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CONNECT THE WORLD

Historic Visit to Benghazi; Offensive on Gadhafi Stronghold Sirte; Training on the Move in Sahara; Abused Gadhafi Nanny Gets Medical Care in Malta; Big Interview: Jeffrey Archer; Eye on Poland: Crumbling City Resurrected; Images of Poland; Rogue Trader Under Arrest in London; Taming the Credit Crisis; Pakistan Floods; Turkish-Israeli Face-Off; Controversy Over Black Coaches

Aired September 15, 2011 - 23:00:00   ET

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


MAX FOSTER, HOST: A suspected rogue trader is under arrest after UBS discovers a $2 billion black hole. It's not the first time that rogue traders have left a bank licking its wounds.

So why don't they learn their lessons?

Plus...

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITAIN PRIME MINISTER: Thank you.

(END VIDEO CLIP)

FOSTER: The leaders of Britain and France get a hero's welcome in Libya and...

(BEGIN VIDEO CLIP)

JEFFREY ARCHER: I'm a storyteller, I'm not a writer. I want you to turn the page.

(END VIDEO CLIP)

FOSTER: Jeffrey Archer on politics, prison and phone hacking.

These stories and more tonight, as we connect the world.

Every day seems to bring a big story from the financial world at the moment. Most are about the European debt crisis.

But tonight, we begin with a bombshell from the Swiss banking giant, UBS. It says it's out roughly $2 billion because of a rogue trader here in London. If true, it would be the third biggest loss of its kind in banking history.

Police say they were contacted by UBS and made an arrest overnight. CNN hasn't independently confirmed who was taken into custody, but British media say his name is Kweku Adoboli, whose Facebook page is seen right here.

Well, CNN's Atika Shubert is with us now on this developing story.

You've been digging into it all day.

What have -- what have you found out?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, really, there are very few details at this point. But it is interesting to note, as you said, that apparently that first tipoff came from UBS at the very early hours of Thursday morning and it appears that he was arrested possibly at his desk at UBS.

This is what city of London police commander, Ian Dyson, told us earlier.

FOSTER: And in terms...

(BEGIN VIDEO CLIP)

CMDR. IAN DYSON, CITY OF LONDON POLICE: UBS about an allegation of fraud by one of their employees. And at 3:30 a.m., detectives from our force arrested a 31 -year-old man on suspicion of fraud by the use of (INAUDIBLE).

He was taken to a city of London police station for questioning and he remains in custody while detectives continue to investigate the matter.

(END VIDEO CLIP)

SHUBERT: so he's still in custody. UBS hasn't made any comment on what the police have said. And they just said that they are still investigating, they're still waiting for more -- more details.

FOSTER: So away from -- the arrests, what do we know has happened in terms of loss of money or the loss of trade?

SHUBERT: We really don't know that much. All that we know is that it was these unauthorized trades and the loss was estimated about about $2 billion. We don't know whether that's just a few transactions or whether this was a much steadier loss over a longer period of time. This is something UBS says they're still investigating. And we'll have details sooner or later.

FOSTER: Any more suspects?

SHUBERT: At the moment, no. It just appears to be this one person. But that is something police will be looking into, whether there's more to this. All that we know at this point is that it's fraud by abuse of office. That's what he's suspected of. But again, we don't know the exact details.

FOSTER: Atika, thank you very much, indeed.

Well, the UBS event is hardly the first case of unauthorized trading. We've talked about it before, of course. And it has enormous repercussions.

In 1995, trader Nick Leeson was convicted of bringing down Barings Bank, with $1.3 billion in losses. He spent three years in a Singapore prison as a result.

Yasuo Hamanka was sent to jail for eight years in 1997 for fraud and forgery in the copper market. His trades wound up costing Sumitomo Bank $2.6 billion.

And Jerome Kerviel's unauthorized trading was discovered in 2008, after costing Societe Generale almost $6 billion.

It turns out Kerviel's case is still not totally settled, either.

And as Jim Bittermann reports, Kerviel's lawyer has an interesting perspective on the UBS case.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Even before the details of the UBS case were known, Jerome Kerviel's lawyer here in Paris was reacting to it. Kerviel, you'll remember, is the rogue trader who cost Societe Generale almost 5 billion euros. That's $7 billion, in losses, after it was discovered he had been trading out of control -- out of the control of the -- his trading supervisors. He was taken to court because of that. He has now been prosecuted and found guilty. He was sentenced to five years in jail, two of those years suspended. So it looks like he may spend three years in jail, although he's got an appeal going. So until that appeal is heard, he will not be in prison.

He's also supposed to pay back the damages, which is to say, 4.9 billion euros.

In any case, Kerviel's lawyer today was using the same argument that he used in court talking about the UBS case.

He said that traders are always encouraged to make more money and when they do, they're rewarded. But when they lose it, they are cast out and used as scapegoats. And that's what he's said all along, that Kerviel is a scapegoat.

Whether that same applies to the UBS case, it's not clear, but we'll know when the details come out.

Jim Bittermann, CNN, Paris.

(END VIDEO TAPE)

FOSTER: We'll take a closer look at the point raised by Jerome Kerviel's lawyer then -- is it possible the banks know what's going on and only wind up turning on their traders when they lose big chunks of money?

And is it always fraud, or could these bad trades be the result of clumsy fingers or outright stupidity?

Well, Larry Levin is with us now from Chicago.

He is the founder and president of Trading Advantage.

Thanks for joining us.

LARRY LEVIN, PRESIDENT, TRADING ADVANTAGE: Thank you, Max.

FOSTER: As a trading insider, how common are big unauthorized trades?

LEVIN: Well, they're only common when they get out of hand and it becomes a situation that, you know, is -- is more than than, you know, their accounts or their proprietary accounts can handle. But there's a lot more out there that doesn't get discovered as maybe they trade out of those positions and -- you know, and it doesn't get discovered.

The issue is when it gets so big -- Bernie Madoff type situations -- and this is similar to that -- when a situation gets so on the other hand that there is no hiding it anymore. That really is the situation.

So usually when it becomes so big that you can't hide it is when it comes to light.

FOSTER: So would you say that the banks are often aware that big trades are taking place but so long as they're covered and a profit is made on it, they don't actually bring it up?

LEVIN: Yes. And in many cases, there are rules in place, as many of these proprietary trading firms, the banks out there, have rules to hedge these positions.

The real issue comes when these traders out there don't do the hedges. They -- they put one side on, a naked side, where -- where the trade has unlimited risk and that's putting the other side, the hedge on, that limits that risk. Obviously, you can make a lot more money when you don't put the hedge on, but then you can lose a lot more in that same situation. When the hedge is on, the trade is really protected and you can, you know, keep those losses to a limit and what's -- what's within the proprietary trading firm's trading ideas.

But when you don't do those hedges, you can really get in big trouble. And that's usually what happens. In fact, it wouldn't surprise me if that's what happened in this case.

FOSTER: And the system is set up to -- to reward risk, isn't it?

But it does need to be a calculated risk, doesn't it?

When we hear that the banks encourage these sorts of trades, they don't really do that. They encourage risk taking, but it's a calculated risk they're encouraging?

LEVIN: Yes, they're really encouraging taking, you know, a -- a minimal amount of risk and then hopefully, you know, a -- a larger amount of profit. That really is what trading is all about is, you know, is matching up that risk to reward.

The banks are not in business to take so much risk where they get knocked out or they can't keep those proprietary tradings firm.

So in most cases, it's usually somebody in a supervisory position that can kind of hide the bad situation or hide that they're not following the rules, so to speak. That's usually where it comes out.

And then, you know, when they don't follow the rules and they can't hide it any longer because the amount has gotten so large -- again, that's really where it comes to light.

FOSTER: Why don't these big banks seem to learn their lesson, though, because this keeps happening. When -- we can't talk specifically about the UBS case. We're not sure about the details.

But if we're right, that it follows a trend, it just keeps happening. And, again, they're going to say we learnt the lessons, no doubt.

But why does it keep happening?

LEVIN: It -- well, it's, you know, it really is a question of finding the right people to put in those supervisory positions. It seems every time a situation like this happens, whether it's Leeson, whether it's with the Barings or -- or any of these other situations, it's always someone who is in some kind of position with -- with risk control in their hands versus, you know, a -- you know, a relatively new trader. Now, granted, they're not going to give a relatively new trader a lot of leeway to be trading big money.

So it's usually these senior traders that have very little supervision above them, but they're supervising other people. And it's -- it's fairly easy to hide things if you are the guy in charge. If you're not the guy in charge, it's not easy to hide things.

So it usually happens like that.

So they really need to be picking the right people and -- and it's not so easy to do, either. You know, as these markets get kind of crazy, you know, traders can take bigger and bigger chances. And -- and that can be very dangerous.

So, you know, you've got to pick the right people and then you certainly needed to be watching them all the time. I mean the banks are at big risk when these traders, you know, do things that are crazy. And if they're not watching them all the time, they've got nobody to blame but themselves.

FOSTER: Larry Levin, thank you very much for joining us from Chicago.

Well, European banks have a liquidity problem, meanwhile. But never fear, they say the big central bankers -- that's what the big central bankers say -- it's nothing a fistful of dollars won't cure.

And coming up in 12 minutes, talk about your tough road game -- an Israeli football team finds itself in a tough place at a tough time.

And Libya's rebels gear up for a big push to the south. And as we'll show you in 24 minutes, it's much more than a military advance.

(COMMERCIAL BREAK)

FOSTER: I'm Max Foster in London.

You're watching CONNECT THE WORLD.

And here's a look at other stories we're following this hour.

Trying to tame the credit crisis, top central banks are promising to lend dollars to Europe's struggling banks. The European Central Bank is working with the U.S. Federal Reserve and the central banks of England, Japan and Sweden to extend three month loans. The idea is to make sure Eurozone banks have enough dollars for the rest of the year.

The move sent stocks soaring across Europe. The rally comes on the same day that IMF chief, Christine Lagarde, sounded a new alarm over the global economy.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, IMF MANAGING DIRECTOR: And we're certainly living through a very troubled time at the moment, with great economic anxiety. Exactly three years ago, after the collapse of Lehman Brothers, the economic skies today look troubled. They look turbulent. As global activity slows and down side risks increase.

And we have entered into a dangerous phase of the crisis.

(END VIDEO CLIP)

FOSTER: As Madame Lagarde just alluded to there, this is the day bankers refer to as 9/15, because of the crash of the Lehman Brothers Investment Bank. With that as a backdrop, the world's attention is now turning to the financial heavy-hitters heading to Friday's big gathering in Poland.

U.S. Treasury Secretary Tim Geithner will be among those meeting in the city of -- in Poland and looking for a solution to the ongoing debt crisis.

We'll go there now to speak to -- speak to Jim.

This is pretty unprecedented, isn't it, for the American central banker to be there, or the Treasury secretary?

JIM BOULDEN, CNN CORRESPONDENT: It is, indeed, Max, because this is a -- an EU finance ministers and central bank governors in formal meeting. They're supposed to usually talk about what kind of position Europe is going to take ahead of the World Bank and IMF meetings that happen in -- in Washington every year, which will happen in a few weeks, and also ahead of the G-20 meetings.

And so that's why these -- these men and women will get together, to have an informal chat, to come up with some ideas and thoughts over two days.

The fact that Timothy Geithner is coming here for the second time in a week to Europe, to speak to -- to the other finance ministers is unprecedented.

And the point, really, I think, is, is he wants to really tell Europe how serious, of course, all of this is and that Europe has got to start acting and speaking with one voice and to do a lot more to help Greece and to help any other country that may need help and to help the banks.

And I spoke earlier with the finance minister of Poland, who's hosting this meeting, and asked them how significant is it that Timothy Geithner is on his way to Poland?

(BEGIN VIDEO CLIP)

JACEK ROSTOWSKI, POLISH FINANCE MINISTER: It's important that Timothy Geithner is coming -- coming here to -- to Wroclaw, because -- because, you know, things -- if we don't get a proper grip on this and take control of the debt crisis, if we don't resolve it, in fact -- not immediately, not today but -- but over the -- the few months -- a few months -- a very few months -- then the consequences could be extremely serious.

(END VIDEO CLIP)

BOULDEN: One of the consequences, of course, is what happens to the banks in Europe if there is a default in Greece. And it's interesting, Max, that the central banks around the world have stepped in to give the banks here in the Eurozone area in Europe more money or access to money, because they weren't getting it from some of the U.S. banks, who are so worried about contagion.

So that hurdles some of the problems with the banks, at least short- term. That doesn't pay down the debt. It doesn't help countries that need to pay off the debt and these massive austerity packages, which are causing so much pain around Europe -- Max.

FOSTER: OK, Jim. Thank you very much, indeed.

We're back with you, of course, tomorrow.

It could be this weekend before we know what's next for the American hikers, meanwhile, that were convicted of spying in Iran.

An attorney for the two men says he's filed the necessary paperwork for their release, but says he doesn't expect Iranian judges to act on it before Saturday,

Earlier this week, Iran's president suggested the hikers could be freed within days.

Well, the judges say they would have to approve any release.

Israeli Prime Minister Benjamin Netanyahu has decided to personally address the United Nations next week when Palestinians make their historic bid for statehood. Israel wants to avoid that showdown, preferring direct talks instead. But Palestinian President Mahmoud Abbas says the decision to approach the United Nations is a done deal.

More than 240 people have now died as a result of the flooding in Pakistan. Heavy rain hags been falling since August and aid agencies are struggling to help the victims.

CNN's Nick Paton Walsh has visited some of the worst affected areas and has sent this report.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CORRESPONDENT (voice-over): In Badin, one of the worst flooded areas, some aid is not getting through, not because it's lacking, but because of these -- protest blockades.

(VIDEO CLIP)

WALSH: They won't let aid through to others until they get some.

(VIDEO CLIP)

UNIDENTIFIED MALE: See all the boats and the water here?

Because of that they have no food to eat.

WALSH: The trucks sit idly behind. The few police here also sitting idle, waiting for reinforcements.

More aid sits here waiting because the police, who could escort it to the hungry, are busy escorting a VIP, the chief minister of the region, who's visiting.

AMJED JAMAL, WORLD FOOD PROGRAMME: Well, currently, what we heard from our security colleagues is that there is some VIP movement in the -- in the town and the local administration is busy escorting them.

WALSH: But these people need aid now, not arguments over it.

(on camera): Well, here it seems quite still and serene. But you have to remember that just weeks ago, this was farmland. And even though it hasn't rained for nearly three days, still, the water has not drained away.

(voice-over): Mohammed shows us where his house used to be, until the rain swallowed it, for the second year in a row. Now he and the children live just down the road.

"The government will drain the water," I guess, he says. "How else will it be taken out?"

Nature particularly cruel here. Just once he built this shelter, the rains came again and washed it away. They rebuilt it, but on their own.

The chief minister, we think, passing in this helicopter, part of a government that, for these people, watches from afar.

The rains have stopped for now, but the suffering, the disease and the hunger may just be beginning.

Nick Paton Walsh, CNN, Badin.

(END VIDEO TAPE)

FOSTER: Just ahead on CONNECT THE WORLD, the -- you won't believe -- face-off between Israel and Turkey could make headlines on the front page, as well as the back pages of sport. We'll be live at the stadium in Istanbul in two minutes.

And in 20, we'll take you live to Malta for some good news on the nanny so many of you have come to love.

(COMMERCIAL BREAK)

FOSTER: Right now, a tense calm in Turkey amid tight security and worsening diplomatic tensions between Turkey and Israel. Maccabi Tel Aviv faced off against Besiktas in Istanbul -- a encounter of both sporting and political significance. The game ended not long ago.

CNN's Ivan Watson joins us now live from other side the stadium in Turkey's capital.

How did it go -- Ivan?

IVAN WATSON, CNN CORRESPONDENT: Well, it was a night of football, I mean all the fears and the tensions that actually had Turkish police protecting the Israeli team all the way from the airport to their hotel and -- and warning, reportedly, the players not to leave the hotel grounds without police escort.

The game went off clean. It was apolitical inside the stadium. The Besiktas club won 5-1, really trouncing the team, Maccabi Tel Aviv. The colors of the flags and the -- and the fans in the crowd were black and white, the -- the Turkish club team.

There were only about 14 fans in the section reserved for the Maccabi Tel Aviv supporters, perhaps a sign that people didn't feel too comfortable coming to Turkey in this time of extreme political tension between Israeli -- between the Turkish government and the Israeli government.

There was an attempt to try to march, about several hundred anti- Israel Turkish protesters, from the square where I'm standing now, toward the stadium where the match was held. And some of those demonstrators were carrying Palestinian flags and carrying Hezbollah flags and -- and chanting, "Damn Israel!"

But the substantial phalanx of police managed to keep them away from the stadium. So it was a night of pretty much good, clean football -- Max.

FOSTER: OK, Ivan, thank you very much, indeed.

Now, tense times in Turkey and it's not alone.

My colleague, Pedro Pinto, joins me now for a look at a subject causing tension among some players and managers in Britain's Premier League -- and, Pedro, there's a glaring lack of black coaches in England and that's what people are talking about.

PEDRO PINTO, CNN "WORLD SPORT" ANCHOR: You're right. And this has been a topic that is discussed many times throughout the season, then it kind of goes away.

Well, the different now is that the League Managers Association actually wants the Football Association to do something about it. And they are recommending that they at least give some of the minority managers and coaches a chance to interview from a lot of the positions.

What's crazy right now, Max, is that as multicultural and multiracial as the Premier League is, and other professional leagues are here in England, only two of the 92 clubs actually have a black manager, which is astounding. They're Chris Hughton and -- and also Chris Powell.

And what we've seen in the past is that there have been some black managers in the Premier League. And we can think about names such as Rhett Hollett (ph), Janti Ganan (ph), Paul Lynst (ph) recently.

They -- they've had some success, but what -- what a lot of the managers deal is that there is an institutionalized racism. And what the Football Association and the League Managers Association are going to do now is -- is to try to -- to introduce a process which gets rid of this at the institutional level, so at least the clubs are giving minority managers a chance to interview.

FOSTER: So the candidates are there, are they?

PINTO: The candidates have been there, at the lower level. So we're talking about some of the youth level coaches.

FOSTER: But they're not coming through?

PINTO: But they're not coming through.

What I can tell you is that what -- what's curious is that -- that there has been something done about this in other countries and in other leagues...

FOSTER: In the U.S.?

PINTO: Exactly. In the States, for example, with the NFL, there's a great example. And I can give you some -- some really interesting numbers, where they introduced a rule in 2003 called the Rooney Rule. Now, it has nothing to do with Wayne Rooney.

This rule basically forced teams to interview at least one minority candidate per coaching position. And you're seeing here the difference that has made. Only two back in 2002 and now there are up to seven. And I can tell you that this season, there are up to eight minority coaches in the NFL.

And let me remind you that this has nothing to do with affirmative action. This has nothing to do with the league forcing clubs to hire minority coaches. What it is doing is at least giving them a chance and making them interview minority coaches for -- for the position.

And it's crazy, Max, because you look at the amount of minority players that are on the field, so surely, out of all those players that have the experience, some of them have to be considered to be managers, as well.

FOSTER: And there's no explanation for this. We haven't heard from a club that hasn't promoted someone or anything.

What sort of reasons do they give?

PINTO: No, some of the -- some of the black managers that have worked in the top tier in England and the latest one was Paul Lyntz (ph), he said that he wasn't given the same kind of respect that they give some of the other internationals, because Paul Lyntz (ph) was someone who played for England for many years. He had a great reputation as a player. And when - - when he got to be a manager, automatically, people didn't really respect him. This is his view of -- of what happened.

And that is why, now, the Football Association and the League Managers Association are trying to come up with a system so at least it gives them a chance to be interviewed, to be out there, to have an opportunity to get a job.

FOSTER: OK. Pedro, thank you very much, indeed, for that.

Now, straight ahead, cheering crowds we can the first Western heads of state to visit Libya since the uprising began. We'll have details of an historic trip to Benghazi.

Then, storyteller, athlete, politician, auctioneer -- is there anything this man can't do?

Tonight's big interview in just 15 minutes.

And in 25, bringing a crumbling old city back to life -- we're keeping our eye on Poland this week.

(COMMERCIAL BREAK)

FOSTER: You're back with CONNECT THE WORLD on CNN, the world's news leader.

Let's check the headlines for you this hour.

The London police are still holding a suspected rogue trader whom UBS says cost the company roughly $2 billion. He was arrested overnight. British media have identified him as 31 -year-old Kweku Adoboli.

Europe's central bank is working with the U.S. Federal Reserve and other central banks to give three month loans to Europe's struggling banks. They want to ensure Eurozone banks have enough dollars for the rest of the year.

A lawyer for two American hikers imprisoned in Iran says he has filed all the necessary paperwork for them to be released on bail, but he does not expect Iranian judges to act on it before Saturday. The two Americans were convicted of spying and sentenced to eight years in prison.

Syrian activists are lashing out at Turkey over the fate of this Syrian military officer who deflected to Turkey, but is somehow back now in Syrian custody. A Syrian news agency broadcast what it called a confession from the officer.

Severe flooding in Pakistan has killed more than 240 people in the past month. The heavy rains in the south have pretty much ended, but the high waters remain.

Those are the headlines this hour.

A hero's welcome in Libya today for two leaders who helped turn the tide of the war.

(BEGIN VIDEO CLIP)

DAVID CAMERON, BRITAIN PRIME MINISTER: Thank you.

(END VIDEO CLIP)

FOSTER: Cheering crowds in Benghazi greeted British prime minister David Cameron and French president Nicolas Sarkozy. The leaders spearheaded NATO's bombing campaign that helped drive Moammar Gadhafi from power. They met with Libya's new rulers, offering their full support and some encouraging words.

(BEGIN VIDEO CLIP)

CAMERON: What an honor it is to be here in Tripoli with you to see how the Libyan people are taking their country back and taking it forward to a new era.

A few weeks ago, Gadhafi was still in control here in Tripoli, and I think what the world has seen is, frankly, an impressive transformation.

(END VIDEO CLIP)

FOSTER: Amid all the celebrations, NATO issued a sobering reminder, though, that Libya is not completely free quite yet. It says 15 percent of Gadhafi's forces are still operational.

One of their last remaining strongholds is Sirte, Gadhafi's hometown. Anti-Gadhafi fighters launched a major offensive there today, storming the city from three fronts. Our Phil Black is near Sirte, he joins us now with an update on how they're doing. Phil?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: Hello, Max. Yes. Well, late today, anti-Gadhafi forces entered the city where the dictator they fought so hard to bring down was actually born.

We've got some pictures to show you, it's amateur video shot by one of the rebel fighters on his cell phone. It shows -- and you can hear, hopefully, the anti-Gadhafi forces firing a great deal of weaponry.

They say they met some resistance, but they also look pretty relaxed there. I don't think -- and they tell us that they didn't meet quite as much resistance at that point as they had expected.

Earlier, as they approached the city, in particular, the lead column, heading down the coast road from Misrata, came under heavy rocket attack, particular around the 30 to 50 kilometer mark.

But once it closed that distance, got inside the range of rocket fire, they say that a lot of the loyalist fighters and a lot of that resistance essentially melted away.

The fighters tell us they hadn't intended to enter Sirte today. They did, they advanced further than expected, but they didn't stay. They reached the center of the town, they have now all pulled back to well outside the city.

But tomorrow morning, they're going to advance again, and this time, they say, they're going to take and hold the city where Gadhafi was born, Max.

FOSTER: And is he still there? That's the big question. Any clues?

BLACK: That is the big question, and there's been a great deal of speculation about that ever since Tripoli fell. I don't think any of the fighters, though, realistically expect that they will now find senior Gadhafi regime figures inside Sirte.

The reason being, well, the theory is among the fighters that the effort to hold Sirte has simply been a stalling exercise, playing for time, if you like. An opportunity to allow figures from the regime, Gadhafi loyalists, to escape south.

There is a road due south of Sirte that heads deep into the country. It has been open until today, so those loyalists and senior regime figures, if they were ever in this city, have had plenty of time, plenty of opportunity, to make an escape into the south of the country. Max?

FOSTER: And Phil, after Sirte, what's next? How many more strongholds are there?

BLACK: Well, there are three that we're hearing about, three that are significant ones. Sirte is an important one, it's strategic, sits on the coast, essentially dividing the important populated coastal strip of the country.

The others nearby, Bani Walid, and deep in the south, Sabha. It is certainly hoped that if Sirte were to fall tomorrow, that will send a powerful message that Bani Walid should -- and the loyalist forces there should reconsider and negotiate some sort of settlement to end that one peacefully.

But it is the city of Sabha in the south that, I think, a lot of the attention will turn to once Sirte falls, Bani Walid is dealt with. Because all the speculation is that that is where senior regime figures could now well be. Max?

FOSTER: OK, Phil Black, thank you very much, indeed, for joining us from Sirte. Wait to see how that unfolds, it probably will be quite quick at this rate that we're seeing of these strongholds falling.

But fighters converging, then on Sabha. They're driving through the Sahara desert, making some quite unusual pit stops as they gear up for battle. Ben Wedeman is with those fighters and filed this exclusive report.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): A timeless desert scene -- until the pickup arrives. The calm and quiet of the Sahara has been disturbed by the arrival of a force heading to loyalist strongholds in the far south.

But this is a fighting force in the making. They're learning literally as they go along.

In the early morning cool, Ahmed, formerly in Gadhafi's army, is giving a lesson in how to use a rocket-propelled grenade launcher.

Everyone gets a chance to shoulder it, get used to the feel of it. It's only a matter of days at the most before they'll be in battle.

Ahmed concedes it's a tall order to cram months of training into a few hours during the journey to the front.

"Of course, of course," he says, "but over the next day or two, we'll try to teach them."

(MEN SPEAKING ARABIC)

WEDEMAN: What follows are more lessons in the art of the heavy machine gun, how to load it, how to fire it.

(GUNFIRE)

WEDEMAN: And then, an anti-aircraft gun.

(MEN CHANTING IN ARABIC)

WEDEMAN: Not everyone is new at this, 61-year-old former soldier Mohammed Arabi can chant and cheer with the best of them.

The plan is to try to negotiate a peaceful surrender in the largest southern city, Sabha. All indications so far, however, point to a bitter fight for the south. It could be Gadhafi's last stand, warns commander Ahmed Hasnawi.

"Their biggest concentration is in the south," he tells me. "We even have information they want to set up an independent entity to be ruled by all the figures of the old regime."

It's not all about fighting, however. A large group of doctors and nurses has also come along with trucks and ambulances full of medicine. And not just the usual material for battle wounds. There's a humanitarian side to this mission.

Dr. Hatem Abu Bakr was a car dealer in Tripoli before the revolution. He says he made more money selling cars than practicing medicine.

HATEM ABU BAKR, ANTI-GADHAFI FIGHTER: There are two missions. One part of the mission is to keep all the people with us in the front lines safe. The other part is that Sabha is now closed since one month, and I think all the stocks are near to zero.

WEDEMAN: Most essential is water. They've brought thousands of bottles. In this heat, dehydration can be deadlier than a bullet.

By midday, the force finally starts to move.

WEDEMAN (on camera): Now they're finally moving out, but it's still a long way to go, more than 300 kilometers to the front lines outside Sabha.

WEDEMAN (voice-over): It will be a long, hot, and difficult journey.

Ben Wedeman, CNN, in the Sahara Desert, Libya.

(END VIDEOTAPE)

FOSTER: An update now on a sad story that touched so many of you, the case of a domestic worker found horribly abused in the home of Hannibal Gadhafi, one of Moammar Gadhafi's sons.

Shweyga Mullah suffered terrible burns but, as Dan Rivers reports, she's now receiving first-class medical care abroad.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Preparing to leave after an ordeal at the hands of the Gadhafi family that was as sickening as it was incomprehensible.

Shweyga Mullah boards a specially chartered plane to fly to Malta for longterm treatment, her relief and happiness welling over as the plane took off.

This is how we found the nanny to Colonel Gadhafi's grandchildren, lying on a mattress in an exclusive Gadhafi family beach resort.

She told us Colonel Gadhafi's daughter-in-law Aline poured boiling water over her head simply because she wouldn't beat their toddler to stop her crying.

As her plane touched down at the international airport in Malta, she was entering a different world, flowers and the sort of welcome accorded to visiting presidents. The Maltese prime minister has been personally touched by her story and has offered her longterm asylum and all the care she needs.

We rode in the ambulance as she made the last leg of the journey to a state-of-the-art hospital.

She says, "I feel relaxed. It was a little bit scary there, but now I am relaxed." And that's in part thanks to the compassion of the head nurse, Mary Bezzina.

MARY BEZZINA, HEAD NURSE: And now the plastic surgeon is waiting for her at the emergency department at Mater Dei Hospital. So, we start from there.

RIVERS (on camera): After one year, Shweyga's nightmare in Tripoli is over. She's arriving here in Malta to world-class treatment in stark contrast to the awful suffering she's endured in Libya. Dan Rivers, CNN, Malta.

(END VIDEOTAPE)

FOSTER: Dan joins us now live from Malta. So, take us through, Dan, exactly what sort of treatment she's going to have there.

RIVERS: Well, a plastic surgeon was waiting for her when she arrived at the Mater Dei Hospital here in Malta. It's a pretty new facility that they've got here, and they are promising that they will give her as much care as they possibly can. They're offering her that she can stay here and claim asylum if she wants to, educational facilities, as well. And of course, limitless free treatment as long as she needs it.

What she said, though, is that she still wants to go back to Ethiopia as soon as she's been treated. She wants to get back to see her family, her mother and father live in Addis Ababa, and her six brothers and sisters as well.

But you could just see the relief on her face, Max, when she was here. She was smiling, she's already looking a lot better than when we first saw her last month in Tripoli. And I think it's just been a huge lifting of a weight from her shoulders just being out of Libya and inside the EU and somewhere safe.

FOSTER: Yes, she must feel quite overwhelmed. That time when you found her, completely ignored in that room and suffering so much, to now being the center of world attention and getting this great attention in the hospital. Has it been a -- quite an overpowering experience for her? How's she coping with that?

RIVERS: Yes -- no, I think that there was definitely an element of her not quite realizing how much her story's touched people around the world, really.

There were quite a lot of journalists at the airport along with us who saw her arrive, a lot of the Maltese press, there. And I think she was a little bit taken aback with all of the cameras suddenly focusing in on her.

But we tried to -- to get going to hospital as quickly as we can so she's not too overcome by all the attention.

But she said she's very, very grateful for all of the help that has been offered to her, and that the website is still up and running if people want to donate through cnn.com/impactyourworld. So people can get to this site, which -- where they can donate money to her.

But yes, she's just completely overwhelmed by this massive outpouring of donations from around the world, having come from a situation where she was pretty much isolated and cut off, a prisoner to the Gadhafi family.

FOSTER: OK, Dan, thank you very much. And we'll be back with you as we get more news on the treatment.

Ever since we brought you that story, we've received tremendous outpouring of support and offers of help, and donors have now given $38,000 for her medical care.

You, too, can contribute. As Dan was saying, do log onto cnn.com/impact. There you'll find a link to a page set up by Anti-Slavery International specifically to help Shweyga. Again, that is cnn.com/impact.

Next up on CONNECT THE WORLD, the man whose life reads like a tall tale. The latest saga from Jeffrey Archer. The controversial author is tonight's Big Interview, up in just two minutes.

(COMMERCIAL BREAK)

FOSTER: Celebrities are lining up to take part in Britain's top-level inquiry into the phone-hacking scandal. The actors Hugh Grant, Sienna Miller, "Harry Potter" creator JK Rowling, they will top the list of high- profile victims who are being permitted to take part in the hearings.

The inquiry was set up amid public outrage over claims of phone hacking by the Murdoch-owned tabloid "News of the World," which was closed down in July.

In tonight's Big Interview, a man who is no stranger to the tabloids. He's been the subject of a headline-grabbing expose once before. And as Becky discovered, he's also among the thousands of potential victims of the "News of the World" scandal.

(BEGIN VIDEOTAPE)

BECKY ANDERSON, CNN CORRESPONDENT (voice-over): Published in 97 countries in 37 languages, Lord Jeffrey Archer is widely considered one of the world's most successful writers, though on one point, he would disagree.

JEFFREY ARCHER, AUTHOR: I'm a storyteller, not a writer. I want you to turn the page. I don't -- I can't win the Nobel Prize, so I want you to turn the page.

ANDERSON: This 71-year-old best-selling storyteller and avid art collector is living a life that itself reads like a tall tale.

A one-time champion sprinter who ran for Great Britain, he went on to run for Parliament in what turned out to be a tumultuous political career, interrupted by near bankruptcy and a two-year stint in prison for lying to win a libel case.

ANDERSON (on camera): I want to give you some quickfire questions. Just a sense of who you are when you wear different hats. Jeffrey Archer the politician.

ARCHER: Well, I'm by nature slightly right of center. I sit on roughly the central ground, but slightly right.

ANDERSON: Jeffrey Archer the athlete.

ARCHER: That's a long time ago. I ran for Britain when I was a child. I enjoyed it very much. I wasn't quite good enough.

ANDERSON: Jeffrey Archer the prisoner.

ARCHER: That was an interesting experience, two years of meeting people I would never have met in normal circumstances, never have come across, where I learned a lot about myself and a lot about them. And three books came out of it.

ANDERSON (voice-over): In fact, he got his first book out of his very first hardship, writing "Not a Penny More, Not a Penny Less" to repay his creditors after a bad investment during his political career.

He's since become a multimillionaire, with 17 novels under his belt, including the first installment of a new five-book series.

ANDERSON (on camera): You're such an accomplished writer. Millions have read your books. What made you decide that you wanted to do it all over again. And five?

ARCHER: I think the challenge to write five books in a row, the Clifton Chronicles. Take a family in 1920 and take them right through to 2020 in five volumes.

And start with a kid who's born in the back streets of Bristol to a docker's family, and you assume he's going to leave school at 14 and be a docker, and then suddenly at the age of 8, he discovers he has the most staggering beautiful voice, and this changes his whole life.

And he's taken out of the docks and put into a world he would never have come in contact with, and then following what happens to him, his family, and all those around him, not for 20 or 30 years, but for 100 years.

I thought that would be a real challenge. I have to admit to you that I hadn't quite realized how much of a challenge.

ANDERSON: There must be an awful lot of research, given the length of the time span. Do you enjoy that research?

ARCHER: It's terrific fun research. It can be boring when you have to look up something and you just can't find, so if anyone is listening to this program and can tell me, I can't find out when it was discovered that colorblindness goes through the women's side and not through the men's side. I can't find the year in which that was medically discovered.

ANDERSON: CNN viewers will help you with that, I am sure.

ARCHER: And don't think I haven't asked some leading doctors and -- failure.

ANDERSON (voice-over): Archer is most certainly well-connected. He was once a confidante of Lady Diana and counts former British prime minister Margaret Thatcher among his friends.

ARCHER: Margaret Thatcher's been a great friend for 30 years, yes. And the test of a great friend, particularly when they're in high office and so well known, is how they treat you when they're down. And her greatest quality for me is I wouldn't have known I was down.

ANDERSON (on camera): You will have been watching the Rupert Murdoch story unfold.

ARCHER: Yes.

ANDERSON: What are your thoughts?

ARCHER: I watched him very carefully, indeed, and I think he has been staggered by it. He's built up one of the great companies on Earth in his lifetime. His father and his mother, two remarkable people, and the man I've known over the years unquestionably a giant.

But I think he's been knocked backwards by this, and when he said "I didn't realize it was going on," I think there's an -- with the father, I think there's a very strong element of truth in that.

People have said to me, "But Jeffrey, how couldn't he know about a check for 600,000 being paid?"

And I try to explain to them that if you run a company that makes three or four billion a year, it -- he -- if it's gone through the lawyers, with their permission, it isn't something in a cycle of the size of those companies that he'd become involved in.

So, I came out with a little sympathy for him, but no sympathy for those people who were ruining other people's lives.

ANDERSON: You've been a victim yourself of tabloid journalism, haven't you?

ARCHER: Who hasn't? I mean, I -- I understand that there are I don't know how many people are on the list, but I'm on that list, and I'm very conscious -- I've had my visit from the police and filled in all my things months ago.

And so, if I'm on the list, there must be thousands of them.

ANDERSON (voice-over): The plot always thickens, in life and on the page, for Archer, ensuring his name also finds its way onto another list. That of the best-seller.

ANDERSON (on camera): You describe yourself as a -- storyteller. Writing books which are page-turners. Some people might say that that's almost a criticism of your work, that they're page-turners --

ARCHER: Yes.

ANDERSON: -- they're not sort of deep literary tome. I'm pretty sure you have a deep literary tome in you. Is that something that you would pursue going forward?

ARCHER: It's a fair question, through vanity alone, whether you'd finally like to do something that very few people read but was acknowledged to be a work of great importance. No, thank you very much.

If you're asking me to swap 300 million readers for the Nobel Prize, thank you very much, I'll have the 300 million readers.

(END VIDEOTAPE)

FOSTER: Jeffrey Archer speaking to Becky, there, as the first book in his new series hits the shelves today.

We've got more Big Interviews coming your way. Next week, Beyonce. The superstar, who's just revealed she's pregnant, is also getting ready to unveil her latest fashion collection. The singer gives us a sneak preview next week.

To find out more about other Big Interviews we've got coming up, head to cnn.com/connect.

You're watching CONNECT THE WORLD. I'm Max Foster. Coming up, visions of renaissance, one Polish city on a mission to rebuild itself. Our Eye on Poland special is up next.

(COMMERCIAL BREAK)

FOSTER: What do Hollywood makeup legend Max Factor and film directors Roman Polanski and David Lynch have in common? Well, it's a crumbling city in the center of Poland. Now, one man wants to bring a vibrancy back to Lodz. Jim Boulden has the story as part of our Eye on Poland special.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): It's far from Hollywood and has seen better days, but Lodz in central Poland has a thriving film school complete with its own walk of fame, and has one man and a big plan.

Andrzej Walczak wants to renovate a city once the heart of Eastern Europe's textile industry.

ANDRZEJ WALCZAK, FOUNDER, ATLAS: When you see our population in our city, of course we are going down. So, no one promised to our city that we can be like a city. We have to build it ourselves.

BOULDEN: The master plan was born five years ago. First fruits are seen in the renovation of this 100-year-old power station.

WALCZAK: When you have nothing in the city, it's not your reason to stop an activity, which means that someone -- you have to start.

BOULDEN (on camera): And this is the starting point.

WALCZAK: Yes.

BOULDEN (voice-over): Part of director David Lynch's 2006 feature film "Inland Empire" was shot in Lodz.

JEREMY IRONS AS KINGSLEY STEWART, "INLAND EMPIRE" (through translator): I think -- I've seen the two of you together.

UNIDENTIFIED FEMALE (through translator): That's awful.

BOULDEN: He's quoted as falling in love with its crumbling industrial backdrop, and wanting to help restore Lodz.

WALCZAK: When we have -- part -- David Lynch as a partner, we could approach everybody, call everybody, because it was a kind of -- I'm from --

BOULDEN (on camera): The name opened the doors.

WALCZAK: Yes.

BOULDEN (voice-over): Lodz lacks a central market square, a modern train station. Now there are plans to bring high-speed rail here and money to actually lower the town's rail lines below ground.

WALCZAK: That's why we are smiling. Five years ago -- I show you in newspapers was a joke, crazy guy, thinking no chance. But it's done. It's done, yes?

BOULDEN: The Lodz-born Walczak is the co-owner of a big buildings material company, called one of Poland's richest men. He's now spending more time with his foundation to restore Lodz.

WALCZAK: The beginning of the city, it was German, Russian, Polish, and Jewish.

BOULDEN: Walczak says renovating Lodz, where architect Daniel Libeskind was born, where Hollywood's Max Factor was born, is important for Eastern Europe's history.

BOULDEN (on camera): One man's dream and determination to transform his hometown and make it relevant once again in the new Poland.

Jim Boulden, CNN, Lodz, Poland.

(END VIDEOTAPE)

FOSTER: Well, during our Eye on Poland coverage, we're asking you to share your images of the country, and this iReport comes to us from June Roberts. It shows a mermaid statue in Warsaw's Old Town. The mermaid is Warsaw's symbol.

The origin of the mermaid is not fully known, but the sword and the shield represent the city's defensive character.

Scot Magnuson toured Poland in April last year. He says many of the castles seem untouched for centuries.

And Kasia Pilat took these pictures during summer in Poland. She intended to stay three weeks in the country, but says her visit has now become permanent.

If you have imaged you would like to share of Poland, do log onto cnnireport.com.

I'm Max Foster, thank you for watching. The world headlines and "BackStory" follow this short break.

END