The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of today's news; testimony from Enron whistle- blower Sherron Watkins; a campaign finance debate between Senators Feingold and McConnell; the first of three Elizabeth Farnsworth reports from inside Saudi Arabia; and a look at the growing uproar over an Olympics figure skating decision. NEWS SUMMARY JIM LEHRER: The combat over campaign finance reform moved to the Senate today. Early this morning, the House gave final approval to a bill that would ban unregulated donations to national political parties. Senate Majority Leader Daschle said the Senate would take it up right away, and he said he'd fight any filibuster. At the White House, a spokesman was noncommittal on whether President Bush would sign the bill. We'll have more in a few minutes. On the Enron story today, a company whistle-blower charged top executives had duped former Chairman Kenneth Lay and the Enron board. Sherron Watkins appeared at a House hearing. She testified she became "highly alarmed" by the company's accounting last year. She said she warned Lay that shareholders were being misled by inflated profits. In Houston today, Enron announced it had fired its top two accounting officers. Slobodan Milosevic formally began his defense today in his war crimes trial at The Hague. We have a report from Gaby Rado of Independent Television News.GABY RADO: He'd waited for seven months in a foreign prison to hit back at his accusers, and when he finally got his chance this morning, he was filled with a bitter contempt. SLOBODAN MILOSEVIC (Translated): You basically have nothing, and that is why you have to concoct things. You have to invent things. You want us to engage in a swimming competition, 100 meters, but you want to tie my hands and feet and let me swim that way, and you consider that to be a fair trial. GABY RADO: To get maximum impact, he produced some of the most disturbing photographs ever seen of the victims of NATO bombing in Kosovo. Many were dismembered or burned civilians, and are too horrific to be broadcast. He used a TV documentary to suggest that the notorious Racak massacre in January, 1999, was deliberately exploited by NATO to start the war. His claim is that the alliance ignored evidence that the victims were Kosovo Liberation Army fighters, not civilians, and he claimed that he was fighting awar against terrorism when he took on the KLA and he got no thanks for it from the West. SLOBODAN MILOSEVIC (Translated): The Americans go right the other side of the globe to fight against terrorism to fight against terrorism in Afghanistan-- a case in point-- right to the other side of the world, whereas here, the struggle against terrorism in the heart of one's own country, in one's own home, is considered to be a crime. SPOKESPERSON: All rise. GABY RADO: The former president resumes his defense tomorrow, and has promised more photos and video evidence. JIM LEHRER: If convicted, Milosevic could be sentenced to life in prison. In Afghanistan today, a fire broke out at the U.S. base at Kandahar Airport. Military officials said U.S. troops accidentally set the blaze. They were using flares to light an area where gunmen fired on the camp on Wednesday. The flames were later brought under control. A Palestinian man is trying to reorganize the al-Qaida network. The "New York Times" reported that today. The suspect has been tied to the September 11 hijackings. In addition, he may know the identities of thousands of recruits who passed through Afghan training camps. Also today, federal officials ordered nuclear power plants to beef up security. The new rules include more frequent ID checks and better training of guards, among other things. A Pakistani militant claimed today a kidnapped "Wall Street Journal" reporter was dead. The suspect told a court he abducted Daniel Pearl three weeks ago. He then said, "As far as I understand, he's dead." Later, a spokesman for Pakistan's foreign ministry dismissed that claim. MOHAMMED AZIZ KHAN: The statements have been coming from him. He has been changing them from day to day, and we cannot give any credit to any of the statements that he gives. As far as the concerned agencies are concerned, the government of Pakistan is utilizing all means possible to resolve this case as quickly as possible. JIM LEHRER: Pearl disappeared in Karachi January 23. He had been trying to meet with Islamic extremists. President Bush announced a voluntary plan to combat global warming. He offered tax breaks to businesses to cut emissions of carbon dioxide by 18% over ten years. A separate initiative would reduce power plant emissions of other gases. Mr. Bush has rejected the Kyoto Treaty that mandated action by 40 industrialized nations. Chrysler will recall 1.6 million Jeep Grand Cherokees. The automaker said today the vehicle may roll backward even when it appears to be in "park." There have been reports of at least 59 injuries. The affected vehicles are from model years 1993 to 1998. Federal regulators will continue their own investigation of deaths and injuries linked to a wider range of Grand Cherokees. At the Olympics in Salt Lake City today, the International Skating Union refused to speed up a probe of judging in pairs figure skating. A Russian couple won the competition moon night beating two Canadians touching off claims the voting was rigged. The head of the French stating team today denied saying the French judge may have been manipulated. Country singer Waylon Jennings died Wednesday in Arizona of complications from diabetes. Some of his songs became country music standards, including, "Mamas, Don't let your Babies grow up to be Cowboys," sung with Willie Nelson. In all, he had 16 number-one records. He was 64 years old. And retired Ambassador Vernon Walters died Sunday in Florida. He was a decorated Army general, an aide to seven presidents, and ambassador to the United Nations in the Reagan years. He was 85. And that's it for the news summary tonight. Now it's on to: An important Enron witness; Senators Feingold and McConnell; inside Saudi Arabia; and the figure skating scrape. FOCUS - KEY WITNESS JIM LEHRER: An Enron insider tells her story. Spencer Michels reports. SPENCER MICHELS: Reporter: Sherron Watkins is the Enron employee who went to CEO Ken Lay last August warning him that accounting fraud could sink the company. She was showered with praise today by members of the House Energy and Commerce Committee. SPOKESMAN: I think we should applaud her. It is never easy to be a whistle-blower. REP. BILLY TAUZIN, Chairman, Energy & Commerce Committee: A witness today will talk about how she attempted to give leadership at Enron a last clear chance. SPENCER MICHELS: Watkins, currently an Enron vice president, testified under a "friendly" subpoena, a willing witness. After taking the oath, she outlined her career. Trained as a certified public accountant, Watkins worked for Arthur Andersen, Enron's auditor, before joining Enron 1993. Last June, the company assigned her to work for Chief Financial Officer Andrew Fastow. That's when she said she learned that a partnership run by Fastow called Raptor had lost $700 million, and that the bookkeeping was suspicious. SHERRON WATKINS, Vice President, Eron: I was highly alarmed by the information I received. I continued to ask questions and seek answers, primarily from former coworkers in the global finance group or the business units that hedged assets with Raptor. I never heard reassuring explanations. I was not comfortable confronting Mr. Skilling or Andrew Fastow with my concerns. To do so I believe would have been a job-terminating move. SPENCER MICHELS: "Mr. Skilling" is Jeffery Skilling, then the CEO of Enron. He resigned last summer. Last week he testified that he knew about no financial improprieties. SHERRON WATKINS: On August 14, 2001, I was informed of Mr. Skilling's sudden resignation, and felt compelled to inform Mr. Lay of the accounting problems that faced Enron. I met with Mr. Lay on the afternoon of Wednesday, August 22, 2001. The meeting lasted just over one half hour. I urge Mr. Lay to find out who lost that money. If he discovered that this loss would be borne by Enron shareholders via an issuance of stock in the future, then I thought we had a very large problem on our hands. SPENCER MICHELS: Watkins said Andrew Fastow wanted her fired when he learned about the meeting. REP. JAMES GREENWOOD, (R) Pennsylvania: Did you watch Mr. Skilling's testimony before this subcommittee last week? SHERRON WATKINS: Yes, I did. REP. JAMES GREENWOOD: Would you care to comment on how you reacted as you heard Mr. Skilling describe his awareness or lack of awareness or understanding of these transactions? SHERRON WATKINS: Well, I would like to use Mr. Skilling's own words to describe what I thought about his testimony. He was interviewed by Enron's in-house newsletter in 2001, and in the interview, Mr. Skilling was asked, "What's the best advice you ever received," and his reply was, "if it doesn't make any sense, don't believe it." SPENCER MICHELS: Republican Billy Tauzin asked about a second memo she wrote to Lay in October advising him to blame others for Enron's problems. SHERRON WATKINS: I was providing this to Mr. Lay as a concept on public relations. However, I felt it was a truthful public relations strategy, and it was... It was something I felt should be... Should be said. REP. BILLY TAUZIN: So... So the things you recommended that Mr. Lay say and do, based upon facts in this document that you believed to be true? SHERRON WATKINS: Yes. I do believe that, that Mr. Skilling and Mr. Fastow, along with two very well respected firms, did dupe Ken Lay and the board. SPENCER MICHELS: Florida Republican Cliff Stearns asked Watkins about Enron executive Cliff Baxter. Baxter was found dead in Houston two weeks ago of an apparent suicide. Watkins said he shared her concerns. SHERRON WATKINS: I actually... The last time I spoke with Mr. Baxter was January 15 of this year. I phoned him to give him the heads-up that... That my memo had been discovered and was in the press, and that it mentioned that executives had warned Mr. Skilling. So I told Mr. Baxter that I mentioned him specifically, and I read to him over the phone exactly what I had written about him. And he said, "Well, Sherron, you're right. I was very concerned about these transactions," he said, "But I'll tell you what: If I had known there was anything illegal about it, I would have pushed it further." SPENCER MICHELS: Iowa Congressman Gregg Ganske asked about the memos to lay last August. REP. GREGG GANSKE: Did you keep a copy for your personal files? SHERRON WATKINS: Yes, I did. REP. GREGG GANSKE: Where did you keep them, at home? SHERRON WATKINS: No. REP. GREGG GANSKE: At work? SHERRON WATKINS: No, in a lock box. REP. GREGG GANSKE: So you were enough concerned about this, you wanted to put this somewhere where it couldn't be destroyed? SHERRON WATKINS: Yes. REP. GREGG GANSKE: Were you worried about your own personal safety? SHERRON WATKINS: At times. I mean, just because the company was a little bit radio-silent back to me, so I didn't know how they were taking my memos or the investigation. REP. GREGG GANSKE: Why would you be worried about your personal safety? SHERRON WATKINS: Because it was the seventh- largest company in America. REP. GREGG GANSKE: And you were dealing with a really powerful problem? SHERRON WATKINS: Yes. REP. BILLY TAUZIN: Will you agree to inform us immediately if, as a result of your coming forward to testify before this committee and your willingness to come forward to Mr. Lay with your concerns as you have, if any retaliatory action is threatened or posed or suggested in terms of your employment and your position with Enron? SHERRON WATKINS: Yes, sir. SPENCER MICHELS: The hearing ended late this afternoon. The attorney for Jeffery Skilling criticized Watkins' testimony, saying she had no basis in fact for her views. UPDATE - MONEY POLITICS JIM LEHRER: And now to the campaign finance story. Kwame Holman begins. SPOKESPERSON: "I just want to say that today you are the American peoples' Valentine... KWAME HOLMAN: The authors of the Shays-Meehan campaign finance overhaul bill, Connecticut Republican Christopher Shays and Massachusetts Democrat Martin Meehan, savored sweet victory this morning after seeing their bill pass a few hours earlier. They celebrated with the Senate creators of the legislation: Republican John McCain of Arizona and Democrat Russ Feingold of Wisconsin, whom McCain enlisted for help on the issue when Feingold arrived in the Senate nine years ago. SEN. RUSS FEINGOLD: There are only two things that I am certain of right now, and that is that I am Feingold, and the other is that we won last night, and what a thrill it was! SPOKESMAN: We stand here with an amendment that says we ought to have a ban on soft money tomorrow - today. Today is tomorrow, my friend from Massachusetts tells me. KWAME HOLMAN: It was very early this morning when Shays-Meehan supporters in the House of Representatives safely maneuvered through the last of a minefield of so-called "poison pill and spoiler-substitute amendments" to a final victorious vote. In the end, 240 members, 198 Democrats, 41 Republicans, and one independent joined to approve Shays-Meehan. The Shays-Meehan bill would ban soft money, unregulated, unlimited contributions given to national political parties by corporations, unions, and individuals. But limited soft money contributions still could go to state or local parties for voter registration and "get out the vote" efforts. Shays-Meehan also would prohibit advocacy groups from using soft money to broadcast ads that identify a federal candidate within 60 days of an election. The bill would take effect November 6th, the day after this year's federal election. The legislation now returns to the Senate, where Democrats like those in the House overwhelmingly support the campaign finance bill. This afternoon Majority Leader Tom Daschle praised the House vote. SEN. TOM DASCHLE: We are very, very appreciative of the tremendous work done by so many of our colleagues, I mean, outside and are very pleased now that we are at a point where hopefully we can take this to - to the Senate floor and then send it off to the President. KWAME HOLMAN: Daschle then requested unanimous consent of his colleagues to bring up the campaign bill. As expected, a Republican, Mitch McConnell of Kentucky, objected. SEN. MITCH McCONNELL: And we've got people on my side of this issue who did not prevail in the House yesterday who would like to have an adequate time to read the legislation. Fortunately, we're not in session next week, which gives everybody on both sides an opportunity to look at the fine print. KWAME HOLMAN: In turn, Daschle said he will try again to get Senators to agree to take up Shays-Meehan when Congress returns from the week-long Presidents' Day break that begins Monday. President Bush has indicated he'll sign whatever campaign overhaul bill Congress approves. JIM LEHRER: Margaret Warner takes it from there. MARGARET WARNER: So what happens next? For that, we turn to two key Senate players you just saw in Kwame's report: Democratic Senator Russ Feingold of Wisconsin, cosponsor of the campaign finance bill passed by the Senate last April; and Republican Mitch McConnell of Kentucky, one of its chief opponents. So Senator Feingold, beginning with you, what are your expectations now? How soon do you think you can get this bill to the floor of the Senate? SEN. RUSS FEINGOLD: Well, we received last night a wonderful valentine, a bipartisan valentine from the House of Representatives to the American people. Since the Senate has already passed this almost-identical bill by a vote of 59-41, I'm hoping that the body will take it up very quickly as soon as it gets here, and it will pass this ban on these unlimited soft money contributions by corporations and unions and individuals. There is the possibility of procedural barriers, but I think the train is clearly moving in the right direction. MARGARET WARNER: Senator McConnell, are you going to put up any procedural barriers? SEN. MITCH McCONNELL: Well, that really remains to be seen. First I want to congratulate my friend, Russ Feingold. I think it was a remarkable victory after many years of work on this over in the House yesterday, but let me say this, Margaret. This was a bill that is different from the Senate-passed bill. It was produced late at night, previous night. We are today having the best lawyers in town who understand these issues reading the bill carefully, which is not an inappropriate thing to do before agreeing to passage. And I think once we are absolutely certain what's in the bill, that will determine the strategy as to whether or not there would be an effort to force it into conference or to send it on down to the President. Fortunately we're out of session next week, and it gives adequate time for us to make that decision about what the strategy will be once we return. MARGARET WARNER: But it sounds as if you're not ready to agree with Senator McCain, who said today these are "basically the same bill," is the way he put it. SEN. MITCH McCONNELL: Well, it's not basically the same, but somehow it is actually better than the bill that left the Senate. For example, one of the things that I have advocated over the last 15 years is an increase in hard money limits. Both the candidates and the parties are operating under a contribution limit set back in 1974, when a Mustang cost $2,700. One of the really good things in this bill is that it increases what an individual can give in hard money, the so-called good money -- to $95,000 over a two-year period; increases the individual contributions to candidates, doubles them from $1,000 to $2,000, also increases significantly the amount of hard dollars that an individual can give to a party. All of that is very good. There are other parts of the bill that are clearly troubling. I don't think anybody believes that the restrictions on outside advertising within 60 days of an election is going to be upheld by a court. This precise language has been struck down before. You shouldn't have to register with the federal government and raise hard money in order to say unpleasant things about people like Russ and myself in proximity to an election. Even though we would like that, that's clearly unconstitutional, and I think that provision will be struck down. And if this comes to law, I will be going to court with others to contest parts of it we think are unconstitutional. MARGARET WARNER: But let me just ask you -- earlier reports had you threatening a filibuster. Are you -- SEN. MITCH McCONNELL: That was for the purpose of getting a conference-- as to whether or not we need a conference, it depends on what's in the bill. As I've said to Russ and John McCain and others, and the press all day today, we are in the process of reading it because this is real bullets. This is a bill that the proponents would like not to be conferenced and to go straight to the President. So before signing off on that, we like to know exactly what it does. And frequently the devil is in the details, so fortunately we have time here to look at it before we decide whether we should try to force it into conference or send it on down to the President. MARGARET WARNER: Senator Feingold, how do you read... SEN. RUSS FEINGOLD: -- graciousness -- In effect, he's not saying he's going to filibuster it, which I think is very important and very different. He's not saying necessarily that we have to have a conference committee and I give him credit for that. There's nothing wrong with reviewing the bill for the next week. The fact is the two bills are not really different in any significant respect. We didn't choose to decide for the House and Senate that they should raise the hard money limit from $1,000 to $2,000 because we didn't think it was our business; we thought that was the job of the House. And it's really a trivial difference people would have expected to happen. With regard to these ads that Senator McConnell mentions, I guarantee you no bill would have gotten through the Senate or House if we actually banned any ads. Of course we don't. All we do is say that the people who run those sorts of ads, the phony issue ads, in the last 60 days before an election have to follow the same rules that everybody else does who participates in the electoral process. Not a single ad is banned or prohibited by the McCain-Feingold/Shay-Meehan bill. MARGARET WARNER: Senator Feingold, supporters in the House said they believed that the Enron scandal really gave new life to their push there and helped them. Do you think it's going to have an impact on the vote when the Senate essentially revotes on this? SEN. RUSS FEINGOLD: Well, I think we're in a position to win this in any event. We carefully built this, brick by brick, over seven years, but I would have to be less than honest if I didn't admit that things like the Chinese money in 1996, the questions about the presidential pardons last year, and now the Enron scandal are the kinds of things that have illustrated what's wrong. When Senators and Congressmen are asking corporations and unions and individuals for $100,000, $500,000 or $1 million, it's inherently corrupt, and I think what Enron did is sort of shine the final light on the House and on the Senate so that no dirty tricks could be played at the last minute and we've got the will of the people. MARGARET WARNER: I guess what I'm asking you is, you could - you got 59 votes last April. Do you think you might get more? SEN. RUSS FEINGOLD: Yes, I do. The 59 votes were for passage of the bill. I believe there are more for passage of the bill now in part because of the view of corporate abuse of this through the Enron scandal, but also I think that we have the ability to have even more votes, if there is any need on procedural votes. So I think we may get an even stronger vote if comes to that. SEN. MITCH McCONNELL: Margaret, if I may? MARGARET WARNER: Yes, Senator McConnell, please. SEN. MITCH McCONNELL: Soft money had about as much to do with Enron's collapse as Martha Stewart had to do with Kmart's collapse. But Russ and his allies have very smartly used these scandals-- in this case a corporate scandal-- to promote the passage of this legislation. I agree with him-I think it probably, in the end, didn't have a whole lot of impact on the outcome. They had cleared the Senate, which was their biggest hurdle, last year. This had always, in a similar form, passed the House. So I think the big victory for Russ and for John McCain on this issue is actually last year when it cleared the Senate. Nevertheless, what's different as the Senate takes it up nine days from now is that this is not just a bill; this is something on the way to becoming law if it leaves the Senate. That's why reading the bill, finding out what impact it has on my party, for example, is very important. If we conclude, Margaret, that this is unfairly tilted against the Republican Party, I guarantee you there will be 41 Republicans in the Senate who will insist on a conference. But we're going to wait and see. And that decision will be made sometime over the next week. MARGARET WARNER: Senator McConnell, the President's attitude has been described as noncommittal -- that is Ari Fleischer's attitude today was noncommittal. He certainly hasn't gotten himself involved. Has that complicated your job in trying to muster Republican opposition? SEN. MITCH McCONNELL: Well, it certainly would have been easier if the President had taken a particular position on this. He did have a statement of principles both during the campaign and last year during the Senate debate, and the very future of the President's principles are actually in this bill. But, look, I'm not going to question his strategy. The President is sitting on an 85% approval rating. He's obviously doing a lot of things right, and he decided not to engage on this issue until later in the game. And if we decide not to have a conference, he won't be engaged at all. He'll either sign it or veto it. I think it's up to us here in the Senate to analyze the bill thoroughly, figure the impact on our party, what level of unconstitutionality there is, and frankly that can be dealt with in the courts. We'll make that decision in the next week and decide at that point what the strategy is. SEN. RUSS FEINGOLD: I would like to thank President Bush for his willingness to set a standard, and his standard was, if the bill that comes before him improves the system, he'll sign it. Yesterday he said that the McCain/Feingold, Shays/Meehan bill improves the system. That's the right standard. He doesn't get everything he wants in the bill and I sure don't have everything I want in the bill, but I'm grateful that this President is looking at this for what it is: A bipartisan effort in both Houses. It would be very appropriate for the signature of President Bush. MARGARET WARNER: All right, Senators, thank you both, very much. SEN. RUSS FEINGOLD: Thank you. SEN. MITCH McCONNELL: Thank you. JIM LEHRER: Still to come on the NewsHour tonight: Inside Saudi Arabia, part one; and the figuring skating flap. SERIES - INSIDE THE KINGDOM JIM LEHRER: Saudi Arabia, long inaccessible to most foreign journalists, has opened up in recent months to American reporters. Elizabeth Farnsworth and a NewsHour crew just returned. Here is their first report. ELIZABETH FARNSWORTH: A visitor to Saudi Arabia is struck by images that often seem discordant. There's downtown Riyadh with its modern architecture, traffic jams, and trendy shopping malls. And then there are the women who still cover themselves head to toe with veil and Abaya, the robe all females, including foreigners, must wear in public. There's the black gold that powers our modern life. Saudi Arabia sits on about 25% of the world's known oil reserves. And then there are camel races, like this one at a folk festival in Riyadh that was the big social event last month. Little boys age seven or eight served as jockeys, and a Toyota SUV went to the winner. We came to Saudi Arabia to see as much of its culture and people as we could, and to learn about the place that produced Osama bin Laden and 15 of the 19 hijackers. We started at the folk festival, which Crown Prince Abdullah attended. He's the de facto ruler of the kingdom, as it's called. His half-brother the king has long been ill, and Prince Abdullah governs in his stead in what some people have called the most absolute monarchy in the world. This is the spectacle he saw on stage that night. It was broadcast live on Saudi television. (Arabic singing) It tied the ruling family directly to the glories of the Islamic past, and specifically to the great Muslim warrior Salahadin, who re-took Jerusalem from Christian crusaders nine centuries ago. A film about Salahadin was inter-cut with news footage of Israeli soldiers shooting Palestinians. (Arabic singing) "Jerusalem will be ours once more," the Arabic says. "This is the sword of Salahadin, and it must be unsheathed again." This is just the kind of rhetoric American newspaper columnists and analysts have jumped on since September 11 as they lambasted the kingdom for extremist views. In "Time" Magazine's words, for example, Saudi Arabia "fanned al-Qaida's hateful cause, and still harbors a populace that fervently supports it." Saudis have been blindsided by the criticisms, said Hussein Shobokshi, a business leader in Jeddha. HUSSEIN SHOBOKSHI, Businessman: It's no longer bin Laden at issue here. It's the country of Saudi Arabia at issue; it is the religion of Islam at issue. This is where we have to differentiate. This is where we have to really tread lightly, because bin Laden is going to be history in a couple of months, but Saudi Arabia is here to stay, and so is Islam. ELIZABETH FARNSWORTH: The hijackers of September 11 came from all parts of Saudi Arabia, and especially from the Southwest, from the province of Aseer. Five were from the area around Abha, capital of Aseer. Two attended this college of Islamic law. One was Imam at this mosque. We were among the first American TV crews to get access to this place. Our experience as a news crew reflected what seems to be a very dynamic but confusing process under way here. At times, we were allowed much freedom to shoot and do what we wanted to do. At other times, people were warned away from talking to us, and it was often hard to determine why or by whom. Some people spoke openly with us about their criticisms, for example, of the extremism of some religious leaders here. Others feared speaking on camera about those matters, saying they could lose jobs, or worse. We came to believe there were deep differences in Saudi Arabia about September 11 and the kingdom's role in the attacks, and we found a strong reluctance to air dirty laundry publicly. Many of the people we spoke to refused to believe the hijackers were Saudi At all. MAN ON THE STREET (Translated): This is the version the Americans have adopted. It hasn't been proven yet. We and the rest of the world are waiting for evidence. MAN ON THE STREET: I think they... Most of them are not from Saudi Arabia, and we are surprised if there is... Any of them is from Saudi Arabia, because as your know, we are... The people in Saudi Arabia are peaceful. ELIZABETH FARNSWORTH: Most people we talked to did condemn bin Laden and the attacks of September 11. MAN ON THE STREET: Islam is against killing innocent people, even if they are not Muslims. ELIZABETH FARNSWORTH: But a survey carried out by Saudi intelligence reported in the "New York Times" last month revealed that 95% of educated people age 25 to 41 very much supported bin Laden. Sami Angawi, an architect in Jeddha, said he was surprised to find that his teenage son's friends considered bin Laden a hero. SAMI ANGAWI, Architect: My son and his friends, they were in the House three days after the incident. I kind of asked them, "what do you think of bin Laden?" They shrugged their shoulders. They didn't know. A week later, they were also here, and one of them said, "Do you know... You asked us about bin Laden, and we didn't tell you what. You know what? We think he's a hero." That disturbed me. ELIZABETH FARNSWORTH: Really? Your son and his friends? SAMI ANGAWI: My son was quiet. But his friends... And that really disturbed me. ELIZABETH FARNSWORTH: We asked a group of journalists and business leaders, some of them friends of Angawi, to gather at the home of a newspaper editor in Jeddha one night to help us understand more about the Saudi reaction to September 11 and bin Laden. KHALED AL-MAEENA, Newspaper Editor: The support that came for bin Laden came because they considered bin Ladenas a folk hero, and he twisted the nose of the giant. ELIZABETH FARNSWORTH: And this group insisted the support was directly related to people's anger at American politicians' support for Israel. YUSUF AGEEL, Businessman: They are more pro-Israel than the Israelis, and we consider them, you know... Your politicians, we consider them fanatics. They're fanatically pro-Israel, so it really antagonizes the whole thing. SAMAR FATANY, Radio Journalist: The news every day-- watching innocent children and innocent Palestinians dying or being killed or abused or tortured or whatever... You can't help but feel the rage, feel the anger. So of course we'll be sympathetic towards anyone who stands up and says, "Stop it; enough is enough." So this is what is happening. This is how the Arab world feels. ELIZABETH FARNSWORTH: And the Palestinian suicide bombings of Israelis, she said, should be understood as self-defense. The group was also very concerned about the criticisms of Saudi Arabia in the American media. ALI ALIREZA, Businessman: We are surprised. We are shocked. Our government, our people, have never said anything bad about America except, of course, you know, "look, you've got to rethink your support towards Israel." But we... You know, we didn't start this campaign. We are fighting it. We are hoping it subsides. ELIZABETH FARNSWORTH: Meanwhile, our host, Khalid al Maeena, and his wife, Samar, and others have brought children back from schools or jobs in the United States, and are enrolling them at home or in Europe instead. Most had stories about family and friends in the United States. Hussein Shobokshi's sister was in Boston in September. HUSSEIN SHOBOKSHI: She was with my father in Mass General. Basically he was having some medical checkups and an operation. And on the 12th of September-- she's a veiled girl-- they came into her hotel room-- I think members of the FBI and the local police-- and interrogated her and aggressively beat her up. She had a 20-centimeter slash on her face. There was a mistaken identity. That's putting it mildly, I guess, because her fianc 's name is Mohammed Ataj, and they mistake him for Mohamed Atta, and it was six hours later till things cleared up. ELIZABETH FARNSWORTH: Mohamed Atta was the name of the Egyptian who is believed to have led the hijackers of September 11. And there are people like Yasin Qadi who may lose their fortunes because of the attacks. He studied and worked in the United States, and then built a business empire in Jeddha including diamonds, real estate, and high-tech interests. He's one of the Saudis whose assets have been frozen by the U.S. Treasury, which charged they were used to support international terrorism. YASIN QADI, Businessman: As far as I know, we were never engaged in helping any terrorist group whatsoever. If we discover that an employee did something wrong, we're ready to hear it; we're ready to take all legal actions against him, if that happened. But according to my knowledge, I never had something like that. I never heard something like that. ELIZABETH FARNSWORTH: How badly are you hurt economically now? Very bad? YASIN QADI: You can say bad-- very bad. ELIZABETH FARNSWORTH: Qadi met Osama bin Laden in Jeddha in the 1980s, and then again in Afghanistan. YASIN QADI: My uncle took me, at that time, for so-called... To help the warlords to get together. So I was young; he took me with me... With him, and I think I saw Osama at one meeting in that. But that's... You know, how many American officials saw Osama? How many people from Europe saw Osama? How many politicians saw Osama? ELIZABETH FARNSWORTH: Saudi officials have also frozen Yasin Qadi's local bank accounts, and are monitoring more than 100 accounts of other prominent people at the request of U.S. law enforcement agencies, according to press reports. Security forces have also arrested al-Qaida suspects, and Adel al Jubeir, foreign affairs advisor to Crown Prince Abdullah, said the kingdom is cooperating in other ways too. ABDEL AL-JUBEIR: The cooperation between the two countries is excellent. Everything that Saudi Arabia could do, Saudi Arabia has provided. There are a number of things that we were able to establish that we shared with the U.S., and visa versa. At the end of the day, we are both victims of this terrorism, and we both have an interest in rooting it out. ELIZABETH FARNSWORTH: On the public relations front, Crown Prince Abdullah gave a rare on-the- record interview to the "New York Times" and "Washington Post" affirming the kingdom's close ties with the United States. He recognized that most of the 19 hijackers were Saudi-- "deviants," he called them. He also said it's hard to defend America now because of what he implied was a bias toward Israel in the conflict with the Palestinians. The crown prince also urged religious leaders to avoid extremist language and actions. Nevertheless, most Saudis we talked to refused to concede that problems in Saudi society could have contributed to September 11. AHMAD AL-KHERIJI, Oil Industry Executive: Nothing went wrong here. As was said, we had 10, 11, 12, or 20 bad guys, okay, if I can call them that, out of 20 million people. That doesn't mean that something went wrong in Saudi Arabia. ELIZABETH FARNSWORTH: Sociologist Fatina Shaker said many Saudis may sound defensive now because they're sensitive to the criticisms from abroad, but she thinks there is a problem. The voice of moderate or middle Islam isn't heard. FATINA SHAKER, Sociologist: Yes, we have a problem, and we don't realize that we have a problem only now because 9/11 happened and now, because you are here and you are trying to find out. We've been saying this over the years. "Look, guys-- responsible people, decision makers-- we have problems in the education system; we have problems in the family system; we have problems in terms of religion, that the middle Islam, the voice of the middle Islam, has been silenced." ELIZABETH FARNSWORTH: Even at the top, there is a new awareness that perhaps all is not well in the kingdom. Prince Turki al-Faisal is half- brother of the king, and was for 25 years director of Saudi intelligence. He retired shortly before September 11. PRINCE TURKI AL-FAISAL, Former Chief of Intelligence: A society that... Whose makeup is based on religion-- a religion of tolerance and a religion of understanding and the religions of extending the hand of friendship-- and yet someone can come and hijack some of these ideals and put them to the service of murder and the killing of innocent people, which is 100% contrary to all the teachings that we have been taught in our lives. It gives one pause. ELIZABETH FARNSWORTH: And in our next report, we'll look more deeply at the Saudi debate over Islam, education, and culture. FOCUS - THIN ICE JIM LEHRER: Now, Terence Smith has the latest on the big skating war at the Olympics. TERENCE SMITH: The world of Olympic figure skating was in turmoil today after two skating officials suggested that the judging of Monday's pairs event was tainted. France's Olympic chief was quoted last night as saying that the French judge had been "somewhat manipulated" into voting for the Russian pair, who were awarded the gold medal over the Canadian duo, Jamie Sale and David Pelletier. But late today, the French official denied the interpretation of his remarks. An American referee who oversaw the judges during the competition, Ron Pfenning, is said to have filed a report alleging that a judge had been influenced. As they skated Monday night, the Russians, Yelena Berezhnaya and Anton Sikharulidze, made several apparent errors. When Sale and Pelletier took to the ice, they skated a nearly flawless performance. NEWSCASTER: Simply perfect. TERENCE SMITH: But five of the nine judges ranked them below the Russian couple. The decision sparked outrage and questions about the judges' integrity across Canada and the United States. After their initial and public reaction of shock and criticism of the result, Sale and Pelletier have since been gracious in accepting their silver standing. JAMIE SALE, Canadian Olympic Pairs Skater: I'm just really glad that we skated the way we did tonight in front of this, the American crowd. And it was an American love story, and it couldn't have been more perfect. DAVID PELLETIER, Canadian Olympic Pairs Skater: When the marks came up, it was like a punch in the stomach, but... JAMIE SALE: Twice. DAVID PELLETIER: Twice. People may say that we got robbed, and we can talk about it until next week, but it is not going to change the results, and it's not going to change the way we look at each other. And this silver medal doesn't mean our career is a failure or a success. We knew our career was a success before we came here. TERENCE SMITH: Figure skating's ruling body, the International Skating Union, announced Tuesday it would conduct an internal assessment. ISU President Ottavio Cinquanta spoke in salt lake yesterday. OTTAVIO CINQUANTA, President, International Skating Union: It was a very tough competition with performance on the same line. So we are doing this assessment, because there are more. There has about some pressure in order to let, let's say, the opinion of judges, prevail in favor one participant instead of the other. TERENCE SMITH: A few hours later, the International Olympic Committee in an unusual move told the figure skating union to settle the dispute quickly. FRANCOIS CARRARD, President, International Olympic Committee: The IOC is concerned about providing the athletes with the most speedy resolution of this controversy. TERENCE SMITH: A Canadian Olympic official held his own press conference calling for an independent investigation and offering this solution. MICHAEL CHAMBERS, President, Canadian Olympic Association: And we see no reason why the Council of the ISU should not consider awarding a second gold medal. TERENCE SMITH: An 11-member council of the ISU is scheduled to discuss the allegations at a meeting next week. TERENCE SMITH: For more, we're joined by Dick Button, a two-time Olympic champion figure skater and five- time world champion. He is now a commentator with ABC sports for 30 years. And by Vicki Michaelis, who covers the Olympics for "USA Today." Welcome to you both. Vicki Michaelis, there have been charges and denials coming thick and fast here. Have you been able to get to the bottom of it? VICKI MICHAELIS, USA Today: I think it's going to take days, even weeks, maybe even months before we get to the full bottom of this. Obviously there were reports that the French judge was pressured into a certain kind of action, and they're investigating those allegations. I know Canadian skating officials are also filing an appeal, so they're investigating the same allegations, probably talking to the same people. TERENCE SMITH: Some papers, Vicki, are reporting an alleged "vote swapping" arrangement between the French and Russian judges. Is there in fact any evidence of that? VICKI MICHAELIS: At this point there is no concrete evidence. There is hearsay; there is secondhand information that perhaps there was a vote swap involving both the pairs competition and the ice dancing, which begins tomorrow, in that the French judge was perhaps pressured to score the Russians higher in the pairs in exchange for a Russian judge scoring the French team higher in the ice dancing. TERENCE SMITH: But no concrete evidence? VICKI MICHAELIS: No concrete evidence of that yet. TERENCE SMITH: Dick Button, you watched the competition Monday night; how did you - how would you have judged it? DICK BUTTON, Former Olympic Figure Skating Champion: Well, you know I'll be happy to tell you how I would have judged it, but that doesn't mean anything because I wasn't one of the judges. I would clearly have given it to Sale and Pelletier, because their performance was a complete one, a whole one. It was both musically and choreographically, idea-wise as well as technically, first rate. There were no flaws. On the other hand, Yelena Berezhnaya and Anton Sikharulidze are also beautiful skaters. They have wonderful line, wonderful elegance, and very intriguing choreographic moves, but they made two mistakes. And I think those two mistakes, plus the overall program wasn't as complete and whole a program as what Sale and Pelletier skated, was the reason why I would have given it to Sale and Pelletier-- that night, that performance, in that location. TERENCE SMITH: Were you startled by the outcome? DICK BUTTON: I wasn't startled. I was surprised. I must say I was very surprised by it. But, again the... There is a whole world of complication here with the judging. This is a subjective sport, and that creates an enormously difficult scene. I think I have heard... Of the 60 years that I have been following skating, I think I have heard in 59, 59-and-a-half of those years have heard incessant complaints about judging. That's all right; complaints don't hurt anything. They're not a problem. They give you your own opinion. Do you like orange or do you like blue? And if you don't, it doesn't mean that the judges are wrong. The problem comes in when you have more than one skater who's at the very top, and that allows the opportunity for nationalism to rear its very ugly head, and I think that's what happened in this situation. TERENCE SMITH: Well, you get complaints, Dick Button, about judging, but you don't always get, do you, suggestions of influence? DICK BUTTON: I think that's what I was saying. Nationalism in this case reared its ugly head once again, and we have had many instances of that in the past, and I think this is just another one. I hope... The specific problem I hope gets solved. What I hope more is that the general problem of how you control the judging system is resolved. I will say that the ISU has made major steps forward in judging in the past few years, and there have been many, many competitions, which have been accurately and correctly and very satisfyingly judged. So I mean it's not a black-and-white scene. I just think that this is a highly unfortunate one, it's also at the peak of popularity of figure skating this competition is. And it's a very unfortunate scene for the world of figure skating. TERENCE SMITH: Vicki Michaelis, how typical is this in the world of figure skating? You've covered it. How typical? VICKI MICHAELIS: I wouldn't say that allegations that judging was fixed are typical. As Dick was saying, the complaints certainly are very typical. I don't think there has been one competition I've been to where there hasn't been complaints of this or that-- "the score should have been higher." Why weren't they scored technically here or artistically here? This is not unusual when you're around figure skating all the time. As Dick also pointed out, because we are on the sport's biggest stage at this point, it's getting a lot more attention than it generally would. And because we do have these very serious allegations, and we have a French Olympic chief reportedly saying that a judge was pressured, those things are bringing it to the fore and making more than it has been before. TERENCE SMITH: Is there a lot of conversation as a normal event, Vicki, between judges and coaches and the teams and the different judges? VICKI MICHAELIS: There is a lot of conversation. I'm sure Dick is much more well aware how much discourse actually does go on between the coaches, judges-- not necessarily the skaters. I think the coaches and the federations talk more on their behalf with the judges. The judges are often consulted after a competition to see what maybe they did like, what they didn't like, what could be changed, and some of that might be incorporated into a skater's program for the next competition. So these kinds of conversations are very usual in the sport. They have been going on for decades and decades, and this is how this business is done. TERENCE SMITH: Where does it cross the line, Dick Button, between conversations and something more than that? DICK BUTTON: Well, let me give you a perfect example. In 1999, at the world championships in Lausanne, and our cameras from ABC caught the back view of the Russian judge, his name was Babenko, and he was sitting with his legs crossed like this, and the foot hit the wall that was underneath his desk, the desk jutted out from the hockey barrier, and the Ukrainian judge was probably sitting a little bit further than Vicki from me right now, and he was tapping his toe - I call him the "tap dancing judge -- against the wall. What does that mean? He was tapping out one for the person in first place, two and three and so forth. Well, those judges were brought up and suspended by the ISU. It took them three weeks to have a hearing about it. It should have been done instantly because the guy was caught on film. That's a very clear situation. That's not somebody's assumption. He was caught on film doing it. What happened then was the procedure that was followed for the... That was appealed by the Russian Federation was... The appeal was over... Was successful because there had been some mistakes in the way the complaint had been filed. So what happened was that the judges, instead of having a year and a half or two years penalty, had... Were released immediately. And they appeared at Skate America in Colorado Springs the very next fall. Now, there is a perfectly clear example. That's what has to be resolved. Let me say again, the ISU has done yeoman service and yeoman work trying to clean this up. It is always going to be a problem when nationalism rears its ugly head and comes into the world of a subjectively judged sport. TERENCE SMITH: What do you think, dick button, the ISU should do now? DICK BUTTON: Look, if I had that answer, they would have it too. I think, number one, they should always act extremely quickly, because it tells everyone they're on the top of the subject doing the best they can. That's why I'm sorry to hear the ISU isn't meeting until next Monday. There may be reasons it can't be sooner. Secondly of all, I would think once a judge is caught in the act, so to speak, he should be put in the same situation Tonya Harding was, and that is eliminated-- not for nine months or a year and a half or two years, but for life. When you are caught cheating in this business, you should be out of it, period-- end of subject, over and out. The third thing is, I think that there has to be some way of development-- and I don't have the answer for this, I'm sorry to say-- about how one can rotate, and... Which is already instilled into the support, but rotate still further and create purity. You are never going to have that. The best you can do is to do the best that you can to avoid that. TERENCE SMITH: Okay, Dick Button, Vicki Michaelis, thank you very much on that. DICK BUTTON: Sorry I was a little sloppy on that. TERENCE SMITH: Not at all. Thank you, both, very much. RECAP JIM LEHRER: Again, the major developments of the day: The fight over campaign finance reform moved to the Senate. On the NewsHour tonight, Republican Mitch McConnell of Kentucky stopped short of saying he would lead a filibuster; he said he first wants to study the bill that passed the House early today. It bans unlimited donations to national political parties, among other things. And at a House hearing, an Enron whistle-blower said top executives had duped former chairman Kenneth Lay and the Enron board. And before we go tonight, a holiday poem. Here is NewsHour contributor and former poet laureate Robert Pinsky. VALENTINE'S DAY ROBERT PINSKY: Here for Valentine's Day is a passionate poem by the great American poet, Emily Dickinson. Wild Nights - Wild Nights! Were I with thee Wild Nights should be Our luxury! Futile - the Winds - To a Heart in port - Done with the Compass - Done with the Chart! Rowing in Eden - Ah, the Sea! Might I but moor - Tonight - In Thee JIM LEHRER: And have a nice holiday evening. We'll see you again online again tomorrow evening. I'm Jim Lehrer. Thank you and good night. I'm Jim Lehrer. Thank you and good night.