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CNN RELIABLE SOURCES

Martha Stewart's Downfall; Explosions in Baghdad

Aired March 7, 2004 - 11:30   ET

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

(BEGIN VIDEOTAPE)
HOWARD KURTZ, HOST (voice-over): Domestic diva's downfall: are journalists relishing the conviction of Martha Stewart and turning it into a morality play?

Kerry's crowning moment: will reporters turn up the heat on the Democratic nominee or spend their time speculating about the veep stakes? And are they making too much of the brief 9/11 footage in President Bush's ads?

Also, Jayson Blair's media blitz. Is the former New York Times reporter cashing in on his lies?

(END VIDEOTAPE)

KURTZ: Welcome to RELIABLE SOURCES, where today we turn our critical lens first on Martha Stewart's conviction for obstruction of justice. I'm Howard Kurt.

When the lifestyle maven was found guilty Friday afternoon, the broadcast networks, along with the cable news outlets, all went live.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: All counts against Martha Stewart, guilty.

UNIDENTIFIED FEMALE: Count one, guilty for Martha Stewart, conspiracy.

UNIDENTIFIED MALE: It seems that the jury rejected practically every claim of the defense on both sides.

(END VIDEO CLIP)

KURTZ: With producers bursting from the courthouse, holding color-coded signs to signal the verdict on each count, confusion reigned on the air waves, particularly during the initial moments on CNBC, while MSNBC briefly made the wrong call.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Not guilty on the first count we are hearing.

(CROSSTALK) UNIDENTIFIED FEMALE: And Martha found not guilty?

UNIDENTIFIED MALE: Martha guilty.

UNIDENTIFIED MALE: Four guilty.

UNIDENTIFIED FEMALE: Count three guilty.

(END VIDEO CLIP)

KURTZ: And today, Martha Stewart on the cover of "Newsweek." But is this really a story of such megaproportions?

Joining me now here in Washington, Michelle Cottle, senior editor for "The New Republic." And in New York, CNN's senior legal analyst, Jeffrey Toobin. He's also a correspondent for "The New Yorker."

Welcome.

Jeffrey Toobin, this is clearly a big story.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: You bet.

KURTZ: All right. We have breaking news now. Let me go straight to Atlanta for the latest.

RENAY SAN MIGUEL, CNN ANCHOR: All right, Howard. Thank you very much. We want to talk more about these explosions, these series of explosions that have been reported in the last 15 minutes or so in Baghdad.

CNN has now confirmed that these explosions were indeed heard in the Green Zone. That is the area around the coalition headquarters in downtown Baghdad. Our officials there on the ground with CNN in Baghdad have reported six explosions so far. The Associated Press have reported a series of ten explosions. Right now, CNN says about six explosions.

We have no other details. These details are coming in as we speak. So as we get more information, we will bring it to you. But again, you understand that these explosions were heard in the Green Zone. That is the area in downtown Baghdad that is around the coalition headquarters there in the city.

Six explosions that we have heard. And we see some video right now. Sirens have been heard going off concerning this series of explosions, live pictures right now that you are seeing. At least six explosions, as we have said, in Baghdad's Green Zone.

We're trying to get more details available to you. As they situations have happened, sometimes there have been a series of mortar attacks by insurgents in and around the coalition headquarters. The damage estimates usually vary on those particular attacks. It has been a while, though, at least a couple of weeks, since we have heard something of this nature, where there have been explosions heard in and around the Green Zone. Stay with CNN. As we get more details on this, we will bring it to you.

Now back to Howard Kurt and RELIABLE SOURCES.

KURTZ: Thanks for that news update, Renay.

Jeffrey Toobin, have you been struck by the massive media attention the Martha saga has been getting?

TOOBIN: Well, struck by it, but not surprised, and not offended at all. I mean, this is a woman who is one of the dozen best-known women in America, I think it's safe to say. And here she is charged with very serious felonies, now convicted, and that's an irresistible story. And I don't think there's any reason for the press to resist it. It's just a good story to cover, interesting, and important in a way.

KURTZ: Michelle Cottle, in recent weeks, we've had the indictment of WorldCom's Bernie Ebbers and Enron's Jeff Skilling. We've had trials of Tyco's Dennis Kozlowski and Adelphia's John Rigas. Hundreds of millions of dollars involved. So why is Martha's measly little $50,000 stock scam getting this kind of mega attention?

MICHELLE COTTLE, "THE NEW REPUBLIC": Well, because she's Martha. She is a celebrity. Nobody would recognize Bernie Ebbers if he bit them on the street.

But Martha is not just a celebrity. She's a controversial select. People love to hate Martha because she has this reputation of kind of being hard-nosed and not all that warm and fuzzy. So of course this is the big news everybody wants to know.

KURTZ: Jeff Toobin, you interviewed Martha Stewart last year for "The New Yorker." She gave you kind of a tour of her Westport, Connecticut, home. She was doing a lot of television interviews at the time. What did you make of that media offensive while these charges were pending?

TOOBIN: Well, you know, it was very interesting to compare what I heard when I interviewed her for "The New Yorker" and what I saw in the courtroom. And though I knew I was presented with obviously a one-sided picture of her status in the investigation when I interviewed her, and the people around her, it was very striking to see the prosecution put on evidence that showed she had lied to me, just like she lied to the FBI and the SEC. And, you know, sitting there in that courtroom, the jury -- I found the jury's verdict no surprise at all, because it was just obvious that she was guilty.

KURTZ: Did it affect your coverage at all when you realized based on the evidence that she had lied to you?

TOOBIN: Well, I guess it might have a little bit. I guess you always feel a little worse when you've been personally lied to as opposed to just sort of generally misled. But I don't think I was unduly harsh. Perhaps I think the real lesson to me was that maybe I was unduly friendly when I -- when she sold me a bill of goods. I mean, I think I wrote a balanced story for "The New Yorker" last January, but it was a really strong case that the government put on. And I am pleased to report that I can correct my previous errors, if I made any, and say that she was absolutely guilty.

KURTZ: Isn't Stewart getting harsher coverage because, as you mentioned, a lot of people don't like her, and she's a woman? She can be portrayed as the evil witch.

COTTLE: Well, sure. But it's always the case...

KURTZ: Doesn't that bother you?

COTTLE: But what you're looking at -- on the other hand, she gets more attention, and she's probably goat more good press in the past because she's one of the top 10 most recognizable women in the country. I think what prosecutors did is they turned her into the poster child for corporate crime, to a certain extent, when this wasn't the kind of corporate crime that Ken Lay and Bernie Ebbers were accused of doing.

This is kind of like personal insider trading stuff she was doing. It wasn't about her misleading her corporation or misleading her stockholders. In fact, the prosecutor had to drop that charge against her. But, you know, of course she's going to get this, because people love to hate her.

KURTZ: Do you think that -- I don't know if you agree with that, Jeff Toobin, but to the extent that the coverage was driven by this, could that have even affected the jury?

TOOBIN: I don't think so. And, in fact, I'm not sure I agree with Michelle that the prosecutors turned her into a poster child for much of anything.

The case was actually very professionally, very narrowly tried on the facts before it. They did not try to inflate her significance into something more than it was. It was a case, as the prosecutor, Karen Seymour, said in her opening statement; about the importance of investigators getting the truth when they interview people.

That's what she was charged with, and that's what she was convicted of. There was no attempt to make this into a case about people losing money in the stock market.

COTTLE: Oh, sure there was. She was charged with having misled her stockholders by proclaiming her innocence. She said they were trying to prove that they could charge her with fraud because she came out and said she, "I'm innocent," which kept Martha Stewart's company stock price elevated. And they...

KURTZ: Because the whole company is based on her image.

COTTLE: Because the entire company is (UNINTELLIGIBLE) personality. And they had to drop that charge because it was just so completely absurd.

TOOBIN: Well, I don't think it was absurd. I mean, actually, the judge did dismiss it, and I think it was probably the right decision. And I was actually surprised at how good the prosecution's evidence was that she really did make an effort to prop up her stock price, she really did go to investor conferences and say these charges are false for the following reasons. All lies, as it turned out.

So, you know, I actually don't think the securities fraud charge was as absurd and all that. But I understand why the judge dismissed it. And I think that is yet another reason why Martha has virtually no chance of winning this case on appeal, she got all the good breaks at the trial level.

KURTZ: Just briefly, Jeff Toobin, 10 years from now, when many of us have forgotten about Dennis Kozlowski and Jeff Skilling, will Martha Stewart be held up in the media as a symbol of a hero of greed?

TOOBIN: I think she may. But don't rule out a Martha Stewart comeback either.

You know, "Martha Stewart Living" is a wonderful magazine. Her products sold at Kmart are terrific products. And I think it is worth keeping that in mind as we beat her up, as we should, for committing these felonies. The good that she has done, and perhaps the good that she will do, may well live on after this conviction as well.

KURTZ: All right. A good point. Jeffrey Toobin, in New York, thanks very much for joining us.

Michelle Cottle, stay put.

When we come back, it's now a two-man race for the White House. Will the media get a whole lot tougher on John Kerry?

(COMMERCIAL BREAK)

KURTZ: OK. We are going to go back to Atlanta to get an update now on the situation in Iraq.

SAN MIGUEL: Thank you very much, Howard.

We have been reporting about a series of explosion that have been heard in downtown Baghdad about 20 to 25 minutes ago. CNN's Ben Wedeman joins us now on the phony with the latest there -- Ben.

BEN WEDEMAN, CNN CAIRO BUREAU CHIEF: Yes. About 20 minutes ago, we heard at least six explosions coming from the direction of the so- called Green Zone. That is where the U.S.-led Coalition Provisional Authority is headquartered. And it has been the target in the past of repeated such attacks.

At this point, all we know is that, as I said, at least six missiles hit there, an area -- rather, rockets. We have seen increased military activity in that area, helicopters flying over head. In fact, one of our guards saw some sort of streak of light going over our hotel in the direction of the Green Zone as soon as the first explosions were heard. We also heard the sirens going off that had been installed in that area. When this sort of thing happens, we have not heard as yet any word about damage or injuries from the Green Zone.

SAN MIGUEL: Yes. I just want to double-check with you, because we're getting some reports in over on this side from The Associated Press that maybe the former Ministry of Foreign Affairs building may have caught some kind of rocket fire. It was on fire, according to one witness, and that there is a U.S. military mess hall that sits right behind that building. Have you heard anything that might confirm those reports?

WEDEMAN: No, no such specifics, in fact. But of course the administrator of foreign affairs -- the former Ministry of Foreign Affairs is right there. It's near the Rasheed Hotel, right next to the main compound that used to be one of the palace complexes of Saddam Hussein, which has now become, of course, the headquarters of the coalition authority.

So when we get these details, we'll bring them to you. But we can confirm that at least six explosions coming from the direction of the Green Zone. More military activity, there's been some Bradleys or Humvees moving around in this area. It appears possibly re-deploying helicopters overhead.

But as I said, this is not an unusual occurrence. This happens on a fairly regular basis.

SAN MIGUEL: And you're right. I mean, the insurgents there have lobbed mortars and rockets every once in a while. But hasn't it been a while since we've heard something of this kind of nature, as far as multiple types of explosions heard near or in the Green Zone?

WEDEMAN: Certainly, this number of explosions is unusual. Occasionally, there may be two or three, but we're talking about at least six, maybe as many as 10. And obviously, when this sort of thing happens, the coalition forces really jump into action.

What they try to do is determine from whatever information they have immediately afterwards to determine where the rockets -- or whatever they were, mortars -- were fired from. They fly over the area where they believe it was fired from, they move forces into that area to try to find out -- possibly find who might have done it. But it's a very different task.

As you can see, it's nighttime here. In some areas of the city, there's no electricity. So it's a very difficult task.

These explosions came in quick successions. Whoever did it probably let those whatever they were, mortars or rockets, go, and have clearly long ago left the area.

SAN MIGUEL: It seems to have been the MO, since these attacks did occur on an almost a daily basis a couple months ago. We want to bring our viewers up to day, Ben, for just a second here, that we are reporting about a series of six, possibly 10, explosions heard within the last half-hour in or near the Green Zone of downtown Baghdad. That is where the Coalition Provisional Authority's headquarters are in Baghdad.

The Associated Press is reporting that the former Ministry of Foreign Affairs was on fire. That according to an eyewitness. That building was damaged by U.S. bombing during the war this time last year.

A U.S. military mess hall sits behind the building. We have no word so far of any kind of casualties or any kind of damage assessment so far. But smoke and fire have been seen coming from a building in or near the Green Zone just minutes after several explosions. As Ben Wedeman reported, maybe at least six, possibly 10 explosions heard, about 7:25 p.m. local time, 11:25 here on the East Coast.

As we get more information on this particular situation in Baghdad, we will bring it to you. I want to go back to Ben right now and talk a little bit more about the security precautions that have been taken there in and around the Green Zone since these mortar attacks used to be a daily occurrence a couple of months ago.

WEDEMAN: Well, certainly it's a very difficult task to get anywhere near, or certainly inside the Green Zone. But obviously there are some things that they can't totally protect against.

Now, we know they've got sandbags on the windows; there are concrete barriers all over the place. They've installed these sirens now, which in the beginning did not exist, and there was no system of warning everyone in that area when these attacks occurred. But this is the most difficult thing to prevent or stop or protect against, because these projectiles, for lack the a better word, they have a high trajectory. They just go up, they go down, and it's almost impossible to protect them.

Now, obviously, the Americans are taking whatever precautions they can in the wider sense of the word, sending out patrols. In another time I was here, every time this would happen, there would be not only helicopters going up in the air, but other aircraft as well. And they were circling around the city during a period of repeated bombardments of the Green Zone, and they were pinpointing, trying to pinpoint as soon as those projectiles left the ground to find out where they happened. And they would send in as quickly as possible a rapid reaction force to try to suppress this sort of thing.

But it is a difficult task. This is a huge city of five million people, with lots of streets and alleyways. And it's just a very difficult task to prevent this sort of thing happening. But they have, as I said, taken measures within the Green Zone to protect the people who are there to the best ability possible. But it's not easy.

SAN MIGUEL: We understand that. Ben, we're going to give you a chance to get some more information, while I tell the viewers about the idea that these attacks have to be taken in context with what is going on with the transitional authority and the attempts by the coalition to hand over the reigns of the government back to the Iraqi people.

As you may have been aware, there was supposed to be a signing ceremony on a new Iraqi interim government last Friday. That was canceled at the last minute because of some concerns from Shiite clerics about the veto power given to Kurdish powers in the country. We've been reporting so far this morning that that signing ceremony has been rescheduled and will take place tomorrow morning.

We also under that L. Paul Bremer, the coalition authority's -- the civil administrator there in Iraq for the coalition, spoke about these very issues and how difficult it is to have these kinds of attempts to translate power back to the Iraqis going on while you have some insurgent attacks like the one that has apparently gone on here within the last half-hour. He will be speaking with Wolf Blitzer. That begins at noon Eastern on "LATE EDITION."

But we want to recap, just to tell you again that smoke and fire have been seen coming from a building in or near the Green Zone, after at least six explosions were heard in the downtown area near the Green Zone, the coalition headquarters there in Baghdad. We have no reports just yet on casualties, any possible casualties or injuries or damage, although we have heard from The Associated Press that the former Ministry of Foreign Affairs was on fire. That, according to an eyewitness that told the AP.

Ben Wedeman joins us again from Baghdad.

Do you have some more information for us, Ben?

WEDEMAN: Yes. We've heard from officials in the coalition authority. They say that between six and eight rockets landed in that area near the Rasheed Hotel, which is adjacent to the Green Zone.

We were told by one of our producers who spoke with somebody over there, a CPA official, he said they were having dinner in the mess hall. And normally, when there are these bombardments, they're told to evacuate. In this case, they were not.

So it appears that at least the heart of the Green Zone was not targeted in this instance. As I said, it appears that it hit somewhere in the area of the Rasheed Hotel.

The Rasheed Hotel, of course, has come under bombardment before. Back in I think early November, it was hit by a series of rockets, and one person was killed in that incident. But we are told that, as I said, in the area of the Rasheed Hotel, no world yet on any casualties or damage.

SAN MIGUEL: All right. Ben, thanks very much. We will be checking back with you later.

As a matter of fact, please stay tuned to CNN, because we will bring you the latest information as we get it at the top of the hour on "LATE EDITION WITH WOLF BLITZER."

I'm Renay San Miguel at CNN headquarters in Atlanta. Now back to Howard Kurtz and RELIABLE SOURCES.

KURTZ: Renay, thanks for that update.

Joining me now to talk about the campaign, Roger Simon, chief political correspondent for "U.S. News & World Report." Still with me, "The New Republic's' Michelle Cottle. And in New York, John Podhoretz, columnist for The New York Post and author of "Bush Country: How W. Became a Great President While Driving Liberals Insane."

John Podhoretz, the media have labeled a furor over the president's initial TV ad showing some few brief seconds of the 9/11 footage. Do you think this is -- you know, it was obviously criticized by some representatives of victims' families. Has this been overblown as a press controversy?

JOHN PODHORETZ, NEW YORK POST: I think so. I mean, I think also very little has been done to explore and research exactly how this issue bubbled up so quickly, and with -- you know, with such passion, and just how specifically it helps the Democratic candidate for president. I mean, it's a talking point out of his campaign that has simply emerged in the mainstream media without any filter.

KURTZ: Roger Simon, the Democrats talk about Bush's perceived shortcomings on security all the time. Why would this be off limits to the Bush campaign?

ROGER SIMON, "U.S. NEWS & WORLD REPORT": Well, because it's a failure as a commercial. It's not a matter of whether it's off limits or not.

This was a feel-good commercial. It had no information it, it wasn't supposed to. It was only supposed to make you feel good about the president of the United States.

It was not supposed to cause people to start discussing whether it was the proper use of imagery or not. And on that level, it was a total failure. And one wonders, in a Bush campaign, as well financed as it is, and with as many smart people as it has, how its first commercials can set off a controversy rather than making people feel good about the incumbent.

KURTZ: Manufactured media controversy, Michelle?

COTTLE: You know, you can't always predict what people are going to latch on to. It's like the flight suit controversy. I'm sure the Republicans would have never let him do that if they knew that it was going to become such a big deal. And this is the same kind of thing.

It's a very sensitive topic. The families got involved. And when you get the survivors involved, there's no way that you can predict what's going to happen.

KURTZ: All right. We will continue our discussion in just a moment. Hold on, John. We'll be back in a moment. (COMMERCIAL BREAK)

KURTZ: We apologize for having to truncate the program because of breaking news. Next week on RELIABLE SOURCES, I'll sit down with disgraced former New York Times reporter Jayson Blair.

Now we're going back to Atlanta to bring you the latest update on the situation with the explosions in Iraq.

SAN MIGUEL: All right. Howard, thank you very much. We do want to bring our viewers up to date now.

It was about 7:25 p.m. Baghdad time, 11:25 p.m. Eastern, when smoke and fire was seen rising from a building in or near the Green Zone of Baghdad just minutes after (AUDIO-GAP) Coalition Provisional Authority's headquarters are located. Sources inside the Green Zone have told CNN that the explosions did not involve the presidential palace, which serves as coalition headquarters, but may have struck some buildings in the zone.

CNN's Ben Wedeman, who is on the ground there in Baghdad, reported just a few minutes ago that he is hearing from sources that maybe six to eight rockets may have struck near the Rasheed Hotel, which has been a target of attacks by insurgents in the past. He is still working to get some other information, confirmation on that.

We had also heard from The Associated Press that the former Ministry of Foreign Affairs building, which was severely damaged by U.S. bombing during the war, which started just a few weeks from now this time last year, may have been hit as well, was possibly on fire. This according to an eyewitness who told the AP that the building -- there's a U.S. military mess hall that sits behind the building. We have no word on whether that was struck or not.

Wed don't have anything in details concerning casualties or confirmed damage to any of these buildings that we're talking about. But we need to tell you that these events are developing rapidly, and that some of the -- some of our producers and some of our team members there, they still need to get actually to the site. And as you can imagine, the Coalition Provisional Authority is going to guard the security there very tightly until they're ready for journalists to go in and see exactly what is going on.

There you see a map of the Green Zone, the festival and the parade ground, and the park nearby. The Republican Palace, one of the main presidential palaces of the former leader, Saddam Hussein, which is now serving as one of the coalition's headquarters there, right there the bend in the Tigris River.

We need to tell you that there are some activities going on that may have prompted this attack by the insurgents. The signing ceremony that was set to take place on Friday, which was canceled at the last minute because of some concerns from Shiite clerics about the role of Kurdish authorities in Iraq, that was canceled. We are hearing now that that is going to go on tomorrow morning, that that signing ceremony will take place. We also heard from L. Paul Bremer, the U.S. civil administrator in Iraq, during a taped interview with Wolf Blitzer that you'll be seeing on "LATE EDITION" coming up here in about two minutes, he had said that these kinds of attacks will make it difficult for the authority to turn over to -- back to the Iraqi people. But that mission will continue regardless of the attacks. But as you can imagine, security remains a huge concern in Baghdad.

Again, six to eight rockets may have sit somewhere near the Rasheed Hotel within the Green Zone. Also that may have hit near the former Ministry of Foreign Affairs building.

We have heard initial reports that at least 10 rockets were detonated. And as CNN's Ben Wedeman told us, the insurgents many times will set up their mortars and rocket launchers and will fire off these rockets in sequence, and then will leave the area just as soon as they can, which makes it difficult for the CPA authorities there to try to track these people down and try to find out what's going on. But it has been awhile, at least a couple of weeks since we have heard any kind of attacks of this nature.

As you recall, this used to be a daily occurrence of mortars being lobbed into the Green Zone there. Security measures have been tightened considerably around the Green Zone area since that time, a couple of months ago. But as you can see, this is still a concern for those CPA authority officials who are working in the Green Zone to try to transfer power back to the Iraqi people.

We're going to have more on this with Wolf Blitzer and "LATE EDITION," coming up out of Washington. As we say, he does have an interview with U.S. civil administrator L. Paul Bremer coming up at the top of the hour.

I'm Renay San Miguel at CNN headquarters in Atlanta. Thank you for joining us.

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