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LIVE FROM THE HEADLINES

Tape of Saddam Hussein Released; Cezanne Self-Portrait Sells for $17 Million

Aired May 8, 2003 - 19:00   ET

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

ANNOUNCER: The White House is urging Congress to make it a federal crime to kill an unborn infant. Are Republicans exploiting the memory of Laci Peterson for political advantage?
SUVs: it seems like everybody's driving them. And everybody else seems to hate them. Tonight why won't Detroit make fuel efficient vehicles?

A painting, unseen for 65 years, is set to go on the auction block.

UNIDENTIFIED MALE: It does represent the once in a lifetime opportunity for today's collectors.

ANNOUNCER: Will the masterpiece be put back on public display or will it disappear again.

LIVE FROM THE HEADLINES with Paula Zahn in New York.

PAULA ZAHN, HOST: Good evening and welcome on this beautiful evening in New York City tonight. It is May 7.

Coming up in this hour, the oil giant once run by vice president Dick Cheney, will it play a larger role in post-war Iraq than previously thought? According to a Democrat congressman, Halliburton has a deal not only to operate Iraq's oil field, but to distribute the oil it produces, as well.

Also ahead, as one of the biggest cult movies in recent memory "The Matrix" is almost reloaded and ready to go at your local theater. We'll have a preview a little bit later on.

But first, is it a hoax or is it proof that Saddam Hussein is still alive? That is the debate tonight after the release of an audiotape said to have been made by the ousted Iraqi president.

According to an Australian newspaper, the tape was delivered to its reporters in Baghdad by two unidentified men.

Senior international correspondent Nic Robertson joins us now from Baghdad with the very latest on that. Good evening, Nic.

NIC ROBERTSON, CNN CORRESPONDENT: Good evening, Paula.

Well, if it is genuine, it certainly is the first time that Saddam Hussein would have been heard speaking out since the end of the war since he was ousted from power.

Now on this tape recording, he makes a reference to his birthday on April the 28, where incidentally he says that he was well supported on his birthday in Iraq. And that wasn't that something we witnessed here, that's for sure.

He also talks about the looting on the national museum. Now both of these events occurred after U.S. forces arrived in Baghdad and after he was forced out of power. So this was an indication that this recording may, indeed, have been made quite recently.

The people that have listened to the tape for us here in Baghdad feel reasonably confident it could be Saddam Hussein. The quality of the tape, they say, is poor, but it is his phraseology, does sound -- does, indeed, sound like his voice.

What this tape appears to be is the first organized call for an organized resistance against the United States forces inside Iraq, calling for Iraqi people to shoot at U.S. troops, calling for them not to do business with U.S. troops, indeed, saying anyone doing business with a foreigner was essentially -- was essentially going against the Iraqi people.

Also calling on the Iraqi people to write anti-American slogans on the wall around Baghdad.

But the message, and if it was from Saddam Hussein, Saddam Hussein saying that he was still inside Iraq.

(BEGIN AUDIO CLIP)

SADDAM HUSSEIN, FORMER PRESIDENT OF IRAQ (through translator): Through this secret means I am talking to you from inside great Iraq and I say to you, the main task for you, Arab and Kurd, Shiite and Sunni, Muslim and Christian and the whole Iraqi people of all religions, you main task is to kick the enemy out from our country.

(END AUDIO CLIP)

ROBERTSON: Now when we talked to people around Baghdad today, they said to them, it didn't matter whether or not this was Saddam Hussein or not Saddam Hussein. They weren't going to follow this call to arms. They say they have no interest in the former Iraqi leader and therefore they wouldn't fight for him.

And indeed we went to one neighborhood in Baghdad where people used to support Saddam Hussein quite strongly. Absolutely no evidence of support there today. People say we're not going to fight the U.S. troops for one reason. They're protecting us here now so we're not going to do it -- Paula.

ZAHN: Is there a belief that there is still enough opposition out there where this message would be taken seriously and where there would be a serious attempt made to sabotage the American effort here?

ROBERTSON: That's really a very critical question at this time, and it's no doubt something that U.S. officials here will be wanting to pay a huge amount of attention to. The reason being this could be the beginnings of a serious and sustained threat to U.S. troops here.

Now there's no indication that we've seen, from talking to people here today, that there is that level of support, but it doesn't mean that that support cannot be found in some areas of the country, some areas of Baghdad -- Paula.

ZAHN: Nic Robertson, thanks so much.

While the fate of Saddam Hussein remains uncertain at this hour, more and more of his former associates are now in U.S. custody. The latest name on the list of prisoners is Ghazi Hammud al-Ubaydi, an official of Hussein's Ba'ath Party. He was number 32 on the U.S.'s most wanted list and the two of hearts on those U.S. issued playing cards.

Now as U.S. troops continue for their search for former Iraqi leaders, they're also searching for evidence Iraq had weapons of mass destruction.

Officials say a trailer seized in northern Iraq appears to have been used as a mobile biological weapons laboratory. It is now being examined in Baghdad.

The Bush administration is lifting some of the sanctions imposed against Iraq when Saddam Hussein was in charge. The administration also announced some new rules to make it easier to send humanitarian aid into Iraq. These rules will also allow individuals to send up to $500 a month to friends and family members in Iraq.

Of course, efforts to end the suffering of Iraqis are taking many forms and Tim Rogers, of International Television News, has the story of a wounded Iraqi teenager who has come to a Michigan hospital for help.

(BEGIN VIDEOTAPE)

TIM ROGERS, ITV CORRESPONDENT (voice-over): She is the first in America, and now with a chance of recovery, Hanan has found her safe welcome.

DR. PAUL TAHERI, UNIVERSITY OF MICHIGAN HOSPITAL: Welcome, Hanan. I'm Dr. Taheri, I'm going to say hi. Welcome to America.

UNIDENTIFIED FEMALE: Thank you.

ROGERS: She is here with her mother because of the extraordinary determination of those who made it happen, eventually persuading the Pentagon, the American government and General Tommy Franks, the commander in chief of the coalition forces to let her come.

I met Hanan at Frankfurt Airport as she prepared for the second stage of her journey. By now she'd been traveling for 24 hours. She'd been given an Army escort out of Baghdad, accompanying her here from Kuwait. But exhaustion was offset by relief and the ultimate goal ahead.

Without passports or any means of getting out, Hanan and her mother were given humanitarian parole, special permission to enter the United States. Since she was burned, her condition has stabilized, but without the treatment she needs, she lives in constant pain.

Arriving in Detroit, this was almost the end of her journey and from where she was taken to one of the finest burns units in the country.

UNIDENTIFIED MALE: Let's find out how the tube is. Is it bothering the back of her throat?

ROGERS: Dr. Paul Taheri at the University of Michigan was one of those determined to bring Hanan in.

TAHERI: This is certainly an instinctual response, not only for myself, but other members of the team. And when I discussed this with the leadership of the hospital and the health system, they were all supportive and nobody even thought about saying no. Everybody said yes instantaneously.

ROGERS: From the moment she arrived, the treatment began. Watching all this, Hanan's mother, grateful to America, despite the fact that it was the blast from an American bomb that caused her daughter's injuries.

UNIDENTIFIED FEMALE (through translator): We appreciate -- Yes, that is true, but at the same time they're the people that are helping us at the same time not only that it was the bombing from the United States, but they helped us also. They brought us here to treat my daughter.

ROGERS: The days ahead will change her life.

(on camera) What Hanan has found is an opportunity that simply would not exist in Iraq, where it would be impossible to find the sterile conditions that she needs.

(voice-over) Ahead is a course of treatment that will be long, difficult and sometimes painful, but now at least she has hope.

Tim Rogers, ITV News at the University of Michigan.

(END VIDEOTAPE)

ZAHN: Now it's time for some of the headlines across America tonight.

A federal judge in New York is holding Osama bin Laden and Saddam Hussein financially responsible for the 9/11 attacks on the World Trade Center. The judge ruled that families of the victims are entitled to more than $100 million from bin Laden, his al Qaeda organization, and the former leaders of Afghanistan and Iraq.

The families are hoping to collect frozen assets, but more court hearings will be required before any payouts take place.

Officials think a single arsonist may be responsible for a series of fires at religious buildings in the L.A. area. In the past week and a half alone, there have been fires at a Presbyterian church, a Bahai community center and two synagogues.

There were court proceedings today in a case alleged FBI double agent Katrina Leung. Leung was accused of giving the Chinese government information she got from her long time lover, retired FBI counterintelligence agent James Smith. A grand jury in Los Angeles today began hearing evidence against Smith, who is accused of gross negligence.

Folks in southern Missouri spent another day keeping an eye on the sky after getting more bad weather overnight. Although it hit some of the same areas devastated by Sunday's killer tornadoes, the storm, fortunately, caused no deaths or injuries this time.

With every building damaged or destroyed on Pierce City's main street. Some residents are saying the weather was the nail in the town's coffin. Others say it strengthens their resolve.

David Mattingly reports. David, good evening.

DAVID MATTINGLY, CNN CORRESPONDENT: Paula, for a time today it seemed that this little town here was coming apart brick by brick. Bulldozers were lining this street, along with dump trucks. They were picking up, scooping up the piles of debris that was in the street, left behind by Sunday's tornado and they were putting it in bulldozers, being taken away, hauled away from here. And some pieces of this town will never be coming back.

The town council, ultimately will have the final decision on which of these old buildings stay and which of them go and that is a decision, Paula, that none of them want to make here.

These buildings are cherished here, not only because they are an economic draw for tourism, but because they mean so much to the people who have moved here to become a part of this town. There's so much charm in these, in fact, just look on the inside wall of this store up here. You can see some of the old writing. "Arabian powder." "The world's best poultry food." This used to be a very viable railroad town back in the day, and over a hundred years of history, the people just cherish here and they're not willing to let that go.

There was a meeting of business leaders today. They are very much committed to keeping every single one of these buildings standing if they can possibly do it. They are arguing, with some of the reports we've heard from structural engineers here in town who have looked at these buildings and say they could fall at any moment.

In fact, last night when the storm front was coming through and there was some severe weather here, there was some concern that the winds with that storm might actually push some of these damaged buildings over. But again, the business leaders, the people who want to keep these buildings up and vital are saying that they're going to do everything they possibly can to make sure this town stays alive -- Paula.

ZAHN: Tell us a little bit more about those who were emboldened to go on.

MATTINGLY: Some of the business leaders here have made quite a bit of a personal investment. Each one of these buildings is a shop full of antiques, things that they would sell to tourists.

We are 22 miles off of the expressway here, and this town had become quite a draw to pull a large number of tourists in here in the summertime and they were just beginning to get into their big season. Unfortunately, the tornado has hit and turned this town into quite a different kind of attraction.

One other thing we want to show you. We're going to turn around this way. Something we haven't been talking about too much today. It's the other side of the street here. The residential section. There was a great deal of activity on this side of the intersection today with all the bulldozers, all of the FEMA-funded activity that was taking away the debris here.

A lot of the individual property owners are still struggling on their own and you can see there's a great deal of debris over where the people still live.

We talked to one family, a couple of brothers over there today. Their mother was in her house at the time. It was just by luck that she got up out of the living room to go to the kitchen to get something to eat, because at that time, the tornado hit, drove a tree right through the living room. She would have surely been killed.

But now the shock is also falling in for the family. Even though she survived, she has no insurance and they have no idea where she's going to live in the future or what the family's going to do next.

So a lot of decisions to be made here and a let of people confused right now in the aftermath of what to do next -- Paula.

ZAHN: We wish the community well. It's heartbreaking to see all that damage suffered there. David Mattingly, thanks.

Coming up, the criticism continues to mount from the hill, particularly the Democratic side, about the president's trip to the USS Abraham Lincoln.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is not some made for TV backdrop for a campaign commercial. This is real life. And real lives have been lost.

(END VIDEO CLIP) ZAHN: Also tonight, the bill that would allow violent crime against a pregnant woman to be treated as a crime against two separate people. The family of Laci Peterson endorsed that bill today. Tonight why some people don't want it to be passed by the U.S. Senate.

And then a little bit later on, they are one of the most popular vehicles on the road and yet they get some of the worst gas mileage. SUVs. Is anything being done about their fuel efficiency?

(COMMERCIAL BREAK)

(AUDIO/VIDEO GAP)

ZAHN: Now we'll take a quick look at some of the other stories making news in the world tonight.

In Hong Kong, 11 more people have died from SARS, and health officials say eight more people have become infected. The new case has raised the SARS total in Hong Kong to 1,654, 204 fatalities.

A formal caution from British police to Rock 'n' Roll Hall of Famer Pete Townshend today. The Who guitarist admitted breaking the law when he logged onto a web site containing images of child abuse in 1999. Townshend says he was doing research in Internet pornography.

And much of the rock 'n' roll hardware of another member of The Who, John Entwistle, went on display today. It will be auctioned next week at Sotheby's in London. Included are more than 150 guitars owned by the bass player who died just last summer before the band went on tour.

And the art world is hoping for big news tonight with the auction of a self-portrait of the artist Paul Cezanne, the semi-annual art sale of the major New York auction houses started this week. And the pre-sale estimate of the Cezanne, sell between 15 and 20 million dollars.

Maria Hinojosa is standing by. The auction is underway. Maria, what's going on right now?

MARIA HINOJOSA, CNN CORRESPONDENT: A very exciting night, Paula. In about two and a half minutes, the painting sold for $15.5 million. That was the auction price. The actual price of the seller, who did this on the phone, would actually be $17,367,000. So a lot of money.

Now, it's an extraordinary painting. The Degas -- I'm sorry, the Cezanne portrait of 1895. It's his second-to-last self-portrait, and what's extraordinary about it is that this painting has not been seen publicly for 65 years. This is only the third owner of this painting, so pretty extraordinary.

Now the most expensive Cezanne painting sold in 1999 for $60 million. They had been expecting this to sell from anywhere between $15-20 million. So the fact that it sold for $15.5 million in two and a half minutes -- who knows? A lot of people who watch these -- these auctions say that what happens here rally determines the state of the art market. And what's being sold tonight is the Impressionists and the modern art of around the world.

Important because this is, again, the self-portrait, his second- to-last. They say that in this portrait he looks skeptical, questioning. He's got this raised eyebrow. Perhaps questioning, looking, though, directly at his public. But the people here at Christie's are saying that they are pleased with this sale.

So again, Paula, the self-portrait of Paul Cezanne from 1895 sold for a mere $17.3 million just about three minutes ago -- Paula.

ZAHN: Oh, a mere bargain there. Let me ask you this: do you have any idea who bought it? Did we know if it was a dealer or a private collector or whom?

HINOJOSA: We don't know yet, Paula. What's extraordinary, though, is what happened in this room. I mean, you have a room full of bidders that, yes, they are actually raising their hands and bidding. But you've got on either side of the -- of the room, you've got people on phones all over the world. And these are some of the major biddings are coming in from the phones. I guess these are people who just can't take the time to get off of their yachts to come down to Christie's here in New York.

But a very intense, very stressful atmosphere, as well. Because as I said, what happens here tonight determines the state of the art market. Again, they had been expecting a high bid of $20 million, so we will see what they say about the fact that it sold for $15.5 million. Again, the real price from the -- from the buyer will be $17.367 million -- Paula.

ZAHN: Pretty stressful during the cold season. You don't want to sneeze holding a paddle in your hand unless you mean to buy, right?

HINOJOSA: I didn't want to risk any movement, because you know, they really watch everything that you do. You go like this and that's it. I was just watching very carefully. Very stressful, very...

ZAHN: No sneezing aloud. Enjoy the rest of the auction. Maria Hinojosa.

Still to come tonight, the deaths of Laci Peterson and her unborn son are reigniting efforts to push a bill through Congress. That bill would allow violent crimes against a pregnant woman to be treated as crimes against two people. Coming up, find out why some people don't want that to pass.

Also tonight, they have some of the highest sticker prices and the lowest miles per gallon. We're talking SUVs. So is Detroit doing everything it can to make these vehicles more fuel efficient? That story straight ahead, but first a look at some of the closing numbers from Wall Street.

We're back in a moment.

(COMMERCIAL BREAK) ZAHN: One crime, two victims, or is that two crimes, two victims? That's the gist of a bill getting renewed attention in the nation's capital, a bill aimed at crimes against pregnant women.

It is known as the Unborn Victims of Violence Act. It's been around for awhile, but supporters are hoping a big endorsement will finally get it through and give it some new momentum.

Congressional correspondent Kate Snow explains.

(BEGIN VIDEOTAPE)

SHARON ROCHA, MOTHER OF LACI PETERSON: In my mind, I keep hearing Laci say to me: Mom, please find me and Connor and bring us home.

KATE SNOW, CNN CONGRESSIONAL CORRESPONDENT (voice-over): It is such an emotional story. And, sometimes, emotion translates into political opportunity.

SEN. MIKE DEWINE (R), OHIO: Baby Connor was found near his mother with his umbilical chord still attached.

SNOW: A graphic story, the murder of pregnant mother Laci Peterson becomes the easiest way to push for a new law that's never made it past the Senate. Laci Peterson's family knows the power of their story, too.

They want a bill named in her memory to make killing or hurting a pregnant woman a crime against two people, not just one.

"Knowing that perpetrators who murder pregnant women will pay the price not only for the loss of the mother, but the baby as well, will help bring justice for these victims," they wrote to the sponsors.

About half the states already have laws treating the fetus as a separate victim of violate crime. California is one of them. Scott Peterson is charged with two murders.

The bill Republicans are pushing in Congress wouldn't change state law, but would apply to federal crimes, like the murder of a pregnant woman on a military base.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: That if an individual attacks a pregnant woman who has chosen to have the child, you ought to throw the book at them.

(END VIDEOTAPE)

SNOW: But opponents of this bill accuse the supporters of the bill of taking advantage of Laci Peterson's case, of exploiting the Peterson tragedy. They see the bill as a backdoor way to get at abortion and to knock down abortion rights because you're defining a fetus as a human life. The bill is expected, Paula, to once again sail through the House up here. And as for the Senate, now controlled by Republicans, they're going to try to push it straight to the Senate floor, no public hearings, don't even go through committee so it can't get bogged down.

The key thing here, Paula, is to try to get this through as fast as they can. Supporters know that once Laci Peterson's case becomes a distant memory, it might be a little harder.

Back to you.

ZAHN: Kate Snow, thanks so much for the update.

I want to bring in now two people -- two very different views of this bill.

Congresswoman Melissa Hart of Pennsylvania is the leading sponsor of the bill. She joins us now from Washington.

Also in Washington tonight, Representative Jerrold Nadler of New York.

Good to see both of you.

REP. MELISSA HART (R), PENNSYLVANIA: Evening.

ZAHN: Congressman....

REP. JERROLD NADLER (D), NEW YORK: Good evening.

ZAHN: ...I'm going to start with you first. Congressman Nadler, if some one is found guilty of murdering a pregnant woman, why shouldn't that person be charged with two crimes?

NADLER: Well, I mean, prior history -- well, first of all let me say that whoever's found guilty of murdering Laci Peterson and the unborn child should -- the book should be thrown at him. He should be in jail for the rest of his or her life.

But the fact is, if you assault a pregnant woman and you injure the fetus, that should enhance the gravity of the crime. It should be a much more serious crime and a much bigger penalty. But it should be a much bigger crime against the mother.

Unless you -- if you define the fetus as a person to make it two separate crimes, then that's a revolution in law and it has certain implications.

Number one, if the fetus is a person, then you're giving the Supreme Court the grounds to say that abortion is murder and states can't even allow it. That's the real reason. The practical application of whether it's two crimes or a heavier, single crime, doesn't make a difference. You can put the person in jail for life, whatever you think the appropriate penalty is. The difference is, as a matter of law, do you define the fetus as a person, which would lead to saying that abortion is murder, which would lead further down the line to placing restrictions on the freedom of pregnant women, because if they're carrying a full born person, then they have certain responsibilities, and you can say pregnant women can go to jail for endangering the fetus by doing things like drinking or other things. And that's something we've never done in law.

Even in the Bible, it says if you assault a woman and you kill her, you -- or any person you kill, but it's a death penalty. But if you assault a woman and she has a miscarriage as a result of that, you pay monetary compensation. In the book of Exodus...

ZAHN: All right.

NADLER: ...we have defined a fetus as a person, as a separate crime and the entire purpose for this bill, as opposed to simply enhancing the gravity of the crime is to undermine a woman's right to choose.

ZAHN: All right. Let's let Representative Hart weigh in on a couple of the points you made. What about the point Representative Nadler raised about why not just introduce a bill that would create a much stiffer penalty for some one who is found guilty of murdering a pregnant woman? What's wrong with that idea?

HART: If you ask Laci Peterson's family, and you ask any one who has lost a family member, and if even it wasn't the mother, they see this as two victims. The reality is there are two victims here.

The family had planned for and probably had the nursery painted and ready to go. They lost a child. They lost their sister, their daughter as well in this case. There's two crimes and that's why it's very important for us to acknowledge that. If the woman had not died in this kind of a crime and a child dies, and that child was eight months along, that family lost a child.

I think it's really awful for us not to understand that as human beings. It's a terrible loss that a family faces. And that person who committed that crime would not be charged with a murder. That person would be charged with assaulting the woman. But that's as far as it could go. And that's wrong.

We need to make sure that -- to acknowledge the loss of the two lives here.

NADLER: You can -- you can...

ZAHN: Are you saying, Congressman Nadler, that this baby -- I mean, Melissa's saying and your being opposed to this bill, you're essentially saying that this embryo was not a victim. Is that what you're saying?

NADLER: No, what we're saying is that the embryo does not have separate standing as a victim. That's the way the law's always looked at it.

HART: Well, actually...

NADLER: And that's exactly right. And if you -- if you say that the embryo is a separate -- and by the way, this law -- this bill that Melissa and others are pushing does not define an embryo at eight months old. It could be at six weeks pregnant.

But the fact is, you could -- people certainly think and the emotions are real here that they've lost a -- they've lost a potential life. They've lost a child. And I understand that. But there's no reason you can't amend the law, if the law doesn't already say that, to punish that. If the mother survives but there's a miscarriage, the baby doesn't survive -- the fetus doesn't survive, you can punish that by life imprisonment without defining it as a separate person.

ZAHN: OK. Representative Hart, your reaction to that.

HART: Yes. There's a precedent in federal law already.

Several years ago, they passed the Innocent Child Protection Act. And that was to prevent capital punishment from being carried out against a woman in prison who was carrying a child. And they defined the child as a child in utero. We're not making the child equal with the adult mother. It is a separate status. It is a child in utero, but acknowledged by us that this is what it is.

(CROSSTALK)

HART: A little boy or a little girl that the family is expecting.

ZAHN: I want to give you both a chance to answer and we just got really, literally, 20 seconds a piece.

First of all, Representative Hart, what about the point Representative Nadler was making that this is all about an effort to ultimately overturn Roe v. Wade?

HART: Well, actually, specifically in this legislation, abortion is exempted. We do not talk about abortion. He's trying to cloud it for some reason I don't understand. Our purpose in this is to make sure that people are aware that the largest reason for the death of pregnant women in several states -- we have statistics -- is murder. That means that often that child is the motive.

So if that child is killed along with the mother or without, we should certainly acknowledge that as a separate crime.

ZAHN: Representative Nadler, you get the last 20 seconds.

NADLER: We should acknowledge it. We should put the person in jail for life. If you believe in the death penalty, even give capital punishment. But defining it as a separate person has one purpose and one purpose only and that is to undermine abortion rights and that is why this bill and the bills like it in all the states are being pushed by the right-to-life committees and by the anti-choice people. It is a pure anti-choice move and it has....

(CROSSTALK)

HART: With pro-life and pro-choice votes.

(CROSSTALK)

NADLER: The fact of the matter is, it is pushed by the anti- choice people and that's the only purpose for it, because every other purpose could be accomplished simply by increasing the gravity of the crime and punishing it by life in prison.

HART: There are two victims here and if you only increase the gravity of the crime, you're only acknowledging one.

(CROSSTALK)

NADLER: ...and only matters for abortion purposes.

ZAHN: Representatives Hart and Nadler, thank you both for joining us this evening.

HART: Thank you.

NADLER: Thank you.

ZAHN: And we will stay in touch with you as this debate rages on.

Still to come tonight, the same group that said buying SUVs helps support terrorism has a new claim -- that your national security might be at risk.

(BEGIN VIDEO CLIP)

ARIANA HUFFINGTON, COLUMNIST: You must think that this is public policy made in an insane asylum. In fact, it is not. It has been bought and paid for by Detroit.

(END VIDEO CLIP)

ZAHN: Coming up, the attack on SUVs and what the manufacturers are saying about that.

Also tonight, the true story of the comic book comeback. Last weekend's hottest movie making money for Marvel Comics. Andy Serwer will be joining as LIVE FROM THE HEADLINES continues on this Wednesday night.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

A former FBI agent is charged with U.S. counter intelligence on China was indited by a federal grand jury today on charges of wire fraud and allowing removal of national defense information. Charles Feldman, who's been following the story from L.A. all day long. He joins us live with this breaking news -- Charles.

CHARLES FELDMAN, CNN CORRESPONDENT: Hi, Paula.

Yes. There are two people involved in this story. One James Smith, he is the retired FBI agent. He was indicted, as you pointed out, on six counts, wire fraud and gross negligence for allowing the removal of his home and other places of documents. Documents believed to be documents relating to national security.

The other person in this story is the person in this picture right next to him. She is Katrina Leung, and she was his mistress for some 20 years and is accused of being a double agent. He was being handled by him as somebody who was supposed to be spying on China for the U.S. Instead the government says she was spying on the U.S. for China. She was arrested. She is being held without bound. Action on her, possibly, possibly later this week.

Right now the action centers on James Smith. As said indicted not on espionage charges, it wasn't expect that he would be by the way, Paul, but on charges of wire fraud. What that means is he was transmitting allegedly (UNINTELLIGIBLE) reports back to headquarters in Washington about his relation with her. And also indicted on charges of gross negligence -- Paula.

ZAHN: Charles Feldman, thanks so much for that update, appreciate it.

Now we are going to moving to other information for you know. To the critics who once said SUV drivers are supporting terrorist. An new ad campaign in shaming car makers into building cars that guzzle less gas.

Patty Davis has the details.

(BEGIN VIDEOTAPE)

PATTY DAVIS, CNN CORRESPONDENT: They are one of the fastest growing vehicles on the road. Sport utility vehicles average just 17.8 miles per gallon. This new ad by the Detroit Project, chastises automakers for not doing better.

UNIDENTIFIED MALE: Is 40 miles to every gallon, and thousands of dollars saved at the pump. The only problem is Detroit won't build it.

DAVIS: Syndicated columnist Arianna Huffington, founded the Detroit Project.

ARIANNA HUFFINGTON, DETROIT PROJECT: I used to drive a Lincoln Navigator so it took me awhile to connect the dots. So I don't demonize people who drive Lincoln Navigators. I am just asking them to connect the dots between our consumer choices and the impact that we are having on oil dependence and national security.

DAVIS: Earlier this year, Huffington's group released ads equating buying an SUV to aiding terrorist. UNIDENTIFIED FEMALE: I gave money to a terrorist training camp in a foreign country.

DAVIS: For their part Detroit automakers say they are working to improve fuel efficiency. Not only for SUVs but trucks and cars as well. GM showed off it's Hydrogen fuel cell cars on Capitol Hill. They are expect to be on the market by the end of the decade.

UNIDENTIFIED MALE: Bring this technology forward very, very quickly.

DAVIS: General Motors is plans to unveil a gas and electric hybrid version of it's Saturn (UNINTELLIGIBLE) in 2005. It will get 40 miles per gallon. While consumers are gobbling up 13 miles per gallon Ford Excursions and the 11 miles per gallon Hummer HII. Many say they would buy more fuel efficient SUVs if they were available. In fact, a survey by J.D. Power and Associates find that gas guzzlers are the consumers second most common complaint.

UNIDENTIFIED MALE: It could be better, much better, because you get that big car and spend a lot of gas.

DAVIS (on camera): Although the Detroit Project had some trouble getting stations to run it's previous ad. It's making a $300,000 ad buy this time. The group says it's latest add may not be it's last.

Patty Davis, CNN, Washington.

(END VIDEOTAPE)

ZAHN: No matter what size your car is big, small or somewhere in between, with gasoline prices are as high as they are you have to be concerned about fuel efficiency.

Lets ask someone who knows what's good, what's not so good Jack Gillis, author of the "Car Book" joins now from Washington.

Good to see you, Jack, Welcome.

JACK GILLIS, AUTHOR: Good to see you, Paula.

ZAHN: Is your view that it would -- won't be until gas goes to five dollars a gallon if that ever happens, if people won't demand car manufactures to produce a SUV that is more fuel efficient?

GILLIS: Well, that's a good point. In fact, we are used to paying a $1.80, $1.90 of gasoline. And it doesn't seem to be (UNINTELLIGIBLE) our demand for larger SUVs. I do think however some of these political motivations as well as concerns about the environment is having an impact. Good news today is that SUVs today are downsizing. They are becoming more fuel efficient. The bad news is you are still making huge trade off's when buy the larger SUVs. You are buying a car that, obviously, eats a lot of gas, and also maybe less safe than smaller cars on the market.

ZAHN: So, besides downsizing SUVs, what other efforts are underway to make them more fuel efficient?

GILLIS: I think the most important effort is the new innovative engine technology, the hybrid engines. Ford has introduced it into one of it's smaller SUVs, as well as Honda shortly. I think that what we are hoping is that the technology will be there so we can put more powerful hybrid engines which are more fuel efficient in these larger vehicles. And that still is a very huge challenge from pure physics. It takes a lot more fuel to power a bigger vehicle.

ZAHN: And talking about these hybrid engines if they ultimately become the norm what will be their impact on the sticker price.

GILLIS: Like we heard from carmakers when we wanted airbags, and they said they would be very, very expensive. With mass production and new technology there really shouldn't be a major impact on sticker price. The key is consumer demand. If consumers start demanding more and more of these vehicles. The manufacture will figure out how to put the technology into the new vehicles that are out there. The bottom line is, it's all about the dollars. And more and more consumers are voting with their dollars for more fuel efficient SUVs.

ZAHN: I wanted to close of this interview now with a new survey that came out by J.D. Power Associates, it sort of ranks by the problems owners have with them. Go through this list with us and what the significance of it is.

The top three performers, Lexus, Cadillac and Infinity.

(CROSSTALK)

ZAHN: You want me to -- I'll move on to the next then you can talk.

The worst ranked brands were Kia, Land Rover, and Hummer.

GILLIS: Sorry for interrupting. I think one of the significant aspect is that we are seeing a lot of domestic cars showing up on the tops of these list, that's good news. In terms of using this information to buy a new car it's more difficult. The true benefit for consumers however is that it's getting the manufactures to compete on something other than moonroofs and color keyed interiors, but customer satisfaction and quality. And we are all going to benefit when that competition heats up.

ZAHN: Well, you were a big help tonight. We all should have you standing buy when we purchase a new car or trucks or whatever it is we are driving around. Thank you so much for thoughts tonight.

GILLS: My pleasure, Paula.

ZAHN: Still to come tonight the next installment of the box office hit the "Matrix," a preview of what promises to be a summer block buster right out of the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP -- "X2")

UNIDENTIFIED MALE: On the ground, now.

UNIDENTIFIED MALE: You know all those dangerous mutants you hear about on the news? I'm the worst one.

(END VIDEO CLIP)

ZAHN: They're called "The Characters." And they dynamite at the box office. The X-Men sequel which came out last Friday is pulling people into the theaters as did "Daredevil" earlier this year, "Spider-Man" last year, and then, of course, "The Hulk" is due out in June.

These film characters are straight out of the pages of Marvel Comics. So the parent company Marvel Enterprises is obviously doing quite well. And Andy Serwer is here to talk a little bit about how've done it. How did they do it, Andy?

ANDY SERWER, "FORTUNE": Well, a couple things going on with Marvel. First of all they had the great characters, Paula. I mean when you have Spider-Man and Hulk sitting there in your pool of assets, that's just a huge advantage, a bog leg-up at the box office.

But actually, this company's benefiting from its own misfortune because it was so badly managed for years that now they've abled to be unfettered and unshackled and they're releasing these thing, all these movies coming out this decade. Where as with "Superman," that came out in the 1980s, "Batman" came out in the 1990s. They finally got rid of all the litigation hanging over this company, and now they're just exploiting, as they say in this business, all these characters.

ZAHN: And there any other companies that have paralleled this kind of turnaround? Or is this one unique when you look at just how much its stock price has jumped?

SERWER: Yes, well there are all kind of unique. And this one, you know of course comic books, that's a pretty singular business.

But, you know, it sort of speaks to this problem that so many companies are going through right now. So many companies down and out, in the dumps. Shareholders worried, employees worried, customers worried. But if the company has real assets, real tangible things that people want to buy, they have a much better chance of coming back.

So that's something really to look for. And if you take a look at some of these companies here, and we've identified, there's Marvel. Over the past three years stock up 250 percent. But look there. Mattel, that stock is almost double.

ZAHN: Home of Barbie.

SERWER: That's right. And that's exactly why they came back like that. The company also...

ZAHN: But I don't get that. There was a point where Barbie was controversial and the sales went down.

SERWER: Yes, but it's such and icon, Paula. I mean in everyday, no matter how badly that company's run, how incompetent the people are, how close to bankruptcy they are, some little girl's going to tug at their mommy's sleeve and say, I want a Barbie today. I mean you can't kill something like that.

The last one on that list, IHOP, International House of Pancakes.

ZAHN: Sure.

SERWER: I mean they had a tough time there too. But I mean how classic is pancakes? And so they've managed to turn things around too. You can see while the market's been swooning, that's the number at the bottom, these guys are doing well.

And so it's not that atypical. I mean Harley Davidson, they almost went bankrupt in 1985. Now incredibly successful. Kmart, they're in big trouble right now. That's a more questionable situation because what does Kmart really have compared to Wal-Mart or Target? So you really have to look at these things on a case-by-case basis.

ZAHN: Have you been to the theaters lately?

SERWER: I have.

ZAHN: Have you seen "X2"?

SERWER: I haven't seen that one yet. But I'm really looking forward to "The Matrix Reloaded".

ZAHN: Yes, the preview's look pretty...

SERWER: Compelling.

ZAHN: ... compelling, strong. Thanks, Andy.

SERWER: OK.

ZAHN: Movie fans are awaiting anxiously, including Andy...

SERWER: Yes.

ZAHN: ... for another sequel. This one is a more graphic novel than a comic book story. "The Matrix Reloaded" opens around the nation this week. The premiere of this special effects-loaded story of the battle of man against machine is in Los Angeles tonight. And that's where Eric Horng is standing by -- Eric.

ERIC HORNG, CNN CORRESPONDENT: Well, Paula, "The Matrix" media blitz certainly in full-swing. If you haven't seen "TIME" magazine the week, stars of the film on the front cover. And at the L.A. premiere tonight, we were told some 70 media outlets applied for credentials. Certainly a lot attention being paid to what is one of the year's biggest films. (BEGIN VIDEOTAPE)

KEANU REEVES, ACTOR: We've done things that I don't believe have ever been attempted in Western action cinema before.

LAURENCE FISHBURNE, ACTOR: With regard to the stunts, it was much more involved and much more intense.

JADA PINKETT-SMITH, ACTRESS: You see representation of humanity in its fullest.

HORNG (voice-over): Man and machine square off once again in "The Matrix Reloaded." Directed by Andy and Larry Wachowski, the second installment in the franchise features familiar characters as well as some fresh faces.

GREGG KILDAY, THE HOLLYWOOD REPORTER: With the new movie, they've introduced enough new elements to extend the mythology.

HORNG: To prepare for the intricate fight sequences, stars underwent four months of martial arts instructions, training so intense that Carrie-Anne Moss, who plays Trinity, suffered a broken leg.

CARRIE-ANNE MOSS, ACTRESS: I came into the process really gung ho and excited and then I was taken down within seven days of training.

HORNG: The first "Matrix" grossed more than $450 million worldwide, became the first film ever to sell one million DVDs and spawned a visual style copied and parodied in other films, like "Shrek."

With a budget of nearly $130 million, about twice that of the first film, there's pressure for "The Matrix Reloaded" to raise the bar.

FISHBURNE: That pressure, you know, started at the top and we all just tried to give all that we had to the project.

(END VIDEOTAPE)

HORNG: And in case you're wondering, filming on the third movie -- yes, there is a third movie -- "The Matrix Revolutions" has already been completed and it's scheduled for release in before the end of the year -- Paula.

ZAHN: Well we hope you get to see the movie before the crowds start heading to theater. Eric, thanks so much. Have fun. Andy and I have decided that we are going to wait two weekends. We're not going to deal with three-hour lines.

SERWER: I'm not going to do the lines, no.

ZAHN: You're just not going to do that.

SERWER: No, no.

ZAHN: Thank you for joining us tonight. We're going to take a short break and LIVE FROM THE HEADLINES will continue at the top of the hour. We'll be right back.

(COMMERCIAL BREAK)

ANNOUNCER: Saddam Hussein rises again? A new audiotape turns up in Baghdad. Is he alive? And will this tape prove it?

He's been called a genius and a rogue. Karl Rove, the so-called brain behind the strategy of George Bush, makes a rare public appearance. What will his next strategy be?

After a week of devastating tornadoes, weather experts say the worst may be yet to come. Where will nature's fury strike next and how can you prepare?

LIVE FROM THE HEADLINES with Paula Zahn in New York.

PAULA ZAHN, CNN ANCHOR: And good evening.

Welcome back.

Glad to have you with us tonight.

Appreciate your joining us.

We've got lots of ground to cover in this half hour. We're going to be talking about all that nasty weather that has been pounding the Midwest and the South. And over the next 30 minutes we're going to take a look at those headlines, as well, some of the day's other big stories in the order they happened.

First up, in the 2:00 a.m. Eastern time, the tale of the tape. A new audiotape tied to Saddam Hussein surfaces. It is purportedly made as recently as this past Monday. What it does show or portrays is a man who is tired, but still defiant.

National security correspondent David Ensor reports.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN CORRESPONDENT (voice-over): Intelligence officials at the CIA are now analyzing the audiotape, trying to assess whether the voice is really Saddam Hussein or not. They tell me it may take a while this time and that they may never be able to say definitively whether the voice is Saddam because the quality of the recording is quite poor.

(BEGIN AUDIO CLIP FROM TAPE, IN ARABIC)

ENSOR: In the past, U.S. intelligence was quick to say the last audiotape made public was, indeed, the voice of Saddam Hussein, and, of course, a videotape of that same address was recently made public, too.

(BEGIN AUDIO CLIP FROM TAPE, IN ARABIC)

ENSOR: If this one is Saddam, clearly he's alive and seeking to rally his supporters. But not much more can be said. Audiotapes don't tend to reveal as much as videotapes sometimes do. For example, if you remember the first tape made public of Saddam Hussein walking about on the streets of Baghdad, U.S. officials satisfied themselves that it was, indeed, him, and they also looked at it frame by frame, at things in the background. And if you'll recall, the claim was that that recording had been made in early April, on April 4th.

But U.S. intelligence officials said that was not true, that certain clues in the background, things that had changed by then, told them that the tape had been recorded a month earlier in early March, when the regime was still in control of the whole city.

U.S. officials say their working assumption is and has to be that Saddam Hussein is probably still alive until something proves otherwise. So this latest audiotape, if genuine, will just reinforce that working assumption.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

ZAHN: So, U.S. officials may not know the status of Saddam Hussein, but that hasn't stopped them from taking another of Iraq's most wanted into custody. In the 2:00 a.m. hour, U.S. Central Command announced it had its hands on former regional Baath Party commander Ghazi Hamud al-Adib. He is number 42 on CENTCOM's list of the 55 most wanted Iraqis.

Speaking of card decks, Greenpeace says it has to print its own deck, what it calls suits and nukes. It focuses on the dangers of nuclear arsenals. The cards were being handed out to delegates at a meeting on the 1968 Nuclear Non-Proliferation Treaty in Geneva, Switzerland. President Bush filled in for Saddam Hussein as the ace of spades.

In the nine o'clock hour, another matter for environmentalists, gas guzzling SUVs. But this time the focus isn't on what SUVs do to the environment, but rather their effect on national security.

Here's our report.

(BEGIN VIDEOTAPE)

JULIE VALLESE, CNN CORRESPONDENT (voice-over): National security, that's what two advocacy groups say auto makers and government are compromising for not building more fuel efficient cars. ADRIANNA HUFFINGTON, THE DETROIT PROJECT: You might think that this is public policy made in an insane asylum. In fact, it is not. It has been bought and paid for by Detroit.

VALLESE: In a $300,000 ad campaign, the National Resources Defense Council and The Detroit Project are targeting and challenging auto makers to build vehicles that get at least 40 miles per gallon.

UNIDENTIFIED MALE: Our dependence on foreign oil...

VALLESE: But auto makers say they are producing vehicles with the future in mind.

LARRY BURNS, GENERAL MOTORS: We've improved the efficiency of our vehicles model by model, engine by engine, year by year.

VALLESE: Honda and Toyota have already put two hybrid vehicles on the road and two U.S. makers, Ford and Saturn, will both introduce hybrid SUVs.

(on camera): The EPA estimates in 2002, the average fuel economy in the United States hit a 22 year low. The combined average for all classes of vehicles was 20.4 miles per gallon.

(voice-over): While owners of SUVs do want more fuel efficient vehicles, they say there's a more important issue advocacy groups should spend their time and money on.

UNIDENTIFIED MALE: Anyone who really wants to help this country, get on a campaign, use your celebrity status to get on a campaign to get people to buckle their safety belts.

VALLESE: Ultimately, it's up to consumers to decide what they are willing to drive and at what cost.

Julie Vallese, CNN, Washington.

(END VIDEOTAPE)

ZAHN: And looking overseas now, in the 10:00 a.m. hour, the child pornography investigation of legendary guitarist Pete Townsend comes to an end without any charges. Scotland Yard investigated him for four months after learning he had logged onto a Web site containing images of child abuse in 1999. He claims to have been a victim of child abuse earlier on. But Townsend contends he looked at the site because he was actually doing research on Internet pornography.

Authorities apparently agreed and formally cautioned Townsend. He is expected to be placed on Britain's national sex offenders registry for five years.

After a short break, we're going to pick up our time line at noon.

Also coming up... (BEGIN VIDEO CLIP)

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: Congressman Waxman has never met a Republican he didn't want to investigate.

(END VIDEO CLIP)

ZAHN: The White House responds to charges it's in bed with one of the vice president's old businesses.

Plus, the man said by many to be pulling the strings in the White House makes a rare appearance. Well, not such a rare appearance, but he did answer some questions posed to him in a very public forum.

Those stories, when we come back.

COMMERCIAL

ZAHN: And we'll pick up our time line now in the 11:00 a.m. hour. That's when we got word that Laci Peterson's family is endorsing a controversial piece of legislation on Capitol Hill. It is known as the Unborn Victims of Violence Act. It would allow violent crimes against a pregnant woman to be treated as crimes against two people.

Twenty-six states, including Peterson's home state of California, have similar laws. This congressional measure, if passed, would cover federal cases. Some opponents describe it as a way to influence the abortion debate because it would define a fetus as a separate life. The bill's supporters say that's simply not so.

(BEGIN VIDEO CLIP)

SEN. MIKE DEWINE (R), OHIO: No one should make this into an abortion issue. That's not what this is about. No one looks at this tragedy in California and says this is an abortion issue. There are two victims and there should be two prosecutions. That's all we're saying.

(END VIDEO CLIP)

ZAHN: And we're going to move from Capitol Hill to the White House now. In the noon hour, the Bush administration responds to the so-called Halliburton firestorm. Democratic Congressman Henry Waxman has questioned whether the Bush administration's deep ties with the company helped it secure a contract that basically lets it run all phases of the Iraq oil industry. Vice President Dick Cheney was once the head of that company. But his office repeated again today that he has severed all corporate ties with that company.

The White House says it is a non-issue.

(BEGIN VIDEO CLIP)

FLEISCHER: Congressman Waxman has never met a Republican he didn't want to investigate. You can ask all, address all questions to the contracting agencies and, of course, the oil of Iraq belongs to the Iraqi people. All resources of Iraq belong to the Iraqi people. And the United States, through the Agency for International Development and through other entities, is going to be there to help the Iraqi people. And that is exactly what we're doing.

(END VIDEO CLIP)

ZAHN: Moving ahead to the one o'clock hour, political junkies and some very lucky college students got a close-up look at the man behind President Bush's political plan. We're talking, of course, about presidential adviser Karl Rove, who made a rare appearance in that he took questions from an audience and tried very hard, we are told, not to make news.

Our senior political correspondent Candy Crowley explains why.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): Karl Rove doesn't get out much.

UNIDENTIFIED MALE: First off, thanks for coming to the school. It's great. You know, you don't make too many public appearances, so it's good that you've come to say...

KARL ROVE, SENIOR WHITE HOUSE ADVISER: I'm not allowed to.

CROWLEY: You think he's kidding? The truth is, the foundation of the president's reelection strategy is to act as though there is no campaign, to be as presidential as possible as long as possible. Which means when Rove, the embodiment of politics in the Bush world, arrived in New Hampshire, the most political of states, to talk to a forum known as Politics and Eggs, he didn't talk politics, not so you'd notice, anyway.

ROVE: The president understands we have two great necessities, to win the war on terror and to strengthen the American economy.

CROWLEY: Which pretty much defines the staples of reelection strategy. Rove also hinted at the early defensive line. Conceding six percent unemployment is a problem, Rove said the best cure is the biggest possible tax cut. But he later told an interviewer voters understand the president inherited a weakened economy that was further buffeted by 9/11, corporate deception and the uncertainty of war.

ROVE: I think people look at it and say, you know, we're doing OK, were not doing great. We can do better. But we're not going to, you know, we're not going to blame the president for what the economy is because these problems are deeper, bigger and longer in being caused then just simply the action, you know, one man walking into the presidency.

CROWLEY: He's been called a political guru, boy genius, more harshly, Bush's brain. But Rove downplays sound mikes and staging. At the end of the parade, he says, voters see the candidate for who he is and how he leads. ROVE: You can either capture the moment and express what the American people want to hear and know from their president, or you can't.

CROWLEY: New Hampshire, as a primary state, has never been kind to candidates named Bush. And Rove probably didn't help matters much when he questioned New Hampshire's first in the nation primary status. But in the larger world, Rove served his boss well.

ROVE: And with that, I conclude and I'd be happy to answer or duck your questions.

CROWLEY: Candy Crowley, CNN, Goffstown, New Hampshire.

(END VIDEOTAPE)

ZAHN: U.S. forces say they have made a big find in Iraq.

When we pick up our time line, senior Pentagon correspondent Jamie McIntyre looks at whether this find is, indeed, the elusive smoking gun.

Now, let's check in with Jacqui Jeras, who's going to tell us the concern all across the country about some pretty nasty weather -- Jacqui.

JACQUI JERAS, CNN CORRESPONDENT: Yes, Paula, right now we've got about 12 tornado warnings in effect for four different states. We'll tell you who's getting hit the hardest and what's to come tomorrow.

It's all coming up when the time line continues.

COMMERCIAL

ZAHN: A little bit earlier tonight, we told you about an audiotape that has surfaced that might -- and we emphasize might -- have been made by Saddam Hussein, raising questions again whether he is alive. During the two o'clock hour this afternoon, the Pentagon addresses another item of unfinished business from the Iraq war, the hunt for Saddam's suspected weapons of mass destruction.

As senior Pentagon correspondent Jamie McIntyre reports, the U.S. has found a trailer that officials are convinced is a mobile biological lab.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): The Pentagon says this truck trailer, stopped by Kurds at a checkpoint in northern Iraq last month, is almost certainly a mobile biological laboratory.

COLIN POWELL, SECRETARY OF STATE: What we've seen so far of the labs is that it matches very closely, as was said in the Pentagon today.

MCINTYRE: Officials say the size of the vehicle and the equipment inside, including a fermenter and air cleaning system, match the description given to the U.S. by an Iraqi defector before the war and used to produce these drawings shown to the U.N.

STEPHEN A. CAMRONE, UNDERSECRETARY OF DEFENSE FOR INTELLIGENCE: The experts have been through it and they have not found another plausible use for it.

MCINTYRE: But burned by previous premature suggestions of WMD finds, the Pentagon is withholding a final verdict until the suspected germ factory, which appears to have been cleaned with strong ammonia, can be dismantled to search for trace amounts of bioagents.

CAMRONE: On the smoking gun, I mean the, I don't know.

MCINTYRE: So far, the search for Iraq's banned weapons has been fruitless. Of the 576 suspected WMD sites the U.S. identified before the war, teams have now inspected 70. No banned weapons were found there, nor at 40 additional sites discovered since the war began.

Could the intelligence have been faulty?

VICE ADMIRAL LOWELL JACORY: It's too early to tell. It really is. That will come more clear as there's more access to the people that are making the decisions.

MCINTYRE: The commander of U.S. ground forces has his own theory. Appearing by teleconference from Iraq, Lieutenant General William Wallace told a Pentagon briefing that the time between when the U.N. inspectors left and the U.S. troops arrived was so short the Iraqis didn't have time to retrieve any weapons from their hiding places.

LT. GEN. WILLIAM WALLACE: Because they were so clever in disguising that and burying it so deep that they themself had a problem getting to it.

MCINTYRE (on camera): Now, the Pentagon hopes to prove that deadly anthrax and/or botulinin toxin were made in these mobile labs. But even if the tests come back positive, it will only show that Iraq once had biological agents, not that they still had them when the war began -- Paula.

ZAHN: Jamie McIntyre, thanks so much.

We're going to move on to the two o'clock hour. A newly introduced bill to help paralyzed Americans got some attention on Capitol Hill thanks to the presence of actor Christopher Reeve, who helped members of Congress announce the introduction of a bill to spend hundreds of millions of dollars on research into paralysis and rehabilitation. Reeve, who has been paralyzed from the neck down in a 1995 horse riding accident, talked our Judy Woodruff.

(BEGIN VIDEOTAPE)

JUDY WOODRUFF, CNN CORRESPONDENT: We're told that some in the brain injury advocacy community say yes, it's good to spend money on research for a cure down the road, but what about the people today who don't have resources, who need help, who need support?

How do you make that very difficult choice between what's, which is more important?

CHRISTOPHER REEVE, ACTOR: Well, all are equally important and this bill addresses all three phases of need. One is research towards a cure. The other is rehabilitation research. And the third, and probably the most important right now, is quality of life, and that's today. That's about jobs, recreation, transportation, the opportunities to be included in society. And this bill would blanket the 50 states then make sure that people who are denied access to things that they should have, for a better quality of life today get what they need.

And it also would send a signal if it passes -- I don't know if it will -- and it's appropriated, which is the other part of it -- it would send a signal that the federal government cares about two million Americans who have been left in the margins for far too long.

(END VIDEOTAPE)

ZAHN: You can see more of that interview with Christopher Reeve tomorrow at 3:00 p.m. Eastern on "Live From Washington With Judy Woodruff."

As the afternoon wore on, the weather continued to be a big story, as it is tonight. Severe weather confronting a lot of folks.

Let's turn to Jacqui Jeras, who's standing by in Atlanta right now to tell us what folks in the nation's mid section and places not too far from there are up against tonight -- Jacqui, good evening.

JACQUI JERAS, CNN CORRESPONDENT: Well, Paula, good evening.

It's been unbelievable across the state of Alabama and into Georgia. Since about five o'clock Eastern time, we've had tornado warnings in effect for many of the same areas. We had what we call a training situation going on, where some of these super cell thunderstorms have been redeveloping behind the initial storm and so the same areas have been getting hit over and over and over again.

And we do have a report of a tornado on the ground earlier in Roanoke, Alabama. And so we've got a tornado warning for Truth County (ph) in West Central Georgia. So that's right across the state line right here. So if you live in Truth County, you want to be taking cover right now, as a tornado has been associated with this particular thunderstorm.

So, we also have some tornado warnings across parts of Maryland and also into Texas.

I want to show you what's been going on across the Atlanta metro area. We have tornado warnings in effect for Clayton County. You can see they're pushing on down to the south. Here's Hartsfield Airport along I-20. It's been getting hit throughout much of the evening and now we're starting to see a little bit more of a dip, these pushing a little more southwards and moving away from more populated areas.

This loop I want to show you has started out from about three o'clock this morning and watch these thunderstorms develop and move across Arkansas. Then you see it move through Mississippi, then into Alabama. Watch that line continuing to go into West Central Georgia.

So we've been seeing this same cluster of thunderstorms moving through the same area over and over and over. It's just been a very unbelievable situation. Tornado watches remain in effect across Central Alabama and Central Georgia until nine o'clock local time for both of these, and this is our primary area of concern for tonight.

We do have one tornado warning just to the north of Abilene right along I-20 here, and that's going to be in effect for about another 20 minutes or so. And this one is pushing off to the southeast. This tornado watch will continue throughout your evening. And this is the beginning of our next outbreak, we think, of severe weather by tomorrow. And then we have that one other warning. St. Mary's County down here south of Washington, D.C. and these thunderstorm (UNINTELLIGIBLE) are going to go on to the south and the east, by the way, as well.

Now, tonight the southeast, that's what we're going to be keeping our eye on. That, we saw that watch box across parts of Texas. What's going to be next? Well, today overall we're slow comparatively speaking, with the number of tornadoes. We've had 22 reports so far. Tomorrow we're going to be seeing a higher number. We've just had a slight risk of severe weather today across parts of the Southeast. Well, as we head into tonight and into Thursday, it's this dark red area that we're going to be primarily concerned with.

And does this look familiar to you? These are the same areas that got hit so very, very hard on Sunday. Southeastern parts of Nebraska over towards Omaha, into Kansas City, right along the Missouri River there, down towards Choplin (ph) and then into Fayetteville. So these areas could get hit very hard once again tomorrow. We're expecting more significant tornadoes tomorrow than what we saw today -- Paula.

ZAHN: Jacqui Jeras, thanks so much.

We're going to take a short break here. When we come back, we're going to share a couple of different stories with you that caught our attention because they happened to be caught on videotape. And some of them might surprise you.

COMMERCIAL

ANNOUNCER: A new audiotape purported to be of Saddam Hussein surfaces in Baghdad. Is it really him and do Iraqis really want him back?

A high school tradition turns ugly.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Suddenly everything changed. Buckets were flying. Hands were flying. People were bleeding.

(END VIDEO CLIP)

ANNOUNCER: An annual off campus initiation sends five girls to the hospital. What are school authorities doing to put an end to the tradition of brutality?

A chilling audiotape reveals a bus driver allegedly abusing a disabled boy on the way to school.

Tonight on LIVE FROM THE HEADLINES, caught on tape.

ZAHN: Stories powerfully recorded on videotape.

We start with Whitney Casey's report on the high school hazing incident in the suburbs of Chicago. And you can decide yourself whether what you see on tape is actually worse. That's what some of our upcoming guests will say.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Buckets were flying. Hands were flying. People were bleeding. Girls were unconscious. A girl got a bucket put on her head.

WHITNEY CASEY, CNN CORRESPONDENT (voice-over): Students at this suburban Chicago high school described the weekend's melee. Caught on tape, the aftermath of a powder-puff football game, a tradition, junior girls versus senior girls. Except this year, the hazing got way out of hand, sending five girls to the hospital and injuring many more.

UNIDENTIFIED FEMALE: Well, there was this sort of paint can thing thrown at me and Tabasco sauce and vinegar and stuff like that in my eyes and spam on my face and I just got taken, there was pig intestine wrapped around my neck.

CASEY: Dr. Michael Riggle, the school principal, says with the help of school deans, authorities have identified 50 of the girls on the tape. Criminal charges are pending. Dr. Riggle says alcohol was an escalating factor in the fracas. And another factor?

DR. MICHAEL RIGGLE, GLENBROOK NORTH HIGH SCHOOL: And there were some similar actions that happened the year before, but nothing that we really were knowledgeable of. And I think that the girls had that done to them that year and now this year they've looked at that and said, you know, this is something that I've got anger about and I want to do the same thing to someone else.

CASEY: Some 200 people attended the off campus game. Witnesses say buckets of animal and human waste were used in the hazing, along with paint thinner, blood and spoiled food.

UNIDENTIFIED FEMALE: Obviously I'm angry that this happened. I'm disgusted. I'm appalled a hundred percent. I'm embarrassed to say that I go to Glenbrook North High School because of this. It's disgusting.

(END VIDEOTAPE)

CASEY: Now, while some remain outraged, others underscore that this incident should not sully the school's academic achievements, achievements that 97 percent of the student body that will be graduating will go on to college. And out of the 2,100 here in this student body, only 250 actually attended the powder-puff game.

However, the principal did point out to us that many of those seniors he saw there in the hazing were also A, accomplished students here, Paula, A students that may face criminal charges as late as Friday -- Paula.

ZAHN: Whitney Casey, thanks for that update.

We now go to two young men who were actually witnesses to this hazing incident, Nich Babb and Kevin House.

They are both standing outside Glenbrook North High School.

Good of you to join us.

Thanks so much for dropping by tonight.

Nich, I want to start with you. Describe to us what you saw when the violence started.

NICH BABB, GLENBROOK NORTH HIGH SCHOOL SENIOR: Well, it all began with just a bunch of, you know, stuff like paint being thrown onto the girls. But then the violence started and I kind of walked away because I didn't really want to be a part of it. And I mean it was all part of the whole powder-puff tradition. So I didn't really think much of it.

But then when I realized that people were actually getting hurt and people were getting injured and I saw the girl who had the 15 stitches or the 10 stitches in her head, I saw her walking out, I knew that this was becoming something that was wrong. And I don't know, it's just -- it was shocking pretty much. I was surprised.

ZAHN: Kevin, if you would elaborate for us at what point you became concerned. You talked, you know, Brad just talked about this -- excuse me, Nich just talked about this being an annual rite. But something was very different this year.

KEVIN HOUSE, GLENBROOK NORTH HIGH SCHOOL SENIOR: Yes, when I went to it I didn't think that it was going to escalate into the, you know, violent brawl that it did. You know, this is something that happens every year and it's this humiliation thing. It's a hazing thing. But it's never really been a violent thing. And, you know, at first it was sort of fun and it was sort of expected and it was sort of a consensual thing between the juniors and seniors. The juniors are doing it so they can do it next year.

But the second that, you know, fists started getting thrown, buckets, kicking, you know, I just walked away. I just, you know, I couldn't stand watching it any further.

BABB: Yes.

ZAHN: Kevin, there are a lot of people saying that they saw some of these senior students drinking before this all happened. What role do you think alcohol played in all of this?

HOUSE: Well, I think alcohol did play a fairly big role in what happened. But it would have happened if there was drinking there or not. I don't know if you could say it would have escalated to the point it did if there was not drinking there. But, you know, it did play a role in probably, you know, some of the judgment the, some of the girls made. You know, it might have clouded that, I believe.

ZAHN: Nich, why didn't someone call 911 earlier than they did?

BABB: Well, because the whole point of powder-puff wasn't to get anyone in trouble or it wasn't to -- and the injuries at the time didn't really seem so serious that a 911 call needed to be called. And I think a lot of the people there didn't want anyone to get in trouble. But I guess when things got way too out of hand and people started going to the hospital, that's when, that's when the proof hit the fan, I'd like to say.

And one thing I just wanted to, want people to keep in mind, that it wasn't all the seniors who were punching and kicking. It was just a few, and like a few people who had personal grudges against the junior girls that had to, took it personally and had to beat them up, so to speak.

ZAHN: Well, Kevin, let me ask you this. There was a disturbing report that came out of your school today that some of these young women actually paid to be hazed. What's that all about? And is that true?

HOUSE: Yes, it's true. They paid -- I mean each junior girl pitched in for jerseys and for beer for the event. They buy the seniors it. So, I mean they paid to -- they know what they're getting into to an extent.

BABB: Yes.

HOUSE: But I mean when it got, they didn't pay for stitches. They didn't pay for, you know, broken bones. They paid for humiliation so they could humiliate next year. That's the whole idea of it.

ZAHN: Nich, how embarrassing is this, do you think, to your school?

BABB: I think, I really think that people are just blowing it all out of proportion and people are just, I don't know, they're acting way too embarrassed. I mean it's really not a school issue. Like it is, but it shouldn't be because these girls and these -- everyone who was there, including us two, even though we go to this school, we were there to have like a good time. And it was just, I mean the school is embarrassed, but it shouldn't be because I mean like people are just over reacting. And I don't know what else to say. I mean people should know that this kind of thing isn't the school's problem, you know? But it is kind of, I don't know...

ZAHN: Well, I guess it is now.

Well, Nich Babb and Kevin House, thank you very much for both joining us tonight. And we wish your school some luck as it tries to clean up this mess.

And when we come back, an audiotape reportedly to have been made by Saddam Hussein turns up today, handed over to some Australian reporters. What does it mean?

Stay with us.

COMMERCIAL

ZAHN: Yet another tape surfaced today, this one reportedly made by Saddam Hussein. An Australian newspaper says it got the audiotape from two unidentified men in Baghdad. That's where senior international correspondent Nic Robertson is tracking down exactly what we know about this tape -- Nic, what can you tell us?

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): Seemingly in contrast with the writing on Baghdad's walls, Saddam Hussein's first reported verbal message since his fall from power is a call to arms. Reportedly recorded this week, it was delivered in a tired voice.

VOICE OF SADDAM HUSSEIN (through translator): You, the Iraqi people, men and women stand together against the invasion and show your stances much as you can by writing on walls or making positive demonstrations or not selling them anything or buying anything from them, or by shooting them with your rifles and trying to destroy their cannons and tanks.

ROBERTSON: Hussein's message finding little support in Baghdad's Adamia (ph) neighborhood, traditionally pro-Saddam.

"We don't have the ability to fight the U.S. Army" says Abu Katab (ph) an agricultural engineer. "We don't even want to fight the American troops. They're preserving our security."

The streets of Adamia were the last place Hussein is thought to have appeared publicly. His new message refers to his birthday and the looting of the Iraqi National Museum, both events occurring since that appearance and his removal from power. According to the new audiotape, resistance will be a secret struggle, reminiscent of Hussein's Ba'ath Party underground movement from the 1960s.

VOICE OF SADDAM HUSSEIN (through translator): Through the secret means I am talking to you from inside great Iraq and I say to you the main task for you, Arab and Kurd, Shia and Sunni, Muslim and Christian, and the whole Iraqi people of all religions, your main task is to kick the enemy out from our country. You have to believe that he who is working with the foreigners is working against you.

ROBERTSON: For Iraq's former Foreign Minister Adnan Pechachi (ph), returning from several decades in exile, the specter of the speech troubling.

UNIDENTIFIED MALE: I fully understand the apprehension that some people feel that, you know, he may suddenly be among us.

ROBERTSON: Among anti-Western protesters to whom CNN played the speech, Hussein's words falling flat.

"Whether Saddam is dead or alive, he's finished as far as we Iraqis are concerned" he says. "Saddam is over and we don't want him back."

A group of looters we also played the tape to, undecided whether it was Hussein. "Saddam had seven doubles" he says, "and we say it's not him."

"Whether it is his voice or not we're against him anyway" says this looter.

(on camera): Even if the authenticity of the tapes isn't important to people here, the question for the U.S. is will this call to arms result in a serious and sustained threat against U.S. troops or will it simply fade like so many of Saddam's posters and likely be forgotten.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

ZAHN: And this is what the White House had to say about the so- called authenticity of this tape.

(BEGIN VIDEO CLIP)

FLEISCHER: As for Saddam Hussein and as for the latest, this tape that is in the news, we don't know if the tape is genuine or not. It's being studied. We don't know if he's alive or not.

(END VIDEO CLIP)

ZAHN: And joining us now from Washington is Judith Yaphe. She is a former Iraq analyst for the CIA. She's now at the Institute for National Strategic Studies at the National Defense University.

Welcome.

JUDITH YAPHE, FORMER CIA IRAQ ANALYST: Hi, Paula.

ZAHN: Good to have you with us tonight.

YAPHE: Nice to be back with you. ZAHN: What do you make of this tape?

YAPHE: Well, it's, you know, it's not great news. We'd like to think that he's dead. But I think it does, it will probably be confirmed that yes, he is alive. So that's not so good. On the other hand, it's hard for me to see him posing a major threat. And he could encourage isolated acts of violence. He may think that his Saddam Fedayeen, who've disappeared back into the woodwork, so to speak, and into the desert, will come out and mount guerrilla operations.

But I don't see Iraqis rising up in any great number to do the kind of things he wants. So I guess I don't see it as a major trip, but an annoying one, yes.

ZAHN: So what do you think, if he is alive, he would be capable of pulling off in some strongholds? You talked about the Fedayeen. What about places like Falluja, where you've seen a tremendous amount of anti-American sentiment?

YAPHE: Look, you're going to see anti-American sentiment with or without Saddam being alive and encouraging it. There are going to be Iraqis who just are not going to like a lot of the things that we're going to do. They won't like the imposition of an interim government or this leader or that policy or what we're doing with whatever.

Add to the mix that Saddam is encouraging it, it's easy to say. But it's hard to see that he will have widespread influence. So will he contribute to it? Will he encourage more? That's a possibility. But you're going to see some of this here anyway. You can't say that anything which happens in the coming weeks and months which is an anti-American act, violence or rudeness or whatever, and just say well, that's because of Saddam, he did that. That would be over stating the case.

ZAHN: So, Judith, as this tape is analyzed, are you hopeful that there will be some clues that will allow investigators to once and for all figure out whether he's alive or not?

YAPHE: Well, they're pretty good with audiotapes, voice matches. Maybe they can do that. They'll probably come up with something which is rather inconclusive. But if I think like an Iraqi, which I do on rare occasions, I would say that it's probably increased the chances that he is alive. What else they can learn from the tape, you have background noises. Will they tell them anything? Probably not.

So that until we can conclusively show here's a hand, here's a DNA, here's a real body part, we're going to live with this for -- until one way or the other we can confirm he is dead or we can find him. But this is going to be a really tough search. Maybe not as touch as going throughout the case of Afghanistan, but not easy.

ZAHN: So, Judith, let's close tonight with some of the analysis that's being done on this find that's being billed as the finding of a mobile biological weapons lab.

YAPHE: Very interesting. One would hope that through residue tests -- usually there's residue of something which survives, at least it does on the TV programs -- they will be able to say what was done there. If the equipment they’ve found in there is correct -- and I'm no scientist, I don't really know technology well -- but some of the components they were describing in there, it very well could have been a biological lab.

I don't want to make any judgment. You need to see the equipment. You need to have people who know what they're talking about look at it. If so, this is the first confirmation that one of these actual trucks, this kind of equipment existed. Although, I think the information was fairly good that they did anyway.

ZAHN: Well, Judith Yaphe, thanks.

Thanks for coming in and talking with us this evening.

YAPHE: You're welcome.

ZAHN: Always appreciate your insights.

YAPHE: Thank you very much.

ZAHN: We're going to take a short break.

When we come back, we're going to share a heartbreaking story for you, once again, a story involving videotape that maybe someone didn't know was being shot. A little boy with Down's Syndrome is allegedly slapped around by his school bus driver.

We're going to meet his parents right after this short break.

COMMERCIAL

ZAHN: Welcome back.

A school bus driver in Milwaukee is facing charges for allegedly harming a 9-year-old boy on his bus with Down's Syndrome.

Brian Duchow is accused of threatening and striking Jacob Mutulo while he was strapped into his seat. These charges stem from a piece of videotape his parents, the parents of this little boy had actually put a tape recorder in Jacob's backpack and it caught the attack on tape.

Now Vince and Rosemary want cameras in every special ed bus.

And the Mutulos join us now from Milwaukee.

Thank you very much for being with us tonight.

VINCE MUTULO, JACOB'S FATHER: Thank you.

ROSEMARY MUTULO, JACOB'S MOTHER: Thank you.

ZAHN: I know this is going to be difficult for you all to talk about, but to put it all in perspective, I'm going to share with the audience now exactly what happened on the bus, and we'll all listen together.

(BEGIN VIDEO CLIP)

BRIAN DUCHOW: No more of your crap, Jacob. Put that seat belt down. Now!

JACOB MUTULO: No!

DUCHOW: Now!

JACOB MUTULO: No!

DUCHOW: I'm going to slap the hell out of you.

(END VIDEO CLIP)

ZAHN: So, Rosemary, when you actually listened to that tape for the first time, tell us what you thought.

ROSEMARY MUTULO: Well, the first time I heard it I couldn't listen to it all the way through. It made me sick to my stomach. And then I thought about it, that Jacob had gone through it, so I could go through it and listen to it. And I cried through all the rest of it. And I was just in shock. I couldn't believe that this was happening to my child. You never ever think of that possibility of something happening to your child.

ZAHN: Vince, obviously you all had some concern about the safety of Jacob on this bus. Explain to everybody why you put a tape recorder in his backpack in the first place.

VINCE MUTULO: The main reason, we were trying to focus on trying to figure out why Jacob's behavior had changed so drastically over the past months. This was a kid who loved to ride the bus, it was a kid who loved to go to school. And all of a sudden he didn't want to do some of those things, to the point that he'd even throw a tantrum on the way coming home from school.

His behavior in school has drastically changed, to the point where he's hitting other kids that are smaller than him and it's really affected him academically, too. I mean he's already got a delay because of his condition and he didn't need any more help.

So it was the day following Easter break, the first day he was back, the bus driver wrote him up again for his misbehavior on the bus. And my son took him off that day and he told me what had happened. But that's when we talked about it and said we've got to do something. We've got to find out why Jacob's behavior is the way it is.

So that's when we decided to put the recorder on the bus, to find out Jacob's behavior so we could help him.

ZAHN: And Rosemary, I guess what you all are pushing for is for videotape cameras to be put in all buses transporting children with special needs. ROSEMARY MUTULO: At the very least for children who have special needs and who cannot speak for themselves, who have been up to this point mostly silent victims, unable to verbalize what's happened to them. At the very least, we should put videotape cameras on their school buses so that it can speak for them. Video cameras are impartial witnesses that at least the children would have a voice and some protection.

ZAHN: Vince, what happened when you came forward with this audiotape and you shared it with school officials?

VINCE MUTULO: Actually we didn't share it with the school officials. The first thing we did was we called the police, the local police department. And then from there we were called by local alderman and a school administrator who is a school board member that is our supervisor for our area. Then from there this all escalated. And the police originally then kept asking questions, you know, because they weren't really sure the proper area to have this go to get this done correctly.

And they found the sensitive crimes unit is a unit that takes care of only crimes of this nature. And the gentleman, another police officer came on, it was Saturday evening, and he asked us some questions, listened to the tape and after the first statement he heard he had plenty.

He took a copy of the tape back to the department. He and his supervisor listened to it and Mr. Duchow was arrested that night.

ZAHN: Tonight, Rosemary, an official from an organization called ARC, and that's an organization that helps children with special needs, says that this type of -- I don't think you can hear me.

Vince, can you still hear me?

VINCE MUTULO: Yes.

ZAHN: Yes, unfortunately this ARC organization is saying that what we just heard on tape, as disturbing as it is, is not uncommon. Are you aware of other situations like we just witnessed along with you tonight?

VINCE MUTULO: Well, actually, locally we are. But I had heard about this organization and it actually kind of shocked me that, of the number of percentage that of children like Jacob or any other handicapped person of any nature, 80 percent or some number like that, are being abused in some way or another.

But people have called us since this has come out and talked to us about their children and other issues or instances where this has happened.

ZAHN: Well, we won't keep you any longer. I know Jacob would love your attention right now.

Rosemary and Vince Mutulo, we really appreciate your time. We know how troubling this is for you to share your story and know how important it is for you to get the information out there that this shouldn't happen to any other child again.

Again, thank you for joining us tonight.

VINCE MUTULO: Thank you.

ROSEMARY MUTULO: Thank you for having us.

ZAHN: And we should mention that we did call the bus driver who is being accused of this kind of mistreatment. We called his home. We got no answer. And the bus company would not provide us with any statement, the bus company that employs him.

We need to end it there.

Thanks so much for being with us tonight.

Larry King is up next after a quick check of the headlines.

Hope you'll join us again tomorrow night.

Good night.

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