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WHO urges avoid Canada and Beijing because of SARS; Arafat Backs Down in Power Struggle; White House Warns Iran Not to Interfere With Iraq

Aired April 23, 2003 - 19:00   ET


ANNOUNCER: Saddam alive? The British defense minister thinks so. Can the war in Iraq really be over and called a success without proof of Saddam's demise?

No fly list, airport security officials have a list of potential threatening air travelers. How do you get on the list? Is your name on it and how do you get your name off of it?

And, has the material girl grown up?

MADONNA: Just being provocative for the sake of being provocative that doesn't really interest me right now.

ANNOUNCER: Her first album in three years but will people listen?

LIVE FROM THE HEADLINES with Paula Zahn in New York.


PAULA ZAHN, CNN ANCHOR: And good evening. Thanks so much for joining us on this Wednesday night. We join you from the CNN Broadcast Center in New York.

Coming up tonight, the deadly virus SARS, more new cases, more travel warnings, what you need to know.

Also ahead grounded, American Airlines and the management blunder that is shaking the company, the executives will get retirement perks while the workers would take a big pay cut. Do you think that's fair, that story just ahead.

But first, we begin with the deck of cards that is getting thinner by the day as four more key Iraqi leaders have either been captured or surrendered. What do they do now and can they help the U.S.?

Well, Jamie McIntyre is following these developments from the Pentagon tonight. He joins us with this live update. Good evening, Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, good evening Paula. Of the Pentagon's top 55 most wanted Iraqis, three more cards in the deck were taken into custody today, but perhaps the most interesting capture wasn't in the deck, wasn't on the list of the top 55.

That was a commando raid in which U.S. Special Forces in Baghdad raided a location and captured a man that the U.S. identifies as the head of the American desk at the Iraqi Intelligence Service and what does that mean?

That means that this is the man who would presumably have knowledge about Iraqis spying against the United States in the United States. They're hoping to get some useful information from him.

Meanwhile, the other three taken into custody today, the top one, the Queen of diamonds, a man identified as the Iraqi air defense commander, he apparently lost his job early in the Iraq war for putting up such an ineffective air defense.

Also, the seven of hearts, this man is the director of military intelligence, not part of the Republican Guard or Special Republican Guard, part of the regular army. Even though he has intelligence in his title officials tell us he most likely was in charge of sort of overseeing the loyalty of Saddam Hussein's troops.

And then, lastly, the six of hearts, Muhammad Mahdi al-Salih, the minister of trade also on the top 55 list. Now that means of the 55 most wanted, 11 now are in U.S. custody. Three are believed to be dead including the man nicknamed as Chemical Ali and that remained 41 on the list of 55 still at large.

But, as evidenced by the fact that one of the arrests today was not on the list, the real list is much bigger. In fact, Pentagon officials tell us the actual list of people that the U.S. is interested in Iraq is over 200 names long -- Paula.

ZAHN: So, Jamie, come back to the bottom line for a moment. Just what is it the Pentagon expects to learn from these men?

MCINTYRE: Well, they hope to learn everything. They're hoping to learn where weapons of mass destruction may be, what may have happened to them. They're hoping to learn where the other regime members are, including Saddam Hussein, what happened to him and other senior members.

And they're also even hoping to learn things like what happened to Michael Scott Speicher, Captain Speicher the person, the Navy pilot lost in the first Gulf War, still thought possible he might be alive in Iraq and they believe the only way they'll find him is to find someone who knows what happened to him, or at least to account for him.

So, they believe that the people are the key to solving most of these mysteries about what's going on in Iraq.

ZAHN: Thanks so much Jamie McIntyre, reporting from the Pentagon. The U.S. still doesn't know if the most wanted member of the old Iraqi regime is alive but during a visit to Umm Qasr today, British Defense Secretary Geoffrey Hoon told reporters he believes Saddam Hussein is alive and probably hiding in Iraq.


GEOFFREY HOON, BRITISH DEFENSE SECRETARY: There are any number of stories coming in now as to where he might have been but obviously the efforts are being made across the board to arrest those who were responsible for the appalling regime here, above all else Saddam Hussein. But we're seeing day by day successes as we capture more of those who were to blame and we go on with that effort.


ZAHN: Iraq's past president and what many hope will be its future were on display today in Karbala. The city is the burial place of a Muslim martyr, the Prophet Mohammed's grandson.

Between one and two million Iraqi Shiites made the pilgrimage to Karbala this year. It is a pilgrimage that includes (unintelligible) of self flagellation, a pilgrimage that was banned by Saddam Hussein.

Now, Shiites make up about 60 percent of Iraq's population. Repressed by Saddam and distrustful of the United States, they are sure to be a force in the new Iraq. But, as David Ensor explains, the U.S. is taking some steps to make sure Iraq does not go the way of another Shiite dominated state, Iran.


DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): With Iraqi Shi'a passions high for their holy days, U.S. officials say there are signs Iranian intelligence agents are moving into Iraq in increasing numbers causing concern in Washington.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: We have made clear to Iran that we would oppose any outside organization's interference in Iraq, interfering with their road to democracy. Infiltration of agents to de-stabilize the Shi'a population clearly fall into that category.

ENSOR: That message went through diplomatic channels in recent days, officials say. There was a similar message just before the war from Zalmay Khalilzad President Bush's special envoy at a meeting with Iranian officials in Geneva.

BOB SOBHANI, GEORGETOWN UNIVERSITY: There's no doubt that Iranian intelligence agents and revolutionary guards are in Iraq today because to the extent that they can help set up an Islamic Republic of Iraq they would have accomplished their mission. In addition to that, the goal of the Iranian government is for the United States not to succeed in Iraq.

ENSOR: But other analysts in and out of government are less worried. They say the influence of Iran in Iraq is, in fact, somewhat limited. The Iraqi Shi'a are Arab, not Persian, and the two countries fought a bloody war. These analysts argue Iran does not want a confrontation with the U.S. over Iraq and would, in fact, like to warm up its frosty relationship with Washington.

Former Iranian leader Ali Rafsanjani recently suggested putting to a democratic vote whether to improve relations with the U.S. Polls suggest the idea would win handily in a nation where clerical rule and reflexive anti-Americanism are no longer popular.


ENSOR: U.S. officials are also emphasizing to Tehran how much better U.S.-Iranian relations could become if there is cooperation and not meddling in next door Iraq -- Paula.

ZAHN: Thanks so much, David Ensor reporting for us tonight.

Meanwhile, the man in charge of putting Iraq's government back together spent today in the stronghold of one of the country's most important ethnic minorities, the Kurds.

For the second day in a row, retired U.S. Lieutenant General Jay Garner was mobbed by friendly crowds. After touring a Kurdish school in the northern Iraqi city of Erbil, Garner said the school should serve as a model for the rest of the country.

U.S. troops in Baghdad keep finding cash, as you'll see in these pictures, hidden by Saddam's regime. One hundred and twelve million dollars turned up today in some dog kennels. So far, U.S. soldiers have discovered nearly $600 million hidden around Baghdad.

Four U.S. soldiers are under investigation for allegedly keeping some of that. The four were turned in after other soldiers noticed several hundred thousand dollars in U.S. currency missing from neatly packed cases.

Fear about Severe Acute Respiratory Syndrome, or SARS, is spreading. Major League Baseball plans to warn its players heading to Canada, particularly to Toronto for the All-Star break in July, to take some precautions. That means instead of meeting the fans and signing autographs they'll be keeping their distance and waving. There are at least 39 suspected cases of the SARS virus in the United States. No one has died from the disease here.

So, concern about SARS has World Health officials expanding their travel advisory. They are now warning people visiting Beijing, China and Toronto, Canada. Both countries have been hit hard by this disease but Canadian officials are lashing back. They say this organization is overreacting. Peter Viles has that part of the story.


PETER VILES, CNN CORRESPONDENT (voice-over): A sharp new disagreement in the global fight against SARS, the question is it safe to travel to Toronto, Canada? The World Health Organization now says no, urging travelers to delay unnecessary trips to Toronto, for that matter Beijing.

DR. DAVID HEYMANN, WORLD HEALTH ORG.: In both China and in Toronto, there is local transmission of the disease outside of the hospital setting and their close personal contacts. Cases are being exported from both China and Toronto to other countries.

VILES: Canadian officials reacted with shock and outrage, arguing they do have the SARS virus under control.

DR. PAUL GULLY, HEALTH CANADA: We believe that it is safe to travel to Toronto. We do challenge the WHO's assertion that Toronto is an unsafe place to visit and we will make our challenge formally through a letter to be sent to the World Health Organization today.

MAYOR MEL LASTMAN, TORONTO, CANADA: I want them here tomorrow. I want them to investigate Toronto tomorrow. I think they're doing this city and this country a disservice.

VILES: The United States through its CDC appear to back Canada. Americans are urged to take precautions before traveling to Toronto but not urged to avoid the city.

DR. CLIFFORD MCDONALD, U.S. CDC: In terms of the criteria that we use to issue a travel advisory, we do not feel like that has been met.

VILES: There was no immediate protest of the travel warning in Beijing where the government has now closed down the schools and warned it will use its power to order quarantines and even shut down entire buildings.

The WHO now reports there have been 4,288 cases of SARS globally, a 30 percent spread in the disease over the past week, 251 people have died. The death rate now stands at 5.9 percent and rising.


VILES: Only one new case of SARS reported today in Canada but there were more than 300, 306 in China today, and the World Health Organization warned that it now believes that China is still underreporting this disease now in the city of Shanghai -- Paula.

ZAHN: So, Peter, if there is only one new case in Canada, how is the WHO responding to charges it might be overreacting here?

VILES: Right. What they are most concerned about in Canada is evidence that the disease has left Canada. Five cases that have been exported out of Canada, as the WHO said, and when the disease is leaving a country they want to take the most cautious approach possible, which is to tell people not to go in and out of that country.

The Canadians say they know exactly which cases have left the country. They've identified them. They've notified them. They have the virus under control; nonetheless WHO taking a very hard line here.

ZAHN: So, you got conflicting advice. You got conflicting interpretations of the advice. What impact is this going to have on American businesses?

VILES: Well, I think they may take the Major League Baseball approach, which is to follow the guidelines of the CDC. Go to Canada but take extra precautions if the trip is scheduled and can't easily be rescheduled, as baseball games can not. It it's a business trip that can wait, it might wait. The Canadian officials say that this travel advisory from the WHO will have a very big negative impact on the economy of Toronto.

ZAHN: I could see that already. Peter Viles thanks so much, appreciate it.

Back here at home, stormy conditions have residents in Texas and Oklahoma keeping an eye out for severe weather. Tornado watches are in effect in both states right now. Let's go to meteorologist Jacqui Jeras who joins us in the weather center with the very latest on this severe weather pattern. Good evening.

JACQUI JERAS, CNN METEOROLOGIST: Good evening, Paula. Things have been intensifying in the late afternoon and early evening hours but in the last 15 minutes this is the first time since about one o'clock Central time that we haven't had a tornado warning in effect but the watches remain in effect with some very strong thunderstorms right along the I-35 corridor.

Dallas, you're quiet right now with 68 degrees, but under that tornado watch with the threat continuing through at least ten o'clock for tonight. This is a very potent, very vigorous system. We've had at least one tornado touch down into the panhandle of Texas early this afternoon causing a little bit of damage there, also a lot of hail being reported between golf ball and baseball size. This storm system brings thunderstorms all the way across the plains, across much of Kansas, even into Nebraska, and cold air on the back side is bringing snowfall into the higher elevations of the Colorado Rockies. Up to eight inches can be expected.

The reason why we're having such a significant outbreak is we have warm, moist air which is pulling in from the Gulf of Mexico and that's interacting with some dry air coming in from the West. So, it's right along what we call the dry line where things are triggering.

That storm system pushes off to the East and we have a severe weather threat for tomorrow still across the central plains and lower Mississippi River Valley -- Paula, back to you.

ZAHN: Keep us posted, Jacqui, thank you.

Still to come tonight, a breakthrough in the road to peace in the Middle East, Yasser Arafat and the new Palestinian prime minister.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: When the Palestinian people have new leaders, new institutions, and new security arrangements with their neighbors; the United States of America will support the creation of a Palestinian state.


ZAHN: Also tonight, a billion dollar loss for American Airlines. Ahead, those who are still getting the money, those who aren't, and what it might mean to you, the traveler.

And then a little bit later on, Madonna, and the "Winds of Change. Her new album is out. Will anyone buy it or even listen to it?

You're watching LIVE FROM THE HEADLINES. We'll be right back.


ZAHN: Welcome back. A breakthrough in the crisis in the Middle East tonight, the Palestinian Authority overcame a major hurdle today easing the way for a U.S. peace initiative.

Yasser Arafat had challenged some cabinet appointments but today gave in to his new prime minister. This diffused a crisis that had jeopardized a formation of a new Palestinian government.

Having such a government in place is one of the necessary steps set out by President Bush before he would unveil his road map for Mid East peace. That plan includes Palestinian statehood down the road, and our Senior Political Analyst Bill Schneider looks at just exactly what is at stake.


BILL SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Palestinians never miss an opportunity to miss an opportunity, the late Israeli diplomat Aba Iban once said. Today was their last opportunity to demonstrate that the Palestinian Authority is committed to reform. That looks like the only way Palestinians can get what they want.

BUSH: When the Palestinian people have new leaders, new institutions, and new security arrangements with their neighbors the United States of America will support the creation of a Palestinian state.

SCHNEIDER: Last month the Palestinian legislative council gave Yasser Arafat's deputy Mahmoud Abbas, known as Abu Mazen, sweeping authority to form a new Palestinian government. Abu Mazen is someone both Aerial Sharon and George W. Bush feel they can do business with. They refuse to do business with Arafat.

Palestinians were perfectly aware that without a new government led by Abu Mazen the U.S. would not go forward on what they are calling the road map to peace. SAEB ERAKAT, PALESTINIAN CABINET MEMBER: The bigger picture, the (unintelligible) of the road map, and this means that Abu Mazen must succeed.

SCHNEIDER: At the last minute a power struggle broke out between Yasser Arafat and Abu Mazen, the issues, personnel. Abu Mazen insisted on choosing his own cabinet, including critics of Arafat like Mohammed Dahlan (ph) for security minister. Israel and the U.S. see Dahlan as a young reformer. Arafat and his old guard see him as a threat.

Policy, the key issue according to Israeli newspaper reports was whether the new prime minister would have the power to disarm Palestinian militias responsible for terrorist acts against Israel.

Authority, Abu Mazen threatens Yasser Arafat's authority because reform means making Arafat irrelevant. Today, Palestinian leaders showed they were willing to take that fateful step.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: The United States is determined to do all we can to help such a government move rapidly toward the two state vision outlined by President Bush and Palestinians can't afford to miss this opportunity.

SCHNEIDER (on camera): Now, a new road map to peace can be published which may not make some Americans and Israelis too happy because they may not want to go where the new road map will take them, to a new Palestinian state.

Bill Schneider, CNN, Washington.


ZAHN: Still to come tonight, imagine trying to board an airplane and being told you can't get on because of your name. That's at the heart of a new national no fly list. Find out how your name could end up on it and how to get it off.

Also tonight, more fallout on the Pennsylvania Senator who likened homosexuality to incest and adultery, Rick Santorum and the new calls for his resignation.

This is LIVE FROM THE HEADLINES. We're back in a moment.


ZAHN: Welcome back. The man who became the most prominent voice of NASA following the Shuttle Columbia disaster is now stepping down. Ron Dittemore, head of the shuttle program for the past four years, he says he had been planning to resign before the February 1 tragedy but now will stay on through the investigation.

Meanwhile, investigators today heard testimony that shuttle wings were not built to withstand heavy objects striking them, objects like the foam that hit Columbia's wing during liftoff. Pioneers of the Space Shuttle Program were questioned by the Columbia board and suggested that NASA should have taken the problem more seriously.

It has now gone from bad to worse, a billion dollar quarterly loss announced today in the latest of American Airlines' financial woes. The carrier could be headed for bankruptcy after as an executive decision comes back to haunt those who made it.

Financial Correspondent Greg Clarkin has more.


GREG CLARKIN, CNN FINANCIAL CORRESPONDENT: Don Carty thought he had it all figured out. He had spent weeks pressuring his workers at American Airlines to take steep pay cuts, give up holiday pay, vacation time. It was all about working together to avoid bankruptcy.

DON CARTY, CEO, AMR CORPORATION: Here at American Airlines we have all shared in the sacrifices necessary to restructure our costs and I have every reason to believe that by working together we will be successful.

CLARKIN: But Carty's plan backfired when it was learned American's top executives had secured their financial futures with a hefty package of perks. There was a trust fund set up to protect the retirements in the event of a bankruptcy. The workers, they were told they get layoffs in the event of a bankruptcy, as many as 10,000.

But that's not all. There were rich bonuses for Carty and his execs, double their base salaries if they'd agree to stick around for a few years. As for the pilots who are lucky enough to stick around for a few years, they'd be getting pay cuts of more than 20 percent.

So, where was the shared sacrifice? Well, Carty scrapped the bonuses but that wasn't enough. A few days later he may have set a record for CEO apologies in one press conference.

CARTY: I'm here tonight to apologize to all of American Airlines employees. I want to offer my sincere and most heartfelt apology to the men and women of this airline. I again apologize to our employees and to our union leaders and I ask for their forgiveness.

CLARKIN: The blunder has brought emotions at American to a boiling point.

RICHARD ABULARA, TEAL GROUP: I think it confirmed the worst suspicions of the workers and the unions about their management that it really wasn't in it with them, that is to say it really was removed from their day-to-day troubles and not at all interested in their economic plight.

CLARKIN: And now the flight attendants and the ground workers want to vote again on the concession deals.

THOM NULTY, FMR. AMR: It's a mess right now. The union has lost confidence in management. Management is trying to figure out exactly how to deal with this problem. CLARKIN: And one of the ways they may deal with it is by forcing Don Carty out. The board of AMR, the parent of American, meets in Dallas on Thursday and there are reports that some board members believe Carty must step aside in order to salvage labor relations at the world's largest airline.

Greg Clarkin, CNN Financial News, New York.


ZAHN: And is there a race to the bottom among those at the top? Tune in later for our special report "Good Business or Greedy Bosses." That's at 8:30 Eastern time tonight.

Other news around America tonight, going to trial, a federal appeals court is reinstating charges against two men accused of bribing International Olympic Committee officials. The payoffs allegedly won Salt Lake City the Winter Games in 2002. The charges were dismissed in 2001 by a federal judge in Salt Lake. It was the worst scandal in Olympic history and led to a shakeup of the international committee.

Defending his words, the backlash is building over Senator Rick Santorum's comparison of homosexuality to bigamy and incest. At a town hall meeting in Pennsylvania today, a gay man lashed out at the Senator but Santorum is standing by his comments even though he says they were taken out of context.

Concealed cash, New York Transit officials are struggling to explain why they begged for and got a fare increase. According to the state's comptroller an audit of their books shows that they had half a billion dollars tucked away. The audit revealed two sets of books, one for the public to see, the one it didn't. The transit agency denies there were two sets of books.

Still to come tonight, a national no fly list, all based on your name and possible ties to terrorism. Are you on it? And should there be a list in the first place, that debate coming up at the half hour mark.

Also tonight, Madonna in a brand new album with ti war messages, will the material girl become another Dixie Chick?

But first, a look at the closing numbers from Wall Street. We're back in a moment.


ZAHN: Welcome back here at the half hour mark.

The American Civil Liberties Union is suing over the government's so-called no-fly list. It is a list of people suspecting -- or suspected that is, of having ties to terrorists. The problem is if your name is on the list and you may not know it until why you get to the airport, you could be stopped from getting on a plane anywhere in the country. The ACLU suit is on behalf of two peace activists who say they were wrongly detained at San Francisco Airport because their names popped up on the list.


JANE ADAMS, PEACE ACTIVIST: There's something very disturbing about suddenly discovering you're on a list. And it sounds as if this is happening to thousands of people.

REBECCA GORDAN, PEACE ACTIVIST: It's bad enough that we were detained and held by the police in the middle of San Francisco Airport. But now the government won't tell us anything about why this happened to us, whether it will happen again.


ZAHN: The FBI says a list is needed to protect Americans and the White House is echoing that stand.


ARI FLESICHER, WHITE HOUSE PRESS SECY.: The president has every confidence that the agencies responsible for securing the homeland are acting in a way that is in accordance with the constitution and with the powers they have as well as the Patriot Act, which was passed recently with the Congress with an overwhelmingly large vote. So he doesn't worry very much about a ACLU suit.


ZAHN: Jayashri Srikantiah is an attorney with the ACLU. She joins us from San Francisco tonight.

And Michael Smerconish is a CNN contributor, an attorney in Philadelphia.

Good to see both of you.



ZAHN: Jayashri, I'm going to start with you tonight. Why do you think your clients ended up on this list?

SRIKANTIAH: Well we don't know the answer to that question. We definitely understand that all Americans want to be safer after September 11. But our question is does this list actually make us safer? Our clients aren't terrorists. They are peace activists and yet they were stopped at the airport, they were questioned and we have every reason to believe that this is happening to literally thousands of travelers across the country.

We think that the public should have accountability. We should know whether this list makes us safer or whether it's just a big waste of government resources.

(CROSSTALK) ZAHN: Let me ask you this, though because one of your clients has said she's fairly certain that she ended up on this list because of her anti-war views. Do you think that's the case?

SRIKANTIAH: Well, certainly that's something we're concerned about. We cannot think of another reason for our clients, who are longtime peace activists, to have ended up on a list of suspected terrorists. And what we want answers to is questions like does a name like our clients get on the list? How can our clients get their names off of the list? How accurate is the list? What is the government doing with the list information in terms of airlines. And that's what -- that's what we're trying to find out with our lawsuit?

ZAHN: Michael, the transportation security administration has told us that they strongly deny they put anybody on this list because of their political views. Do you think, though, that is a possibility?

SMERCONISH: No. You would have a very difficult time convincing me, Paula, that the Bush administration, through the TSA, is somehow singling out peacenicks and putting them on a watch list.

I think that law enforcement would be derelict in its duty if they did not have such a list. Now I can't answer as to why these two individuals were on the list nor if they deserved to be there. I mean, I understand that they write a peace magazine. If they've written things supportive of al Qaeda, then they deserve to be on the list. But I don't know all the facts. But do I know we need to have a list in the aftermath of 9/11.

ZAHN: Do you have a problem with having this list, Jayashri?

SRIKANTIAH: Well, let me tell you, we think that if the government does investigation after September 11, as it should, it should base that list on individualized suspicion about specific people. But we have no information about the list to know whether that's what's happening here.

What we do know is potentially thousands of people are being stopped across the country and that they're innocent, like our clients, who certainly did not publish in any magazine in support of al Qaeda, but rather are sharply critical of the Bush administration's policies. That's why we want basic information and some basic answers, because we think the public has a right to know and we have a right to know whether what our government is doing is making us safer or whether it's creating an illusion of safety.

ZAHN: Michael, if you ended up on this list -- and I'm not certainly not suggesting that you will, don't you think you would be entitled to find out why?

SMERCONISH: With a name like Smerconish, it would be hard to mistake me from somebody else, like some of the people who are on that list and have made their complaints.

I think that we owe it to the individuals who end up on the list mistakenly to be told we're sorry, it's not you that we were looking for. It's somebody else. And there was a lengthy story in yesterday's "Wall Street Journal" that detailed the means by with which we come up with these names and it's an antiquated system. I think the TSA, Paula, has bugs in its system and they need to come into the new millennium.

But having said that, I think I'd get over it. I don't think I'd run to the courthouse and ask for a check to be written to me in the aftermath of 9/11. I think I would understand...


SMERCONISH: We're fighting a war against terrorism and enough already.

ZAHN: Now Jayashri...


ZAHN: Your clients are not asking for a financial settlement.

SRIKANTIAH: We are certainly not.

ZAHN: They are simply asking to be told where they're on the list, right?

SRIKANTIAH: Yes, we're certainly not asking for any damages in this case. What we're asking for is some basic information.

And I'd like to clarify that our clients' names are Jan Adams and Rebecca Gordan. And certainly they were just as astonished as the next person to find out that their names are on this list when they have no reason to understand why they're on such a list.

As to the -- the -- the "Wall Street Journal" article that -- that Michael alluded to, I think the problem here is that the government created this list. They're responsible for the list. And now we have thousands of travelers across the country who are being stopped because of this list. Does this actually make us safer? We think the public has a right to know whether this makes us safer or whether it's just a big waste of resources to have law enforcement investigating thousands of innocent people.

ZAHN: Michael, do you have any fear big brother watching you and mistakingly ending up on this list. If the database, you're saying is as antiquated as it is, you certainly can see there will be a lot of people that end up on this list that probably shouldn't be on it.

SMERCONISH: Unfortunately, that's probably the case. I think law enforcement needs to be given better tools to do their job and every time you make the case they need to have better access to data, people start to come through with the big brother sound bites and both liberals and conservatives get frightened off. But I-- I for one think that law enforcement needs to do a better job at managing its database. But here's where I part company with your guest. When I go through an airport and I have to take off my shoes, under my breath I'm cursing Osama bin Laden. Because that's where this all began. It's not the fault of the Bush administration. And frankly, I just get a little bit tired hearing that the Bush administration did this or John Ashcroft did that. I think they're doing a pretty good job fighting a war against terrorism and it's going to ask of all of us perhaps to forego civil liberties that in the past were sacrosanct.

All right. Jayashri, you heard what Michael said a little bit earlier on, that maybe your client should just move on if they're given an apology. Would that be enough for them if someone from their government said, Oops, we did make an honest mistake here.

SRIKANTIAH: Well, what we're really asking for here is some public accountability. Our clients and we want to know and the public wants to know why people who are innocent like our clients, why their names are ending up on a list.

And the big problem here, to respond to what was said earlier, is that we don't know that any of this is making us any safer. And that's why the -- the (UNINTELLIGIBLE) lawsuit that we filed today asks some basic questions like how does the name get on the list. How can a name be taken off of the list? How many people who are stopped are actually on the list and does this make us safer? How many airlines get involved and what's the error rate? These are all basic questions that we have to know so that we can know whether our government is taking actions that make us safer or whether they're just wasting resources.

ZAHN: Michael, I'll give you about 10 seconds. Do you want some of those questions answered?

SMERCONISH: If -- if the women didn't deserve to be on the list they should be afforded an apology by the government. But I don't think they're owed an explanation in detail as to how they ended up there to begin with.

ZAHN: Michael Smerconish and Jayashri Srikantiah, thank you for both of your perspective tonight.

SMERCONISH: Thank you.

SRIKANTIAH: Thank you.

ZAHN: Appreciate you stopping by.


ZAHN: Still to come tonight, U.S. citizen or U.S. journalists? When do embedded reporters and photographers cross the line? After the break, we'll speak with a "Boston Globe" reporter who says he went to what he calls the dark side.

You're watching LIVE FROM THE HEADLINES on a Wednesday night.


ZAHN: Being impartial is one of the guiding principles of journalism. You report the facts as you see them. You don't take sides. You don't get involved, but like many ideals, true impartiality is truly very hard to live up to indeed.

One of the reporters embedded with U.S. troops during the war in Iraq was Jules Crittenden of the "Boston Herald." He did more than just observe. He joins us now to talk about impartiality and reality.

Welcome home. Good to see you.


ZAHN: In this piece, you talk about going over to the dark side. What did you mean by that?

CRITTENDEN: Well, it was a bit of a phrase that just reflects exactly what you said -- that there's the expectation that we're going to be observers, that we're not going to be participants, and at a certain point in time I found that I was crossing a line.

It doesn't -- it was not a phrase I chose to suggest that I had any misgivings or qualms about what I did. It was a phrase just playing on, I think, the expectations of the business that I had crossed the line here.

ZAHN: For people who haven't had a chance to read your article yet, what did happen to you?

CRITTENDEN: Well, we rolled into Baghdad, into the palace complex. We had been taking fire and receiving fire from the moment we entered Baghdad -- the moment we entered the outskirts.

Essentially, the column had to fight its way into the palace complex. We rolled up in front of a palace. It looked like something from Versaille, but it had these large, bizarre busts of Saddam Hussein on top of it.

I was in a 113 -- you showed the image of one, the small boxy APCs -- that afforded me a great view. There was a big hatch that several of us were standing up -- standing out of.

We looked at this palace in amazement. We looked up at it and thought, "Look at this guy. See what he's done here. The rest of the country lives in poverty, and look at these massive monuments to himself."

So it really stunned us, in a way, to see that. But we were taking fire then from hedges and ditches -- roadside hedges to our left. We turned and started paying attention to that.

There was a .50 caliber -- a guy on a .50 caliber right in front of me in the track commander's hatch. I could see something he couldn't see. I could see under the hedges in the shadows looking out of a ditch. There were three soldiers.

I said to him, "There's three of them right there."

ZAHN: And you knew at that point -- you were convinced, at that point, that they were Iraqi soldiers?

CRITTENDEN: Oh, they absolutely were. That's where the fire was coming from. Those were fighting positions. There's always a remote possibility that the gardener jumped in there on his way to work, but this was an abandoned complex and it was quite clear that the only people around us were either combatants or people who made a very bad mistake that morning. I had no question in my mind about that.

ZAHN: And because of you alerting the troops to that, these three Iraqi soldiers ended up getting killed?

CRITTENDEN: Well, he opened fire. He still couldn't see where they were. I said a little bit more to the left.

The bullets ripped up one soldier. I saw that. It's a sight that I'm never going to forget.

There were two others. They were sticking their heads up. They were looking at us. This was happening. They continued to look at us, and he opened up on them. He killed them as well.

ZAHN: I know you have been criticized by some who have read this piece and some are aware of what you've been through. But what is it that people expected you to do -- ignore the fact that the troops you were with, and your life as well, as being in peril that you could have died there?

CRITTENDEN: Well, this is what happens when you get into combat -- is that a lot of the lines end up getting blurred. I was in an American vehicle. I'm an American. I was riding with them. I was eating their food. I was taking the same fire that they were taking. This is a lightly armored vehicle. If it had been hit by anything, which was a real threat on many occasions, we would have all been killed. The Iraqis would not have distinguished between us. And so I really had no question, no qualms.

I've received very little criticism. You know, a couple of sort of nagging e-mails from people out there. A couple of ethicists who've sort of pondered the deep questions, but among my peers -- people who have been in the same situation -- we're starting to hear more stories like this from other embedded reporters.

We know that people like Joe Galloway, author of "We Were Soldiers," went beyond that. He picked up a rifle.

I never did that. I had a rifle available to me if I wanted it. They always let me know there's one right there if you need it.

I told them I'm ready to use it if we have to bail out. If we get into that situation, I'm ready to use it. Don't worry. I'm not going to throw up my hands and say, "I'm a journalist" and let the people that I was riding with die -- without joining them in whatever their fate may be.

It was a different kind of assignment. I'm not saying that I would necessarily act the same way if I was in a conflict where I was not embedded with troops, where I had not chosen to ride with them, where I was not linked to them by -- in many ways -- our fate was linked. I'm an American as well, and I don't want lose sight of that. .

ZAHN: You also had more controversy surrounding you because of some of the things you brought back from the country from Iraq. You declared them as war souvenirs at Logan Airport. They were confiscated. Why?

CRITTENDEN: Well, apparently what they tell me is there's a policy that nothing is coming out of Iraq -- that everything out of Iraq is contraband.

You know, there's very legitimate concerns which I share about Iraqi cultural heritage, Iraqi valuables, the world's heritage -- cause that's the cradle of civilization.

The items that I brought back were included. Images of Saddam Hussein which were being destroyed wholesale by both the Iraqi people and the United States military. These are items that came from, in some cases, active battlefields, destroyed palaces from the rubble. Or there was also military equipment which came from the kind of thing that you might give to a friend or a colleague or something like that -- or keep as a keepsake.

These came from battlefields where we fought. I'm sorry. I did not fight. The men that I was riding with fought. I shared their hazards -- some vigorous actions where we all faced the danger of death or injury. It's a time-honored tradition.

ZAHN: Well, we thank you for sharing your story with us tonight. And we should probably should make a little footnote, Jules, that today was the day we first saw the first criminal charge for bringing objects allegedly looted from Baghdad back into the United States. Of course, that did not involve you, and the items you were talking about. And again thanks for dropping by tonight, Jules Crittenden, from the "Boston Herald."

Still to come this evening the material girl has a new album out, Madonna and the one thing you thought you'd never heard her say, and the video you'll never see. Find out right after the break.


ZAHN: In the past popular musics haven't worried too much of being politically correct or pushing the limits. These days some of them may be singing a different tune. Anderson Cooper looks at Madonna's new album and what it is not saying.


ANDERSON COOPER, CNN CORRESPONDENT (voice-over): Once upon a time when Madonna released a new album, she'd also unleash a new controversy.

So what happened?

Her new cd, "American Life" was just released, but the controversial video wasn't.


COOPER: Here's a peek at what you won't see on MTV. A militaristic Madonna camping out against a camouflaged car, singing against an a backdrop of an American flag.


COOPER: Madonna says the video's message was anti war, but with a war under way the fear was it would be interpreted as anti-American so a new video was created. Same Madonna singing, but not in front of an American flag, gone, too, the camouflage and the groping and grinding. The message, whatever it is, is now muted.


COOPER: So what does the new mild Madonna have to say about this.

MADONNA, ENTERTAINER: Just being provocative for the sake of being provocative doesn't interest me right now.

COOPER: What! Wait a minute. Did she say what I thought she said.

MADONNA: Just being provocative for the sake of being provocative doesn't interest me right now. I'm not interested in the hype that's surrounding the video.

COOPER: Not interested in hype. Hype was once Madonna's greatest hope. It was her business plan. The more she infuriated -- the more money she made -- and the more CDs she sold. Some 140 million albums in 20 years.

MADONNA: Thanks to everyone watching out there tonight.

COOPER: Why is Madonna now pulling the punches? perhaps it's because she's seen what's happened to other singers who hadn't.

Remember Sinead O'Connor?

Come on think hard.

She hasn't done much since tearing up the picture of the pope on "Saturday Night Live."

SINEAD O'CONNOR, ENTERTAINER: Fight the real enemy!

COOPER: And look at what happened to the Dixie Chicks. They tumbled in the charts after criticizing President Bush during a concert. Maybe Madonna's latest move is simply smart business. Maybe a sign of maturity.

MADONNA: Oh, my god.

COOPER: After all it was 1983 when she first was on the pop scene.


It's now 2003. She's married, a mother, for Pete's sake, she can't be crawling around in an old wedding dress, now can she?


COOPER: There's no telling how long this new, milder Madonna will last. A new metamorphosis may just be another album away.


COOPER: But for now it seems Madonna has figured out a truly unique way to create controversy by not creating controversy at all.

Anderson Cooper, CNN, Atlanta.


ZAHN: Pretty impressive curtsy there, huh?

For whatever you think of Madonna you can't doubt her business acumen.

There's much more ahead in the next hour of LIVE FROM THE HEADLINES. Tonight is there a race to the bottom from those at the top. Good business or greedy bosses? That's coming up next. We'll take a quick break.



ANNOUNCER: Corporate greed. Think big-time CEO pay is out of control? Wait till you see what these guys get when they retire.

SARS, the epidemic that won't stop. The World Health Organization blames air travel and issues new warnings, leaving some Americans trapped in Hong Kong.

Palestinian power play. A deal between Yasser Arafat and his prime minister-designate ends a power struggle. How will this influence the U.S. vision of a new Middle East?


PAULA ZAHN, HOST: Good evening, and welcome. Glad to have you with us tonight.

Also tonight, the oil is flowing again in Iraq, while a major company announces huge losses. And that could put an airline boss's job on the line.

In our second half hour, former GE CEO Jack Welch will be joining us as we look into some of the problems some companies are facing here in the States. Is it good business, or greedy bosses?

But first, tonight's timeline begins at 6:00 a.m. Eastern with an update on the growing problem of SARS around the world. The World Health Organization, as you just heard, says people should avoid unnecessary travel to Beijing and other provinces in China. China's Guangdong Province and Hong Kong were already on that travel advisory list.

Also going onto the list, Toronto, Canada, where 16 people have already died from SARS.

Authorities in Beijing have closed elementary and secondary schools for two weeks in an effort to stem the spread of the disease. The shutdown affects some 1.7 million students.

A Muslim cleric is suspected of ties to the al Qaeda terrorist group goes on trial. He faces charges of treason in Indonesia. That happened during the 6:00 hour. Aba Bakar Ba'asyir (ph) has been tried for his alleged role in a series of terrorist church bombings. The blasts killed at least 16 people on Christmas Eve in the year 2000.

Indonesian prosecutors accuse Ba'asyir of being the spiritual leader of the militant group Jemaah Islamiah (ph). The group is suspected of being linked to al Qaeda.

Well, the oil is flowing in Iraq once again. That news came around 7:00 this morning. The first oil will be used for domestic needs. Retreating Iraqis sabotaged some wells, but repairs are ahead of schedule. One official says the fields could produce 800,000 barrels a day by mid-May. The general in charge of restoring Iraq's oil infrastructure says getting back in the oil business is important for the Iraqi people.


BRIG. GEN. ROBERT CREAR, U.S. ARMY: Now, this is for the Iraqi people. That's the (UNINTELLIGIBLE) -- that's why we're doing this. And I think you can see for yourselves that none of this will be exported. Right now, the concern is domestic, and that's the production that we have brought online. The system itself is not fully up yet, but we've figured out a way to do it in such a way to alleviate some of the suffering.


ZAHN: Moving into the 8:00 hour, the U.S. military acknowledges holding teenagers at Guantanamo Bay, Cuba. Officials say three of the 660 detainees being held at the U.S. naval base are between the ages of 13 and 15. The three were taken into custody in Afghanistan, have been at Gitmo since the first of the year. They are, we are told, being held separately from other prisoners. Then in the 10:00 hour, a huge loss for a company already treading water. The parent company of American Airlines, AMR, announces a loss of over $1 billion for the quarter. It says a drop in travel demand, due in part to the war in Iraq, hurt its bottom line. The announcement comes amid growing acrimony between the airline's management and labor unions.

Greg Clarkin reports.


GREG CLARKIN, CNN FINANCIAL NEWS (voice-over): Don Carty thought he had it all figured out. He had spent weeks pressuring his workers at American Airlines to take steep pay cuts, give up holiday pay, vacation time. It was all about working together to avoid bankruptcy.

DON CARTY, CEO, AMR CORPORATION: Here at American Airlines, we have all shared in the sacrifices necessary to restructure our costs. And I have every reason to believe that by working together, we will be successful.

CLARKIN: But Carty's plan backfired when it was learned American's top executives had secured their financial futures with a hefty package of perks. There was a trust fund set up to protect their retirements in the event of a bankruptcy.

The workers? They were told they'd get layoffs in the event of a bankruptcy, as many as 10,000.

But that's not all. There were rich bonuses for Carty and his execs, double their base salaries if they'd agree to stick around for a few years.

As for the pilots who were lucky enough to stick around for a few years, they'd be getting pay cuts of more than 20 percent.

So where was the shared sacrifice?

Well, Carty scrapped the bonuses, but that wasn't enough. A few days later, he may have set a record for CEO apologies in one press conference.

CARTY: I'm here tonight to apologize to all of American Airlines' employees.

I want to offer my sincere and most heartfelt apology to the men and women of this airline.

I again apologize to our employees and to our union leaders. And I ask for their forgiveness.

CLARKIN: The blunder has brought emotions at American to a boiling point.

RICHARD ABULAFIA, TEAL GROUP: I think it confirmed the worst suspicions of the workers in the unions about their management, that it really wasn't in it with them, that is to say, it really was removed from their day-to-day troubles, and not at all interested in their economic plight.

CLARKIN: And now the flight attendants and the ground workers want to vote again on the concession deals.

THOM NULTY, FORMER AMR EXECUTIVE: It's a mess right now. The union has lost confidence in management. Management is trying to figure out exactly how to deal with this problem.

CLARKIN (on camera): And one of the ways they may deal with it is by forcing Don Carty out. The board of AMR, the parent of American, meets in Dallas on Thursday, and there are reports that some board members believe Carty must step aside in order to salvage labor relations at the world's largest airline.

Greg clarkin, CNN FINANCIAL NEWS, New York.


ZAHN: And we hope you stick around for our next half hour. Good business or greedy bosses? We're going to take a look at the uproar lately over extravagant perks for corporate executives. Our special guest, former GE CEO Jack Welch.

In the 10:00 hour today, a breakthrough in the West Bank. A deal is reached ending the power struggle between Palestinian leader Yasser Arafat and the man soon to assume the post of Palestinian prime minister.

Kelly Wallace reports from Ramallah.


KELLY WALLACE, CNN CORRESPONDENT: It was a dramatic day of last- minute shuttle diplomacy, most of it taking place here at what's left of Yasser Arafat's rubble-strewn compound. And it appears the intense international pressure ultimately forced the Palestinian president to back down.

Most of the credit for brokering this deal is going to the Egyptian envoy, Omar Sulaiman (ph), who was shuttling between the two men throughout the day, and who ultimately brought Abu Mazen here to Ramallah, to the compound, to finally shake hands with Yasser Arafat on this last-minute compromise.

The compromise centered around one man, Mohammad Dahlan (ph). Abu Mazen wanted him to head up security in his new cabinet, but he is someone who fell out of favor with Yasser Arafat last year.

In the end, a compromise the two men apparently can live with. Abu Mazen will be interior minister as well as prime minister, and will have total control, really, of security, but Mohammed Dahlan will be in a new position, minister of state responsible for security affairs. The stakes were intense, because the United States and Great Britain have been saying for weeks now that they would not publish the so-called road map for a Middle East peace deal until Abu Mazen's cabinet was approved by the Palestinian parliament and sworn in.

What has to happen now? The Palestinian parliament must discuss and approve Abu Mazen's cabinet. The parliament is expected to meet as early as Sunday.

I'm Kelly Wallace, CNN, reporting from Ramallah on the West Bank.


ZAHN: When the timeline continues, who's trying to influence the future of Iraq?


ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: And we have made clear to Iran that we would oppose any outside organization's interference in Iraq, interfering with their road to democracy.


ZAHN: Are there agents of influence inside Iraq?

And then this...


DR. GABRIEL UWAIFO, WASHINGTON HOSPITAL CENTER: While cigarettes are clearly marked, This could be dangerous for your health, people need to realize that a high-fat diet over a long period of time could just be as dangerous.


ZAHN: The latest skinny on fat. Straight out of the break.


ZAHN: Returning to the timeline at noon Eastern, and the opinion of the British defense minister. Jeffrey Hoon (ph) says he thinks Saddam Hussein is alive and still inside Iraq. Hoon concedes that there is no conclusive evidence about Saddam's fate, but, he says, the search goes on for Saddam and other former Iraqi leaders who are still at large.

And then in the 1:00 hour, a warning from the White House to Iran -- stay out of Iraqi politics. White House spokesperson Ari Fleischer says Iraq is on the road to democracy, and that the Iranian government should not get in the way.

John King joins us now from the White House with more. Good evening, John.


As we have seen in recent days, that road to democracy is indeed a rough one. The United States already worried about the emergence of Shi'ites by the tens of thousands into the streets of Iraq. On the one hand, the White House celebrates their expression of freedom, saying that never could have happened under Saddam Hussein.

On the other, though, there is concern here at the White House that what could come next is a fundamentalist Islamic regime that does not like the United States. This postwar politics stage in its earliest phase right now.

And the White House says it has disturbing evidence that Iranian agents have entered several cities in the south of Iraq, trying to stir things up and trying to exert influence on what happens next, on what type of government comes after Saddam Hussein.

White house press secretary Ari Fleischer says that is interference, and he made clear today it is most unwelcome.


FLEISCHER: We note that some recent reports about Iranian activities, and we have made clear to Iran that we would oppose any outside organization's interference in Iraq, interfering with their road to democracy. Infiltration of agents to destabilize the Shi'a population clearly fall into that category. And that is the position that we've made clear to the government of Iran.


KING: Now, relations between Washington and Tehran, of course, are quite tense. There are no straight government-to-government contacts. But the message has been delivered, we are told, through Bush administration envoys both before the war, and now again in recent days, that the United States is watching closely, and it does not like what it sees. Its message to Iran is simply, Back off, Paula.

ZAHN: So John, what is your understanding of what the White House strategy will be, particularly when you talk about these Iranian agents they believe are already in Iraq and on the ground working?

KING: It's one of the reasons the administration's approach is to go slow. You will see more town meetings in and around Baghdad, more in the south, where the Shi'ites have been most prominent in coming into the streets. There have been reports, including some exclusive reporting by our Jim Clancy today, about this man who claims to be the governor of Baghdad.

The administration says it needs to weed out, if you will, who is real and who is legitimate, who from within Iraq has public support of the people of Iraq. They say that process will take some time. That's why they say they don't want this unwelcome outside interference. Others, of course, including many Iraqis, say, Well, who is the United States to say that? Because it is the United States right now picking and choosing who gets to participate in these planning meetings.

ZAHN: John King, thanks so much.

We're going to move on to 5:00 p.m. Word that four more former Iraqi leaders are in custody.

The highest-ranking official is number 10 on the most-wanted list, Muzahim Sa'b Hasan al-Tikriti, former head of Iraq's air defenses.

Number 21 on the list is Zuhayr al-Naqib, Iraq's director of military intelligence. He turned himself over to U.S. officials.

Iraq's former trade minister, Muhammad Mahdi al-Salah -- (UNINTELLIGIBLE) -- excuse me, Salih, number 48 on the list, was captured today. Also captured by U.S. forces, the former chief of Iraqi intelligence services' American desk.

Now, in the 5:00 hour, more reason to shed those extra pounds. Yet another study furthers the link between obesity and cancer. According to researchers, losing weight could actually prevent one out of every six cancer deaths in the United States, or more than 90,000 every year.

Christie Feig (ph) has more.


CHRISTIE FEIG, CNN CORRESPONDENT (voice-over): Glenda Camara has lost almost 45 pounds in the last six months. She's doing it for her three kids.

GLENDA CAMARA, WEIGHT LOSS PATIENT: I need to, one, be around for them, and I know that, you know, being obese can cause a lot of health issues. And two, I need to be able to get out with them and participate in different activities with them.

FEIG: In shedding the pounds, she may get an additional benefit. A new study shows being overweight increases your risk of many cancers.

EUGENIA CALLE, AMERICAN CANCER SOCIETY: The heaviest men and women in our study were 50 to 60 percent more likely to die from cancer than the men and women of normal weight.

FEIG: That's because fat seems to raise the level of certain hormones that are linked to cancer. But with some cancers, just being heavier puts you at risk.

DR. GABRIEL UWAIFO, WASHINGTON HOSPITAL CENTER: While cigarettes are clearly marked, This could be dangerous for your health, people need to realize that a high-fat diet over a long period of time could just be as dangerous.

FEIG: The U.S. government says two-thirds of American adults are overweight, and that number is expected to rise in the next five years.

UWAIFO: Twenty percent, 30 percent of people who go on a diet can actually lose weight and keep it off.

FEIG: The only way to guarantee success is change your lifestyle to make sure you're burning more calories than you're eating.

In Washington, I'm Christie Feig.


ZAHN: After the break, our timeline picks up with what's going on right now, including a look at the end of a historic pilgrimage. After decades of suppression, religious freedom comes to Karbala. Stay with us.

ANNOUNCER: CNN's complete coverage of today's headlines.

A closer look at bringing democracy to the Middle East.

Plus, concern over SARS brings new travel cautions.

And from the palace walls to checked luggage -- how stolen loot from Iraq ended up in the U.S.

These stories and more tonight at 10:00 Eastern. Stay with CNN, the most trusted name in news.


ZAHN: In the 6:00 p.m. hour, an update on the health of five former POWs. Doctors say the soldiers stationed at Fort Bliss, Texas, are in great shape and good spirits. They're going to get 30 days of convalescence leave. The five members of the army's 507th Maintenance Company were held for three weeks by the Iraqis, and they returned to Fort Bliss last Saturday, which is the scene you're watching now.

One member of their unit is still listed as missing in action. Since the start of the war, 132 U.S. troops have been killed, another 495 have been wounded.

During the 7:00 p.m. hour Eastern time, new information came to light about a U.S. Navy pilot shot down during the first Gulf War.

Senior Pentagon correspondent Jamie McIntyre is standing by at the Pentagon with some of these late details. Good evening, Jamie.


Well, an intriguing, although inconclusive, clue to what might have happened to Michael Scott Speicher. He is the Gulf War pilot, the Navy pilot, who was shot down in the first Gulf War. Initially, it was thought he was shot down and killed, but eventually the U.S. figured out that he was probably captured by Iraqis.

And survey teams have been looking around Iraq now for evidence of what happened to him. And what they have found is, in a Baghdad prison, they found the -- what appear to be the initials MSS, for Michael Scott Speicher, scrawled on the wall of one of the prisons.

Now, that's fairly inconclusive, except that Pentagon sources say that this corroborates some testimony given by an informant who claimed that Scott Speicher had been held at that prison facility somewhere in the early '90s.

Now, what this shows, if it's true, is that he may have well been alive back in the early '90s. But what they don't know is what's happened to him since then.

The U.S. is not sure if he's still alive, but they are convinced that the Iraqi officials who were in charge know what happened to him and if he's still alive. They're hoping that as they go through this list of the 55 most wanted, that they'll eventually be able to find someone who will help them find either Scott Speicher or to be able to account for what happened to him, Paula.

ZAHN: As I understand it, Senator Bill Nilson -- excuse me, Nelson, was among those briefed. Do you have any idea what he had to say after that briefing?

MCINTYRE: Well, I did talk to him briefly as he was heading to the airport, and he told me that he's still convinced that Scott Speicher is alive, although he said they haven't found any new evidence since they've been in Iraq that indicates he's still alive.

But as I said, some of this evidence would indicate that at least some of the sightings or information they got from informants may have been accurate. They're considering still continuing to pursue those clues.

And I think Senator Nelson shares the view that the key to finding Scott Speicher is finding one of the Iraqi officials who knows what would have happened to him.

ZAHN: Well, Captain Speicher's family has long believed that that was the case. I guess this adds more fuel to what they've been arguing about for a while. Jamie McIntyre, thanks so much.

Our timeline ends in Karbala, Iraq, tonight, where Shi'ite Muslims marked the climax of a historic pilgrimage. As many as 1 million Shi'ites participated in the pilgrimage to that town, honoring a martyr killed 1,300 years ago. When Saddam Hussein was in control of Iraq, the Shi'ites were suppressed. They weren't allowed to do this. This was the first time since the 1970s that the pilgrimage has gone unimpeded.

Many Shi'ites used the Karbala pilgrimage to demonstrate for the establishment of an Iranian-style Islamic government in Iraq. That has some Americans observers worried.

State Department correspondent Andrea Koppel reports.


ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT (voice-over): Scenes of ritual mourning, as an estimated 1 million Iraqi Shi'ite Muslims marched to Karbala's holy shrine, a religious demonstration with political undertones.

"We need a national Iraqi government chosen by the people," says this pilgrim. "We don't need or want a United States or any other foreign presence in our country."

At the White House, officials downplayed these anti-American outbursts.

FLEISCHER: That there is some reporting that shows whether the Iraqi people and the Shi'ite people and people around Karbala and other regions really want is to have control of their own future. And that's what we want as well.

KOPPEL: Iraqi Shi'ites, 12 million strong, make up 60 percent of all Iraqis. And while experts agree the anti-American sentiment expressed by these Shi'ite pilgrims may only speak for a small fraction of Iraq, they also note some Shi'ite clergy who want an Islamic republic in Iraq are rapidly filling a power vacuum.

MARINA OTTAWAY, CARNEGIE ENDOWMENT: Nobody had any idea about how strong the hold of Islamist organization was among the Shi'ite population. And I think that is what has surprised the U.S. government at this point.

KOPPEL: The question is, how can the U.S. prevent Iraq from becoming another radical Islamic republic like neighboring Iran?

OTTAWAY: And I'm sure that the U.S. will be looking around very hard in the coming months for Iraqi leaders, for Iraqi political organization, that are not Islamist, and that can be supported by the U.S. And there will be certainly an attempt to create a strong political competition to the Islamist parties.

KOPPEL: One figure some U.S. officials hope might bridge the divide, exiled leader Ahmed Chalabi, an Iraqi Shi'ite who favors democratic principles.

(on camera): The White House says it expects Iraq to have a Muslim leader, but said it hopes its new government would be modeled after Turkey, a Muslim democracy, which, until recently, kept religion out of politics.

Andrea Koppel, CNN, at the State Department.


ZAHN: Well, it's a tough economy, and for some workers, that means a few sacrifices, maybe even a pay cut. But some of those sacrifices stop at the top. Coming up, good business or greedy bosses? Why are some executives still getting big perks when company performance is way down? We'll take a look.

Former General Electric CEO Jack Welch will be dropping by. We'll hope you'll join us on the other side of this break.


WHITFIELD: Hello, I'm Fredricka Whitfield.

At this hour, government records show traffic deaths in America last year reached the highest level since 1990. Drunk driving and motorcycle crashes account for most of the increased fatalities. Nationally, 42,850 people died in traffic wrecks in 2002. At that rate, about five Americans will die on the roads during this hour's newscast alone.

The submarine U.S.S. "Newport News" is back in its home port at Norfolk, Virginia, after service in the Iraqi war. Hundreds on shore cheered as 148 sailors aboard the fast-attack ship arrived today. Another sub, the U.S.S. "Boise," returned to Norfolk from the war last week.

Major league baseball is taking steps to protect players against SARS. It's advising players when in Toronto to avoid crowds. In Toronto, the virus has killed 16 people. Players will be told not to sign autographs, visit hospitals, or use public transportation, either. Ten teams are scheduled to visit the hometown Blue Jays between now and mid-July.

And tourists will once again be able to walk the halls of the U.S. Capitol building. Public tours of the Capitol will resume later this week. officials say with the war in Iraq winding down, security will be able to handle the extra visitors. Public tours had been shut down since the war started.

Those are the latest developments at this hour. LIVE FROM THE HEADLINES WITH PAULA ZAHN continues right now.

ANNOUNCER: More trouble in corporate America. CEO pay up, company performance down. What's the role of the CEO? We'll ask Jack Welch, what's the responsibility of the CEO?

And what do companies really owe their employees?

UNIDENTIFIED MALE: Trust has been violated, but not only with this pilots' group, but every working family at American Airlines.

ANNOUNCER: Is it all about the bottom line?

Today in the headlines, good business, or greedy bosses?

ZAHN: Welcome back.

When we talk about corporate greed, we should make a few things clear. Almost everyone would like to make more money. Not everyone is greedy. And there is no magic, objectively perfect ratio of CEO pay to worker pay. The fundamental issue seems to be fairness.

And Andy Serwer looks now at what some CEOs consider fair and how some of them end up sorry.


ANDY SERWER, CNN CORRESPONDENT (voice-over): These days, sorry seems to be the easiest word for the nation's CEOs.

DONALD CARTY, CEO, AMR: I again apologize to our employees and to our union leaders. And I ask for their forgiveness. I'll learn from the mistake and I'll be a better person because of it. But far more important than that, American will be a better company for its employees.

SERWER: But if you ask employees at American, it might be too late for laments.

And then, of course, there are the CEOs of companies that stand accused of massive fraud and malfeasance: Enron, Tyco, Adelphia, and WorldCom, which became MCI. Last year, when a 22 percent drop in the S&P 500 sent 401(k)s reeling, the men and women in the corner office were raking it in. According to a study commissioned by "Fortune" magazine, the average CEO took home a 14 percent pay raise over the year before, pulling in over $13 million in compensation.

But that's just a drop in the bucket for some CEOs. Steve Jobs of Apple Computer plucked $78 million from the company in 2002, according to "Fortune." Apple's stock plummeted from the tree, down 35 percent. And Cisco Systems, a onetime darling of the tech sector, gave John Chambers almost $55 million. And over at Alcoa, the CEO took home 25 million bucks. Today, some of its aluminum workers in Texas, New York, and Washington state found out they're about to lose their jobs.

It's the new-era no-fault CEO. It seems, no matter how bad their companies are doing, they're still raking in millions of dollars. Now Americans are asking if it should be a level playing field. If they're making sacrifices, why aren't their bosses?

Andy Serwer, CNN, New York.


ZAHN: What focuses attention on CEO compensation is not so much the gaudy perks and high pay that some executives get, but the juxtaposition of those benefits with wage cuts that many employees have to accept.

At American Airlines, unions were asked to accept hundreds of millions of dollars in wage cuts and other concessions, and then American officials revealed that it was funding retention bonuses for its executives and an executive pension fund. Let's get Jack Welch's take on all of this. Welch not only led the General Electric team as CEO. He has served as a consultant to a small group of Fortune 500 CEOs.

He joins us tonight from Washington.

Good to see you again, Jack. Welcome.

JACK WELCH, FORMER GE CEO: Hi. How are you, Paula?

ZAHN: I'm fine. Thanks.

I don't know how much of our broadcast you've been able to hear tonight, but we've been talking about Don Carty quite a bit. And we have reported that some board members on the AMR board are talking about yanking him at their next meeting. Is it time for Don Carty to go?

WELCH: Well, I'm not in the business of taking CEOs in or out. I do think, though, the airline industry faces a dilemma in total and that Mr. Carty, Don, and lots of others have tried to retain employees, tried to keep companies out of bankruptcy. And it's been a tough situation.

ZAHN: So you don't think his sin, perhaps, was accepting the retention package, but not going public with it until such a critical time in the security filings for the company, at a time when he was asking his workers to share the pain?

WELCH: Look, I think Don Carty's one of the best executives in the airline industry. The industry is under siege. He tried to keep his employees.

And he made a mistake. He didn't put all the cards on the table when the union was voting. And the union and the employees weren't part of the decision. And he's apologized, as your show has pointed out, as I've seen several times tonight. He's apologized. He made a mistake. And mistakes have been made by everyone, I guess. And Don is -- he's the first to admit it, I guess.

ZAHN: Now, I know we all have to concede everybody makes mistakes. But you've heard his workers suggesting that he withheld this information. Do you see any evidence of that? Or do you think it's just a case of some P.R. and not thinking about how this would look to the workers?

WELCH: No, I'll take him at face value, that he made an honest mistake.

But I don't know. And the employees -- look, if you're running a story and you're getting the counterstory, of course -- I think the vote was close, even. So before they even knew that, you could have got 40 percent of the vote to say they didn't like the deal. So, I mean, it was a problem before that came out. It was a close vote, as I understand it, with the flight attendants. ZAHN: Well, let's move on to some of the news surrounding your old company today. You probably weren't crazy about this story. But shareholders today narrowly defeated a resolution at the company's annual meeting that was designed to curb executive golden parachute packages like you got. And one of the shareholders talked to your successor and said, "What we did for Jack Welch was absolutely disgusting."

WELCH: Now, that's -- that's a shareowner's view. And that's what shareowners have a right to say. Obviously, I didn't get a golden parachute, or I didn't get a severance package.

In 1996 -- I've been over there since -- kind of boring now -- but I got a retention package. And I forgave, forsaked, forsook -- whatever the word is -- hundreds of millions of dollars to continue the lifestyle that I had. In return, after a bypass, I agreed to stay with GE for five years. Now, we can all look back and say, you should have taken the money, Jack, or you should have done that. I did it. In the times I was in, I gave it back. I've written about it. It's water under the bridge. It's over.

ZAHN: But once you see something like this come out at an annual meeting of your old company, do you suspect this will become a question that a lot of shareholders ask at other corporations in America?

WELCH: Have you been to annual meetings?

ZAHN: I have not had the pleasure of doing that, I must say. I haven't had much free time lately.

WELCH: Well, but if you go to one, you'd understand it. I mean, it's people -- I've never been to one where my pay was right or their pension wasn't too low.

I mean, you opened your story tonight -- and it's one of the parts of America that's great. People want more and they want other people to have less. It's part of the system. And at an annual meeting, every year I went, they complained about executive salaries, even though the team that I managed increased shareowner value at one point to $600 billion that shareowners received, with the largest shareowners being employees.

And they always said that their pensions were too low. But that's the way it goes. And it's a free-market system, Paula. And it's one of the great things about our country, that you can go from the shop floor to the executive office. You can be first generation college. You can be all those things. You can have computers that cost $10,000 five years ago cost $600 now because of competition and free market.

And taking the free out of the free market doesn't make sense to me or I think to you. So...

ZAHN: Well, let's talk more about all that on the other side. We're going to take a short break. If you wouldn't mind standing by, someone's going to put a little commercial in here.

And we'll be back to continue our conversation with Jack Welch.


ZAHN: Welcome back.

So, aside from legal and contractual obligations, what responsibilities do CEOs have to shareholders, to employees? And why should employees act like part of a team if their CEOs do not?

Former GE CEO Jack Welch is back with us.

Now I'm going to let you play shareholder now. Do you want to analyze some statistics for us tonight, starting off with Steve Jobs, the CEO of Apple Computer? We're going to put up on the screen what his compensation was for 2002: $78.1 million, even though the shareholder return dropped 34.6 percent. Should that kind of disparity exist?

WELCH: Steve Jobs did a incredible job of bringing Apple back from the dead. Apple was a done company. This guy left Pixar, which he started, came back to Apple, which he had been one of the founders, and brought it back from the dead and made it a competitive force again.

Now, thousands of employees have jobs because of that. No one can say what number is exactly right any one year. And taking consideration of stock options granted in any one year, of stock exercised in any one year, Paula, just isn't right. It's over a long- term period that you have to evaluate that.

For example, in my case, it's been 10 years. I've owned options for 10 years. Some of them, I have to exercise this year. They were at $8. GE stock is at $30. So GE stock has more than tripled. I got options over the last two or three years that were in the $45 to $50 range. Those are worthless. So, any one year, the market can be down. But over a 10-year period or a five-year period, you've got to give Steve Jobs credit for resurrecting a dead company.

Now, whether the 78.1 is perfect and the right number in absolute terms, no one can pick the right number. It's the free market system at work, with a leader who took a company from the dead and brought it to life.

ZAHN: Yet, on the other end of the spectrum, you see another one of the men you greatly admire, Warren Buffett, CEO of Berkshire Hathaway, whose total compensation for the year 2002 was $296,000, while the shareholder return dropped 3.8 percent.

Do you think that that's a practice that should be more prevalent? Or, once again, do you say you've got to look at this over a 10-year period in company performance?

WELCH: No one has more respect for Warren Buffett than I do. I think he's as smart a man as ever lived on this Earth. Warren Buffett has something like $35 billion because of Berkshire Hathaway. What he gets in a bonus or doesn't get in a bonus means nothing. It's a whole different company, a different concept, a different -- he's the owner, in many ways. God bless him. He's a good, smart person. But I'm not going to get into an argument about his compensation vs. Steve Jobs' compensation. They're two different people doing two different things with two different net worths.

ZAHN: Well, you've heard so much the discussion about people trying to evaluate what the ratio should be. Is there any formula you would ever be comfortable looking at as a broad range of what CEO pay should be compared to what profitability of the company is?

WELCH: Paula, you're one of the great people in the industry. Should you have a ratio of pay to the cameraperson who's right in front of you? Is that what you want? Is it really what we should have in America?

ZAHN: Bruce is one of my favorite guys in the world. I think he deserves every penny he can get, Mr. Welch.


WELCH: And so do I. And so do I. I'm happy for Bruce. And I hope Bruce makes a lot of money. And I hope he does a great job and has a marvelous career, Paula. But I don't think some legislator or some rules should govern Bruce's right to the American dream.

ZAHN: You know, I think he's going in for a pay raise tomorrow. He's hearing all this. He's laughing it up.

WELCH: Good.

ZAHN: Just a final thought from you. The last time we spoke, I think at Christmastime, you were sounding a little more optimistic than some of the economists out there about the economy. What are you reading in the tea leaves now?

WELCH: No, I think I was at that time on the other side of the coin, as I've been for several months. This is a very tough economy. The global competition is brutal and there's no pricing power. There's overcapacity everywhere. And it's just tough in the manufacturing sector.

I do think, though, we'll recover. We have a great economic foundation. I personally hope much of the president's growth package gets approved, so that we get jobs back and we get growth back in the economy. But we'll have to see. I think we're floating along at a relatively level pace.

ZAHN: Now, I want you to be honest about this one. What do you miss most about being a CEO? Do you miss those annual shareholder meetings?


WELCH: Not a thing. I'm having the time of my life.

ZAHN: Well, we are glad you are happy and delighted you could spend some time with us tonight. Jack Welch, again, thanks for dropping by.

WELCH: Paula, thanks so much.

ZAHN: Good luck to you.

WELCH: Thanks.

ZAHN: Well, when we come back: At what point does profiteering go too far, or is there no room at all for ethics in a market economy? We're going to get some answers from "Fortune" magazine's Andy Serwer right after this short break.


ZAHN: Welcome back.

Suppose for a minute that it was fair for CEOs to make 500 times what their employees make and that still wouldn't answer the question: Is it good business or is it just rich guys making themselves richer because they can, or rich gals making themselves richer because they can?

Andy Serwer is back to discuss that question. We have to include both genders here.

SERWER: Yes, we do.

ZAHN: We also have Charles Elson, chair of the Center for Corporate Governance. That's at the University of Delaware. And he joins us tonight from Wilmington.

Good to see you as well.

So, Charles, tell us a little bit about what you think is fair, comparing what you think is legitimate CEO compensation to -- comparing it to the profitability of the company.

CHARLES ELSON, UNIVERSITY OF DELAWARE: Look, the point of compensation, it's to compensate you for work done and to incent you for the future.

And it ought to be the result of an active negotiation between you and the board of directors. The problem is, in most companies, the boards are many times in the pockets of the CEO, so it's a one- sided negotiation. It's kind of like going into a car dealer and paying sticker price. If you do, you're a little out there.

I think the same thing here. The problem is, people ask for a lot and boards are pretty pliant and they give it to them. And that's why we're seeing the, I think, problems we're seeing.

ZAHN: You've seen evidence of that at the annual shareholders meetings you've covered over the years.


ZAHN: Is there anything that's going to change that?

SERWER: Well, I think it will.

And I think the point here, it's a question of degree, Paula. I'm not saying that CEOs don't deserve to get paid millions of dollars, even. They've got tens of thousands of employees, billions of dollars of revenue. It's a question of degree. I think $70 million, $80 million is too much money, quite frankly. I don't think it should be legislated.

And the other point is, it really is true that, when the stock of these companies goes down, when the companies crater and these guys are getting paid tens of millions of dollars, that's unconscionable that the stock's going that way and their pay is going up. The gap between what CEOs is making and the average American worker has never been greater. And that I think everyone would agree, even Jack Welch, is bad for America.

ZAHN: Charles, can you give us an idea of the percentage of the companies where the CEO pay is tied to company performance?

ELSON: Well, everyone ostensibly does it, but, in reality, I don't think it is.

There's the old joke, there are lies, damn lies, and statistics. You can always play games with the numbers. And the problem is, a lot of companies design formulas that will demonstrate success vis-a-vis pay, but, obviously, success is not true vis-a-vis stock price. And that's the problem we're facing now.

You can always create a metric to produce a strong pay package. That's why you've got to have strong pushback on the other side from your board, which we aren't seeing. The way you get that is independent directors and directors that own a lot of stock in the company itself, so any dollar they overpay you comes from their pocket. But that's missing in many companies today, and that's the problem, in my view.

ZAHN: Well, talk a little bit about the responsibility of corporate boards. Charles has raised some very interesting issues and how, if you create a more independent board and where the future of their livelihood is so directly affected, they might make some different decisions.

SERWER: Right. Well, basically, America's boards have been asleep at the switch. And as Charles mentioned, they're all usually the buddies of the CEO.

Sometimes, legislation has bad consequences, though, Paula. There's been a move to limit the amount of dollar compensation that CEOs get. So what happened? CEOs started getting more in stock options. That's where these huge pay packages come from, these huge option grants, where they get tens and 20s, millions of dollars like that. And the problem with those option packages is, there's no downside.

You only get money on the upside. And, again, if the stock goes down, who cares? Maybe you don't get it. You don't lose anything, but you don't share in the pain the way employees do.

ZAHN: Charles, just a final thought on whether you would have thought, at this point of the process, after the Enron debacle, that we would see more changes in the system.

ELSON: Well, you're going to.

As the reforms that are being pushed vis-a-vis independence and director equity kick in, I think you'll see a greater balance. Until then, you're going to see this same phenomenon continue on and on and on. It's very disturbing. It's terrible for relations within the company. And, frankly, it's terrible for your investors. And, as an investor, I'm furious about it.

All the board has to say is no. It's very simple. They ask you for too much and you say no. The fear is, they go somewhere else. I don't think that that fear is legitimate. A lot of people will not walk. They tell you they might, but, honestly, I don't think they will. And that's the key.

ZAHN: Andy Serwer, you get the last word tonight.

SERWER: Well, I think that the owners of American companies -- that is, the mutual funds, the pension funds -- that's where all of our money is -- they've got to start acting like owners, Paula. I mean, they're the ones who should say to these CEOs, enough is enough.

Again, I don't believe in legislation. I think what's going to happen is, it's a classic pendulum, and I think it's going to swing back. We see things like American Airlines, where the unions and employees and shareholders start to get mad. Maybe they'll throw Carty out. That's a big message there.

ZAHN: Well, that certainly sounds like what some of the board members want.

Charles Elson, thanks for dropping by.

Andy Serwer, good to see you in the p.m.

SERWER: Good to see you at night.

ZAHN: You're really smart at night, too.

SERWER: Hey, it's a long day.

ZAHN: And we'd like to bring our friend Bruce on the stage.

SERWER: Yes. He's the man. There he is.

ZAHN: We just heard Jack Welch negotiating for you.

SERWER: Get this guy a raise, right?

ZAHN: So are you feeling empowered to come in here tomorrow?

UNIDENTIFIED MALE: Definitely. Thank you very much.

ZAHN: Jack Welch says you need to go dig deeper, my man.

SERWER: He liked that pay discussion. It's great.

ZAHN: Congratulations.

UNIDENTIFIED MALE: Thank you very much.

ZAHN: We want to thank you all for being with us tonight and hope you join us again tomorrow night. "LARRY KING LIVE" is next, right after a quick check of the headlines.

Again, thanks for being with us tonight.


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