The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of today's news; a WorldCom update, and its impact as seen by four editorial page editors; the first of two reports on how to effectively fight the wild fires in the West; a debate about President Bush's new first-strike doctrine; and "Love, You didn't Do Right by Me," as sung by Rosemary Clooney, who died Saturday.

NEWS SUMMARY

JIM LEHRER: WorldCom acknowledged today it may have even worse accounting problems. The company said it's reviewing financial reserve accounts over a three-year period. The issue is why there were large changes in the reserves. The disclosure came in a sworn statement to the Securities and Exchange Commission. The SEC has already brought civil fraud charges against WorldCom for failing to count nearly $4 billion in expenses. On Wall Street today, the company's stock lost nearly all of its remaining value. We'll have more on this story in a moment. Two major defense contractors agreed to merge today. Northrop Grunnan said it would buy TRW for $7.8 billion in stock. The deal would make Northrop, which is based in Los Angeles, the second largest U.S. defense firm. The sale still has to be approved by shareholders and federal regulators. In Afghanistan today, witnesses said U.S. planes attacked a village, and they claimed dozens of civilians were killed or wounded. It happened in a village about 125 miles north of Kandahar. One local official said guests at a wedding had fired guns into the air in celebration, apparently triggering the attack. A U.S. military spokesman gave a different account.

COLONEL ROGER KING. U.S. Military Spokesman: As far as I know, there was no wedding party. Coalition forces were moving to conduct an operation. They came under fire. They called in close air support. Anti-aircraft fire was fired at. The aircraft and those targets were engaged. If you have armed opposition and they choose to place their weapons systems in an area where any return fire has the potential to cause civilian casualties, then they are placing their own people at risk.

JIM LEHRER: The spokesman said so far military officials had confirmed at least four people wounded. He said the military regrets any civilian casualties and will investigate. A leak of torpedo fuel caused the explosion that sank the Russian submarine "Kursk" almost two years ago. A Russian government commission made that announcement today. It said the initial blast ignited other munitions, sending the "Kursk" to the bottom of the Barents Sea in August 2000. All 118 crew members were killed. Russian officials initially blamed a possible collision with a western submarine, or a World War II mine. The United States and the United Nations were at an impasse today over the first permanent war crimes court; it officially began operations this morning. The Bush Administration had wanted American troops exempt from the court's jurisdiction to avoid politically motivated prosecutions. Without that guarantee, the U.S. on Sunday vetoed an extension of the UN peacekeeping mission in Bosnia. Today a State Department spokesman defended that move.

RICHARD BOUCHER: There's no question of our behavior. There's no question of our accountability. There's no question of the willingness of the United States to punish any actions that might occur within its forces. So it's not really an issue of how they conduct themselves. It's an issue of establishing that our people who go out on these humanitarian missions, who go out on these often dangerous peacekeeping missions, are not going to be subject to jurisdiction by a court which itself is not subject to any higher jurisdiction.

JIM LEHRER: The U.S. agreed to extend the Bosnian peacekeeping mission for another three days, allowing time for an agreement on the war crimes court issue. About 25,000 people were back in their homes in eastern Arizona today, after fleeing an enormous wildfire. A few thousand more may return soon to the Show Low area. The fire has burned 460,000 acres, but it's now about 45% contained. On Sunday, a part-time firefighter, Leonard Gregg, was charged with starting one of the two fires that formed the larger blaze. He allegedly did it to get more work fighting fires. Screeners at major U.S. airports fail to spot weapons a quarter of the time, on average. "USA Today" reported that today. It cited undercover tests at 32 airports by the new Federal Transportation Security Administration. Security checks in Cincinnati, Jacksonville, and Los Angeles were among the worst. They missed fake weapons and bombs from 40% to almost 60% of the time. The only black Republican in Congress announced today he will not seek re-election. Congressman J.C. Watts of Oklahoma was first elected in 1994 and became a member of the Republican leadership in the House. Today, in Norman, Oklahoma, he said he was leaving because he wanted to spend more time with his family.

REP. J. C. WATTS: I know that all the rumbling and all the anonymous sources will say otherwise, and that sounds like the politically correct answer to give, but, friends, you only do this parenting thing once. But once is enough if you do it right.

JIM LEHRER: Watts was the second member of the current House Republican leadership to call it quits. Majority Leader Dick Armey of Texas announced his retirement earlier this year. Singer Rosemary Clooney died over the weekend at her home in Beverly Hills, California. She had lung cancer. Clooney became a star in 1951 with the hugely popular song "Come On-a My House." She went on to co-star with Bing Crosby in the movie "White Christmas." Rosemary Clooney was 74 years old, and we'll hear her sing at the end of the program tonight. Brazil is the new world champion of soccer; it beat Germany two to nothing on Sunday in the title match of the World Cup Tournament in Japan. Brazil has now won the World Cup a record five times going back to 1958. And that's it for the News Summary tonight. Now it's on to the continuing bad news about WorldCom, plus some perspective from four editorial page editors, then effectively fighting the western fires, the first strike debate, and that Rosemary Clooney song.

UPDATE - WRONG NUMBERS

JIM LEHRER: Ray Suarez begins our WorldCom story.

RAY SUAREZ: The statement filed today with the Securities and Exchange Commission is the latest chapter in the accounting scandal surrounding the nation's number-two long-distance phone company. For an outline of the report and its importance, we're joined by "New York Times" reporter Kurt Eichenwald.

RAY SUAREZ: Kurt, why did WorldCom have to file this statement, and what had to be in it?

KURT EICHENWALD: Well, primarily because the Securities and Exchange Commission told them to. What this is, is a document that lays out the circumstances surrounding the discovery of the improper accounting that WorldCom announced last week -- gives the names, the times, dates, who was where, when they talked about it in fairly excruciating detail. It also lays out at the end some additional accounting issues that they are still working on to determine whether or not there might be a need for even further re-statements.

RAY SUAREZ: So what interested you as a reporter who has been covering this story to see it laid out step by step?

KURT EICHENWALD: Well, to me, the most interesting things was the possibility of other accounting issues, these being potential problems with what is known as a reserve account, which is sort of a cookie jar that companies have in the event of a problem with a particular contract. You have... you've taken a reserve to protect yourself against losses. Apparently there's some indication that the folks who were in charge of the finances at this company were backing, undoing certain parts of the reserve account, essentially booking it as revenue, and it's not clear why they were doing it, and that they're investigating now. The rest of it, it was a lot of detail, but a lot of it we already knew.

RAY SUAREZ: So none of it was sort of a corporate smoking gun that pointed to things that were being done behind the scenes at WorldCom that might get the company into even hotter water?

KURT EICHENWALD: Well, I mean, the interesting thing about WorldCom is, unlike Enron, which was this massive collection of complex accounting issues and thousands of entities all working together to create this disaster, WorldCom was a single decision. It was shifting expenses from one part of the income statement to another part, and doing it improperly. It's very simple. It is very likely fraudulent. You do have issues of intent in that. But ultimately WorldCom is a huge number, but for aficionados of fraud, it's very simplistic. It's very easy to understand because it really is only one transaction just done over and over and over again.

RAY SUAREZ: Well, in addition to the Securities and Exchange Commission that demanded the filing of the report, who are the potential audiences for this kind of information?

KURT EICHENWALD: You and me. The audience here tonight. Investors -- certainly the stock started trading again today -- investors took WorldCom down. I believe the last price I saw was down to six cents. It was already trading below a dollar. And that's really what this is about. It's about getting information out to the marketplace so that investors who have this stock or who for some reason might want to buy this stock, are able to look at the situation, get as much information as possible, and price that stock based on what the circumstances dictate. Now, the fact that they are still looking at other areas of potential fraud-- and they may end up being nothing, but at this point they are open areas-- certainly would be disturbing to the marketplace. Certainly these events are disturbing to the marketplace, and we're seeing that in the stock price now.

RAY SUAREZ: The current management of WorldCom is trying to reorganize things to keep the company afloat. Does this report make that work harder?

KURT EICHENWALD: I don't think it could be much harder. The primary thing that they have to accomplish is to convince the banks to provide them loans on an ongoing basis, and to reach a final agreement that everyone has signed off on. Even agreements in principle are going to take time to get a final signed agreement. So ultimately what WorldCom faces is a... certainly an increased probability of a bankruptcy filing. This does not mean WorldCom is out of business. This means WorldCom gets to reorganize itself. They have a lot of assets. They have a lot of things that make them a decent candidate for a bankruptcy filing. And going forward in that scenario it's much easier to get financing than it would be now when the banks all have to be looking at this company saying, "if you file for bankruptcy, I might just be one of many on the list who have to take, you know, a percentage of what I gave you on the dollar." So right now that's really the main outstanding question: Will there be a bankruptcy filing? This announcement doesn't really affect it that dramatically, because it is such a difficult situation for the current management.

RAY SUAREZ: Kurt Eichenwald, thanks a lot.

JIM LEHRER: Now some editorial reaction to WorldCom and other recent corporate revelations. Media Correspondent Terence Smith has that.

TERENCE SMITH: Joining me now to discuss the WorldCom financial fallout and corporate responsibility are newspaper editorial page writers and editors from around the country: Susan Lee of the "Wall Street Journal;" Bob Robb of the "Arizona Republic;" Cynthia Tucker of the "Atlanta Journal Constitution," and Nolan Finley of the "Detroit News. Welcome to all of you.

Susan Lee, as an economist and as somebody who writes about this all the time, when you watch this-- another revelation practically every day-- how do you read it? Is it a collapse of the system? Is it several bad apples?

SUSAN LEE: Well, it is especially I think for conservatives-- and I'm speaking for myself-- it requires an enormous paradigm shift. And that is our concern has always been or my concern, that you have to protect the financial markets from corporate America. And now when I'm looking at this stuff, I'm thinking, no, no, I've gotten it wrong. I have to protect the financial markets from... I'm sorry not from government regulation but from corporate America. It's a reminder to us that corporate executives' interests are not exactly the interest of investors, and for me who's always said government regulation has a problem, that's the problem, this has been amazing.

TERENCE SMITH: Nolan Finley, how do you read this and where do you place the blame?

NOLAN FINLEY: Well I'm not sure what we're dealing with here is a shortage of regulation but rather a deficit of morality and ethics in the executive suite. We have laws in place that require full and honest disclosure of assets and liabilities. These executives chose to either bend or break those laws, and they're paying a heavy price for it. Their companies are either in bankruptcy or headed that way. Many of them have lost their job. The stock has plummeted so I feel the marketplace is working.

TERENCE SMITH: They're paying a price, of course, Nolan Finley but so are the stockholders.

NOLAN FINLEY: Well, and the stockholders are. Perhaps this will be a spur for increased shareholder activism, a return to that. Shareholders need to do a much better job of demanding of the companies they invest in, demanding better accounting procedures and better... just a better... to better serve the owners of the company.

TERENCE SMITH: Cynthia Tucker, give us your perspective on this and who's to blame.

CYNTHIA TUCKER: I could not disagree more. That is absolute nonsense. How is the average shareholder, who owns no more than a few shares of the average major conglomerate anywhere from, say, 100 to 5,000 shares, that shareholder doesn't have the influence or the power to demand of corporate executives that they turn over the books. For heaven's sakes, Arthur Andersen claims not to have known what WorldCom was up to. And they had access to the books. How in the world can the average shareholder get access to that kind of information? I was very cheered by what Susan just said because it is true that conservatives for so long have condemned government regulation as the problem. In fact, I think the scandal has helped to shift the pendulum to show us once again that government regulation is absolutely necessary, and government oversight.

TERENCE SMITH: Bob Robb, Cynthia Tucker is only one voice among many calling for more government regulation to step in and supervise all of this. Is that the answer?

BOB ROBB: Well certainly you're going to see an effort in Congress and in the SEC to increase the degree to which corporate audits are independent and at arm's length and probably to broaden the scope of activities that perhaps are declared an illegal business practice, but the main action I think will occur in the markets themselves. After all, the independent corporate audit was an invention of corporations seeking to gain advantage in attracting investor money. In this market, which been depressed because of this and has previously mentioned some stocks in particular have been hit, which have complicated or questionable accounting practices, there will be a premium placed on corporations trying to develop additional steps that they can take themselves to assure investors that their accounting practices are sound and honest and that their books can be relied upon. And I suspect the activity that occurs in the market itself will ultimately be more fruitful meaningful than what occurs by regulators in Congress.

TERENCE SMITH: Um-hum. Susan Lee, what about the question of the law? There are proposals now to, in effect, criminalize some of this behavior. Do we need prosecution first and regulation second?

SUSAN LEE: I would certainly like to see a whole bunch of these people go to jail. I think the demonstration effect of having corporate executives go to jail is very, very strong, particularly for other corporate executives, and I would like the jail not to be - and this sounds very bad of me - but I don't want it to be Club Ted. I want it to be a place like Attica. I think what they have done is very serious, and that should be done before we start thinking about regulation.

JIM LEHRER: And what impact, Susan Lee, would it have on the market if that was done, if that was on the front page of the newspaper?

SUSAN LEE: Well, I think the market would be very cheered up because the market would say, "aha, they know if they do this again, they're going to go to jail. That might stop them from doing this again not because they have some altruism but because they don't want to go to jail."

TERENCE SMITH: Nolan Finley, where do you come down on that? Is that the image you want to see?

NOLAN FINLEY: Of course. If they break the law they should be punished for it. But the law already holds them accountable for fraud and they should be prosecuted. I don't know that we need a whole raft of new laws to prevent this.

TERENCE SMITH: Well, there's a proposal for example already in discussion to make CEO's responsible, liable, for the accuracy of the financial statements of their company. Is that reasonable?

NOLAN FINLEY: That is reasonable. If they signed their name to it, they should stand behind it.

TERENCE SMITH: And make them personally and if necessary criminally liable?

NOLAN FINLEY: If there was criminal fraud. I mean, that's a hard thing to prove. Where do you separate incompetence from criminal intent? I would hate to be the person who had to sort that out.

TERENCE SMITH: Cynthia Tucker, were do you turn on this for an answer? You say the shareholders can't be expected to do it. Where and specifically what would you like to see?

CYNTHIA TUCKER: Well, I would like to see a combination of both - much stiffer criminal prosecution and stronger government regulation and oversight. I think both are absolutely necessary. For heaven's sake, some guys goes out and robs a convenience store of $7 with a steak knife; we put him in a very serious prison for a very long time. Yet, these corporate CEO's go off, go out and rip off investors and pensioners for billions of dollars, and we're talking about making civil cases against them. Maybe they pay a fine for which they have to give up a few million of the hundreds of millions that they have gotten illegally. So, no, I agree with Susan. There needs to be much more strenuous criminal prosecution. But we also need stronger government oversight. After all, the prosecution kicks in only after we've caught them doing something wrong. But stronger government oversight might stop them from doing these things in the first place.

TERENCE SMITH: Bob Robb, you spoke earlier of confidence in some of the existing laws and institutions in the market itself. What about the Securities & Exchange Commission, is it doing the job it should? Does it need to be revived or revamped in any way?

BOB ROBB: Well, certainly I think the present leadership inspires neither confidence nor a sense of being afraid of its activities, so there may need to be -- the Bush Administration may need to look at a change in leadership. But - and I do believe that there have been examples of very egregious corporate wrongdoing, and the individuals who engaged in that conduct to the extent it is illegal should be prosecuted extensively and aggressively, such as President Bush has suggested that he would. But I think it's important that we concentrate on the individuals who do the wrongdoing. By making the decision to go after Arthur Andersen as a corporation, for example, the federal government removed from the marketplace a revamped Arthur Andersen that was emerging under Paul Volcker, that would have been exclusively devoted to doing these independent corporate audits. Well, I think the market would have benefited from having such an entity, and the government's decision to prosecute Arthur Andersen criminally, rather than going after individual cases of wrongdoing, we moved what would have been I think a beneficial competitor in the independent corporate audit market from the marketplace. What's been the impact of this on the markets-- not just dollars and cents but on mood and confidence?

SUSAN LEE: Well, I think there is an enormous erosion of confidence. You can see that most clearly in the inflow of foreign money, which has almost dried up. Foreign capital are saying maybe there are better opportunities some place else or I'm going to wait and see what happens with the corporate governance scandal in the United States. And unfortunately, that's beginning to have some sort of effect on corporations themselves. They're pulling back; they're paying back debt. While they're doing that along with a weak stock market you're not going to get capital investment, which is what you really need to come out strongly from this recession.

TERENCE SMITH: Nolan Finley, what's your view of the impact of this on people's confidence in the system, in the market, in addition to Susan's point about overseas confidence?

NOLAN FINLEY: Well, confidence is the number one motivator in the market. And these corporate boards are going to have to take the necessary steps to reassure investors that they are operating openly and honestly and they have good accounting procedures in place. And I think that will be the ultimate solution to this crisis. There is no preventive here in a regulatory scheme but if these companies hope to attract investor dollars. They're going to have to restore investor confidence.

TERENCE SMITH: Cynthia Tucker, President Bush's name was mentioned earlier. What have you heard form him that you've liked; what - has he played the role you want him to play or does he have more to do and more to say?

CYNTHIA TUCKER: Well, Terry, President Bush has belatedly come to the table understanding that there are going to have to be a lot stronger criminal prosecutions of corporate executives. For the longest time, the President, like many conservatives, resisted any stronger regulation. He didn't say anything for the longest time about stronger criminal prosecutions. He tended to defend business practices, to claim that there were just a few bad apples out there, but his address on Saturday was a very strong one focusing on very aggressive criminal prosecution; I like that. And I'm looking forward to an address he's expected to give later this month where he's expected to outline more of the procedures he will back. So I'm hoping that he will call for stronger government oversight and regulation as well.

TERESITA SCHAFFER: All right. Well, stay tuned. Thank you all four very much.

JIM LEHRER: Still to come on the NewsHour tonight: Fighting fires in the West, the preemptive strike debate, and a song by Rosemary Clooney.

FOCUS - FIRE FIGHT

JIM LEHRER: The huge forest fires in the West this year have triggered a debate over how to keep them from being so damaging. Here is the first of two reports by Betty Ann Bowser.

BETTY ANN BOWSER: Mother Nature is driving wildfires in the West with such ferocity that firefighters compare them to the perfect storm.....they even create their own tornadoes and weather systems. This is how Rick Cables of the U.S. Forest Service describes it. RICK CABLES, Regional Forester, USDA Forest Service: We can't get in front of the fire...can't suppress it effectively and it burns hot; it gets up into the crowns of the trees and burns from tree to tree. And you have these unbelievable rates of spread when the fire gets going and wind gets behind it. So that's where we're getting catastrophic wildfires -- wildfires that are not normal, they're not natural.

BETTY ANN BOWSER: Not normal...not natural because this is a new breed of unpredictable forest fire that has only recently been documented.

Forest Service ecologist Merrill Kauffman has been studying this new kind of fire since 1996 when the first one appeared at Buffalo Creek in Colorado.

MERRILL KAUFFMAN, Ecologist, USDA Forest Service: I would not at all be surprised if we had such a fire to hear that hundreds of peoples lives will be lost in those kinds of fires and along with a lot of firefighters and, and law enforcement people trying to get those people out and to protect them and so forth. There's simply, these fires move so fast, so explosively that people hardly have time to understand that there's a bad fire and by that time their point of egress may be lost, they may be overrun by fire.

BETTY ANN BOWSER: Fed by record drought conditions in the West....this fire south of Denver spread 17 miles in six hours. The Rodeo Fire inArizona doubled in size in one day...

They spread so fast because the forest's that are providing the fuel are drier...denser....thicker than they've been in 100 years...forests that grew out of federal government policy.

It started with the big blow up. On August 20th 1910 hurricane force winds blew fires through Idaho and Montana destroying three million acres and killing 87 people in less than two days. Americans were so frightened by the fires that the U.S. Forest Service made its primary mission fire suppression and eventually its poster boy, Smokey Bear.

SMOKEY THE BEAR: Remember, only you can prevent forest fires

REP. MARK UDALL: Fire is a part of these ecosystems in the West.

BETTY ANN BOWSER: Congressman Mark Udall represents one of the most fire prone areas in Colorado...

REP. MARK UDALL: Smokey the Bear was such an icon for all of us that we couldn't see what was really occurring. We got to this situation because we suppressed fire for 100 years. We're in the midst of a drought cycle that's probably the most severe in at least 100 years and we've had a really pattern of growth in Colorado where a lot of people have moved here; we've doubled our population in the last 20 years from about two million to over four million. And a lot of those people are living in this so called red zone area where forests are more prone to catastrophic fire particularly if you suppress fuel loads and you have a dry climatic pattern.

BETTY ANN BOWSER: Through all those years of fire suppression thousands of acres of acres of new forest were able to grow in the mid elevation areas of the mountains with trees that were not as fire resistant.

The government says there are 221 million acres of tinderbox forest land like this in the mountain states...that need to be thinned out by cutting down trees and using fire to fight fire with controlled burns.

Dr. Wayne Shepard of the Forest Service took the NewsHour to an area of forest that was overrun in the recent Hayman Fire South of Denver.

DR. WAYNE SHEPARD: Before the fire reached here about a 1/2 mile it was a crown fire. It was really cooking -- coming down the hill destroying all the trees in its path. When it hit the thinned area west of here the wind shifted it allowed the fire to drop in under the trees and burn on the forest floor.

BETTY ANN BOWSER: Almost to lay down?

DR. WAYNE SHEPARD: It laid down. That's the term the firefighters use. It laid down and it burned in the forest here...not in the crowns of the trees. And so as w e look back through here you see a lot of green. even small trees -- a lot of those trees will survive and almost all of the large trees will survive in this area.

BETTY ANN BOWSER: The Hayman Fire almost stopped in its tracks in another part of the forest where the government had thinned the trees with a controversial 8,000 acre deliberate or prescribed burn last year. But it's an imperfect science. In another section of the forest that was treated and thinned out, all of the trees were destroyed.

DR. WAYNE SHEPARD: Thinning a forest doesn't work in all situations. You know, that's not the cure-all if you will to preventing wildfires. It certainly probably contributes to the lessening effect of wild fires. There are many other factors involved: The climate - the weather - the direction the wind was blowing.

BETTY ANN BOWSER: Is it sort of like improving your chances at the roulette table in Las Vegas?

DR. WAYNE SHEPARD: I would say so. Yes.

BETTY ANN BOWSER: The Forest Service has argued for fuel reduction in recent years, saying it's the best alternative, given the catastrophic nature of today's fires. But the government has had trouble getting programs off the ground.

Congressman Scott McInnis, who represents the area where the three Colorado fires are still burning, blames environmental groups for slowing the process down.

REP. SCOTT McINNIS: They obstruct us at every point in an attempt to try and thin a forest. They interpret thinning a forest as logging a forest. The Forest Service has to deal with litigation every day of the week. These national organizations like the National Sierra Club, the Aspen Wilderness Workshop kind of people, they throw these lawsuits at them you know right hand over the left hand and so the Forest Service has to take a lot of resources to defend themselves in litigation.

BETTY ANN BOWSER: Even the Forest Service's top brass admit the agency suffers from analysis paralysis, often spending months and millions of dollars defending their programs before any action is taken against them.

RICK CABLES: In the Forest Service our people try to design projects -- we call them bullet proof or they will stand up to the scrutiny of the appeal process in the courts. So we build documentation that's very onerous, it's expensive; it's voluminous. We create these documents that will sustain themselves and that we can survive a court challenge or an appeal. All that is time, energy, that's directed away from getting the work done on the ground.

BETTY ANN BOWSER: Greg Aplet of the Wilderness Society says very few Forest Service thinning programs have been opposed by environmental groups. He cited a 1999 Government Accounting Office report based on Forest Service data.

GREG APLET: The Forest Service reported that they were implementing 1671 fuel reduction projects. Out of that 1600 -- 20 had been appealed not just by environmentalists but also by industry interests and by individuals an so forth. But approximately 1 percent of those fuel reduction projects had been appealed by anyone. And of the those the majority...the issues had been resolved and the project was proceeding. So the allegation just doesn't hold water.

BETTY ANN BOWSER: And Sierra Club Regional Director Steven Smith says his organization has been unfairly portrayed as obstructionist.

STEVE SMITH: Sierra Club has not appealed or objected to a fuels reduction project that's close to where people live around communities, around individual homes or clusters have homes. We have indeed objected to misdirection of that fuels reduction money when it's applied into backcountry or into road less areas...where it's not going to have as strong an effect on that fire intensity reduction as it can have if you do it where people live.

BETTY ANN BOWSER: And that's part of the problem...more and more people moving into high risk fire areas...complicating an already complex problem that has only long term solutions.

RICK CABLES: You can't snap your fingers and fix 100 years of fire suppression policies overnight. It's going to take time to get the forest back into the kind of shape and I don't believe we'd ever treat every acres. But strategically figuring out where we want to treat these acres, where the risks and the value's the highest...that the public really cares about, if we roll up our sleeves and get after it with public support, which is crucial, yes, I think we can make a tremendous amount of progress over the next decade and decades to come.

BETTY ANN BOWSER: As the policy debate continues so does the risk. The Forest Service estimates right now in Colorado alone conditions are ripe for 40 more big destructive and potentially deadly fires this year.

JIM LEHRER: Betty Ann's second report will examine the impact of building homes in the forests.

FOCUS - STRIKING FIRST

JIM LEHRER: Now Margaret Warner has the first strike story.

SPOKESMAN: Robert D. Freezeman, Jr.

MARGARET WARNER: President Bush told graduates at West Point last month that America's long- standing defense strategy was no longer equal to the task.

PRESIDENT GEORGE W. BUSH: For much of the last century, America's defense relied on the Cold War doctrines of deterrence and containment. In some cases, those strategies still apply, but new threats also require new thinking. Deterrence, the promise of massive retaliation against nations, means nothing, against shadowy, terrorist networks with no nation or citizens to defend. Containment is not possible when unbalanced dictators with weapons of mass destruction can deliver those weapons on missiles or secretly provide them to terrorists' allies.

SPOKESMAN: Two, one, zero.

MARGARET WARNER: The President was describing what's been official U.S. policy in the nuclear age, a defense posture that relied on deterring enemies from attacking the U.S. by the threat of massive retaliation if they do. But Mr. Bush says this new era demands a new strategy: To strike some adversaries first before they attack the U.S.

PRESIDENT GEORGE W. BUSH: We must take the battle to the enemy, disrupt his plans and confront the worst threats before they emerge. And our security will require all Americans to be forward- looking and resolute, to be ready for preemptive action when necessary to defend our liberty and to defend our lives. (Applause)

MARGARET WARNER: Some Democratic lawmakers responded cautiously to the new strike-first doctrine. California Senator Diane Feinstein told CNN she assumed the President had Iraq in mind, and said: "I think a preemptory attack without full debate in Congress would be a terrible mistake." White House officials point to President Kennedy's blockade of Cuba during the 1962 Missile Crisis as an example of preemptions that did not include a massive military strike. National Security Advisor Condoleezza Rice told the "New York Times" there's a whole range of possible ways to take early action. Senate Foreign Relations Committee Chairman Joseph Biden said it will be hard to decide which countries pose a sufficient threat to become targets under the new policy.

SEN. JOSEPH BIDEN: The hard question is going to be whether or not one has the capacity, does that necessarily mean they have intent? For example, the Chinese have a capacity. Does the President have the right to preemptively go strike the Chinese, a Communist regime? The answer is no. So but with Saddam, there is... it's much more tenuous because he has used weapons of mass destruction before. He has made assertions about intentions to use these weapons, and therefore it gives more credence to the President's capacity to be able to go act preemptively.

MARGARET WARNER: The U.S. policy has sparked some concern in Europe. One "Financial Times" columnist wrote: "that preemption could too easily become an instrument of unbridled U.S. power." A "Guardian" columnist criticized Washington's chilling u-turn, noting that the U.S. condemned Israel's 1981 preemptive strike against an Iraqi nuclear reactor. "It is carte blanche for a war on the world," the columnist wrote. President Bush is expected to formally spell out the new policy later this year.

MARGARET WARNER: And for more on the President's first-strike policy, we turn to Richard Perle, former Assistant Secretary of Defense in the Reagan Administration. He's a Fellow at the American Enterprise Institute and head of the defense policy board, which advises Defense Secretary Rumsfeld. The views he expresses this evening are his own. And Phyllis Bennis: She's a Fellow at the Institute for Policy studies. She covered the United Nations for Pacifica Radio and is finishing a book on American foreign policy. Welcome to you both.

Richard Perle, let's examine the President's... first his premise. Is he right when he says that the policy of deterrence has outlived its usefulness?

RICHARD PERLE: Yes, I think he is right. He's referring, of course, to the policy that we adopted during the Cold War in which we threatened a massive nuclear response if we were attacked massively with nuclear weapons. Some us didn't much like that policy then because it implied that we would kill large numbers of civilians as a way of punishing or avenging an attack that might take place on us. But now after the Cold War, when the threat we face can emanate not only from governments, but from individuals, from the Osama bin Ladens of the world, or from governments run by brutal dictators like Saddam Hussein, the policy of massive retaliation, punishing the innocent, no longer makes sense.

MARGARET WARNER: Do you agree with that?

PHYLLIS BENNIS: Absolutely not. I think if we look at President Bush's speech, he spoke very clearly about the question of the necessity of the rule of law, and I think that the United States, despite it being the most powerful country that has ever existed in the world, should not be exempt from international law. We can't have one kind of law for the rest of the world that we impose on the rest of the world and an imperial law, if you will, a law of empire, that applies only to the United States.

MARGARET WARNER: But I mean, do you think that the policies of containment and deterrence can still work in this world?

PHYLLIS BENNIS: I think that we live in a very different world than the world of the Cold War. One of the biggest differences is that the United States is the sole power, the sole superpower that is calling the shots, if you will, in foreign affairs across the board. I think that we have to set an example of a rule by law. That meant by abiding by international law, abiding by treaties that we sign, not walking away from treaties when we decide that we don't like them, but holding ourselves accountable to the same standards of international law, human rights, and accountability that we demand of the rest of the world.

MARGARET WARNER: Mr. Perle, if the U.S. were to strike... issue a first strike essentially without being directly attacked, does that, a, violate international law - well, does it violate international law?

RICHARD PERLE: No, I don't believe it does violate international law. We certainly have the right, not conferred, but acknowledged in the United Nations Charter, Article 51, to defend ourselves. If a threat is imminent, are we compelled to wait until we've been struck? The notions of law that arise in domestic law within our societies always envision the possibility that if an injury has been done, compensation can follow, but there can be no practical compensation in a case where we have been struck possibly with weapons of mass destruction. We would be foolish to wait until the damage was done and then try to respond. That's especially true when the only plausible response is a highly punitive one. How do you make massive retaliation credible unless you threaten to destroy millions of people? I find it ironic that international law is being invoked as a way of defending a policy that destroys innocents in retaliation.

MARGARET WARNER: What about that point?

PHYLLIS BENNIS: I think we're talking very clearly about the destruction of innocents now. Article 51 is not a carte blanche. It says very clearly that a nation that has been attacked has the right of self-defense of military unilateral self-defense until-- that's the key word in that article-- "until" such time as the Security Council can meet and decide what to do. Now in the case of what happened on 9/11, I happen to view it as a crime against humanity, not as a war. I think it should have been responded to that way. The Security Council did meet within 24 hours of the attack. It passed with great emotional fervor, with every diplomat standing to cast their vote, not just raising their hand, exactly what the United States wanted to pass. The United States made a decision not to ask for a United Nations endorsement of any particular policy, particularly a military strike, which it probably ironically enough would have gotten because, in my view, the Bush Administration was following on its long-standing principle that it did not want to share power with the rest of the world. It was insisting, as we had seen even before 9/11, this wasn't a brand-new reality. It was just gone to a much higher level. We were seeing the possibility of a new kind of law of empire where we would stand above the rest of the world, and the bottom line when we look at the question of attacking civilians, what happens when we're wrong? Like we were today in Afghanistan, where civilians died because of bad intelligence?

RICHARD PERLE: Phyllis, no one is talking about attacking civilians.

PHYLLIS BENNIS: No one is talking about it, but we are attacking them.

RICHARD PERLE: I am talking about taking preventive action. If your neighbor tells you that he hates you and wishes to destroy you and you see him coming home every evening with a box of explosives, you don't have to wait until he blows up your house before you take action to protect yourself. The UN...

PHYLLIS BENNIS: Your action cannot include killing him first.

RICHARD PERLE: It depends on how big a risk you want to take.

PHYLLIS BENNIS: When you're the biggest and strongest military power in the world, with economic and cultural and military and strategic reach beyond the reach of any empire that has ever existed in the history of humanity, you don't have the right to take them out first.

RICHARD PERLE: I'm sorry. The President has an obligation to defend the citizens of this country. You would wait, and after the destruction is done, after we've been hit, what would you do then? Go to the United Nations?

PHYLLIS BENNIS: I would do many things. I would start by changing the policies that make it so easy for people to attack us because they have support, widespread support, because of so many people that are antagonizing...

RICHARD PERLE: I'm sorry. Osama bin Laden....

PHYLLIS BENNIS: I'm not talking about Osama bin Laden. I'm talking about people...

RICHARD PERLE: Saddam Hussein.

PHYLLIS BENNIS: No, I'm talking about the people...

RICHARD PERLE: Who are we talking about?

PHYLLIS BENNIS: The people who cheered, who thought it wasn't such a bad idea.

MARGARET WARNER: All right. Let me jump in here. Give me a scenario, Richard Perle, that is like your neighbor scenario, but would apply, say, to Iraq or any other country. In other words, at what point... how would ... sort of Joe Biden's question, how would the President decide who the target is, how imminent the attack is, and how effective can a preemptive strike really be if it, say, doesn't have international support?

RICHARD PERLE: Those, of course, are the issues: How one applies this policy, and no one is suggesting that it should be applied extensively or in an irresponsible manner. But if you have a Saddam Hussein who has killed people with poison gas, if he is pledged to do damage to the United States, as he has and he repeats it on every occasion, if he is building nuclear weapons, as he is attempting to do, do we have to wait until he has a nuclear weapon? I don't believe we do. I think we have every right and prudence dictates that we not permit a Saddam Hussein to put himself in the position of delivering a weapon of mass destruction against the United States. And if I have to choose between some abstract concept of the international community and protecting the citizens of this country, there's no question what comes first.

MARGARET WARNER: All right. And let me ask you, turn the same question around and ask you the same one, which is if the intelligence were that good, if it was clear that Saddam Hussein was planning a chemical or biological or nuclear attack, what would you have the President do at that point?

PHYLLIS BENNIS: First of all, it isn't. We don't have that clarity. We don't have any indication that there is...

MARGARET WARNER: I know, but I asked him to answer a theoretical.

PHYLLIS BENNIS: I'll answer the same theoretical question. I think we would have a better shot at having credibility in looking at those questions if we had not been responsible for arming Saddam Hussein for so many years in the 1980s, including with the biological weapons.

MARGARET WARNER: But, still, what would you do confronted with this situation?

PHYLLIS BENNIS: What I would do is move regionally. I would act with all the other countries in the region, say we are cutting off all arms to the entire region, including of course Iraq should remain unable to obtain weapons of mass destruction. But I would broaden it as is called for in the resolution that was passed at the end of the Gulf War, Resolution 687, that talks in Article 14 about the need for regional disarmament. That's where I would start. I would engage in a collaborative way, not in an imposed way where we say we are going to attack Iraq and we expect all of the Arab governments, despite massive popular opposition, to support us.

MARGARET WARNER: What do you think, Mr. Perle, is - was the reason for the President saying this now, and what is the likely impact of essentially announcing this?

RICHARD PERLE: I think the President recognized that the concepts that served us during the Cold War are no longer applicable, just as he has recognized that many of approaches to military power that worked during the Cold War will no longer work. I think he's putting people on notice that if they are plotting to destroy Americans, if they are putting themselves in a position to take action against us, we're not going to give them the luxury of choosing the time and place at which they attack us. And I think it is just hopelessly naive to respond to a Saddam Hussein by talking about UN Resolutions. He's in violation of 50 UN Resolutions.

MARGARET WARNER: Do you think, though, just going back to the original part of your answer, that in a way by announcing this, the President intends it as a sort of new kind of deterrence?

RICHARD PERLE: Well, certainly he is hoping to discourage the plots against the United States by people who coolly and deliberately assemble the weaponry, organize the operations, and then carry them out. So he's saying, while you're planning, while you're plotting, beware because we may well act first to defend ourselves.

MARGARET WARNER: And what do you think is the impact of announcing it this way?

PHYLLIS BENNIS: I think that it on the one hand makes clear to the rest of the world that the United States is not prepared to hold ourselves accountable to the kinds of international law that we are prepared to go to war for against a government that has violated it, those laws and those resolutions. Clearly the Iraqi government has violated international law and UN Resolutions. The Israeli government has done it for far longer. Many other countries have violated those resolutions. I think the impact of announcing it now goes directly to the question of putting the world on notice that we now are asserting a kind of imperial law that affects only the United States, that we are not going to be held accountable to the same criteria, to the same standards that we are demanding others be held to.

RICHARD PERLE: Could I just say that I think any other country properly held responsible for the protection of its citizens would do, if they were in a position to do so, exactly what the President suggests we ought to be prepared to do.

MARGARET WARNER: All right. Thank you both. We have to leave it there. Thanks.

FINALLY - REMEMBERING ROSEMARY

JIM LEHRER: And, finally tonight, remembering singer Rosemary Clooney, who died over the weekend. Here she sings "Love, You Didn't do Right by Me" in the 1954 movie "White Christmas." ( Music playing )

ROSEMARY CLOONEY: (singing) Love you didn't do right by me

you planned a romance that just hadn't a chance

and I'm through. Love

you didn't do right by me I'm back on the shelf and I'm blaming myself but it's you

My one love affair didn't get anywhere

from the start to send me a Joe

who had winter and snow in his heart

wasn't smart love, you didn't do right by me

as they say in the song you done me wrong... ( musical interlude )

My one love affair didn't get anywhere

from the start to send me a Joe

who had winter and snow in his heart

wasn't smart...

oh, love you didn't do right by me.

As they say in the song you done me wrong

Yes, Mr. Love you done me wrong!

RECAP

JIM LEHRER: Lehrer: Again, the major developments of the day: WorldCom acknowledged it may have even worse accounting problems than thought before. They involve large changes in its reserve accounts. And in Afghanistan, witnesses said U.S. planes mistakenly attacked a village, killing or wounding dozens of civilians. But the U.S. military said the planes came under anti-aircraft fire. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.