The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Gwen Ifill. Jim Lehrer is on vacation. On the NewsHour tonight: Our summary of the news; then, the president speaks to the nation tonight; we examine the situation on the ground in Iraq, and the political situation at home, with analysts Rich Lowry and Tom Oliphant; the Senate passes a big new energy bill, and sets the stage for a fight with the House; an update on tsunami relief efforts, six months later; former HealthSouth chief Richard Scrushy is cleared of fraud charges; and from religion to marijuana to the death penalty, we assess the Supreme Court's year.

NEWS SUMMARY

GWEN IFILL: President Bush addresses the nation tonight in a bid to shore up flagging support for the war in Iraq. He'll speak before a military audience at Fort Bragg, North Carolina, on the first anniversary of returning sovereignty to Iraq. According to excerpts released in advance, the president plans to say the work in Iraq is "difficult and dangerous," but worth it just the same. Democrats insisted that's not enough. Sen. John Kerry said, "We have no realistic strategy to reduce the risks to our soldiers and achieve our goals." In Iraq today, two soldiers were killed, along with a dozen Iraqis, including a Shiite member of parliament. More than 4,400 Iraqis have since the transfer of sovereignty, according to several news organizations. Nearly 900 Americans have been killed during that period, more than half of the war's total. But today, the Deputy U.S. Ambassador to Iraq, David Satterfield, pointed to the future.

DAVID SATTERFIELD: We have every confidence that in the year ahead, the Iraqi people, through a constitution, through free elections, will be able to take further steps forward to take their place in this region and in the world as a model of a state that has overcome tyranny and moved forward into democracy, freedom, and respect for human rights.

GWEN IFILL: Iraq's President Talabani called it a "blessed day" and touted progress made in the last year. But on the streets of Baghdad, many Iraqis complained it's far too little. They said officials haven't done nearly enough about the basic issues of sanitation and electricity.

SPOKESMAN (Translated): It is the same, nothing has changed. No electricity, no water. We in the neighborhood haven't had electricity for three or four days.

SPOKESMAN (Translated): So far, Iraqis are still suffering from stagnant water, bad sewage systems, shortages of water, and outages of electricity.

GWEN IFILL: In western Iraq today, U.S. and Iraqi forces launched a new offensive against insurgents, the third in recent weeks. A U.S. Military transport helicopter crashed in eastern Afghanistan today. The CH-47 Chinook may have had fifteen to twenty American troops onboard. There was no word on their fate. The Taliban claimed it shot down the helicopter. The U.S. Military said the cause was unclear.

The Senate overwhelmingly passed an energy bill today. It calls for $18 billion in tax breaks for renewable energy, hybrid cars, and improved appliances. It also calls for an expanded ethanol use and increased natural gas imports. Unlike the House version of the bill, the Senate says nothing about drilling in Alaska's Arctic National Wildlife Refuge. The two bills now have to be reconciled. We'll have more on this story later in the program tonight.

The Supreme Court refused today to hear four more cases on the Ten Commandments. The Justices let stand rulings against courtroom and school displays in Kentucky and Ohio. Yesterday, the court alloweddisplays to honor U.S. legal traditions, but not to promote religion.

Also today, the court agreed to take up, again, protests at abortion clinics. The issue is whether an anti-abortion group can be prosecuted under racketeering laws. We'll have more on the court term just ended, later in the program.

A federal jury in Birmingham, Alabama, today acquitted Richard Scrushy in the HealthSouth fraud case. He founded the giant healthcare chain that nearly collapsed in 2003. Scrushy was accused of directing a scheme to overstate earnings by $2.7 billion. He faced 36 counts of conspiracy, falsifying records, and money laundering. Today, he called the verdict a vindication, and he thanked his supporters.

RICHARD SCRUSHY: We've got to have compassion, folks, because you don't know whose next, who's going to be attacked next. So I have to thank my family for everything that they have done to be with me and to stand with me, my employees and my little company, my wife's company have stayed with us. They didn't leave us. They believed in us. They knew the kind of people we were, they stood by our side through this whole situation.

GWEN IFILL: Fifteen of Scrushy's aides have already pleaded guilty in the HealthSouth case. We'll have more on this story later in the program.

In Rome today, 11 people pleaded guilty in the fraud scandal at the Italian dairy group Parmalat. They included three former top executives. The defendants were sentenced to prison terms of up to two-and-a- half years. Parmalat filed for bankruptcy in 2003.

The price of crude oil fell sharply today, as traders took profits. In New York, futures were down more than $2 to close at $58.25 a barrel. The news lifted Wall Street. The Dow Jones Industrial Average gained more than 114 points to close above 10,405. The NASDAQ rose more than 24 points to close above 2,069.

Civil war historian Shelby Foote died last night in Memphis, Tennessee. He wrote a three-volume history of the conflict that led to a major role in the PBS series "The Civil War" in 1990. Shelby Foote was 88 years old.

Also on Monday, Wal-Mart heir John Walton was killed when his experimental aircraft crashed in Wyoming. He was one of the richest people in the world, worth more than $18 billion. John Walton was 58 years old.

That's it for the News Summary tonight. Now it's on to: An Iraq update; Oliphant and Lowry; energy and the Senate; tsunami relief efforts; the Scrushy verdict; and the Supreme Court's year in review.

UPDATE - STRUGGLE FOR SECURITY

GWEN IFILL: As the president prepares to address the nation tonight from North Carolina's Fort Bragg, we turn to the view from Iraq one year after the hand-over of sovereignty. I spoke earlier this evening with john burns, the Baghdad bureau chief of the New York Times.

John Burns, welcome back. The violence seems to continue in Iraq. Today, we hear of the killing of an influential Shiite Muslim member of parliament. What can you tell us about that?

JOHN BURNS: Yes. He was the oldest member of the parliament, 87 years old, and a prominent Shiite tribal leader, assassinated with his son and three of his bodyguards in the northern district of Baghdad on his way to the national assembly, which has been in adjournment for some time because the insurgents attacked water mains outside Baghdad. And tonight, the greens under much of Baghdad need water, the second parliamentarian assassinated out of the 275 elected in January, and yet another of these incidents, which grieves the heart of course because you have to ask yourself what an 87-year-old man, whatoffense he could possibly have given to anybody; a bad day altogether because another thirty to forty people killed, at least five or six suicide bombings, two of them, one in Balard, and one in Tikrit, killing American soldiers, two American soldiers killed in those two incidents, so a rather gloomy way of observing the first anniversary of the transfer of sovereignty.

GWEN IFILL: The president's aides tell us tonight when he speaks to the nation, he expects to talk about the -- counsel Americans to be more patient with this insurgency. Are people on the ground in Iraq feeling more or less vulnerable these days?

JOHN BURNS: Well, I can give you a current answer to that, if you will. We at the New York Times sent a number of our Iraqi reporters out into the streets today, something which is more difficult for us to do because of the general security situation. And they spent the day in various neighborhoods of Baghdad and came back with a wide range of voices. And the thing that struck me, reading through these returns, if you will, of our poll, was the patience that a lot of people showed. There are, of course, people who are very impatient. There are people who want American troops withdrawn on the instant. There are people who feel that the transfer of sovereignty was bogus, but many more people that we spoke to today counseled patience and counseled hope, and I have to say that surprised me a little bit. There were many voices who said no to immediate withdrawal of American troops, the kind of thing that's being discussed in the Congress at the moment; that we need American troops to stay here long enough to establish security, long enough for our own troops to be able -- Iraqi troops to be able to develop to the point where they can take main responsibility for security in the country. We need the political process, which is fragile, to be protected. My feeling reading this-- and I have to say this surprised me a little bit-- was that if President Bush and Secretary of State Rice had read these reports, they wouldn't have found everything in there they wanted, but they would have found at least some comfort from many of the voices that we went out and found today.

GWEN IFILL: Here in the United States, every new poll seems to show continued weakening in the president's position in terms of what Americans see about what is going on in Iraq. I wonder whether that weakening position, that slide in public opinion that we're seeing here in the United States, matches the reality on the ground in Iraq or perhaps even is ahead of reality.

JOHN BURNS: The situation has not got a lot better since the elections, at least on the military front. The insurgency is not weakening. It's getting, if anything, stronger. The use of suicide car bombings is proving very demoralizing. Some days in Baghdad alone we have six, seven, eight suicide car bombs. It's now become increasingly rare for a day to pass in which there are less than thirty or forty people killed across the country, and those are only the deaths that we hear of. Against that, you have to set the fact that the national assembly, the transitional national assembly elected in January, and its constitutional committee, are in fact moving ahead. We learned today that the constitutional committee is perhaps only twenty-four or forty-eight hours away from settling the question of its own membership, crucial list, because, of course, they're reaching out, trying to include, to co-opt, if you will, Sunni Arabs who had boycotted the election. And the people who lead that committee continue to say that they think they can get a constitution agreed by Aug. 15, improbable as that seems to us. So there is progress on the political front, halting and faltering as it may be. But on the military front, I have to say, the hopes of January have been pretty profoundly dashed.

GWEN IFILL: Also, on the political front, there have been reports recently that there have been meetings among allied forces, or at least allied leaders in Iraq, and representatives of insurgent groups. What can you tell us about that?

JOHN BURNS: My sense of these contacts that there have been at the political level are that they have so far been rather disappointing. It's not even clear that the people who claim to speak with the insurgents really do. And notably, the three groups named in a story by the Sunday Times of London at the weekend, three insurgent groups, as having met with American commanders is just plain wrong. Those three groups have, each of them, issued web site denunciations within the last 48 hours saying that they have not and will not talk to the Americans, or any representatives of the Americans.

GWEN IFILL: All right. John Burns, thank you very much.

JOHN BURNS: It's my pleasure.

FOCUS - OLIPHANT & LOWRY

GWEN IFILL: A new USA Today/Gallup Poll out today says only one in three Americans believe the United States and its allies are winning the war in Iraq. So what does the president need to accomplish tonight? For that, we turn to National Review editor Rich Lowry, and Boston Globe columnist Tom Oliphant.

Tom, since you're sitting right in front of me, you get that question: What does the president get to accomplish tonight?

TOM OLIPHANT: Well, at least from what they've been telling us since the morning, have a sense of what he's going to do. I think this is a campaign of reassurance, rather than a report to the nation that we're going to hear tonight with two purposes: One, to reassure the country that he has a strategy that 60 percent of the people think he doesn't have, both to win militarily and for further progress politically and economically. And there will be a lot of very hot rhetoric about not quitting, not providing any timetables, not leaving until Iraq has a stable democracy. And, finally, we may see a return of some old language from last year's campaign mixing up the war in Iraq with the broader war on terrorism.

GWEN IFILL: Rich, I want you to talk about that last observation there, but also, why do you think he's doing this now?

RICHARD LOWRY: Well, because, obviously, the polls have slipped somewhat, and the White House is very forthright about the fact that they're facing a head wind in the public opinion polls here. Now, the public is not panicking. It's not a hemorrhage by any means. If you look at the Washington Post poll that was in the paper this morning, only one out of eight people say we should pull out immediately, and I would wager none of those people supported the war in the first place. And you have slim, very slim majorities saying that they're optimistic about the situation in Iraq, that it's enhanced our security, and that it's increased the stability in the Middle East. So there is something there for the president to work with. But over the last several months he hasn't been attempting to sell the war. He's been trying to do other thing, talking about Social Security, and that has not entirely accounted for the slippage, but it's at least contributed to it. So they're trying to--.

GWEN IFILL: Well, how about this link that Tom is talking about between the war in Iraq and the war on terror, do you anticipate the president will try to make that case again?

RICHARD LOWRY: Absolutely. That will be a key theme tonight. And I'd emphasize two points there: one that you can you argue about whether terrorists were there before we started, but they're certainly there now. And you can't get a sort of worse terrorist poster boy than Zarqawi, who is, you know, one of our fiercest enemies there in Iraq. And he'll also, I think, make the broader case, which is that if you want to win the war on terror, you're going to have to try to create a better, more democratic and freer Middle East to change the political culture there, and Iraq is a crucial piece of that.

GWEN IFILL: Tom, we have heard in the past couple of weeks kind of a shifting serious of rationales about how serious this insurgency is and what it's going to take to get out. Dick Cheney said it's going to -- that the insurgency is in its last throes; Donald Rumsfeld said something like 12 years. We even heard al-Jaafari, the president of Iraq, saying only two years. Is part of the president's goal tonight to kind of shift down all mixed messages?

TOM OLIPHANT: Absolutely. And he will, I think. One thing you can do in a White House is concentrate the minds so there is one message. Furthermore, we're encountering this tonight in mid campaign. It really started with the visit of the Iraqi prime minister last week, and there is not anything that the president is going to say tonight that is particularly different from what he has been saying since last week. I think, however, that to the extent this is argumentative, that this is a rally speech -- that it is something that will be taken on the road, not unlike the Social Security proposal. To that extent, people looking for a more realistic report to the nation, some kind of detailed look ahead of what people can expect will probably be a little frustrated. I noticed administration officials today speaking privately, looking ahead. They're looking for moments like that election in January, where you did see a spike in the president's approval. And right now they really don't see anything coming until August, really the end of the year--.

GWEN IFILL: Do you think this might be a political speech?

TOM OLIPHANT: It is very much-- what's missing, of course, is the 100-plus million dollars of advertising that accompanied the political speeches last week. I think what most people want, however, is a more detailed, sober discussion of a campaign that most Americans want to succeed but suspect isn't going as well as it could.

GWEN IFILL: Rich, how much of this is a political speech?

RICHARD LOWRY: Oh, that's a huge part of it, and you have to maintain political support for the war, because if we don't, you're, you know, potentially facing a real difficulty. It's extremely difficult to wage an unpopular war. So he wants to bump up those numbers a little bit. And Tom is right; there have been some mixed messages from the administration, the foremost example being the Dick Cheney "last throes of the insurgency" comment which was contradicted by Gen. Abazaid. You will not hear anything like that from President Bush tonight. He will be candid about the difficulties there and forthright about them. And that's something with some few exceptions, the mission accomplished event being the biggest one, he's been pretty good at saying this is going to be difficult all along, sometimes to the point of being paretic, in those presidential debates, when he was saying tough and difficult over and over again.

GWEN IFILL: Is anybody listening, Rich?

RICHARD LOWRY: Well, I think this has to be a fear because so much of this has already been said before, and the most important factor is obviously the facts on the ground, and you kind of have dual tracks, and I think this will be another theme of the speech tonight. We heard from John Burns about the deterioration of the security situation, and that makes the most dramatic news, obviously and understandably, you know, bombings can't be ignored by the media, but people tend to hear about that more than they do the political process, where there has been substantial progress, and you do see the Shiites reaching out to the Sunnis, and you do see Sunnis saying that it was a mistake not to participate in the January election, and joining the legitimate political process. And that ultimately is the taking a huge step towards wearing down this insurgency.

GWEN IFILL: Briefly, very briefly, Mr. Oliphant. Is anyone listening?

TOM OLIPHANT: Not particularly. He's going to have to build an audience. And that's why in a political campaign, Gwen, what's important is not so much what you say as what you repeat over and over again.

GWEN IFILL: Okay, guys, see you both later on tonight.

RICHARD LOWRY: Thanks, Gwen.

FOCUS - ENERGY PLANS

GWEN IFILL: Ray Suarez examines the contents and prospects of a new energy bill from Congress.

RAY SUAREZ: A recent surge in gas prices to more than $60 a barrel has made energy policy a hot topic this summer. Today, the Senate overwhelmingly passed its version of a wide- ranging energy bill. The House passed its version this spring. Both bills share a number of similar goals, including: Increasing oil and gas production, expanding tax incentives, and boosting the use of corn-based ethanol in fuel refineries.

But there are still some key differences to be resolved. The Senate bill is more expensive and seeks to expand the use of renewable energy sources, like wind and solar power, and offers no liability protection to companies that use a fuel additive called MTBE.

To walk us through the major issues on the table, I'm joined by Mary O'Driscoll of Environment and Energy Daily.

And welcome back.

MARY O'DRISCOLL: Thank you.

RAY SUAREZ: Would you describe the two sides, now that they're going to go to conference and start reconciliation as far apart?

MARY O'DRISCOLL: Well, that depends how you look at it. They really - they have the same goals as you said, that they both really want -- the need is to increase production of oil and gas domestically, and to be able to expand import of natural gas from overseas because natural gas prices are high or even higher than the gasoline prices that we're finding at the pump.

But where they really differ is on very specific things that, as you said, that the ethanol requirements that the Senate has a higher ethanol market requirement than the House, so they have to reconcile that. That can be pretty well thought out.

They also differ on what the Senate is calling for an inventory of the offshore regions of the country, the oil and gas reserves that are in the offshore regions in the outer continental shelf, which is -- that kind of an issue does not fly very far in the House, which is a very interesting point.

But then there's also the difference of the MTBE, as you said, that is not in there, and there's also no ANWR in the Senate bill, no call for exploring for oil and gas in the Arctic National Wildlife Refuge.

So they are very close in some of the real basic points of it, but there is some divergence, and some of thesethings can really explode into all-out war between the two Houses.

RAY SUAREZ: Well, does the combination of the public attention on $60-plus a barrel oil and the fact that they couldn't get it done the last couple of times this came down the pike create more pressure to reconcile and pass a bill?

MARY O'DRISCOLL: It certainly does. It's very interesting. You think: Do they need a catastrophe to happen in order to pass an energy bill? Well, two years ago we had a big blackout in the Northeast and the Midwest, and that didn't force them over the finish line to get the energy bill done.

But this time, this is the third time the Senate has passed an energy bill in the past four years, and they're very eager to get this done. The Congress, in general, in general, is very eager to get this bill done. And everyone is kind of sick of energy at this point.

The White House would like to get it done. The White House first called for an energy policy in May of 2001. So President Bush has been very active in trying to get Congress to pass an energy bill this year.

They would like very much to have a bill signing at the Rose Garden at the White House, and Congress would like to be able to go home in August or any time later this year and say we did something; we did the energy bill for them.

RAY SUAREZ: The Senate specifically mentions alternative and renewable forms of energy. Does the House not mention it at all, or are they far apart in emphasis?

MARY O'DRISCOLL: No. The House mentions it, too, and they're not that far apart. But, as I said, there are forms of the renewable fuel, such as ethanol and bio-diesel, that the Senate calls for a higher level of a market; it's an 8 billion gallon market, as opposed to the what the House says should be a 6 billion gallon market.

And so that's a distinction that is important when it comes to energy circles; it doesn't really sound like very much when you're just talking about it, but it's very important because it's a requirement that in the Senate legislation, it would bring ethanol up to about 5 percent of our transportation fuels.

RAY SUAREZ: Does that ethanol subsidy explain a lot of why the Senate bill is so much more expensive than the House bill cumulative?

MARY O'DRISCOLL: Well, that and the fact that the Senate bill also, when you look at the extension of programs, the Congressional Budget Office has scored the Senate energy bill at about $35 billion, a little north of $35 billion when it first came to the floor. And that's just for authorizations, and authorizations don't always get approved. They have to be appropriated through the Congressional process. And that doesn't always happen right away. Sometimes it takes a few years to get that done. And so $35 billion is just kind of what they're generally calling for. It's nothing that's definite.

The Senate bill also has a tax portion, a tax incentives provision that is $12.6 billion over five years, and $18.4 billion over ten years, s opposed to the House tax provision, which is $8 billion, but I want to caution that Bill Thomas, chairman of the House Ways and Means Committee, stressed on the House floor when they voted on this last April, that this is just - this $8 billion is to just get us to conference, we will work it out in conference. The goal of the Senate is to keep it right around $11 billion.

RAY SUAREZ: Well, recently, the Senate was very - it was involved in very tough debate over an emissions reduction aspect of their version of the bill.

MARY O'DRISCOLL: Right; right.

RAY SUAREZ: A very weak, by all accounts, version of emission reduction past.

MARY O'DRISCOLL: Right.

RAY SUAREZ: Does that mean the Senate version has a better shot at being reconciled with the House because it's not weighted down by a Kyoto-style requirement?

MARY O'DRISCOLL: Well, yes, it does, and it's very interesting that the Senate did have a very intense debate over climate change, over what kind of -- what the nation needs to do.

It's very interesting that some members of the Senate who never really had expressed views on this before are now starting to recognize that climate change is a problem and we need to do something about it.

And so what they did was they had a series of votes, and what they did accept was hat they call a sense of the Senate resolution that calls for action, some future action that needs to be done to take care of the climate change issue and to reduce emissions.

Now, that is just a sense of the Senate; that does not bind to the House into anything and so that will not be a factor when it comes to the discussions on the energy bill between the Senate and House. However, the Senate is poised to start some hearings. Sen. Domenici, the chairman of the Energy and Natural Resources Committee, is going to have some hearings later this summer on this issue.

RAY SUAREZ: The House version of the bill includes liability protection for producers who included this additive, MTBE, in their gasoline.

MARY O'DRISCOLL: Right.

RAY SUAREZ: There are members of the United States Senate that are adamantly against that. They say they won't vote for a version of the bill-- Republicans-- won't vote for a version of the bill that includes that liability protection. Is this big enough to be a deal breaker?

MARY O'DRISCOLL: Well, it certainly was two years ago; this was the deal breaker in 2003; it kept the Senate from taking a final vote on the energy bill, and it's coming back again because House leadership is determined to keep that liability provision in there, that liability waiver. But the Senate doesn't want it. What they're trying to do now, House members are now trying to come up with some sort of a compromise that they would provide funds for cleanups of the MTBE spill sites.

And it's a problem all over the country, but lawmakers, the Republicans in Northeast and the lawmakers from the West are very adamant about that in particular, that this-- you do not need the liability waiver for the MTBE producers.

But it was a deal breaker two years ago. It could be this time. However, they're trying to work out a compromise. But when you talk to any of the leaders in the House, they always say that, you know, our bottom line for the compromise is that we have to have liability protection, which doesn't really fly in the Senate. So it will be interesting to see if they can actually work it out this time.

RAY SUAREZ: Did either or both chambers urge a new look at nuclear energy as a way of reducing dependence on imported oil?

MARY O'DRISCOLL: Oh, certainly. There's a lot of nuclear power in both bills, but more so, probably, in the Senate, essentially, because Sen. Domenici, who was leading the charge for the energy bill in the Senate, is a very big supporter of nuclear. And when you're talking about climate change, when you're talking about trying to reduce emissions and having emissions-free sources of electricity, nuclear power is the logical choice for many people because it doesn't produce any emissions. It does produce a lot of nuclear waste, and that's another issue for a later debate, but it has no emissions that can -- that cause air quality problems. And so that that is what they're looking at, that if you want to have emissions-free power generation, you've got to look at nuclear.

RAY SUAREZ: And quickly, before we go, if a version of either of these two bills passes, will the end users, people filling up their tanks, people paying an electric bill or a natural gas bill notice much difference in the way they acquire any of these commodities?

MARY O'DRISCOLL: No, not right away. But, President Bush, as soon as he signs it, if he signs it, he could sign it tomorrow; it's not going to have any effect on prices. But what they're saying is that this is a long-term process; it's going to take five years, ten years, fifteen years to be able to see the fruits of what happens with this bill. They're very well aware of that, except, you know, they do tend to use the high prices of $60 a barrel oil that we have, the high natural gas prices, the high electricity prices, the loss of jobs because of the high cost of energy as a reason to pass this bill, but it's really not going to do anything in the immediate future.

RAY SUAREZ: Mary O'Driscoll, thanks for being with us.

MARY O'DRISCOLL: Thank you.

FOCUS - SIX MONTHS LATER

GWEN IFILL: A report on the struggle to rebuild in Aceh, Indonesia, six months after a tsunami claimed more than 200,000 lives. Dan Rivers of Independent Television News has the story.

DAN RIVERS: It's dark and as barren as the day the ocean savaged this coast with such unremitting ferocity. This is Aceh, six months on. Mile after mile is still a godforsaken wasteland, little sign here of the billions of dollars of aid raised after so many were claimed by the sea. And this is how many tens of thousands of people are still living, afraid to move elsewhere lest they lose their land, clinging to the hope that one day the money will arrive to help them rebuild.

I visit one family who have lost everything, whose tent has been repeatedly flooded, three adults and three children living in utter misery. He says life is a struggle, but they have nowhere else to go. Others are contending with profound trauma.

Jamula Din lost his wife in the tsunami. He was the one who found her body. This photo is just about the only personal effect he has left. He says he cries himself to sleep every night thinking about his wife.

Some building is under way, in this case funded by a U.S. charity, but the scale of what's needed is massive, and there are problems. Here, new houses have been erected in the wrong place; already they're flooded by the sea. The man newly appointed to oversee Aceh's rebuilding admitted to me that of the $5 billion in his budget given by foreign governments, only a tiny amount has been spent.

DAN RIVERS: How much is that as a percentage of the overall amount donated, 10 percent?

KONTORRO MANGKUSUBROTO, Head of Reconstruction, Aceh: No, no, no -

DAN RIVERS: Less?

KONTORRO MANGKUSUBROTO: 1 percent.

DAN RIVERS: 1 percent.

KONTORRO MANGKUSUBROTO: 1 percent.

DAN RIVERS: Has been spent so far?

KONTORRO MANGKUSUBROTO: Yes.

DAN RIVERS: Do people find that very unacceptable?

KONTORRO MANGKUSUBROTO: Yes, that's not acceptable. Actually we have to move much faster this because six months is about as intense-- is very long, okay?

DAN RIVERS: Most of the money spent has been on food, medicine and emergency supplies so far. It's prevented disease and starvation, but getting on with the long-term reconstruction has been hampered by endless bureaucracy and government restrictions. Some charities have cut through the red tape building these new houses, but they admit, progress is slow.

PATRICK NICHOLSON: I think it's taking too long and if you come back in even two months and it's the same situation, then I think aid agencies have got to start asking questions of themselves of why the progress hasn't been quicker.

DAN RIVERS: But for every little pocket of hope, there are these vast vistas of utter despair, where it appears for the last six months, nothing has been done, and while the charities and aid organizations and the government argue about how best to spend the money here in Aceh, there are literally tens of thousands ever people still living in tents amid this misery.

Those that survived are bonded together by grief and poverty. The world responded to this disaster, but don't think for a minute that their suffering is over.

FOCUS - SCRUSHY VERDICT

GWEN IFILL: A clean sweep today for former corporate executive Richard Scrushy. Jeffrey Brown has the story of that trial.

JEFFREY BROWN: Today's acquittal ended a four-month trial and three weeks of deliberations. Richard Scrushy was found not guilty of directing an accounting fraud at HealthSouth, the chain of rehabilitation hospitals he founded 20 years ago.

Fifteen former executives have pleaded guilty for their part in the fraud, including five former chief financial officers who testified against Scrushy during the trial. Scrushy was the first CEO charged under the Sarbanes-Oxley Act, the 2002 law requiring CEO's and chief financial officers to certify the accuracy of their company's financial filings.

Here to discuss the trial and verdict is David Voreacos of Bloomberg News who covered the trial in Birmingham.

And, David, welcome to you. First, could you give us a quick reminder of what this case was about and what Mr. Scrushy was charged with.

DAVID VOREACOS: The Justice Department accused Richard Scrushy of directing this seven-year fraud that inflated profit from 1996 to 2002. Essentially what the government accused Scrushy of doing was inflating HealthSouth's shares and profits so that it would enrich himself and meet the expectations of Wall Street analysts.

A number of executives, as you said, pleaded guilty and testified against him, and the government said that he conspired with those executives, and that he laundered the profits that he got from the fraud through inflated bonuses and stock options that he cashed.

JEFFREY BROWN: And the defense case was basically all of this had occurred but had been done by underlings?

DAVID VOREACOS: The defense conceded that there was a fraud at HealthSouth, but they said the executives who testified against them all lied for their own selfish motives. Essentially, they're saying that Scrushy, while he was a very bright financial man and was even described as a financial genius, did not know the details of this fraud that was carried on by what a defense attorney characterized as "rats in the accounting department."

And they also contended that the people in the accounting department and the treasury department who carried out the fraud concealed it from the company's lawyers and auditors, and so it's quite believable that Scrushy himself did not know about it because those who executed the fraud did so while concealing it from him.

JEFFREY BROWN: Now, everything I'd read, suggested that the experts thought this was a pretty strong case, especially since you had so many of these underlings pleading guilty and testifying against Mr. Scrushy. So how did producers react today? Were they surprised?

DAVID VOREACOS: Going into the trial, theJustice Department believed they had, in fact, a very powerful case, compared to other accounting fraud trials in the last year or so. There were none that had five key financial officers who could say "I directly discussed cooking the books with the chief executive."

In this case they also had a secretly-recorded tape - or series of tapes that one of the finance chiefs, William Owens, made for the FBI in March of 2003 just before the FBI raided HealthSouth headquarters.

So they believed - and after the verdict today U.S. Attorney Alice Martin, who is the local lead federal prosecutor, was very disappointed. She expressed her disappointment and she thought, as they've expressed throughout the trial, that they had a very powerful case.

They will appeal-- during the trial, Judge Karon Bowdre dismissed three perjury counts and an obstruction of justice count which is pending in the appeals court in Atlanta, and they say that if the appeals court reinstates those counts, they want to retry Scrushy on those four counts.

JEFFREY BROWN: Now, Mr. Scrushy had been a very high-profile corporate executive there in Birmingham, and I understand that even during the trial, he continued very publicly in the community to make his case with his philanthropic works. Tell us about that.

DAVID VOREACOS: Scrushy is a local celebrity who has given more than $20 million in philanthropic causes. His name is on buildings, streets. He's given to a number of charitable causes.

About two years ago, our just before he was indicted in September 2003, he joined a predominantly black church, and he's given more than $1 million to that church. And in the past few months, he has preached at a number of churches in the Birmingham area.

He also hosts a local cable television show in which he discussed his Christian faith and the bible with pastors from the area.

So he's not been bashful about being out in public. And in the past month or so, he's also gone out in the courthouse steps to personally discuss the evidence against him and to try to tell people how wanting the government's case was.

JEFFREY BROWN: And, David, finally and briefly, I mentioned this was the first case brought under the Sarbanes-Oxley Law, and, therefore, I know it was watched quite closely by legal experts. Were you able to get any quick reaction to today's verdict?

DAVID VOREACOS: I think a number of lawyers who had been following the case were quite surprised at the outcome because they just understood going in the government had such a strong case.

But people who were actually able to watch the trial understood that the defense attorneys were able to score a number of points with the government's primary witnesses and undermine their credibility. I do think there's a considerable surprise around the country from securities lawyers who thought that this was about as good a case as the Justice Department was going to put together.

JEFFREY BROWN: All right. David Voreacos of Bloomberg News, thanks very much.

DAVID VOREACOS: Thank you.

FOCUS - SUPREME DECISIONS

GWEN IFILL: Finally tonight, gauging the impact of a term's worth of Supreme Court decisions, and to Margaret Warner.

MARGARET WARNER: And joining us first to pinpoint some of the highlights of this term is our regular court-watcher, Jan Crawford Greenburg of the Chicago Tribune.

Jan, you've been covering this court for more than 10 years. What are the really-- were-- first of all, how do you characterize the term? Was it a standout term; were there significant cases in really significant areas of the law?

JAN CRAWFORD GREENBURG: This was not what we refer to as one of those blockbuster terms where the court hands down a number of significant decisions that have a sweeping impact on American life, the civil liberties decisions that we talk about for years and years to come.

But there were a number of significant and important decisions in several areas of the law. The court ruled on several important criminal law cases earlier in the term, and it had a very important decision that said that the federal sentencing guidelines no longer were mandatory. That will affect every federal sentence handed down in this country.

The court looked at the death penalty this term. It's grappled with the death penalty in previous terms. It says that juveniles, people who murder, who are under 18 can no longer be executed, that that constitutes cruel and unusual punishment. In other death penalty cases it said it's going to overturn a death penalty in a Texas case because there they said prosecutors unfairly excluded African-Americans for the jury, sending a strong American to lower courts that the process in death penalty trials should be fair.

MARGARET WARNER: How about in an ongoing theme for the Rehnquist court, which had to do with federalism, federal versus state power?

JAN CRAWFORD GREENBURG: There was a very anxiously-awaited and closely watched term with fascinating facts involving whether the federal government could prosecute people for using marijuana for medical reasons even if the states thought that that should be okay. The court said the federal government did have a role. That curbs some of their previous decision where they have sided with the states and suggests that perhaps there are limits to the court's rulings in those cases.

MARGARET WARNER: And how about on the sort of private property, economic rights?

JAN CRAWFORD GREENBURG: A big, big term for property rights, too. Of course, in one case, the Justices said that the government could come in and condemn your property, take your private property, even for private economic redevelopment projects, that that was not unconstitutional. The court also took up a very important intellectual property case, property that's created in our head. And in that case, it sided with the entertainment industry and said that software services could be held liable if they encourage other people to violate their copyrights.

MARGARET WARNER: And of course we know that Justice Rehnquist, the Chief Justice, was ill for most of the term. Did it cast a pall over the court? How much did he participate?

JAN CRAWFORD GREENBURG: Well, in many ways, this was a term very much defined by the future of the Chief Justice. He announced in late October that he was suffering from thyroid cancer. He missed five months of arguments. He came back in March, he participated in these cases, and he ran the show for the rest of the term.

MARGARET WARNER: All right. Stay right there.

And now for insights and analysis of this term we're joined by two constitutional law professors, Douglas Kmiec of Pepperdine Law School, and Laurence Tribe of Harvard Law School. Welcome back to you both.

Professor Kmiec, let me begin with you. What stands out for you, what jumps out at you sort of broadly thematically, when you look at these decisions taken as a whole?

DOUGLAS KMIEC: Margaret, I think if I was a member of the general public, I'd be both startled and distressed by some of the cases this term. I think it's very distressing to see the result in the Kilo case, the case of taking private property for other private uses. I think that is an opinion that most people would find quite distressing.

I think the opinion in Raiche that Jan just mentioned, the federalism case, where there's no discernible connection to interstate commerce, and yet the federal government presumes to say that a woman with a brain tumor can't receive medical treatment from her doctor pursuant to the authorization of state law.

MARGARET WARNER: That's the medical marijuana case.

DOUGLAS KMIEC: That's the medical marijuana case.

There are other troubling cases. Yesterday's decision in a case where a woman who had received a restraining order and asked the police multiple times to help her when her abusive husband, who was the subject of the restraining order, had kidnapped their children and then constantly refused this help, and the children, tragically, were murder, asked for relief under the civil rights statutes and was denied that relief.

Each of these cases, the diminution of property, the diminution of the ability of states to provide separate authority, and the insensitivity to that due process claim, I think, is a distressing outcome for this term.

MARGARET WARNER: Professor Tribe, did you see it that way, diminution of property rights, diminution of state authority, and did you find it troubling?

LAURENCE TRIBE: I found, certainly, the last case, the case involving the temporary restraining order very troubling, and it represented a case in which Justice Breyer in dissent, I think rightly said that the majority is allowing its adherence to rigid formulas and to abstractions to overcome its sense of judgment, and its ability to read an ambiguous constitutional document in a way that is sensitive to human values.

But as to the other two examples that Doug Kmiec gave, and I respect him enormously-- he and I are friends, although we quite often disagree-- as to those two I think what the court did was, although distressing to the public and although in policy terms distressing to me-- that is, I certainly sympathize a lot more with the woman who wanted and needed to take medical marijuana than I did with government prosecutors; I certainly sympathized more with the homeowner than I did with New London, Connecticut, that wanted to take the home for broader uses. I think in those cases, what the court was doing, the majority of the court, was recognizing the limits of some of the more extreme elements of what had been the conservative revolution the revolution that would have limited national legislative authority by reading the commerce power of Congress almost as narrowly as the court had prior to 1937. That's why even Justice Scalia joined the majority opinion saying that Congress had power, whether wise or not, to deal with the medical marijuana situation, and not to make an exception, and I think that is why the majority opinion of Justice Stephens ultimately prevailed in the economic area, saying if the local government genuinely has a comprehensive plan under which property can contribute much more value as part of a redevelopment project, then the court is not going to second guess that judgment.

MARGARET WARNER: So, Professor Kmiec, let's talk about this revolution, because I think it was yesterday Legal Times ran a headline assessing the term, and the 10 Commandments cases hadn't even come out when it was written -- and the headline was "The Revolution on Hold." Do you think you can look at this term and really say the Rehnquist revolution, the sort of federalism revolution, states power revolution was put on hold?

DOUGLAS KMIEC: Well, I think Professor Tribe and I have both had long conversations about this, and he's recently written an eloquent letter about how fractured the methods of constitutional interpretation have become and how they have confused a number of doctrinal areas.

Let's take the 10 Commandments cases, Margaret. To issue on the same day two five-to-four opinions that basically say one display of 10 Commandments is okay and the other is not is not exactly to win any prizes for clarity. It might as well come down to the fact that the granite monument weighs too much to move and the plaques can be taken off the wall. The seriousness and the importance of religious freedom in our Constitution deserves better than that. So to the extent that the court was unable to articulate itself more clearly, in a doctrinal way, in that case, suggests a type of failure.

I also think in the other cases we mentioned, I think the unfortunate illness of the Chief Justice did-- that Jan mentioned before-- manifested itself. It's often said the chief doesn't have a great many special powers, but he does have influences. He sits in that chair in the internal conferences that begins the discussion, and when your outcome depends on a narrow five-to-four opinion, and you're not in that chair to start that discussion or to persuade, you tend to lose some of your fellow Justices, like Justice Kennedy, and even on occasion, Justice Scalia.

And there are real problems here in terms of method. There was a debate in yesterday's religion cases about what's the appropriate way to interpret the Constitution, on the basis of its original understanding or on the basis of greater latitude that contemplates words in a broader focus. And this was a debate between Justice Stephens and Scalia, and so long as that remains unsettled, any revolution in any particular direction is going to seem somewhat without compass.

MARGARET WARNER: Professor Tribe, respond on both those points. One, did you see a court without compass? And to what degree did you sense that Justice Rehnquist in fact was not exerting the same kind of influence and sway that he had earlier as Chief Justice?

LAURENCE TRIBE: Well, I think the absence of a compass has been clear for a number of years, and I don't see any great change there, except that the fractures within the court, the divisions, are deepening rather narrowing. I think statistically, it doesn't seem the illness of the Chief Justice made a difference to the outcomes. It does, undoubtedly, make a difference to the atmosphere, but, unfortunately, or fortunately-- depending on your view of it-- the court is now run very much like nine separate little law firms, and one of the complaints that many people have is that there's genuinely little dialogue; in the conferences of the court, for example, they announce their reasons and they vote, but there isn't much persuasion back and forth. That occurs largely by e-mail and on paper.

It seeps to me that in the religion cases in particular, it would be lovely to have a formulaic solution, but as several of the Justices, especially Justice Breyer pointed out-- and as the Chief Justice at least noted in his separate opinion-- the two religion clauses create a very deep tension. We are, on the one hand, a religious nation. On the other hand, we're a nation that recognizes for the government to endorse religion may endanger religious liberty.

What's remarkable about the two cases involving the 10 Commandments is that eight of the nine Justices actually took the view that they should be decided the same way. Except those eight divided, four thought they should be decided to remove, four the other way. Justice Breyer I think saw the necessary point that no formula can capture the very contextual fact that sometimes the 10 Commandments can be displayed as a religious part of history. Other times it's very clear that the message sent is the message about God and one God. And those messages, if they're really different, register differently on the seismic sort of graph in terms of how you balance the two constitutional values involved.

MARGARET WARNER: Let me ask Jan a quick question. Any buzz, informed buzz on the court about Rehnquist's plans?

JAN CRAWFORD GREENBURG: Margaret, that's the big question now, in the White House, on Capitol hill, and even in the Supreme Court, the Justices yesterday looked down to the center seat to see if he was going to make an announcement. He didn't, so now we wait.

MARGARET WARNER: Jan Crawford Greenburg, and Professors Kmiec and Tribe, thank you all three.

RECAP

GWEN IFILL: Again, the major developments of the day. President Bush will address the nation tonight, in a bid to build support for the war in Iraq. And the Senate today overwhelmingly passed a sweeping energy bill. We'll see you online, later tonight at 8 PM Eastern Time with special coverage of President Bush's speech, and again here tomorrow evening with reaction to it. I'm Gwen Ifill. Thank you and good night.