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CNN WOLF BLITZER REPORTS

More Than 10,000 Fugitives Apprehended in Nation-wide Law Enforcement Operation; Kidnapping for Ransome Growing in Iraq; Defense Department Wants More UAVs; Tax Deadline Approaches

Aired April 14, 2005 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: Happening now, oil-for-food for profit: a Texas businessman charged with paying secret kickbacks to Saddam Hussein's regime.
Stand by for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Get down!

BLITZER (voice-over): More than 10,000 fugitives captured in a coast-to-coast sweep.

ALBERTO GONZALES, ATTORNEY GENERAL: There currently are bad guys out on the streets that need to be rounded up.

BLITZER: Hostages for sale: it's a growing business in Iraq. Is the motive to terrorize, or make money?

Baseball bat killing: first, a lost game, then lost control.

UNIDENTIFIED MALE: This is a good kid that made a bad decision.

BLITZER: Teen teasing turns to tragedy.

Tax man: Are people who cheat the government cheating you? I'll ask the IRS commissioner.

ANNOUNCER: This is WOLF BLITZER REPORTS for Thursday, April 14, 2005.

(END VIDEOTAPE)

BLITZER: Thanks for joining us. 10,000 fugitives on the run. Almost 1,000 law enforcement agents in pursuit. The result, a dramatic round-up, sending a powerful signal during some crime victims' rights week.

Our security watch begins now. Justice correspondent Kelli Arena standing by -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: This was the first effort of its kind, Wolf. 25 federal agencies joined with state and local law enforcement officials. Attorney General Alberto Gonzalez used the occasion to hold his first press conference since taking office.

(BEGIN VIDEOTAPE)

ARENA (voice-over): Officials say just about everyone with a badge and a pair of handcuffs was asked to help and did. In just one week, more than 10,000 fugitives across the nation were captured, more than three quarters had prior arrest records.

GONZALES: We know from history and from the bitter experiences of far too many victims, that a fugitive with a rap sheet is more desperate, more predatory and more likely to commit the crimes that plague citizens and communities.

ARENA: The results are significant, 162 people accused or convicted of murder now in custody, along with 638 wanted for armed robbery. And more than 500 wanted for rape or sexual assault.

BENIGNO RENYA, U.S. MARSHALS DIRECTOR: While we can quantify arrest numbers and the types of crime, the reduction of criminal activity created when dangerous individuals are behind bars and the pain and suffering of victims that it will prevent is incalculable.

ARENA: In Chicago, Marshall Sharon Metzger led the capture of a fugitive who's been on the run for eight years after escaping from a federal prison. She's part of the Great Lakes Regional Task Force.

CNN spent several days with the force back in February.

SHANNON METZGER, U.S. MARSHAL: When you're working multiple cases at one time and running into dead ends, it's easy to throw the folder in your drawer and say, that's enough, let's go on to something else. But the good investigator keeps plodding along and works at it and feels a real sense of accomplishment when you arrest somebody like that.

ARENA: The nationwide effort was led by the U.S. Marshals to coincide with Victims Protection Week. Officials say it costs $900,000, most spent on overtime for state and local officials who joined in the effort.

(END VIDEOTAPE)

ARENA: Marshals across the nation are hoping that the strong results bring new attention and more resources to the agency, Wolf.

BLITZER: Any specifics on the timing of this? It all unfolded very quickly.

ARENA: Well, they have been planning this for a while. And so the Marshals went forward and said, look, give us every person that you can spare for this operation. They went from April 4 to April 10. And as the state and locals brought forth their arrest warrants, they had federal arrest warrants, and they just got as many people as they could get in that time period.

BLITZER: And it worked. Let's see if they do it again. Thanks very much, Kelli Arena. Appreciate that.

And to you're viewers, please stay tuned to CNN day and night for the most reliable news about your security.

President Bush often finds himself at odds with reporters. Today, he met with many of their bosses, who had plenty of questions of their own. Our senior White House correspondent John King standing by live now to tell us how it went -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Wolf, the president fielding questions on a number of issues: immigration reform, his Social Security proposal, and the president answering for the first time publicly questions about one of the key Republican leaders in Congress and whether the president thinks he should stay.

(BEGIN VIDEOTAPE)

BUSH: ...fix Social Security. I keep emphasizing...

JOHN KING, CNN WHITE HOUSE CORRESPONDENT (voice-over): Taking questions from newspaper editors, the president did not answer directly when asked if Tom DeLay is now a liability to the Republican Party. But Mr. Bush stood by the embattled House majority leader

BUSH: He wants the ethics committee to review his case. And he's willing to step up and talk to the ethics committee about it. He's been a very effective leader. We've gotten a lot done in the legislature. And I'm convinced we'll get more done in the legislature. And I'm looking forward to working with him.

KING: The president forcefully defended his support of death penalty, dismissing critics who suggest it is in conflict with his calls for stronger culture of life during the national debate over whether to remove the feeding tube of a brain damaged Florida woman.

BUSH: The difference between the case of Terri Schiavo and the case of a convicted killer is a difference between guilt and innocence. I'm comfortable with my belief that there is no contradiction between the two.

KING: As always, the editors asked several questions about secrecy and access to government records. Mr. Bush said most information should be easily available, but he made exceptions for sensitive intelligence and national security data. And lamented that public record laws force a president to make tough personal choices.

BUSH: You know, you're entitled to how I make decisions and you're entitled to, you know, ask questions which I answer. I don't think you're entitled to read my mail between my daughters and me. And so I've made an easy decision there, I just don't do it. Which is sad.

KING: Mr. Bush refused to say whether he thinks two journalists should be jailed for refusing to disclose their sources for stories about an undercover CIA operative whose identity was disclosed. BUSH: Why don't we let the courts decide. You think I'm going there? You're crazy.

KING: This president is not one for introspection. He began by sharing this thought.

BUSH: I do find myself much happier than I've been in a long time in Washington. I'm enjoying myself.

(END VIDEOTAPE)

KING: Now, the president also resisting calls from some Republicans that he offer more details of just how he'd like to change the Social Security program. Mr. Bush has been under pressure from Republicans. They say it's time to put the details on the table. The president, though, Wolf, saying he still thinks he has more time, and that his No. 1 priority is to convince the American people there's a serious problem, then, he says, pressure will mount on Congress to debate the solutions.

BLITZER: John, tell our viewers why he is going to enjoy himself tonight?

KING: The president is a big baseball team, a former part-owner of the Texas Rangers. He will throw out the first pitch at RFK Stadium as the Washington Nationals have their home opener and baseball comes back to Washington after more than 30 years.

BLITZER: It's about time. Thanks very much. John King reporting for us from the White house.

In Iraq, insurgents have released a new round of violence, killing at least 18 people in bombings and ambushes across the country. Most of the dead were in Baghdad where twin suicide car bombings ripped through traffic during the morning rush hour, destroying 15 cars. The group led by al Qaeda ally Abu Musab al Zarqawi claimed responsibility.

The U.S. embassy in Baghdad says a 25 member task force is working to secure the release of American hostage Jeffrey Ake. The Indiana businessman was abducted from a work cite Monday and shown on tape yesterday. Beyond the, the circumstances of his kidnapping remain a mystery.

Let's go back to our State Department correspondent, Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, so often after kidnappings like Jeffrey Ake's, we all assume that those responsible were either former Saddam loyalists or insurgents. But experts say what is often the case, and is now not really being reported as much, is the fact that it's often a criminal element that's involved.

(BEGIN VIDEOTAPE) KOPPEL (voice-over): The U.S. says it doesn't know who kidnapped American Jeffrey Ake. A videotape released on Arabic satellite TV showed Ake pleading for the U.S. to start a dialogue with Iraqi insurgents and to leave Iraq.

Experts say Ake's kidnappers were likely insurgents with a political agenda, but say a growing trend in Iraq shows common criminals are often involved.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: Making money is the immediate motive for most of the kidnappings. Often, however, the criminal gangs sell the victims to insurgents who are terrorists.

KOPPEL: And while the U.S. may have a strict policy not to negotiate for hostages, some other governments don't. In July last year, two high level sources in Baghdad told CNN, the Egyptian government had paid an unknown sum to secure the safe release of an Egyptian diplomat.

Following the September, 2004 release of two Italian aid workers, the chairman of the Italian parliament's Foreign Affairs Committee in an interview on French radio confirmed reports a ransom had been paid.

O'HANLON: Westerners have been targeted because there are fewer of them, and therefore they are higher priced, more scarce commodity. You can get more money for kidnapping them.

KOPPEL: American hostages like Roy Hallums, whose fate is still unknown, and Mike Agarem, released last August, grab headlines here in the U.S. 17 Americans have been taken hostage since March, 2003. Less than 200 foreigners in all have been kidnapped. Compare that to the estimated 5,000 Iraqi citizens who have been held hostage according to new statistics from the Iraqi government.

Experts say a law and order vacuum in Iraq have made kidnappings a veritable cottage industry for criminals.

O'HANLON: Most of these are bad Iraqi folk who were not nice people before, but unfortunately now, they are unconstrained. Most of them have been freed from jail in recent years by Saddam, and we have not been able to put them back behind bars yet.

(END VIDEOTAPE)

KOPPEL (on camera): Experts say that most of the foreigners, including Americans, who have been kidnapped, have been released. Hopefully, a small source of comfort to families like Jeffrey Ake's and others whose fate is still unknown. Wolf?

BLITZER: Andrea Koppel, let's hope they're all released and soon. Thanks very much, Andrea Koppel, reporting for us.

Drug busts, national guardsmen accused of smuggling ecstasy aboard an Air Force jet while carrying out their military mission.

Predator program growing: could an unmanned aerial vehicle find the ultimate terror target?

And missing tax dollars: how your bill is affected by people who don't pay their taxes. The IRS commissioner, he'll join me live.

(COMMERCIAL BREAK)

BLITZER: In our CNN "Security Watch," smoking has been banned on U.S. airliners for years, and now you can't even carry a lighter on board. Effective today, cigarette lighters are prohibited on U.S. commercial airline flights. You can't put one in your checked baggage either. The ban was approved by Congress last year as a security measure, but reaction is mixed. The Air Travelers Association says it's long overdue. The Business Travel Coalition says the ban is silly. For now, by the way, you can still carry up to four packs of matches on board.

It gives the U.S. military an eye in the sky, spotting targets and eliminating them without a pilot on board. Could the battle- tested predator soon be hovering over the homeland? Our Pentagon correspondent Barbara Starr has the story.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Falluja, August, 2004. The insurgency is raging. An Air Force predator -- unmanned aerial vehicle, a UAV, loiters above, watching trucks with mounted 50-caliber machine guns. The predator fires its missiles. Now the Air Force is moving to the next step, doubling the size of the predator fleet.

LT. GENERAL STEVE WOOD, US AIR FORCE: I think we're looking in the neighborhood of 200 to 250 of our predators.

STARR: Funding for all UAVs is expected to grow from $350 million in 2001 to more than $2 billion this year. In Iraq and Afghanistan, predator UAVs have struck dozens of targets without putting pilots at risk. Operators are hundreds of miles away, using cameras and sensors on board the predator to watch the battlefield. But the government accountability office issued a report warning of emerging problems, such as operating in bad weather and limitations on satellite communications. With a larger predator fleet also comes a possible new mission, homeland defense.

WOOD: I think that they do have a place in homeland defense, but we're starting just to sit down and looking at how we would do that.

STARR: The Coast Guard may monitor coastlines and waterways with UAVs. The Border Patrol has already used some UAVs along the border with Mexico. But the ultimate question -- could the predator find the ultimate target? Osama bin Laden. General Wood says the predator's cameras don't have the resolution to see bin Laden's face but would look for other clues.

WOOD: If we knew that he was -- it was in the area and we had other kinds of intelligence that put it there, we would be able to discern by the way he travels. I know he travels with a group of body guards and others. There would be key indicators.

STARR: A new version of predator that can fly longer and carry more weapons is in the works. UAVs now here to stay, watching for America's security.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

BLITZER: Please stay tuned to CNN day and night for the most reliable news about your security.

When we come back, going for broke. It's about to get a lot tougher. But will the new bankruptcy reform law hurt the very people it's supposed to protect?

The tax deadline, as all of us know, is looming, and you may be paying more than your fair share. The IRS commissioner Mark Everson, he's standing by. He's my guest. That's coming up.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The 12-year-old is completely out of control, and I can't -- I physically -- she's as big as I am. I can't control her.

UNIDENTIFIED MALE: Okay. Did you want us to come over and shoot her?

(END VIDEO CLIP)

A very -- let's say very unusual 911 call. We'll show you what the controversy is all about. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Guess what? It's tax time again with tomorrow at midnight the deadline for getting your returns in. But did you know many people not only are carrying their own tax burden, but those of others as well. CNN's Mary Snow is standing by live in New York with details -- Mary.

MARY SNOW, CNN CORRESPONDENT: Wolf, a government report shows there's a widening gap between the amount of taxes owed and the amount of taxes paid. And the government says honest taxpayers are footing the bill.

(BEGIN VIDEOTAPE)

SNOW (voice-over: At New York's H&R Block, these Americans are about to do what many do not -- pay their taxes.

UNIDENTIFIED FEMALE: I am afraid of getting audited, because it's always a hassle to find all the records, and you want to do it absolutely perfectly. It's scary.

UNIDENTIFIED MALE: I'm not afraid of getting audited, because I haven't done anything bad.

SNOW: In fact, the IRS says 15 percent of all taxes go unpaid, as much as $353 billion. Only $55 billion of that, the IRS says, will be recovered. So who's making up for that short fall?

SHELDON COHEN, FORMER IRS COMMISSIONER: Us wage earners, people who work for a living and who have -- are compliant. The people who comply with the law are being stolen from.

SNOW: Stolen to the tune of $2,000 annually per taxpayer, according to the Treasury Department.

So who are these people adding to your tax bill?

MAX SAWICKY, ECONOMIC POLICY INSTITUTE: It's unincorporated business firms, it's proprietors, it's the self employed, it's corporations and it's very wealthy people who abuse the law with fancy tax shelters.

SNOW: Economist Sawicky says there's also $30 billion of missing taxes that are owed by people who don't bother to file any income tax returns. Sawicky says part of the blame belongs to the IRS, which he says doesn't have the manpower it needs to do the job.

SAWICKY: The IRS has less resources to deal with a bigger economy today than it had ten years ago. Of course, we have more filers all the time, we have a bigger economy, more income, we have more complicated financial transactions.

COHEN: The present commissioner has made it an emphasis to increase the number of audits, but it's coming back too slowly to really be effective.

(END VIDEOTAPE)

SNOW: And economists point out that there are fewer people working at the IRS with the population growing, and hence more people filing taxes -- Wolf.

BLITZER: Mary Snow reporting for us. Thank you, Mary, very much.

Let's get more now on taxes and the looming deadline for that. We're joined by the IRS commissioner Mark Everson. Commissioner, thanks very much for joining us.

MARK EVERSON, IRS COMMISSIONER: Thanks for having me.

BLITZER: Is that a fundamental fact, you don't have the resources to find these cheaters and get the money they owe the U.S. government?

EVERSON: Well, the last several years, the president has asked for more money for the IRS, but the Congress doesn't always give it to us. He asked for an extra $500 million last year and we got $48 million. So, yes, there's a funny short fall, for sure.

BLITZER: So, is it true there are $300 billion that the U.S. government should be getting every year that it's not getting for various reasons?

EVERSON: Let me say first that we've got the best system in the world. We have a very high overall compliance rate. Our system does work. But nevertheless, just as your piece says, after even the money we get back, over $250 trillion each year we don't get. That's too much, particularly now in this era of deficits.

If you think about it a dollar we don't get in is just a dollar of debt that burdens future generations.

BLITZER: Do you encourage the citizens who are paying their legally, lawfully, their full rate to go ahead and tattle, if you will, to tell the IRS there are others, friends of theirs, neighbors of theirs, who are cheating?

EVERSON: We get leads from a variety of sources. And we, of course, do our own audits. We have complicated programs, formulas if you will, that take a look at returns. And we do our audits that way. We do get a lot of leads, particularly in the criminal area.

BLITZER: Realistically, how much money do you need right now to do a better job, to collect the federal money is due?

EVERSON: Well, the president, he's has asked for another $500 million again this year.

BLITZER: Again?

EVERSON: Again. And I'm -- we're fighting hard to get that money. But we're in a tough territory. The appropriators we're in there with bridges and Amtrak, and sometimes the money goes elsewhere.

But we're making headway here, as I think your piece indicates. Audits have come up from 620,000 four years ago to over 1 million. We've doubled the high income audits. We've made a lot of progress on shelters. This is a particularly abusive area.

So, we are doing more enforcement. And that is reassuring to the average American who pays his or her taxes and just needs to be sure that neighbors and competitors are doing the same.

BLITZER: Audits are one thing. That's for people who actually file a return. What about all those people -- and I don't know how many there are. How many you do you estimate never even file a tax return?

EVERSON: Well, the number you are talking, over $300 billion, about 10 percent of that is non-filing, people who don't bother to file at all. We do have an active program to go after non-filers, particularly when we stumble upon wealthy non-filers. But that number is too big as well.

BLITZER: When you go after them, they don't file, wealthy non- filers, what's going to happen to them?

EVERSON: It's trouble, and it can be criminal.

BLITZER: And you're going to send them to jail, potentially?

EVERSON: That's what happens.

And we're definitely ramping up the criminal investigation.

Sometimes I say, in this technical tax shelter area, where the wealthy and the corporations were using the complexity of the code. The code is way too complex. They used that to navigate things that were never intended by Congress. We're now -- we've got criminal investigations under way where people have taken it really too far.

BLITZER: The president has appointed this commission to study the tax code, because as you pointed out it is a mess. Thousands and thousands of pages, only an accountant could love this tax code. They want to simplify the tax code.

Would it be a good idea, for example, to simply eliminate deductions, have a flat tax, everybody pays, let's say, 10 percent, 15 percent, 20 percent of their gross income and end it that way?

EVERSON: I don't take policy positions because, once the Congress acts, I've got to implement them. But what I have said is that I believe in simplification. Complexity obscures understanding.

What it does is the compliant taxpayer has a difficult time understanding his or her obligation. In the end, makes inadvertent errors or throws up their hands and says, jeez, I just can't do this. And those -- these attorneys and accountants who have been creating these technical tax shelters for corporations, the international -- the tough issues of globalization, all this stuff, makes it much more complex, and they can hide things from us.

BLITZER: In Europe, because there are so many people who cheated, didn't pay their taxes, they simply what they call a value added tax, a national sales tax. In effect, when you go buy a Mercedes, you pay the tax right away, when you buy anything, any goods or services, you pay a tax on the scene. Is that something that America is ready for?

EVERSON: Well, we need to assess all those options. But what I would say is we can't compare our system to a perfect theoretical system. I was in Britain recently, they've got a 12 percent problem as opposed to our 15 percent, 16 percent problem, just in the V.A.T., what you're talking about.

So, any system has people trying to cheat and get around it. And you need to have a vigorous enforcement posture to make sure that doesn't happen. BLITZER: All right. We're a little bit more than 24 hours now from the deadline, midnight, April 15 tomorrow. Any last minute advice you have for the American taxpayers out there who have not yet filed their return?

EVERSON: Just don't panic. If you need an extension, just file for an extension.

BLITZER: It's easy to get an extension.

EVERSON: It's easy to get an extension. Most people get refunds. So, if you anticipate you get a refund, you just have a question on something you haven't found a document on, just file that extension.

On the other hand, if you think you owe money to us, when you file that extension, send in what you think you owe, and that will protect you down the road.

BLITZER: And one additional question. There are people who overpay. And as painful as that sounds, there are a lot of people who overpay, how much money do you get extra because people aren't really paying attention to their limitations, what they owe?

EVERSON: Well, we get it in the billions, but it's clearly a lot smaller than the people who are underpaying. Our research, which we're just now concluding, will help us calibrate that.

But again, Wolf, that's another argument for simplification. The argument the president's made, if it's simpler to understand it, people won't make those errors.

BLITZER: And if you overpay, you can always file an adjusted income tax return and try to get some money back.

EVERSON: Come back with an amended return. That's exactly right.

BLITZER: Mark Everson is the commissioner of the IRS. You have a tough job.

EVERSON: It's a grown-up job.

BLITZER: All right. Thanks for joining us. We'll see you next year, if not sooner.

EVERSON: Thank you.

BLITZER: When we come back, sharing the spoils with Saddam Hussein? A Texas businessman charged with making secret kickbacks in the U.N.'s oil-for-food scandal.

Air National Guardsmen charged with smuggling drugs on their cargo jet. Their next long haul may be to prison.

Bat attack: A baseball game ends in a dispute between two teenagers and then a horrible tragedy. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: From our studios in Washington, once again, Wolf Blitzer.

BLITZER: Welcome back. Oil-for-Food indictment, a Texas businessman arrested for allegedly giving Saddam Hussein millions. We'll get to that.

First, though, a quick check of some other stories "Now in the News."

(BEGIN VIDEOTAPE)

(voice-over): The search continues for a missing Florida girl. A man who has been questioned in the case, David Onstott, has been charged with failing to register as a sex offender. 13-year-old Sarah Michelle Lunde hasn't been seen by her family since Saturday night. Onstott used to date the girl's mother, but they recently broke up.

A 15-year-old Georgia girl pleaded guilty today to the fatal stabbing of her grandparents. Also pleading guilty, the girl's 16- year-old ex-girlfriend. The stabbings last summer shocked neighbors in Fayetteville, Georgia, that's outside Atlanta. One of the girls told the judge they committed the crime so they could be together.

A federal judge in Utah has thrown out the government's ban on the weight-loss drug ephedra. The FDA ordered ephedra off the market, but the maker argued that ephedra has been consumed safely for hundreds of years. The judge ordered the FDA to consider new rules, in her words, "consistent with the court's opinion."

(END VIDEOTAPE)

(on camera): The United Nations Oil-for-Food scandal has hit home with the indictment of an American businessman. He and his Texas company are accused of paying kickbacks to Saddam Hussein's regime. Our senior U.N. correspondent Richard Roth standing by live now with details.

Richard?

RICHARD ROTH, CNN UNITED NATIONS CORRESPONDENT: Wolf, the first American businessman indicted in connection with scandal in the Oil for Food program is David Chalmers. He ran a company called Bayoil in Texas. Chalmers was arrested in Houston hours before indictments against him and two business associates were announced in New York.

(BEGIN VIDEOTAPE)

JOHN KOLCHAN, FBI: The conduct of the Bayoil defendants was unconscionable. Motivated by greed, they flouted the law, made a mockery of the stated aims of the Oil for Food program, and willingly conspired with a foreign government with whom our country was on the brink of war. ROTH: What they did, say officials, was to cash in on Saddam Hussein's schemes to loot the Oil for Food program. The Oil for Food Initiative was approved by the U.N. Security Council ten years to the day of these indictments. Eager to gain support in Baghdad to feed Iraqis hurt by international sanctions, the U.N. permitted Saddam Hussein to choose who got to buy his oil. Eventually, Saddam secretly demanded surcharges, extra payoffs, as a cost of doing business.

According to the government, those indicted played along, paying millions of dollars to front companies that deposited money in Iraqi bank accounts.

DAVID KELLY, US ATTORNEY: By doing this, the defendants were essentially diverted funds that otherwise would have been deposited into the Oil for Food escrow account, from which humanitarian aid to the Iraqi people was to be paid.

ROTH: At the U.N., Secretary General Kofi Annan, himself chastised for another inquiry regarding inadequate management, used his strongest language yet to publicly criticize U.N. powers, including the United States, who were aware of Iraqi oil smuggling to Jordan and Turkey.

KOFI ANNAN, UN SECRETARY GENERAL: The fact that the bulk of this money Saddam made came from smuggling outside Oil for Food, and it was on American and British watch. They were the ones who had interdiction. Possibly, they were also the ones in the air, knew exactly what was going on, and that the countries themselves decided to close their eyes to smuggling.

ROTH: Also indicted was Tong Son Park (ph), a Korean businessman named in the 1970 so-called Korea Gate influence-pedaling scandal in Washington. He was charged with illegal lobbying for Iraq.

(END VIDEOTAPE)

ROTH (on camera): The American businessman Chalmers and his co- defendants appeared in court today and denied the charges in their Houston appearance. They're expected to post bail. They're due to be arraigned in New York next week. An attorney for Chalmers said, quote, "we will vigorously dispute the allegations of criminal conduct." An attorney for the Bulgarian business associate says he plans to plead not guilty because he is not guilty and will be found not guilty at trial. Wolf?

BLITZER: Richard Roth reporting for us. Thanks, Richard, very much.

Let's take a quick look at some other news making headlines "Around the World."

(BEGIN VIDEO CLIP)

BLITZER (voice-over): A master cellist played in Monaco's royal chapel where Prince Rainier's body laid in state. The funeral for Europe's longest serving monarch will be held tomorrow. Royal honeymoon. Britain's Prince Charles and his new wife Camilla made their first public appearance since beginning their honeymoon. They visited a Scottish park, where they were greeted by hundreds of well wishers.

Sweet victory. Chocolate is serious business in Belgium, where a dozen young contestants competed in the Belgian round of the World Chocolate Masters Competition. The winner received $1,500 and an invitation to the international finals in Paris. And that's our look "Around the World."

(END VIDEO CLIP)

BLITZER (on camera): Was it U.S. Air Force cargo plane used to smuggle drugs? We'll tell you about the charges against two U.S. national guardsmen. That's coming up.

Also this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was in shock. Deep in my heart, I knew there was no saving that boy.

(END VIDEO CLIP)

BLITZER: A tragic end to a Pony League baseball game.

And a new bankruptcy law, how it could impact your family. We'll have details.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Analysts are watching closely as Brenda Barnes takes the reigns of number 114 ranked Sara Lee. With only nine Fortune 500 companies headed by female CEOs, Barnes tops the list, running the food, apparel, and consumer products giant that generated an estimated $20 billion in revenue last year. One month after taking over, Barnes is trying a new recipe. By casting off its slower growing brands that accounted for nearly 40 percent of the company's revenue, Sara Lee is hoping to clean up with investors.

(END VIDEO CLIP)

BLITZER: Welcome back. The U.S. House of Representatives today approved a bill overhauling the federal bankruptcy law. The vote was 302 to 126. The Senate has already approved a bill, and President Bush is expected to sign it as early as next week.

The decision to rewrite the bankruptcy code will make it harder for people to wipe out their debts. CNN's Chris Huntington joining us now live with a look at a family that recently filed for bankruptcy -- Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Wolf, thanks a lot. This is a family that got blind-sided by a series of unforeseeable and costly events. The concern about the new, what is soon to be law, is that it makes it very difficult for folks that are caught in this kind of bind to wipe out those debts.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice-over): Greg and Brandy Denno were doing everything they could to get by until a series of uninsured medical bills drove them over the financial edge.

BRANDY DENNO, FILED FOR BANKRUPTCY: Can't even afford to take them to get a Happy Meal.

HUNTINGTON: They celebrated Valentine's Day by filing for Chapter 7 Bankruptcy Protection, which erased their debt of $37,000. But they would not have that option under the proposed changes to the bankruptcy law, which would impose a means test on debtors and deny Chapter 7 protection to anyone like the Dennos with pretax income above the median level for their state.

The Dennos' lawyers say the new rules would put debtors like the Dennos in even worse shape.

GARY FISHOFF, BANKRUPTCY ATTORNEY: We're not talking about tax cheats here, we're just talking about people trying to survive.

HEATH BERGER, BANKRUPTCY ATTORNEY: They would have to do what's called Chapter 13 a reorganization and pay money back over a period of five years, which obviously they don't have.

HUNTINGTON: Those in favor of the new rules point out that the majority of bankruptcy filers make less than the median and would not be affected.

MALLORY DUNCAN, NATL. FEDERATION OF RETAILERS: A lot of people who are filing for bankruptcy genuinely need it. And one of the things that's good about this legislation is it preserves bankruptcy in Chapter 7 for those people.

HUNTINGTON: Still the Dennos are not unusual, because their bankruptcy stemmed from a devastatingly common cause, uninsured family illness.

UNIDENTIFIED MALE: Go slow.

HUNTINGTON: In the summer of 2003, Greg, a trained auto mechanic, had just started a new job, but his health benefits would not kick in for six months. So, when son Christopher had to be hospitalized for dehydration, the Dennos were stuck with a $9,000 bill.

Brandy got a night shift job only to take a bad fall on a wet floor. Sleep deprived and in constant pain, she kept working because Greg was getting sick.

GREG DENNO, FILED FOR BANKRUPTCY: I couldn't breathe. I kept getting really dizzy, no energy. I knew something was wrong.

B. DENNO: We were actually two weeks away from getting insurance when he ended up having no choice but to go to the hospital.

HUNTINGTON: Greg had pneumonia. His left lung was down to just 2 percent capacity. But after four days on a breathing machine, he checked himself out of the hospital against doctor's orders to go back to work. The bill this time, nearly $14,000.

The final blow, ironically came when their health insurance finally kicked in. An MRI revealed that Brandy's fall had torn a knee ligament and she had to stop working.

B. DENNO: Trust me, people don't ask for bad luck, it just happens.

HUNTINGTON: It will still be a challenge to make ends meet, but bankruptcy gives the Dennos a fresh start, and they are thankful they didn't wait any longer.

(END VIDEOTAPE)

HUNTINGTON: Now, even after President Bush signs a new legislation into law -- and it is expected that he will do that soon -- there will be about a six month period before the new rules take effect. And Wolf, bankruptcy lawyers tell me they expect something of a rush of people to file Chapter 7 Protection.

BLITZER: Chris Huntington reporting for us. Thanks, Chris, very much. Important information for our viewers.

More important information for our viewers coming up at the top of the hour on LOU DOBBS TONIGHT. Lou is joining us now live from New York with a little bit of a preview -- Lou.

LOUD DOBBS, CNN ANCHOR: A little bit, Wolf. Thank you very much.

Tonight we'll be reporting on the illegal immigration crisis in this country. President Bush declaring today he doesn't believe in a blanket amnesty for illegal aliens, but at the same time, he says millions of illegal aliens should be allowed to work legally in this country. We'll have that report.

We'll also be reporting on the highly contagious diseases that many illegal aliens are bringing with them into this country. The health of every American at risk.

And the political circus in the Senate confirmation hearings for our United Nations ambassador. My guest tonight, a former White House official says some senators are what he calls moral cowards.

All of that and a great deal more at the top of the hour. We hope you'll join us.

Now back to you, Wolf. BLITZER: I certainly will. I'm sure most of our viewers will as well. And you get a lot of new viewers tuning in to LOU DOBBS TONIGHT top of the hour. Thanks, Lou, very much.

A Texas 911 dispatcher says it was a joke, but the woman on the other end of the line wasn't laughing. The woman called the Watauga Texas Department of Public Safety asking for help with her unruly children. Here's a recording of part of that conversation.

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE: I just got home from work. They were physically fighting with each other. One of them kicked a hole in a door. And they're 12 and almost 14. And the 12-year-old is almost completely out of control. I can't -- I physically -- she's as big as I am. I can't control her.

UNIDENTIFIED MALE: OK. Did you want us to come over and shoot her? Are you there?

UNIDENTIFIED FEMALE: Excuse me?

UNIDENTIFIED MALE: That's a joke. OK.

UNIDENTIFIED FEMALE: Who are you? What is your name?

UNIDENTIFIED MALE: Mike Forbess.

UNIDENTIFIED FEMALE: OK. That's not funny, Mike.

UNIDENTIFIED MALE: I'm sorry.

UNIDENTIFIED FEMALE: Guess what? I'm going to file a formal complaint.

UNIDENTIFIED MALE: I don't blame you a bit.

UNIDENTIFIED FEMALE: Because you know what? This is really not very funny.

UNIDENTIFIED MALE: I know it's not, ma'am. I apologize.

UNIDENTIFIED FEMALE: Well, guess what, it's not going to be very funny when I go in front of your supervisor and tell him.

UNIDENTIFIED MALE: I understand.

UNIDENTIFIED FEMALE: I guess he can just listen to the tape.

UNIDENTIFIED MALE: Yes, he can. I'm sorry. I apologize.

UNIDENTIFIED FEMALE: Well, sorry doesn't cut it.

UNIDENTIFIED MALE: Hold on one second.

(END AUDIO CLIP) BLITZER: Officials say the dispatcher has received two written reprimands for his behavior. The woman who called said, that's not enough.

Two National Guardsmen accused of smuggling drugs on a military plane. But what investigators say they've told them was even more surprising. We'll have details.

Plus, a real nightmare on the field of dreams. One teenage player is dead, and his friend is being investigated for murder.

(COMMERCIAL BREAK)

BLITZER: Two national guardsmen could face long prison terms. Prosecutors say they used an Air Force jet to smuggle drugs. CNN's Kathleen Koch is standing by live at the Pentagon. She has details.

Kathleen?

KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, officials here were stunned by the arrests of these two airmen, who had long histories of service in the Air National Guard and Reserves and were returning from an official mission.

(BEGIN VIDEOTAPE)

(voice-over): The Air National Guard pilot and his load master appeared in federal court -- the charge, trying to smuggle in and distribute as much as $11 million worth of the drug ecstasy. Law enforcement officials say federal agents found 28 large bags, holding some 290,000 pills in the luggage of Captain Franklin Rodriguez and Master Sergeant John Fong after they returned to the U.S. aboard a giant C-5A Air Force cargo plane. Authorities say, after delivering supplies to the Republic of Georgia, the plane made a stop in Germany. There, officials allege, the men went to a hotel room, put the ecstasy into their personal luggage and flew on to Stewart Air National Guard Base in New York. The guardsmen were arrested Tuesday as they unloaded the bags from the plane and into the pilot's car.

DAVID KELLY, US ATTORNEY: It's clear they were obtaining the drugs in northern Europe, bringing it on into -- through their personal possessions onto the air base in Germany, and flying it via plane into the United States to an air base here.

CAPT. KEVIN KERLEY, NY POLICE STRIKE FORCE: The investigation is continuing. We believe that there's no other military personnel involved in this ring. The investigation is continuing in Europe and in the continental U.S. at this time.

KOCH: The Pentagon is not pleased about the development, spokesman Bryan Whitman saying, quote, "we have a zero tolerance policy when it comes to drugs, and they will be dealt with very seriously."

(END VIDEOTAPE)

(on camera): If convicted, the two men face each 40 years in prison and $2 million in fines. Wolf?

BLITZER: CNN's Kathleen Koch reporting. Thank you, Kathleen, very much.

A tragic killing at a youth baseball game: one teen loses control, another pays with his life. We'll have details next.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The United States' first presidential assassination happened this week in history on April 14th, 1865. President Abraham Lincoln was shot by John Wilkes Booth while watching a play at Ford's Theater in Washington D.C. Lincoln died the next morning.

It was said to be unsinkable. However, the Titanic failed to complete its first journey with passengers from England to New York. Just before midnight on April 14th, 1912, the ocean liner collided with an iceberg and later sank into the north Atlantic. More than 1,500 people lost their lives.

And he was considered to be the architect of Cambodia's killing fields. (UNINTELLIGBLE) leader Pol Pot died from natural causes while under house arrest in 1998. And that is "This Week in History."

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: No one is sure exactly what happened, but everyone agrees the incident on a southern California baseball field was a tragedy. Now one teen is dead, another is under investigation for murder.

CNN's Brian Todd is here; he has details. Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, there were seemingly no warning signs for this incident, and according to people who were there, it was over before anyone could respond.

(BEGIN VIDEOTAPE)

TODD (voice-over): Los Angeles County sheriff's officials tell CNN there were plenty of witnesses close to where 15-year-old Jeremy Rourke was beaten to death. But those at the scene say the incident happened so quickly no one had time to intervene.

UNIDENTIFIED MALE: I was in shock. I didn't -- I like -- deep in my heart, I knew there was no saving that boy.

TODD: Saving the 13-year-old boy who allegedly killed Jeremy is another matter. He's being investigated for murder.

On Tuesday night, as Pony League baseball games in Palmdale, California, were wrapping up, Jeremy Rourke and the 13-year-old got in line at a concession stand. Witnesses say the 13-year-old's team had just lost to the team Jeremy Rourke used to play on. Some witnesses say there was a dispute over their place in line. Others say Jeremy teased the suspect over the loss.

SAM CORDOVA, WITNESS: Next thing you know, the boy pulled out a bat, and he like kind of hit him once in the side and once up around the neck. And then he just hit him really with tremendous force to the head.

TODD: Jeremy Rourke, later pronounced dead at a local hospital. The void in this community is certainly not filled with any comfortable answers for this crime or any deeper meaning. This league takes kids of all ages and abilities, is not considered ultracompetitive. No reports of so-called stage-parents or coaches out of control. Locals say the suspect is a competitive kid, but he has no criminal record and is well-liked.

TONY TREVINO, COACH: This is a good kid that made a bad decision. He was a good athlete. A good student.

TODD: A reputation reinforced even by the victim's mother through a friend.

RICH SHADE, ROURKE FAMILY FRIEND: She made the comment that by no means was the kid a monster. Don't make him into -- he was a very good kid. They were friends, believe it or not.

(END VIDEOTAPE)

TODD (on camera): So, no building animosity, no intrigue between the families, no evidence that the increasing pressure of youth sports is at play here. The league has suspended games. Sheriff's investigators are still trying to piece everything together. But what we appear to have here is a momentarily lapse that has destroyed two lives, devastated two families, and has no other answers, Wolf.

BLITZER: What a heart break. What a heart breaking tragedy. Brian Todd, thanks very much for that report.

Remember, you can always catch WOLF BLITZER REPORTS 5:00 p.m. Eastern, Monday through Friday. Until tomorrow, thanks very much for joining us. "LOU DOBBS TONIGHT" starts right now. Lou?

END

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