penalty could rise or fall based on whether the Supreme Court of California, if it gets that far, ultimately decides whether that statute violates essentially a woman's right to choose.

ZAHN: And just a final reflection on what you and I witnessed tonight, along with the audience. We have covered a number of murder trials together. I don't think I've seen anything like the display of emotion we just saw in that courtroom.

TOOBIN: And just, you know, the anger of a mother who lost her daughter and lost her grandson, it was just -- it was wrenching to watch. I can only imagine -- I hope -- to imagine what it must have been like to endure. I mean there was no camouflaging how she was feeling, and she wasn't trying to.

ZAHN: Jeffrey Toobin, always good to have your perspective. Thanks for joining us. We're going to take a short break here. Still to come, the latest on the SARS outbreak. We'll also bring you up to date on what happened in and around Baghdad today. We'll be back after this very short break.

(COMMERCIAL BREAK)

ZAHN: Welcome back. Thirty-four minutes past the hour. America's point man for rebuilding Iraq arrived in Baghdad today. Retired General Jay Garner, in the khaki jacket, will serve as the country's interim civil administrator. He says his main concerns are to get the power and water running again and to help Iraqis become more self-sufficient. That's part of the story now from Nic Robertson.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): On his first day in Baghdad heading the U.S. reconstruction of Iraq, retired U.S. General Jay Garner seemed keen to play down local rumors he's come here to rule the country.

GEN. JAY GARNER (RET.), U.S.-IRAQ RECONSTRUCTION ADMIN.: I don't rule anything. I'm the coalition facilitator to establish a different environment where these people can pull things together themselves.

ROBERTSON: For now, pulling anything together here can be tough. Even lining up for fuel causes heated debate. Gasan (ph), the manager of the government-run filling station, weighs in to calm nerves shattered by war and looting. His message for Garner, relieve the pressure on his station.

"Use the country's oil reserves," he says, "so that all the stations are operating. That will spread hope in the citizens' minds."

State fuel truck driver Jasim (ph) has a more personal call. "Honestly, our salaries are not enough. How I can live on less than a dollar a day?" Opinions at the pumps, however, are whether Garner can deliver, divided.

"We don't accept him," says Kadam (ph). "We need an Iraqi. What can he understand about us?"

"We don't know him," says Yakub (ph). "We'll see how he does and then we'll have an idea."

A few miles away, at the state-run Al Dora oil refinery, Iraqi engineers have just restarted fuel production. Technicians tend government-owned equipment, much of which has seen only sporadic investment since U.S. companies first built the plant in 1952. Keeping this cash-generating industry going, they say, will actually need little help from Garner.

HUSSEIN SULIMAN, AL DORA OIL REFINERY: Inside the refinery, only to protect the refinery, not to help us with the operation.

ROBERTSON: At the gate, oil workers armed with (UNINTELLIGIBLE) keep guard, where less than a week ago they fought off looters.

(on camera): Here at the oil ministry, one of the only Iraqi government buildings where U.S. troops prevented looters destroying the premises, Iraqi officials have already begun talks to choose a new oil minister.

(voice-over): Baghdad's self-appointed governor, Muhammad Zubaydi, who has yet to be recognized by Garner's office, plans sending his deputy as the top Iraqi representative to the OPEC meeting in Vienna this week. For Garner, likely sorting the leadership post will prove the trickiest of his early tasks. Restoring basic services, his most pressing. And reconstruction, the most enduring. No small feat for a man trying to keep a low profile.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

ZAHN: And the Pentagon went on the offensive today, trying to allay fears that the U.S. is empire-building in the Persian Gulf, but the arguments doesn't win over the hearts and minds of some of its critics. Let's bring in our senior Pentagon correspondent, Jamie McIntyre, to explain. Good evening, Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Good evening, Paula. Well the Pentagon is well aware that much of the world is predisposed to believe that the United States is not planning to leave Iraq entirely. And so today, Secretary of Defense Donald Rumsfeld went out of his way to essentially chastise some people at the Pentagon who have been floating the idea that the United States might have permanent basis in Iraq. To that he said, "No way."

(BEGIN VIDEOTAPE)

MCINTYRE (voice-over): With some Iraqis already calling for a U.S. withdrawal, and many in the world suspicious the U.S. is bent on empire-building in the Gulf region, U.S. Defense Secretary Donald Rumsfeld moved quickly to quash statements by some U.S. military officials that the U.S. is hoping for long-term access to military bases in Iraq.

DONALD RUMSFELD, SECRETARY OF DEFENSE: The impression that is left around the world is that we plan to occupy the country, we plan to use their bases over the long period of time. And it is flat false.

MCINTYRE: The U.S. currently operates four main air bases in Iraq: Tallil in the south, H1 in the west, Baghdad International Airport in the center, and the Bashur airfield in the Kurdish- dominated north. Some Pentagon officials indicated the U.S. might want, at the very least, to negotiate access agreements with the new Iraqi government for use of the bases after most U.S. troops have withdrawn. The suggestion inflamed passions in the Arab world and infuriated Rumsfeld, who went out of his way to denounce the unnamed U.S. officials who made the suggestions.

RUMSFELD: And I would rank them right at the bottom in terms of reliability, credibility, judgment, knowledge. They are unhelpful.

MCINTYRE: Rumsfeld argues that, with Saddam Hussein gone, the U.S. is likely to need fewer troops in the region, not more. Over the past decade, the U.S. has maintained roughly 20,000 troops in the region, including an aircraft carrier deployed full time in the Persian Gulf, an Army brigade in Kuwait, and hundreds of aircraft in Saudi Arabia and Turkey to patrol the now defunct no-fly zones. Many of those troops, planes and ships may now be withdrawn, Pentagon officials say. But given the U.S. has long-term bases in Japan and Germany, two other countries the U.S. says it liberated, there is a deep-seeded belief among some critics that this time will be no different.

PHYLLIS BENNIS, INSTITUTE FOR POLICY STUDIES: He was careful not to use the word "never". So what happens later will have a great deal of flexibility, and he'll say, well this isn't a permanent base.

(END VIDEOTAPE)

MCINTYRE: Now, to some critics, it appear self-evident that the United States is going to want to have a military relationship with Iraq after U.S. troops are gone. Others argue it is only logical the U.S. would then want access to bases in Iraq. To that criticism, Rumsfeld replies, simply, "It may be logical, but that doesn't mean we're going to do it" -- Paula.

ZAHN: Now his criticism was pretty widespread. I know we lifted just a small part of that news conference today. Not only did he show anger with the government officials that floated this idea in "The New York Times," how mad was he at the newspaper?

MCINTYRE: Well, I think he separates the newspaper from the officials. He was pretty clear that -- you know he felt that the officials who said this essentially hadn't checked with him -- and he's the man in charge -- nor any of his immediate senior officials. So he was questioning how senior the senior officials are.

However, I have to tell you that some senior officials have told CNN the same thing over the last day or so, that there was some thinking about the possibility of having some kind of access to bases in Iraq. At the same time, though, he chastised the news media, saying that they ought to be more careful about who they consider senior officials and to make sure that they don't consider these sources to be that reliable in the future.

But that's Rumsfeld's style. It's a very aggressive style of challenging what he sees as inaccurate reporting for whatever the reason.

ZAHN: All right. But, Jamie, you said you were given the same information by sources that "The New York Times" got and they put in this article this weekend. Do you trust your sources?

MCINTYRE: Well, actually, there were people who talked to my colleague, Barbara Starr, who was working here over the weekend on Sunday, after "The New York Times" piece came out. They said that, yes, there had been some discussion about what might happen with a post-Saddam government and whether there might be some relationship there. They were very cautious, though, to say that there had been no decisions made and that there was just some thinking.

And they also cautioned against any particular bases being ones that the U.S. was interested in. But you know this is not all that surprising that there would be all kinds of things that people would be thinking about, discussing, trying to think ahead. They haven't doubled (ph) up to the secretary of defense level.

This is clearly a case, though, where the secretary of defense, once it came to his attention, he pretty much is sending a very strong signal that that's not the direction he wants to go.

ZAHN: All right. Jamie McIntyre, thanks so much.

Now the Republican chairman in the Senate Foreign Relations Committee says the Bush administration was "ill prepared for reconstruction post-war Iraq." Over the weekend, Senator Richard Lugar estimated it may take five years before a truly democratic Iraq emerges. Is the U.S. willing to stay the course for that long? With me in New York is Rick Barton, of the Center for Strategic and International Studies. He is the co-director of the center's post-conflict resolution project. And joining us from Washington is Cliff May. He is president of the Foundation for the Defense of Democracies.

Welcome to both of you. Glad to see both of you.

RICK BARTON, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Thank you, Paula.

CLIFF MAY, FOUNDATION FOR THE DEFENSE OF DEMOCRACIES: Thank you.

ZAHN: Cliff, I'm going to start with you tonight. You heard Jamie McIntyre talk about -- CNN also being told that there might be some sort of negotiation for the U.S. to ultimately use some bases in Iraq once the U.S. military is gone. Does that make sense to you?

MAY: Yes, but let me frame it a little differently for you, Paula. Ahmad Chalabi who, as you know, is the head of the Iraqi National Congress, one of the most important organizations, formerly opposition to Saddam Hussein, now it's allied with us, he said there's got to be a U.S. military presence until there are democratic elections in Iraq, and that's probably going to take two years.

Now, once you have a democratic Iraq, will you have some kind of defense partnership with the democratic Iraq? Well, it's up to the Iraqis and it's up to us, but I think it's very probably. After World War II, we maintained -- we still maintain very important defense partnerships throughout Europe.

And in this war we just fought against Saddam Hussein, we have partnerships with all sorts of nations: Uzbekistan, Kyrgyzstan, Hungary, Bulgaria. So it's going to be up to the Iraqis, but they may want an American military presence of some sort and some kind of partnership with us for the long run.

For their own stability and other reasons, it may be in our mutual interest. The most important point is we're not going to impose this on the Iraqis. This will be up to them when they have a democratic Iraq.

ZAHN: All right. Rick, do you buy any of this explanation? Cliff just making the point that you might ultimately have some sort of defense partnership and you might need access to those bases later on. Do you see any scenario under which you would support that?

BARTON: Well, clearly, a partnership is very different than a presence. And our presence in that region is already well established. We have nearly 20 military bases all around Iraq.

This war has been carried out quite successfully without the footprint in Iraq. And we know that it has a politically destabilizing effect in certain countries. It is definitely the wrong message right now, and I think the secretary of defense was correct to quiet the talk because it is provocative at a moment when we have to show we're there for the reconstruction, not for further subjugation.

ZAHN: So Rick, what is the message you think it sends? What is it you think people are fearful of?

BARTON: I think it is it sends the message that the United States is there for other interests than to liberate the Iraqi people. We have had the military moment. There will continue to be a need for security and safety. That is the precondition for reconstruction.

But we want that to be in the lightest possible footprint, preferably with an international assistance, and salvaging as much as we can of the Iraqi police, because public safety is necessary for if we want to make any progress. But this suggests that we are there for longer-term reasons and really to have Iraq as a client state. And we're not in the business of client states.

ZAHN: Cliff what about that? And those in the Arab world who fear the U.S. is in there to occupy Iraq and gain control of the oil business?

MAY: There is no truth to that. And I agree with basically everything Rick said. But understand, we're going to probably diminish our presence. I hope we will in Saudi Arabia, for example.

We may be diminishing our presence in Germany, possibly in South Korea. And we may want over the next few years to be increasing our involvement and our partnerships with the newly emerging democratic countries of the world, and we hope Iraq will be very much among them.

ZAHN: All right. But what is the point you disagree with? What don't you agree with, with what Rick just said?

MAY: Well I think I agree everything Rick said. As a message that may be -- he may be entirely right. Here is where I guess -- where I differ. I don't think that any of the neighbors of Iraq -- and the neighbors of Iraq do not wish Iraq well. Saudi Arabia doesn't, Syria certainly doesn't, I don't even think Egypt wishes Iraq well at this point -- have any say in this. And certainly the terrorist organizations have no say.

It is up to the Iraqis to decide if it is in their interests to have a military defense partnership with the U.S. If they want that and we want that, we should have that. It is not about oil. It's about terrorism and stability and helping Iraq emerge as a prosperous, free and democratic country.

ZAHN: But Rick, you say that's not the message you think is getting through?

BARTON: No, because I think it's -- really the timing of this is way off. There is no Iraqi government. There is no sense of what the Iraqi people really want. To be going into this discussion at this point really again confuses the matter.

We have a very difficult job. This is a country that has been on a downhill slide for decades. It doesn't have much local leadership because they were killed, they were chased out of the country, or otherwise co-opted. And we have an awful lot of involvement work ahead of us. To suggest that this kind of security issue is the central issue is not wise right now.

ZAHN: Cliff, you get the final 10 seconds here. And then we've got to move on.

MAY: Ten seconds to say I don't disagree with Rick. But one of the things we're going to need to do is rebuild Iraq's military potential. You can't do that unless you have some troops there.

(UNINTELLIGIBLE), one of the principal leaders of the Kurdish areas that has been free for 10 years, he says he wants an American military presence for the reasons of stability and strength. Not of occupation, but a presence, a friendship, a partnership. That's how we should see it.

The story's is inconvenient, but there's an underlying truth there. We need to help, including militarily, with the rebuilding of Iraq.

ZAHN: Cliff, Cliff, Cliff, that was a long 10 seconds. You owe Rick 12 on the other side the next time we get the two of you to come back. In fact, I was quite shocked that you agreed with anything that Rick had to say. Cliff, you surprised me.

Always good to have both of you on the air together. Thank you very much for your twin perspectives there, as diverse as they are.

Still to come here tonight , the deadly SARS virus. We're going to talk with a "Wall Street Journal" reporter live from Hong Kong, one of the worst hit areas, after this break.

(COMMERCIAL BREAK)

ZAHN: Now some growing concerns about SARS. In Hong Kong today, the chief executive said the territory is gaining ground in the fight against the disease, even as the death toll continues to rise. There are 225 suspected cases of Severe Acute Respiratory Syndrome in the U.S.; 38 are probable cases, so far no deaths.

Now, globally, however, almost 3,900 people have become infected, 217 have died. Ninety-four of those deaths in Hong Kong, where "Wall Street Journal" employees are being told to work from home. Matt Pottinger, the "Journal's" Hong Kong reporter, joins us now by phone.

Thank you very much for spending a little time with us tonight. First of all, share with us some of the headlines about SARS right now in Hong Kong.

MATT POTTINGER, "WALL STREET JOURNAL": Sure, Paula. Well, right now, in Hong Kong, there is growing concern that the virus that causes the disease may have actually mutated into a more dangerous strain. Now that's because of a rising death rate over the last few days.

There have been a couple of dozen deaths in younger, previously healthy adult patients here. Also, some doctors are reporting that they're having less success than they were having previously using an antiviral drug cocktail to treat some of these patients. So right now, microbiologists are trying to sort out whether this is a statistical blip or whether actually the nature of the disease is changing.

ZAHN: Let's talk about the politics of all this. You had Senate Majority Leader Bill Frist saying in Beijing that China is taking the appropriate actions to combat SARS at this juncture. But that comes after China itself admitted over the weekend that it had underplayed the statistics. What is the perception there and in Hong Kong and the rest of Asia?

POTTINGER: Well, people are certainly happy to see that China is now taking steps apparently to tackle the disease. For instance, they sacked their health minister over the weekend. So it is seen as a first step towards rebuilding its credibility.

But that said, people throughout the region have really been furious at the way that China has downplayed and covered up the known outbreak going all the way back to November. So there is still a palpable sense that -- of resentment, that the sense that, had China acted sooner, it could have prevented the thing from spilling over into neighboring countries.

ZAHN: And Matt, when we introduced you tonight, we made it clear that reporters from the "Wall Street Journal" had been instructed to do their work from home. Just describe to us what has your life has been like as you tried to cover this story.

POTTINGER: Sure. I mean life in Hong Kong and also in Singapore and other cities that have been hit by the disease has sort of taken a turn for the bizarre. The streets are far quieter than they used to be, and the majority of people in the city now wear surgical masks. Myself included, when I'm outside and on the subway.

So we are working from home. A lot of companies have separated staff into different working groups so that if one group becomes infected, it won't impact the other groups. And I'm getting used to spending long hours in my cramped apartment.

Also, people are not shaking hands as often as they used to. Because this virus, like the common cold, it's possible to contract it if you get it on your hands and then rub your eyes or nose. So people are instead using sort of a traditional Chinese greeting. They're holding their hands up and nodding.

ZAHN: Well, thank you for shedding some light on how -- what a strain it must be like to live there, particularly now that there is some concern this virus has mutated. Matt Pottinger, thank you for your perspective tonight.

As you've probably noticed, the news about airlines and air travel these days is not too good. Airlines losing money. Fewer flights to choose from and higher fuel cost that get tacked on to ticket prices. But the situation may be getting a little brighter just in time for summer travel season.

Let's turn to Patty Davis. She has more.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT (voice-over): Heading back home from their Easter vacation in Virginia, the Gomilla (ph) family is already making plans to fly again this summer.

UNIDENTIFIED FEMALE: We're planning to get out of the heat of New Orleans and go up to South Carolina and then up to Maine.

DAVIS: An encouraging sign for airlines who have been struggling with a drop in passengers due to the war in Iraq, a weak economy, and the SARS virus scare. Now that the war is drawing to a close, the airline industry says it is beginning to see a slight pickup in bookings.

AMY ZIFF, EDITOR-AT-LARGE, TRAVELOCITY: We have started to see increased activity, increased bookings. But just how much and how long that will last, it is too soon to tell.

DAVIS: A Travelocity survey finds if Americans do travel it will be closer to home. Eighty-eight percent plan to vacation within the United States. Airlines are using rock-bottom prices to convince people to get back on planes in the U.S. and overseas.

Los Angeles to Washington goes for $158 round trip. Detroit to St. Louis, $88. New York to London, $290 round trip.

UNIDENTIFIED MALE: That's probably right now going to be the best thing to motivate people to get up and travel is those low fares.

UNIDENTIFIED MALE: I'll be able to fly and make some other weekend trips or mid-week trips without putting a dent in my wallet. And that's good.

DAVIS: Travel experts say snap them up. Higher fares could be around the corner.

(END VIDEOTAPE)

DAVIS: Well that is because many airlines are reducing the number of planes and the number of seats available to save money. And as the summer travel season kicks off, now coming up very soon, you may see more people competing for fewer seats. And that certainly would give the airline less incentive to keep those fares low -- Paula.

ZAHN: Patty Davis. Thanks for educating us. We sort of lost sight of the fact that summer was coming. Appreciate it.

That wraps it up for this hour of LIVE FROM THE HEADLINES. In our next hour in the last half hour of the program, we will be focusing in on the case against Scott Peterson.

We're going to take a short break. We'll return at the top of the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: SARS explodes across Asia, Beijing, Singapore, Hong Kong. Now, new concerns here in North America.

UNIDENTIFIED FEMALE: A person who has been diagnosed with SARS was traveling on the go train on two occasions while symptomatic. We wanted to ensure anyone who might have been exposed is informed.

ANNOUNCER: Is this only the beginning of a much wider global outbreak?

Double murder: if Scott Peterson is found guilty of killing his wife Laci and their unborn son, should he face the death penalty?

What is the prosecution strategy?

The man charged with bringing Iraq back to its feet arrives in Baghdad.

GEN. JAY GARNER, U.S. ARMY (RET.): What better day can you have in your life than to be able to help somebody else, help other people? That's what we intend to do.

ANNOUNCER: From turning the water and lights back on, to establishing the rule of law in a war-torn country. The U.S. steps up to the plate to rebuild Iraq. LIVE FROM THE HEADLINES with Paula Zahn in New York.

(END VIDEOTAPE)

ZAHN: Good evening and welcome. Glad to have to have you with us tonight for LIVE FROM THE HEADLINES.

In our time line tonight, the effort to return order to Iraq, and talks to cool nuclear tensions between the two Koreans.

Then in our second half hour we will examine the case against Scott Peterson.

Our look at today's events began in Baghdad with General Jay Garner's arrival there around 7:00 a.m. this morning. Garner is the retired U.S. general charged with returning civilian rule to Iraq. Today was his first visit to Baghdad as head of the Office of Reconstruction and Humanitarian Assistance. Garner toured a power plant, a water treatment facility, and a hospital. He says he has confidence in the effort to bring help to 24 million Iraqis, and was quick to emphasize he is not the interim ruler of Iraq.

(BEGIN VIDEO CLIP)

GARNER: The new ruler of Iraq is going to be an Iraqi. I don't rule anything. I'm the coalition facilitator to establish a different environment where these people can pull things together themselves and begin a self-government process. And with our assistance, begin a reconstruction process. And end up with a democracy that represents the freely elected will of the Iraqi people.

(END VIDEO CLIP)

ZAHN: Also in that hour, word from South Korea talks will take place between it and North Korea. Nuclear issues expected to be a topic during the talks Sunday in the North Korean capital of Pyongyang. That meeting will follow talks between North Korea, the U.S., and China. Those are set to begin Wednesday in Beijing. North Korea proposed the cabinet level meeting with the south. Relations with North Korea have been strained since the communist nation began resumption of its nuclear program.

And then around 8 a.m. Eastern time, senior international correspondent Sheila MacVicar reported from the cooling of tensions between the United States and Syria.

(BEGIN VIDEOTAPE)

SHEILA MACVICAR, SENIOR INTERNATIONAL CORRESPONDENT: Continuing signs of de-escalation of recent tensions between Washington and Damascus with President Bush saying on Sunday he saw signs of cooperation from Syria. The president referring to Syria's closure of its borders with Iraq, and its demand that all Iraqis who wish to enter Syria now do so only with a visa. That follows weeks of allegations from the U.S. administration that high ranking former members of Saddam Hussein regime may have found shelter here in Syria, something that the Syrians have denied.

And which the U.S. would have what seems good information about one, perhaps two individuals who may have been here. Today in a continuing round of diplomatic activity, Spain's foreign minister was here meeting with both Syria's president and it's foreign minister. The foreign minister, talking about what he believed started this off, saying it was a change of heart in the American people, and that Damascus has never sought confrontation with Washington.

(END VIDEOTAPE)

ZAHN: Once again that was, Sheila MacVicar, reporting.

Also during the 8:00 hour, comments from the leader of the Iraqi National Congress on the former president of Iraq. Ahmad Chalabi, leader of the exile group, told the BBC that Saddam Hussein is still alive. And on the move inside the country. He said the Iraqi National Congress has been hearing word of Saddam's movements within the last 12 to 24 hours. A spokesman from the group believes it will be able to narrow that time frame enough to track Saddam down.

(BEGIN VIDEO CLIP)

ZAAB SETHNA, INC SPOKESMAN: We believe Saddam is alive, and in Iraq and we'll find him.

QUESTION: Can you elaborate?

You said he is still alive. I mean, do we know how we get the information?

SETHNA: We get reports, consistent reports, as to sightings or possibilities of his movement and people close to him, including his son Qusay. And what I can say is the net is drawing closer.

(END VIDEO CLIP)

ZAHN: And then during the 10:00 hour, thousands of Shiite Muslims embraced a tradition kept from them during the rule of Saddam Hussein. Many of them had walked or crawled for miles to get to the main square in Karbala, that is where Karl Penhaul picks up the story tonight.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): The scenes here today outside the shrine of the Muslim martyr Hussein in the city of Karbala. Tens if not hundreds of thousands of pilgrims streaming into this city all day. Some have been walking barefoot. Others have been crawling on their knees. Others have been walking for miles and miles, beating themselves on the back with metal chains. For many, this is a celebration.

Why a celebration? Because for many years, these people haven't been able to walk to the shrine. Under President Saddam Hussein, this gathering was banned. The people wishing to walk here, although a much more restricted event, for those traveling in trucks and buses was permitted. That, however, was a very definite way that Saddam Hussein tried to control the Shiite population of his country. Together, they make up about two-thirds of the population. Where Saddam's Sunni faction made up just one-third of the population. So it was a way of exerting control.

Also among the scenes we have seen today, the Shiite pilgrims here are using their newfound freedoms to call for an end to the American and British presence in Iraq. They're calling for them to leave now, and to let the Iraqi people set up their own form of government. Many of them have been carrying placards and banners calling for an Islamic state of government.

Clerics, the leading clerics who have been helping organize this event have publicly called for the Americans to go home. They've also called for the Americans to stay well away from the pilgrimage, for the soldiers not to appear here. That said, we have seen the presence of some of the American warrior helicopters observing, even one of the military drones flying overhead, presumably taking pictures of the events going on down below.

Karl Penhaul, CNN, Karbala, Iraq.

(END VIDEOTAPE)

ZAHN: Then in the city that's been focused on the business of war, a welcome diversion today. Around 10:00 a.m. Eastern, the traditional Easter egg roll on the South Lawn of the White House. Because of security concerns, it was a smaller gathering than usual. A gorgeous day, though. Limited to some 12,000 children and parents from military families. The hostess was vice president Cheney's wife Lynn. The kids had to be swift to get those eggs. We'll continue in a moment with these stories.

The spread of SARS continues. But the Senate majority leader praises the way the Chinese are now handling the problem. And this.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: We don't plan to function as an occupier. We're not arranged that way.

(END VIDEO CLIP)

ZAHN: The U.S. says it is in Iraq as a facilitator, not an occupier. We're going to go live to the Pentagon for the latest on that.

We are going to take a short break, we'll be right back.

(COMMERCIAL BREAK)

ZAHN: Welcome back. Health officials in many countries are stepping up their efforts to battle SARS. During the 11 a.m. hour, we learned more about the outbreak in Asia. Singapore has quarantined 2,500 workers at a wholesale vegetable market. Three workers there have been stricken by the disease, and one of them has died. In China, where the outbreak is believed to have started, officials are now reporting 194 new confirmed cases. U.S. Senate Majority Leader Bill Frist is visiting Beijing. A physician by occupation, Frist praised China's recent steps to control the virus.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R-TN), MAJORITY LEADER: I gave the president, the president, President Hu tremendous compliments because he took bold action over the last 48 hours, while we were here in China, to boldly and courageously address this virus. There has been increased reporting, increased commitment to prevention, increased commitment to treatment by President Hu, and I think that the government here in China is taking the appropriate action at this juncture.

(END VIDEO CLIP)

ZAHN: And tomorrow night on LIVE FROM THE HEADLINES, we'll take a closer look at SARS. Our special report will get under way at 8:30 p.m. Eastern time.

On to marathon news. The 107th running of the Boston Marathon began at noon Eastern time. For the twelfth time in 13 years, the winner was from Kenya. Robert Cheruiyot finished the race in two hours, 10 minutes, 11 seconds. Russia's Svetlana Zakharova was the fastest woman in two hours, 25 minutes, 20 seconds. Both won $80,000 on a perfect marathon day. Nice and cool out there for the runners.

Also during the noon hour, we learned that the head of NASA space shuttle program plans to step down. Forces tell CNN that Ron Dittemore will announce his resignation on Wednesday. Though sources say the resignation is unrelated to the Columbia disaster, they say Dittemore decided several months ago on taking a private sector job, but he postponed his resignation after the Columbia tragedy so he could deal with the aftermath.

Defense Secretary Donald Rumsfeld is playing down reports that the United States is considering permanent military bases in Iraq. He discussed those reports during a 2 p.m. news conference. And senior Pentagon correspondent Jamie McIntyre was there.

MCINTYRE: Well, Paula, defense...

ZAHN: Oh, hello there, Jamie.

MCINTYRE: Hey. Defense Secretary Rumsfeld said that he was very disturbed by the reports that first surfaced in the "New York Times" and were confirmed to CNN by senior military officials that the United States, if not seeking permanent bases in Iraq, would at least seek some sort of access to Iraqi bases in a military to military arrangement, after there was a permanent government in place, but Defense Secretary Rumsfeld said those so-called senior military officials should have checked with him before checking with the news media.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, DEFENSE SECRETARY: The impression that's left around the world is that we plan to occupy the country, we plan to use their bases over the long period of time. And it's flat false.

(END VIDEO CLIP)

MCINTYRE: The U.S. does have four bases that it's operating inside Baghdad that were looked at as possible places where the United States might want to have access to. Right now they are being used to support U.S. troops on the ground and to bring in humanitarian aid. And Defense Secretary Rumsfeld today insisted that that's all they're going to be used for. He said the United States, after this chapter is over, will probably want to be able to provide assistance to Iraq but will not need to base troops inside Iraq. He said the U.S. will probably reduce the overall number of troops in the Persian Gulf region, and Secretary Rumsfeld said the U.S. has plenty of friends in the region, plenty of places where it can base troops, planes and ships without putting them in Iraq -- Paula.

ZAHN: The Iraqi National Congress' Chalabi had some interesting things to say earlier today to reporters, that it is his belief that Saddam Hussein is still alive, and he claims that INC members have actually seen him in the last 12 to 24 hours. How is the Pentagon reacting to those reports? Do they believe him?

MCINTYRE: Well, could be true is I think the way they're looking at it. They don't have any conclusive evidence that Saddam Hussein was killed. They also don't have any conclusive evidence that he's alive, despite these sightings. They're operating on the assumption he may be alive. They have been able to get to one of the sites, the first site where they tried to kill him the first night of the war, and they have found that that site, according to Pentagon sources, was clean. That is, people had already been through and removed things from the site. They didn't find any remains there. They still need to excavate the second site to see if they can determine if Saddam Hussein was killed in a Baghdad residential neighborhood.

But they are confident they will account for him one way or the other. If he is in Baghdad or perhaps up in Tikrit, they're confident that eventually, somebody will give him up, because that's how they're getting most of the information about the Iraqi leaders, is that Iraqis themselves are providing the information to either Iraqi or American authorities -- Paula.

ZAHN: Thanks so much, Jamie McIntyre.

Time to move on now. During the 2 p.m. today, charges filed against the husband of Laci Peterson. Scott Peterson was charged with the murder of his wife and their unborn son, Connor. At his arraignment today, he pleaded not guilty. Because he is charged with more than one murder, prosecutors could seek the death penalty. Laci Peterson was eight months pregnant when she disappeared just before Christmas. Her body and the body of her fetus were found just over a week ago after they washed ashore along San Francisco Bay, not far from the area where Scott Peterson said he had been fishing on December 24. Laci Peterson's family spoke to reporters today about some of they have been through.

(BEGIN VIDEO CLIP)

SHARON ROCHA, LACI PETERSON'S MOTHER: We searched and searched and searched, and still no Laci. I love my daughter so much. I miss her every minute of every day. My heart aches for her and Connor. Without them, there is a huge void in my life. I literally get sick to my stomach when I allow myself to think about what may have happened to them. No parent should ever have to think about the way their child was murdered. In my mind I keep hearing Laci say to me, mom, please find me and Connor and bring us home. I'm scared. Please don't leave us out here all alone. I want to come home. Please don't stop looking for us. Except for that Laci and Connor could no longer wait to be found. So last week they came to us.

(END VIDEOTAPE)

ZAHN: An absolutely raw and unsettling news conference. We're going to be taking a closer look at the Peterson case in just a few minutes. Our special report, "The Case Against Scott Peterson," will begin at 8:30 p.m. Eastern time.

Just ahead tonight, a man suspected of war crimes turns himself in. And this from Iraq.

ROBERTSON: I'm Nic Robertson in Baghdad, and I'll be bringing you more on the arrest of Muhammad Hazmaq al-Zubaydi and the arrival in Baghdad of Jay Garner, the retired U.S. general, the new U.S. administrator inside Iraq. Those stories when the timeline continues.

(COMMERCIAL BREAK)

ZAHN: And we're back at 22 minutes past the hour.

An allege the war criminal has turned himself in. During the 2 p.m. Eastern hour, CNN reported the surrender of former Yugoslav army Captain Miroslav Radic. Prosecutors say he is one of three officers responsible for massacre of some 200 civilians and POWs during the 1991 war in Croatia. Radic surrendered to Serbian authorities. They are expected to extradite him to the Netherlands to face U.N. war crimes tribunal.

And bringing today's timeline up to the moment, another former high-level member of Saddam Hussein's regime is in custody tonight. Muhammad Hazmaq al-Zubaydi was arrested today. He was a regional commander of the Iraqi army, a former deputy prime minister and No. 18 on the Most Wanted list.

Nic Robertson joins us now from Baghdad with details on that and other events taking place in Iraq tonight. Good evening, Nic.

ROBERTSON: Good evening, Paula.

Well, Muhammad Hazmaq al-Zubaydi might feel happier that he's been arrested and caught by the people of Iraq. He was believed to have been responsible for putting down the Shiite rebellion after the 1991 Gulf War. He also believed to have been responsible for killing one of the Shiite Muslims grand ayatollahs, Grand Ayatollah Al-Sadr in 1991 along with his two sons.

He was picked up about 60 miles south of Baghdad in the town of Babylon. And he will likely be able to provide coalition investigators with some information about Saddam Hussein's regime. Also possibly some information about how Saddam Hussein's regime used chemical weapons. It is believed by analysts that chemical weapons were used by the former Iraqi president to put down that Shiite rebellion in 1991 after the Gulf War.

However, analysts also say that Zubaydi had been ostracized over the last few years by the regime. His intelligence may not be the most up to date intelligence. But certainly they think he will have some very useful information for them.

Today in Baghdad, a day for many Iraqis to look with a little bit of hope and anticipation about how the United States might reorganize and re-administer Iraq in an interim period before a government is formed. Retired U.S. General Jay Garner flew into Baghdad early in the morning. He visited a hospital, he visited a sewage treatment plant, he visited a power generating station.

People we talked to today seemed to be divided in their opinions about him. Some people said, no, we need an Iraqi to run Iraq. How can he understand us? Others said, we'll give him a chance, we don't know him, we'll see how he does and see how he gets on.

Certainly, Mr. Garner saying he was not here to run Iraq. He was not a new Iraqi leader. But here to bring civil order, to bring electricity to the city of Baghdad and to other areas of Iraq, and to organize a new administration. What he has not done so far is to articulate how he will set about bringing a new democracy to Iraq.

And in particular, how he will set about bringing the disparate ethnic groups. The Shia Muslims, the Sunni Muslims, the Kurds, the Christians in Iraq, bring them all together in a new democracy here -- Paula.

ZAHN: Nic, on to the status of Saddam Hussein. How much reaction have you heard to this INC report there have been sightings of him in the last 12 to 24 hours?

ROBERTSON: There have been rumors here over the last couple of weeks that he's still been around. That is very difficult to know how much credibility to put into any of these reports or to put into the Iraqi National Congress, the INC's reports. It's not clear how good and accurate their intelligence is.

It is a fear of some Iraqi people that Saddam Hussein will come back. And that is why some of them have been reticent to even at this stage still speak really openly about their feelings. It's not clear where Ahmed Chalabi from the INC is his most up to date information. But it certainly is a concern still to some people who live here in Baghdad, and around about that the former leader could be around somewhere.

ZAHN: Nic Robertson, we're going to have to leave it there tonight. Thanks so much for that update from Baghdad this evening.

A look at some of the top stories when we come back. And then a little bit later on, the case against Scott Peterson. The latest on the California man accused of killing his wife and unborn child, including reaction from Peterson's family when LIVE FROM THE HEADLINES continues.

(COMMERCIAL BREAK) * (NEWS BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: The husband, expectant father, charged with double murder.

KELLY HOUSTON, STANISLAUS COUNTY SHERIFF'S DEPT. SPOKESMAN: This is a really difficult tragedy for both these families to be dealing with.

ANNOUNCER: Scott Peterson's parents defend their son and lash out at what they see as a bungled investigation. What is Scott Peterson's defense? And what are the charges under California law? Laci Peterson was pregnant. Should Scott Peterson be accused of killing his wife and unborn son? Was it a double murder?

And a small town in the nation's spotlight again: first, Chandra Levy; now, Laci Peterson. How is Modesto coping?

LIVE FROM THE HEADLINES: the case against Scott Peterson.

(END VIDEOTAPE)

ZAHN: Welcome back.

Scott Peterson said in court today -- quote -- "I am not guilty." He was arraigned in Modesto, California, on charges he killed his wife, Laci, and their unborn son on or just before Christmas Eve. Tonight, Laci's family spoke publicly about their desire for justice and some of the pain they have endured.

David Mattingly has been following the developments. He joins us now from Modesto tonight.

David, good evening.

DAVID MATTINGLY, CNN CORRESPONDENT: Good evening, Paula.

Scott Peterson's appearance in court today was very brief, but it strongly punctuated what has now become nearly four months of an ordeal for two different families.

(BEGIN VIDEOTAPE)

MATTINGLY (voice-over): In all, it took less than five minutes: Scott Peterson entering the courtroom, handcuffed and in shackles. He was clean-shaven and wearing a red jail jumpsuit. He declared, he is not guilty for the charges of murdering his wife, Laci, and their unborn son.

No details of the crime were discussed in the arraignment, but this copy of the arrest warrant released by the court today shows police believe that Laci Peterson was killed in her Modesto home. Courtroom cameras were not allowed to show members of either family. But before the arraignment, in one stirring moment, Scott's mother, Jackie, approached the mother of Laci.

HOUSTON: Mrs. Peterson went over and hugged Mrs. Rocha. It was really brief. There didn't appear to be any conversation. And then they went back to their -- Mrs. Peterson went back to her seat.

MATTINGLY: But it was Laci's mother, Sharon Rocha, who began crying as Scott Peterson entered the courtroom. In a surprise, Peterson said he was unable to pay for his own attorney and was assigned a public defender. His former attorney of record urged the public to be skeptical of the case against his former client.

KIRK MCALLISTER, SCOTT PETERSON'S FORMER ATTORNEY: The police had to make an arrest on this case or they would have looked like they were from Mayberry RFD.

MATTINGLY: But the last word of the day belonged to Laci's family.

RON GRANTSKI, STEPFATHER OF LACI PETERSON: I know all of you would like for us to say something about Scott. But we're not going to do that. We owe to it Laci to let the courts bring the facts out. I'm not going to say anything that's going to jeopardize all the hard work of so many young men and women.

MATTINGLY: Speaking at Modesto police headquarters, they expressed gratitude to investigators and volunteers, the emotions, after nearly four long months, still overwhelming.

SHARON ROCHA, MOTHER OF LACI PETERSON: Soon after Laci went missing, I made a promise to her that, if she's been harmed, we will seek justice for her and Connor and make sure that that person responsible for their deaths will be punished. I can only hope that the sound of Laci's voice begging for her life and begging for the life of her unborn child is heard over and over and over again in the mind of that person every day for the rest of his life.

(END VIDEOTAPE)

MATTINGLY: So emotional. But, just as they have for the last couple of months, the Rocha family stopping just short of saying that they believe that Scott Peterson killed Laci Peterson -- Paula.

ZAHN: David, as we watched that news conference unfold, along with members of our audience, I guess the best word I could use to describe it was raw and just unsettling and painful to watch.

You were there in the room where the news conference was held. Just describe how people reacted to some of the very sharp and pointed memories this family has had to put up with.

MATTINGLY: Well, among the family, there was not a single dry eye. As you watched the people at the podium just off camera, the other family members had their heads down. They were hugging each other, giving each other strength through this.

The members of the media there, everyone just stood there, quiet motionless, just watching what this family, in such obvious pain, had to say to everyone. Through that pain, though, you could hear such words of deep thanks that they had for all the supporters that they've had, all the volunteers, and for the Modesto Police Department here.

ZAHN: Yes, David, we were expecting to hear from the DA at that point.

Let's come back a little more to some of what the Peterson family had to say. I thought it was interesting that, while none of the family members mentioned Scott with just anything but a glancing reference, it was very clear in listening to Laci Peterson's mother, she was -- at least it seemed to me -- directing her comments to Scott. Is that the way you interpreted it?

MATTINGLY: You could very easily do that. Scott's parents have gone public in the last couple of days saying that they believe that the police here bungled this investigation, saying that they believe that there were other credible leads that weren't followed because they were so focused on their son.

This family, the Rocha family, clearly very complimentary and very supportive of what the Modesto police have done and what they are now going to court with. Now, exactly what evidence they've collected, we don't know. That will all come out as the courts now handle this case -- Paula.

ZAHN: David Mattingly, thanks so much.

As we mentioned, Laci Peterson's family is not alone in speaking out about this case. Scott Peterson's parents, as David just mentioned, also expressed their opinions in an interview on Sunday night with "TIME" magazine reporter Jill Underwood, who joins us now from Sacramento.

Jill, thank you very much for being with us.

First of all, at the time you had done this interview, had they been in touch with Scott?

JILL UNDERWOOD, "TIME": Yes.

ZAHN: Since the arrest?

UNDERWOOD: Not since the arrest. They said, up to the arrest, they were in touch with him every day.

ZAHN: What did they tell you in this interview?

UNDERWOOD: Well, a number of things.

They said, No. 1, that they were in touch with him every day because they feared for his life. They said that Modesto police had basically run him out of town and that's why he was here in San Diego, staying by them. And, also, they said that the fear was that he would run to Mexico. And that's why he was arrested on Friday.

They say their son would never have left his family, that he'd gone to Mexico as recently as six weeks ago on business. Police knew where he was every minute that he was in San Diego, because they say that the police had put a device under his car, tracking him, knowing where he was. Plus, they knew that his parents were in touch with him every day.

ZAHN: Jill, let's talk a little bit more about the feelings of resentment and frustration they expressed about the police department. We're going to put up a small part of your article on the screen right now, where Scott's mother said -- quote -- "I'm feeling like I'm living in Nazi Germany or the Soviet Union. I'm just sick of this. I think every man out there should be in fear if this is the way the police work. If a crime happens to your wife, you'd better know you're with six people and they weren't drunk and that they are good friends who are going to be able to put up with this. If they have any kind of shady character, the police will dismiss them and you'll be ruined."

Do you think that was the sole purpose of the interview, to dump on the police?

UNDERWOOD: Oh, no. No, I think, if you're asking if that was the sole purpose of why they talked, no.

I think that they had a lot of things that they wanted to say. Here's why they're frustrated and also, in their words, disgusted. They say that the police were preening, that no sooner was Scott arrested, the district attorney was saying, this is a slam dunk case. There hasn't even been an arraignment. They also say -- when they were talking about your quote just there, they were talking about, they know of two people, they say, one a three-term city council member in Modesto and another an attorney, who were said to have seen or spoken to Laci after her mom.

They say the police have discredited them and that makes it harder for other people to come forward. So they don't understand why the police are discrediting these people who, in their opinion, have something to say.

ZAHN: Jill, let's close with one other small excerpt. In this article, Jackie Peterson told you -- quote -- that her son sold his car because his job had changed. He doesn't have to haul stuff anymore and he couldn't afford it. "He was making a payment, and we loaned him a car to drive instead."

Apparently, from what we now hear, the police had a device attached to it. His attorney knew where he was at all times. Did the Petersons acknowledge to you that it is their belief that their son has been convicted, basically, in water coolers all across the country?

UNDERWOOD: Yes, I think so. I think they're very frustrated. I don't think that they feel that he'll be able to get a fair trial.

As you know, from seeing Mrs. Peterson, she's also on an oxygen device. She told me that she thinks that this may just be it for her, that this might just kill her.

ZAHN: Were you surprised to hear that he took a court-appointed attorney today, because he said he couldn't afford his own?

UNDERWOOD: Yes and no. According to the Petersons, Scott has always worked very hard, worked three jobs, but lived high on the hog, but, at the same time, never borrowed money from them and didn't always have a lot of money. So, they come from a middle-class, upper- middle-class background. So I was surprised to see that, yes.

ZAHN: Jill Underwood, fascinating reading. Thanks for spending a little time with us tonight. Appreciate your dropping by.

UNDERWOOD: Thanks, Paula. Thank you. ZAHN: Still ahead: Robert Shapiro defended O.J. Simpson and won. We're going to ask him whether Scott Peterson could also get a jury to make him a free man once again.

Stay with us.

(COMMERCIAL BREAK)

ZAHN: Police and prosecutors have been remarkably tight-lipped about their evidence throughout the Laci Peterson investigation.

But in filing charges against Scott Peterson, prosecutors revealed what the evidence has led them to believe: that Scott Peterson killed his wife, Laci, on December 23 or 24, that he did it on purpose, that he did it with premeditation. And, according to court documents released today, he allegedly killed her in their own home.

So have prosecutors really got a slam dunk case, as California's attorney general said, or have police bungled the case, as Scott Peterson's parents say?

Joining us now are well-known criminal defense attorney Robert Shapiro in Los Angeles. And in San Francisco, we have the head of the San Francisco DA's homicide unit, James Hammer.

Welcome, gentlemen. It's good to see both of you.

ROBERT SHAPIRO, CRIMINAL DEFENSE ATTORNEY: Thank you, Paula.

JAMES HAMMER, SAN FRANCISCO ASST. DISTRICT ATTORNEY: Good evening.

ZAHN: So, Mr. Shapiro, if you were representing Scott Peterson, what kind of case do you think you'd have?

SHAPIRO: Well, Paula, as you know, cases in the media are much different than cases in the courtroom. So I think, at this point in time, the fact that the media has already reached the verdict and has all but convicted and sentenced Scott, it's going to be a different story when it gets to the courtroom and the burden of proof is on the prosecution. Then we'll see whether or not the prosecution is able to prove this case beyond a reasonable doubt. If they are, then he'll be convicted.

And their case right now seems to be very much based on circumstantial evidence, which certainly is good evidence. But when compared with direct evidence, the jury instructions are very, very favorable to defendants.

ZAHN: Let's talk about that for a moment with Mr. Hammer.

What kind of a case do you think the prosecution has? Is it a slam dunk case?

HAMMER: Well, I wouldn't be so foolish at this point, knowing very little of the evidence, to say whether or not the prosecution is going to prevail. I would say this, though, that most murder cases don't involve direct -- or many murder cases don't involve direct eyewitness identification, but are circumstantial evidence cases. And, as Mr. Shapiro said, that can be just as powerful or even more powerful.

The heart of this case really lies in the search warrants that were conducted, a total of eight search warrants at that home and around Mr. Peterson's car and boat. And starting to hear -- at least leaked out -- some of the evidence that might be there. And if that starts to pans out, then you might have a winning case.

ZAHN: Mr. Shapiro, let's come back to what you said about what could appear at this moment to be strong circumstantial evidence.

I've just been handed a piece of wire copy, some news one of our reporters has just broken about this case. And let me just read it to you. It says, a source close to the investigation into the deaths of Laci Peterson and her unborn baby said investigators repeatedly returned to San Francisco Bay to conduct searches for the missing mother-to-be after they found very specific tidal charts of the bay on Scott Peterson's computer.

It also says, a source said investigators found traces of concrete in the bottom of Peterson's 14-foot aluminum boat which they believe may have come from some kind of concrete anchors.

How bad does that look?

SHAPIRO: Well, first, these are -- this is an anonymous source. So that is something that is always questionable in my mind. But if those facts turned out to be provable, they are devastating for the defense in this case.

ZAHN: Mr. Hammer?

HAMMER: Those are exactly the facts, Paula, that I was talking about.

I think the heart of this case that we know so far is this supposed fishing trip. A three-hour drive and one hour of fishing is not much of a fishing trip. And if you compound this unusual trip on a day apparently with bad weather, with traces of concrete inside of his boat, and maybe some other things the police have found, purchases of other materials, I think you start to put together a rather devastating case.

ZAHN: But let me ask you this, Mr. Hammer. As far as we know, there were no eyewitnesses. As far as we know, no murder weapon has been found.

HAMMER: Right.

ZAHN: And we also don't believe the cause of death has been confirmed. If you're trying to analyze this case, where does it leave the case? HAMMER: Well, the jackpot would be -- and we'll know soon if it exists -- if there's any forensic evidence inside of that house, blood, trace evidence, actually showing a murder scene. But if not, it's going to come down to the kind of evidence you have mentioned.

And if you ask yourself, who's the likely person, two-thirds of murder victims are killed by someone they know. And, unfortunately, this sort of domestic violence, related -- and that's the allegation in this case -- murder is not that unusual. In fact, the leading cause of death of pregnant women is murder. So when you start to put all this together -- the fact that he's having an affair -- he claims his wife took it very well -- I think when you stack all of his statements on top of the physical evidence, you have the potential for a very strong case here.

ZAHN: I know, Mr. Shapiro, you have said you think people have leapt to some pretty erroneous conclusions here. But would you acknowledge...

SHAPIRO: No, I didn't.

ZAHN: But the media -- I think you said earlier

(CROSSTALK)

SHAPIRO: I didn't say they were erroneous.

ZAHN: Maybe jumping to conclusions that are inappropriate.

Do you think Scott Peterson has been acting like he's innocent?

SHAPIRO: It's always an interesting question, how people are supposed to act, how victims should act when they have horrific events. I think, in this case, the parents and the family members are quite dignified. In other cases, they've been criticized. I don't think there's any particular way that somebody should act when they are charged with such a horrible crime.

(CROSSTALK)

ZAHN: Mr. Hammer, a final thought on what you think the largest challenge is that lies ahead for the prosecution team here.

HAMMER: It's the evidence we don't know about yet. And that is, what did they find inside the home, what other physical evidence there is.

I'll tell you, if any man has his wife who is eight months pregnant murdered, I think he'd be acting a little different than he has acted since her death. And that looks awfully suspicious to me.

ZAHN: Well, Bob, you certainly have experience in that arena, with people questioning how O.J. Simpson acted during his trial. Just a final thought on what you say is the wide parameters with how people react to stuff. SHAPIRO: My only thought at this point is that the presumption of innocence should apply. Unfortunately, it doesn't. We have the assumption of guilt. And that takes away from our constitutional guarantees to a fair trial.

ZAHN: Mr. Hammer, do you think Mr. Peterson will get a fair trial?

HAMMER: I don't think so in Modesto, I have to say. I know the DA is fighting to keep the case there. And he's going to have a good fight on his hands.

From what I've seen from the reports in the media about people in that community, it's a relatively a small community. And following Chandra Levy's disappearance, I think there's so much rage in that community that, if the defense makes a motion, they will get a change of venue. And I want him to have a fair trial. I'm not presuming his guilt at all at this point. This evidence, if it's true, I think would be very powerful, though.

ZAHN: James Hammer and Bob Shapiro, thank you both for joining us tonight. Appreciate both of your perspectives.

SHAPIRO: You're welcome. Thank you.

ZAHN: When we come back: Modesto's struggle. It's not just the mourning for Laci Peterson and her unborn son. This is the third high-profile murder case involving Modesto in the past four years.

We're going to get a check on the mood there when we come back.

(COMMERCIAL BREAK)

ZAHN: For almost four months, Modesto residents believed Laci Peterson had disappeared from her home in the central California town. Now prosecutors say she was killed there in her own home.

This is not the first time Modesto has been in the national crime headlines.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): In the otherwise quiet mid-sized California town of Modesto, the discovery and identification of Laci Peterson's body nearly four months after her disappearance brought both relief and sadness.

UNIDENTIFIED MALE: I'm pretty sure it would be a closure, but it's very hard to take.

UNIDENTIFIED FEMALE: It's just hard for Laci and Connor. Love lives on forever in the heart.

ZAHN: But also had an eerie sense of deja vu. Less than a year ago, the body of another resident, Chandra Levy, was found 13 months after she disappeared. The story caught national attention as the details of her affair with a local congressman, Gary Condit, made headlines.

Each time, the town went through the same emotional roller coaster: first the search, and the waiting for news, any news, then the pressure of the national spotlight as the media stormed the town and public anger at the suspect.

UNIDENTIFIED FEMALE: People just are kind of staying quiet. But I do think a lot of people have a lot of suspicions about Scott Peterson.

ZAHN: Too many tragedies that have left residents tired and worried about the reputation of their town.

UNIDENTIFIED MALE: This is about the third time we've hit the national spotlight in the last two or three years, whatever it's been, since the Yosemite murders and the Chandra Levy story, and now this. It's not good. It's not the way to be put on the map, I guess. But we're there.

ZAHN: Possibly too much attention for this town, whose name in Spanish means modesty.

(END VIDEOTAPE)

ZAHN: And we appreciate your all being with us tonight. That wraps it up for our show tonight. Tomorrow nation, we'll have a special report on the deadly disease SARS and the new fears that it is spreading in the United States.

Now please stay tuned for "LARRY KING LIVE," right after quick check of the headlines.

Again, thanks for being with us tonight. Good night.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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