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CNN IN THE MONEY

A Look At The Changing Face Of Terroism; Is Hiring Celebrity Spokesman Putting A Company Reputation At Risk? How High Will Gas Prices Go?

Aired March 13, 2004 - 13:00   ET

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

JACK CAFFERTY, HOST, "IN THE MONEY": Thanks.
Coming up, on "IN THE MONEY" today, old threat new face. We'll look at how terrorism is changing from Madrid to the cities inside Iraq.

Plus, beyond the brand. See whether companies are risking too much when they use a real person as their symbol.

Also ahead, oil change. The price of gas is rising. We'll look at how high it could go.

All that and much more right after this quick check of the headlines.

WHITFIELD: Here are the top stories. Investigators are looking for answers after a horrific crime in Fresno, California. Police were responding to a domestic disturbance call yesterday when they found 9 bodies, mostly children, inside the home. The victims' father is a prime suspect in the killing. He is now in custody.

Police in Battle Creek, Michigan are investigating a shooting at Kellogg Community College, 2 people are dead and another critically wounded. They were found in a car in a campus parking lot there. Police are trying to determine if one of them was the shooter.

Grief stricken families in Madrid, Spain are burying their loved ones killing in Thursday horrific train bombings. The attacks kill 200 commuters and injured another 1,600. While the Basque separatist group, Eta, remains the main focus of the investigation, officials say they are also following leads suggesting an Islamic terrorism group.

Now to "IN THE MONEY."

ANNOUNCER: From New York City, America's financial capitol, this is IN THE MONEY.

JACK CAFFERTY, HOST: Welcome to IN THE MONEY. I'm Jack Cafferty. Coming up on today's program we have the following.

The changing face of terrorism, as the world focuses on possible al Qaeda connections to the bombings in Madrid.

The United States is looking for the man who may be aiming to be the next Usama bin Laden. Just what the world needs two of those. Plus she's no Betty Crocker. Martha Stewart gave her company a human face. Maybe in the end it turned out to be a little too human. We will look at risks corporations take when they use real people as their symbols.

And the Spam of the free and the pork of the brave -- who wrote that? That little pig product, as in Spam, is one of America's landmark brands. "Cheers" star John Ratzenberger will join us; show us around some of the classics all the way from Crayola, to Zippo, to Harley Davidson.

Joining me today, two of the regulars here on IN THE MONEY: CNN correspondent Susan Lisovicz and "Fortune" magazine's editor-at-large, Andy Serwer.

I didn't look this up, but I'm going to venture a guess. The stock market is coming off its worst week in a year. I mean it really took it whopping. What's going on?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, it was ironic actually, because this is the week where -- the four-year anniversary of the NASDAQ hitting its all time high, 5,048. But it is kind of in a dead zone. First of all, you had, of course, the terrible jobs report from the week before. so that was weighing on investors minds. We got through the fourth quarter. It looked good, the first quarter has ended, you are waiting for the guidance from companies and then their actual earnings, and then you have a terror attack. And that really spooked the markets.

ANDY SERWER, EDITOR, "FORTUNE" MAGAZINE: There's another anniversary this week, Susan, is the one-year anniversary of the NASDAQ bull market.

LISOVICZ: That's true.

CAFFERTY: Right.

SERWER: And that's a problem because people think that the market may have gotten ahead of itself. A lot of people on Wall Street thinking about the C word, correction. And the problem really is the economy, isn't it? I mean the question is the growth there? Are we accelerating? Or are we, dare we say it, slipping back, not moving ahead? Real questions there. Of course, there's no growth on the job front. The trade deficit is widening and there's fears coming back on the street.

CAFFERTY: Although, Alan Greenspan says he senses those jobs are in the pipeline. And they'll begin showing up soon.

SERWER: Right around the corner is where that prosperity was.

CAFFERTY: Yes. The White House hopes he is right.

SERWER: Yes.

CAFFERTY: This week's bomb attacks in Madrid have so far claimed nearly 200 lives and put the spotlight, once again squarely, on the world's terror groups. Despite efforts of a global crackdown, terrorist outfits from al Qaeda to Ansar al Islam continue to make their presence known -- their deadly presence.

For more on the current state of terrorism and the potential for another major attack here in the United States, we are joined by Jonathan Schanzer. He's a terrorism analyst at the Washington Institute for Near East Policy.

Jonathan, nice to have you on the program. Thanks for joining us.

JONATHAN SCHANZER, WASH. INST. FOR NEAR EAST POLICY: Thanks. Good to be here.

CAFFERTY: Walk us through this thing on Madrid and give us your take on it. A lot of fingerprints on that, that suggest al Qaeda might be involved there. Repercussions around the world, including here in the United States, beefed up security in New York, the stock market reacting. What is your read on that event?

SCHANZER: Well, the attack was, of course, a coordinated deadly attack, more than 10 explosions. This does not have the markings of ETA. The most deadly year for ETA had about 120 people killed; and that was in 1980. So I think the attacks from Madrid were well beyond the capabilities of ETA. Which of course, points the finger to al Qaeda. So this, again, raises questions as to how deadly al Qaeda can be in the west and in the Middle East.

And we really are, perhaps, seeing a reconstitution of al Qaeda in a different way. Al Qaeda has really become more of a phenomenon than an organization. Where as once it was sort of a core group. It now appears that there are other smaller that groups carrying out violence in the name of al Qaeda. And this is the kind of thing we have to worry about in the Iraq, in the United States and around the rest of the world.

SERWER: Jonathan, You seem sure that it was al Qaeda in Spain, which is interesting. What about the possibility that al Qaeda is linked up to ETA and other groups, even non-Islamic groups, and wreaking havoc around the world?

SCHANZER: This is a sort of fear that I think terrorist analysts have had for some time. I don't know of any direct links between ETA and al Qaeda, but it's possible. I've heard of one ETA member who was a convert to Islam and that had some contact with al Qaeda. This is yet to be proven.

But what we do know is there are a number of affiliate groups throughout the Muslim world. These are small, organic, local groups that were formed for very local reasons, whether they wanted to topple their governments or install Shariya law. Whatever their beef was, they eventually linked up with al Qaeda and they are now much, more dangerous than they were, let's say, five or six years ago. This was an alliance that Usama bin Laden began in 1998. It has expanded. And this is essentially the next generation of threat coming from al Qaeda. These affiliate groups will continue to get stronger. And particularly if we're able to capture Usama bin Laden, or if he's killed, or we are able to stop him entirely, these small groups are going to come up through that vacuum.

LISOVICZ: And Jonathan, specifically, Abu Musaab al Zarqawi is someone you have described as al Qaeda 2.0, which is pretty scary.

SCHANZER: Yes. Abu Musaab al Zarqawi is the man we caught; we intercepted his memo last month. U.S. intelligence officials found this memo. It indicated that he was trying to continue to carry out attacks against the United States. He was seeking help from the larger al Qaeda network and was seeking to foment internecine violence inside Iraq. This is a man dangerous; he's been linked to attacks in Riyadh, Istanbul and Morocco. This is essentially a freelancer. This is a lone wolf, someone that's acting alone in the name of al Qaeda.

And this is essentially the next generation of al Qaeda. People that weren't part of the core, weren't part of the sort of the more dangerous people coming out of Afghanistan. While this guy was trained in Afghanistan he found his roots elsewhere and he's created a network not unlike al Qaeda. And it has the same vision as al Qaeda. This is the danger, I think, of terrorism in the future.

CAFFERTY: Where do we stand in your opinion on this war on terrorism? We have got this terrible situation in Madrid. We've got this fellow, Zarqawi, you are talking about, the lone Wolf that is active, some think inside Iraq. We have got terrorist attacks happening there. There is discussion all over Western Europe of fear of terrorism, possibly being about to increase there. Are we winning this war or are we losing it? What is your read?

SCHANZER: I think we're winning it. We've certainly -- I mean counterterrorism at its core is just restricting the terrorist environment. So we've cut down on the amount of finances moving around in the terrorist world. We have arrested a number of key figures. So we are doing a good job.

The problem is that this is more of a movement, a phenomenon. So when you cut off the head, another head emerges. And essentially we're going to see more attacks on softer targets. Whereas, I think al Qaeda was once able to carry out the attacks against the USS Cole, against U.S. embassies, they have not been able to hit targets like that. What they are going now --going for now are really the softer targets. Which I think shows that they have less of a capability than they once had; of course, that makes it more dangerous for the average civilian.

This is going to be a long war. This war on terrorism is going to be lasting for quite a long time. And I think we have to get used to the idea that civilians will be targeted but we are actually making headway.

CAFFERTY: You mentioned when one head is cut off, another emerges. A lot of people suggest those head are grown in the fundamentalist schools that are operating inside Saudi Arabia. What are your thoughts on the validity of that statement and the reluctance, if you are really serious about a war on terror, a reluctance to go after this stuff, where it is being fomented, and where it's being bread, and where it is being promoted?

SCHANZER: There is no doubt that Wahabi Islam coming out of Saudi Arabia has been a major source of radicalism throughout the region. Madrassas, or these informal Koranic schools, are certainly where a lot of the radicalism is taught. I can actually look towards Yemen, as one very good example of how to actually stop that. The Yemenis have done a good job of co-opting some of these informal schools, and making sure math and science are being taught there, or English for that matter. This is the kind of thing that we're going to start to ask the Saudis to do. And they've yet to do it.

CAFFERTY: All right. Jonathan, we're going to have to leave it there. Thank you for joining us. I appreciate it.

SCHANZER: Thank you.

CAFFERTY: Jonathan Schanzer is a terrorism analyst at the Washington Institute for Near East Policy.

Coming up on IN THE MONEY as we continue, how to build a better Martha Stewart. It took a human being to land in Martha Stewart's kind of trouble. The Michelin Man didn't even flirt with this kind of stuff. Find out whether it's worth the risk for companies to use a real person as their symbol.

Plus the stars behind the Stars and Stripes. Average Americans make some of which country's most loved brands. See how "Cheers" star, John Ratzenberger is putting the workers of America in the spotlight.

Plus, road rage. Gas prices hitting the roof again and slated to go higher. We'll see how high they might go. And try to find out how long it's going to take before things return to a more pleasant level.

Back after this.

(COMMERCIAL BREAK)

LISOVICZ: People used to poke fun at Martha Stewart for being a little too perfect. It turns out her problem was being a little too human. Martha has been lying low since her conviction last week, and now her company has to figure out how to save its one-woman brand. But that's the risk you run when a real personality becomes the face of a corporation.

To see whether it pays to use a mere mortal to do an icon's job, we are joined by Eric Dezenhall. He's the president of Dezenhall Resources, which does crisis management for companies, CEOs, and celebrities under attack. All of which, I guess would come into play for this particular story.

Welcome, Eric.

ERIC DEZENHALL, PRESIDENT, DEZENHALL RESOURCES: Thanks for having me.

LISOVICZ: You know, everybody is talking about whether Martha stays, whether her name is on the magazine, "The New York Times" has already changed the name of the column. But the fact is even with an icon like Martha, there were many -- there are many talented people behind her. This is a company, Martha Stewart Living Omni Media with 500 people. And this is a very scary time for them. One of the things for a crisis management is to keep them there, correct?


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