PBS NewsHour; April 9, 2013 6:00pm-7:00pm PDT

AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Woodruff: THE UNITED STATES SENATE MOVED CLOSER TODAY TO A SHOWDOWN OVER GUN LEGISLATION. AT THE SAME TIME, SUPPORTERS OF NEW RESTRICTIONS-- FROM THE WHITE HOUSE ON DOWN-- TRIED TO STEP UP THE PRESSURE. TODAY IT WAS VICE PRESIDENT JOE BIDEN LEADING THE CHARGE FOR NEW GUN CONTROL LAWS.

>> WE HAVE AN OBLIGATION TO TRY WE KNOW IF WE'RE DOING THE THING WE TALK ABOUT WE'LL ALL SAVE LIVES. WE'VE ALL AND SEEN THE URGENCY OF THIS ISSUES AND YOU KNOW WHAT WE HAVE TO DO.

>> Woodruff: HE WAS JOINED BY ATTORNEY GENERAL ERIC HOLDER AND LAW ENFORCEMENT OFFICERS FROM AROUND THE COUNTRY AND FAMILY MEMBERS OF THE SCHOOL SHOOTING VICTIMS IN NEWTOWN, CONNECTICUT, WERE ON CAPITOL HILL APPEALING TO LAWMAKERS. THE GOAL: PRESSURING CONGRESS TO ACT ON GUN LEGISLATION IN THE FACE OF RISING OPPOSITION FROM THE NATIONAL RIFLE ASSOCIATION. THE FOCUS-- ESPECIALLY IN THE SENATE-- HAS TURNED TO A DEMOCRATIC BILL EXPANDING THE FEDERAL BACKGROUND CHECK REQUIREMENT TO NEARLY ALL GUN PURCHASES. PRESIDENT OBAMA PRESSED THE ISSUE AT A SPEECH IN CONNECTICUT LAST NIGHT.

>> I'M ASKING EVERYONE LISTENING TODAY, FIND OUT WHERE YOUR MEMBER OF CONGRESS STANDS ON THIS. IF THEY'RE NOT PART OF THE 90% OF AMERICANS WHO AGREE ON BACKGROUND CHECKS THEN ASK THEM WHY NOT. ARE.

>> Reporter: THE CURRENT FEDERAL SYSTEM ENACTED AS PART OF THE BRADY ACT IN 1993 WAS FORMALLY LAUNCHED IN 1998. IT REQUIRES PROSPECTIVE GUN BUYERS TO FILL OUT A SIX-PAGE FORM FOR THE BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES BEFORE THE SALE CAN BE COMPLETED, THE GUN DEALER MUST THEN CALL THE F.B.I. OR OTHER DESIGNATED AGENCIES TO ENSURE THE CUSTOMER IS ELIGIBLE TO PURCHASE A FIREARM. AMONG THE CRITERIA THAT WOULD MAKE SOMEONE INELIGIBLE: HAVING A CRIMINAL RECORD, SPECIFICALLY FELONY CONVICTIONS OR VIOLENT M.D.S SUCH AS DOMESTIC ABUSE. BEING DEEMED MENTALLY ILL BY A COURT OR INVOLUNTARILY COMMITTED TO A MENTAL HEALTH FACILITY. OR BEING IN THE UNITED STATES ILLEGALLY. BUT THE LAW APPLIES ONLY TO FEDERALLY LICENSED DEALERS. UNDER THE SO-CALLED GUN SHOW LOOPHOLE, NO RECORDS ARE REQUIRED FOR PRIVATE GUN SALES AND IT'S A LONG-STANDING POINT OF DEBATE AS TO JUST HOW MANY GUNS ARE SOLD THAT WAY. WHATEVER THE FIGURE, PROSPECTS FOR ACTION IN THE SENATE REMAINED UNCERTAIN. SENATE REPUBLICAN LEADER MITCH McCONNELL JOINED TODAY WITH 13 REPUBLICANS WHO HAVE VOWED TO BLOCK A VOTE ON THE DEMOCRATS' BILL UNLESS IT'S CHANGED.

>> THE PARTICULAR BILL THAT THE MAJORITY LEADER HAS INDICATED HE MAY CALL UP IS ONE THAT CAME OUT OF THE JUDICIARY COMMITTEE ON A PARTISAN VOTE. IT CLEARLY HAD NO BIPARTISAN SUPPORT IN COMMITTEE AND THAT WAS MY VIEW ON THAT.

>> Woodruff: ON THE OTHER HAND, FIVE SENATE REPUBLICANS-- INCLUDING GEORGIA'S JOHNNY ISAACSON-- SAY THEY WANT A VOTE.

>> INSTANT BACKGROUND CHECK LAW IN GEORGIA I WAS A PART OF IN 1995 WHEN IT PASSED. THE ISSUE ON INSTANT BACKGROUND CHECKS -- ON BACKGROUND CHECKS NOW IS HOW FAR THEY GO AND WHETHER OR NOT THEY VIOLATE RIGHTS TO PRIVACY IN TERMS OF MENTAL HEALTH.

>> Woodruff: MEANWHILE, WEST VIRGINIA DEMOCRAT JOE MANCHIN AND PENNSYLVANIA REPUBLICAN PAT TOOMEY ARE STILL TRYING TO WORK OUT A COMPROMISE BILL. DEMOCRATIC MAJORITY LEADER HARRY REID WENT TO THE SENATE FLOOR WITH THE PHOTO OF A PICKET FENCE WITH 26 SLATS IS-- ONE FOR EACH VICTIM IN NEWTOWN AND HE INSISTED THERE'S NO GOING BACK.

>> WE HAVE A RESPONSIBILITY TO SAFEGUARD THESE LITTLE KIDS AND ONCE WE DO SOMETHING MORE THAN THE LAW TODAY, WE'VE FAILED.

>> Reporter: LATER REID ANNOUNCE HEAD WILL TRY TO FORCE AN INITIAL VOTE THURSDAY. IT REMAINS UNCLEAR IF HE CAN GET 60, THE NUMBER NEEDED TO PROCEED WE LOOK MORE CLOSELY AT THE QUESTIONS SURROUNDING THE WAY BACKGROUND CHECKS WORK NOW AND WHAT EFFECT CHANGING THE LAW MAY HAVE. JAMES JOHNSON IS THE BALTIMORE COUNTY POLICE CHIEF. HE'S CHAIR OF THE NATIONAL LAW ENFORCEMENT PARTNERSHIP TO PREVENT GUN VIOLENCE. HE MET WITH VICE PRESIDENT BIDEN AT THE WHITE HOUSE TODAY. AND LAWRENCE KEANE, SENIOR VICE PRESIDENT AND GENERAL COUNSEL FOR THE NATIONAL SHOOTING SPORTS FOUNDATION. IT'S THE TRADE ASSOCIATION FOR THE FIREARMS INDUSTRY. WE WELCOME BOTH OF YOU TO THE NEWSHOUR. CHIEF JOHNSON, LET ME START WITH YOU. HOW WELL DOES THE CURRENT BACKGROUND CHECK SYSTEM WORK?

>> WELL, CERTAINLY WE KNOW ACROSS AMERICA NEARLY 40% OF ALL GUNS THAT ARE TRANSFERRED, NEARLY 6.6 MILLION, ARE DONE OUTSIDE OF LICENSED FEDERAL DEALERS. WE KNOW WHEN A BUYER GOES TO A LICENSED FEDERAL DEALER IT DOES WORK. THERE'S MANY REPUTABLE GUN SHOPS ALL ACROSS AMERICA, NEARLY 58,000 STOP THAT STOP THESE GUNS FROM GETTING IN THE HANDS OF BAD PEOPLE. NEARLY TWO MILLION GUNS WERE STOPPED FROM BEING PURCHASED THROUGH THAT SYSTEM.

>> Woodruff: BUT YOU'RE SAYING IT MISSES A LOT OF GUNS.

>> NEARLY 40% AND WE HAVE CASE AFTER CASE ALL ACROSS AMERICA WHERE THESE GUNS WERE PURCHASED AT GUN SHOWS AND THE PENNY SAVER ADS AND OVER THE INTERNET WHERE THEY GET IN THE HANDS OF PEOPLE WHO SHOULD NOT HAVE THEM.

>> Woodruff: LAWRENCE KEANE, HOW DO YOU SEE HOW WELL THE CURRENT SYSTEM WORKS?

>> WELL, ACTUALLY, WE THINK THE CURRENT SYSTEM IS BROKEN AND FAR TOO MANY RECORDS OF PEOPLE WHO ARE PROHIBITED BY LAW FROM BEING ABLE TO PURCHASE OR POSSESS A FIREARM AREN'T IN THE SYSTEM SO WE THINK THE FOCUS SHOULD BE ON FIXING THAT SYSTEM AND GETTING THE RECORDS THAT AREN'T IN THERE NOW. THAT'S WHY THE NATIONAL SHOOTING SPORTS FOUNDATION IS LAUNCHING A PROGRAM TO WORK WITH THE STATES TO BUILD COALITIONS IN THE STATES WHERE THE RECORDS AREN'T BEING PUT INTO THE SYSTEM. WE THINK THAT'S WHERE THE FOCUS SHOULD BE.

>> Woodruff: SO WHEN YOU SAY RECORDS ARE NOT GETTING INTO THE SYSTEM, WHAT'S FALLING DOWN? WHAT ISN'T HAPPENING THAT SHOULD BE HAPPENING?

>> RECORDS OF PEOPLE, FOR EXAMPLE, ADJUDICATED AS MENTALLY DEFECTIVE OR WERE INVOLUNTARILY COMMITTED TO MENTAL HOSPITALS ARE NOT BEING PUT INTO THE SYSTEM. FOR EXAMPLE, MASSACHUSETTS PUT IN ONE RECORD. RHODE ISLAND, NO RECORDS. SO THERE WAS A STUDY DONE BY THE GENERAL ACCOUNTING OFFICE THAT SHOWS HOW THE STATES -- ABOUT HALF OF THE STATES ARE REALLY FAILING TO GET THEIR RECORDS INTO THE SYSTEM AND IT'S NOT JUST MENTAL HEALTH RECORDS. RECORDS ON RESTRAINING ORDERS, ET CETERA, OTHER RECORDS THAT SHOULD BE IN THE SYSTEM THAT DOCUMENT WHO'S A PROHIBITED PERSON. THE DATABASE IS ONLY AS GOOD AS THE RECORDS THAT ARE IN IT AND IF THE RECORDS AREN'T GETTING PUT IN BECAUSE STATES NEED TO CHANGE PRIVACY LAWS, THAT'S WHAT WE THINK NEEDS TO BE DONE. WE THINK THE CONGRESS NEEDS TO USE A CARROT-AND-STICK APPROACH FOR FEDERAL FUNDS GOING BACK TO THE STATES TO REQUIRE THEM TO GET THE RECORDS INTO THE SYSTEM OR THEY DON'T GET THE FEDERAL GRANT FUND.

>> Woodruff: WE'RE USING THE TERM NIX DATABASE. THAT IS THE NAME OF THE SYSTEM. WHAT ABOUT THAT THAT HE NEEDS STATES TO COMPLY?

>> THAT'S BEEN GREAT IMPROVEMENT INTO THE NATIONAL CRIMINAL BACKGROUND CHECK SYSTEM. GREAT IMPROVEMENT. BUT WHE WE KNOW WHEN YOU LOOK AT THE PRESIDENT'S PLAN, YOU LOOK AT THE WORK OF MANY ELECTED OFFICIALS WHO WORKED VERY HARD ON THIS. YOU LOOK AT THE VICE PRESIDENT AND THE PRESIDENT ON THIS MATTER WE KNOW THAT ENTERING MORE INFORMATION AND CERTAINLY DOING A BACKGROUND CHECK WILL SAVE AMERICANS' LIVES. I'M A SPORTSMAN. I'M A SHOOTER, I'M A HUNTER. I RELATE TO THIS GENTLEMAN THAT I'M TALKING TO TONIGHT AND I'D ASK HID ORGANIZATION, HIS MEMBERSHIP, DON'T WE ALL WANT A BACKGROUND CHECK? THIS IS SOMETHING SIMPLE WE CAN DO TO SAVE LIVES.

>> Woodruff: YOU'RE SAYING IT'S NOT JUST PUTTING MORE OF THE RECORDS -- FILLING OUT THE RECORDS THAT ARE THERE. YOU'RE SAYING THERE NEEDS TO BE MORE GUN SALES THAT ARE REQUIRED TO GO THROUGH A BACKGROUND CHECK.

>> JUST ADDING INFORMATION INTO THE NICKS SYSTEM IS NOT GOING TO MAKE A GREAT DIFFERENCE. WE NEED A BACK GROUND CHECK NATIONWIDE. MARYLAND HAS A BACKGROUND CHECK, FOR EXAMPLE, FOR REGULATED FIREARM BUS IF YOU DON'T LIKE MARYLAND'S LAWS, GO TO ANOTHER STATE AND JUST ACQUIRE IT. THIS IS A CASE WHERE WE NEED A NATIONAL SYSTEM IN PLACE.

>> Woodruff: IN OTHER WORDS, EVERYBODY WHO BUYS A GUN.

>> YES, MA'AM.

>> Woodruff: LAWRENCE KEANE?

>> WELL, IT'S NOT CORRECT THAT YOU CAN SIMPLY GO ACROSS STATE LINES AND BUY A GUN. YOU CAN'T BUY A HANDGUN ACROSS STATE LINES. THAT'S PROHIBITED BY FEDERAL LAW. WE THINK THAT THE PROBLEM WE HAVE WITH THE PROPOSALS FOR SO-CALLED UNIVERSAL BACKGROUND CHECKS FROM THE INDUSTRY POINT OF VIEW IS IT PLACES THE BURDEN ON SMALL MOM-AND-POP FEDERALLY LICENSED FIREARMS RETAILERS AND SMALL BUSINESSES TO PERFORM A GOVERNMENT FUNCTION AND THEN FOR WHICH THEY ARE REQUIRED TO IMCUR THE COST OF KEEPING THE RECORDS. THEY ARE THEN EXPOSED TO POTENTIAL LICENSE REVOCATION IF THERE'S A MISTAKE IN THOSE RECORDS OR TO BE DRAG INTO LIABILITY LAWSUITS, PRODUCT LIABILITY CLAIMS AND SUCH. WE THINK THAT TO PUT THE BURDEN ON SMALL MOM-AND-POP BUSINESSES TO DO THESE BACKGROUND CHECKS TO PERFORM THE GOVERNMENT FUNCTION IS WRONG AND WE CAN'T SUPPORT PLACING THAT BURDEN ONLY RETAILERS AND, IN FACT, A RECENT SURVEY SHOWED THAT 86% OF FEDERALLY LICENSED RETAILERS IN THE UNITED STATES ARE OPPOSED TO THE PROPOSALS FOR UNIVERSAL BACKGROUND CHECKS PRECISELY BECAUSE OF THESE REASONS.

>> Woodruff: SO HE'S SAYING THAT THERE ARE A NUMBER OF SALES HANDLED BY SMALLER GUN SHOPS THAT SHOULDN'T BE REQUIRED TO REGISTER.

>> WELL, I'D LIKE TO CORRECT SOMETHING MR. KEANE STATED. I RESPECTFULLY DISAGREE. MANY PEOPLE DO ACQUIRE THEIR GUNS OUTSIDE OF STATES THAT HAVE STRONG REGULATIONS. IN FACT, WE KNOW IN MARYLAND THAT ONLY 30% OF THE GUNS USED IN CRIMES OF VIOLENCE WERE ACQUIRED OUTSIDE OF THE STATE AND I COULD SHOW YOU CASE AFTER CASE WHERE PEOPLE GO TO GUN SHOWS AND BRING THEM BACK INTO THE STATE. I DON'T THINK THIS IS GOING TO BE AN INCONVENIENCE ON GUN SHOPS. FRANKLY, NEARLY 92% OF ALL THESE GUN TRANSACTION NICKS CHECKS CAN BE DONE IN LESS THAN THREE MINUTES AND, FRANKLY, IF I OWNED A GUN SHOP, I'D WANT THOSE CUSTOMERS COMING IN. PERHAPS THEY'LL PICK UP TARGETS, HOLSTERS OR OTHER APPARATUS FOR SHOOTING WHILE THEY'RE THERE.

>> Woodruff: HE'S SAYING IT'S INCONVENIENT AND WILL PUT PEOPLE OUT OF BUSINESS.

>> I DISAGREE COMPLETELY. I THINK THAT IS NOT GOING TO HAPPEN. 58,000, I THINK YOU'LL SEE A GROWTH IN THE AMOUNT OF LICENSED FEDERAL DEALERS THAT DO THIS WORK AND, FRANKLY, YOU DON'T TO THINK JUST ABOUT GUN SHOPS, THERE WILL BE OTHER INDUSTRIES THAT WILL POP UP TO DEAL WITH THOSE BACKGROUND CHECKS AS WELL.

>> Woodruff: LAWRENCE KEENE, DO YOU HAVE A RESPONSE?

>> WELL, I WOULD AGREE WITH THE CHIEF THAT THERE ARE CRIMINALS WHO GO ACROSS LINES TO ILLEGALLY OBTAIN FIREARMS ACROSS STATE LINES AND THOSE SAME CRIMINALS WON'T GO THROUGH BACKGROUND CHECKS SO THE BURDEN IS BASED ON RETAILERS TO PERFORM A GOVERNMENT FUNCTION FOR WHICH THEY COULD LOSE THEIR LICENSE AND LIVELIHOOD OR BE DRAGGED INTO LAWSUITS. THIS IS WHY 86% OF RETAILERS ARE OPPOSED TO THIS. THAT'S NOT JUST SMALL MOM AND POPS, THAT INCLUDES LARGE CORPORATE RETAILERS LIKE WAL-MART AND OTHERS.

>> Woodruff: WHAT ABOUT THAT?

>> WHAT I'D STY THAT IS CAREER CRIMINALS WILL STILL TRY TO ACQUIRE THEIR GUNS ILLEGALLY BUT LAW ABIDING CITIZENS TODAY THAT ARE SELLING 6.6 MILLION OF THESE GUNS WILL ABIDE BY THE LAW. IF YOU CREATE A UNIVERSAL BACKGROUND CHECK SYSTEM THAT APPLIES ACROSS THIS GREAT NATION IF I'M A GOOD UPSTANDING CITIZEN I WANT A BACKGROUND CHECK. I DON'T WANT MY GUN GETTING IN THE HANDS OF SOMEBODY WHO IS GOING TO USE THAT THING ILLEGALLY. AND, FRANKLY, GOOD LAW-ABIDING CITIZENS WILL DEMAND A BACKGROUND CHECK. THEY'LL GO TO A LICENSED DEALER.

>> Woodruff: IT'S NOT CLEAR YET MR. KEANE AND CHIEF JOHNSON WHAT IS EMERGING IN THE FORM OF A COMPROMISE BUT IT LOOKS AS IF IT'S SOMETHING PERHAPS SHORT OF A UNIVERSAL SYSTEM THAT WE KNOW THAT SENATOR JOE MANCHIN, A DEMOCRAT, HAS BEEN INVOLVED IN THESE CONVERSATIONS SAID THIS AFTERNOON THAT GUN SHOW LOOPHOLES, INTERNET SALES LOOPHOLES WILL BE CLOSED BUT HE DIDN'T MAKE IT SOUND BROADER THAN THAT FF THAT'S WHAT THEY'RE DOING, LAWRENCE KEANE, WHAT WOULD THE REACTION BE FROM YOUR ORGANIZATION?

>> WELL, I'M NOT GOING TO SPECULATE ON WHAT THE PROPOSAL IS. I THINK WE NEED A LEGISLATIVE TEXT TO MAKE A DECISION. FEDERALLY LICENSED FIREARMS RETAILERS, THE FOLKS THAT MY ORGANIZATION REPRESENT ALREADY DO BACKGROUND CHECKS AT GUN SHOW SO FOR THE INDUSTRY WE ALREADY DO THE BACKGROUND CHECKS AT GUN SHOWS. THERE'S A LOT OF MISCONCEPTION ABOUT THE SO-CALLED GUN SHOW LOOPHOLE. THE DEPARTMENT OF JUSTICE HAS DONE SURVEYS OF PRISON INMATES INCARCERATED FOR FIREARMS OFFENSES AND ASKED THEM WHERE THEY OBTAIN THEIR FIREARM AND LESS THAN 1% SAID THEY GOT THEM AT A GUN SHOW. SO LET'S SEE THE PROPOSAL AND THE DETAILS AND WE'D BE HAPPY TO TAKE A LOOK AT THE SENATOR'S PROPOSAL.

>> Woodruff: CHIEF JOHNSON, IF IT'S SOMETHING LESS THAN UNIVERSAL BACKGROUND CHECK WOULD THAT SATISFY WHAT YOU'RE LOOKING FOR?

>> A UNIVERSAL BACKGROUND CHECK WILL DEFINITELY MAKE AMERICANS SAFER. THE NATIONAL LAW ENFORCEMENT PARTNERSHIP TO PREVENT GUN VIOLENCE, THE COLLECTIVE WISDOM OF TENS OF THOUSANDS POLICE LEADERS WERE CALLING FOR A BILL, WERE CALLING FOR ACTION THAT DOESN'T CREATE A MASQUERADE NATIONAL BACKGROUND CHECK AND CERTAINLY WE BELIEVE AND WE STAND NEXT TO 90% OF AMERICANS, 74% OF N.R.A. MEMBERS CALLING FOR A UNIVERSAL NATIONAL BACKGROUND CHECK. I WISH WE COULD ALL JUST GET IN A ROOM AND AGREE TO ONE POINT SO M. WANT THIS. WHY CAN'T WE MAKE THIS HAPPEN?

>> Woodruff: YOU WANT TO RESPOND MR. KEANE?

>> WELL, A RECENT SURVEY OF POLICE OFFICERS INDICATE 85% OF POLICE OFFICERS RANK-AND-FILE POLICE OFFICERS DON'T BELIEVE THAT THE PRESIDENT'S GUN CONTROL PROPOSALS ARE GOING TO DO ANYTHING TO ADVANCE SAFETY SO THERE ISN'T EVEN DISAGREEMENT -- THERE IS EVEN DISAGREEMENT WITHIN THE LAW ENFORCEMENT COMMUNITY. WE THINK THERE'S A LOT OF ROOM FOR BUILDING COALITIONS, THE FOR COMING TOGETHER TO MAKE OUR COMMUNITIES SAFER. REASONABLE MINDS CAN DISAGREE ABOUT HOW TO ACHIEVE THAT. WE THINK THE FOCUS SHOULD BE ON PREVENTING UNAUTHORIZED ACCESS, BY ENCOURAGING INDIVIDUALS WHO OWN FIREARMS-- LIKE MRS. LANZA-- TO LOCK THOSE FIREARMS UP. HER SAFE WAS IN HER SON'S ROOM AND HE HAD THE COMBINATION. SHE FELT A RESPONSIBILITY AS A GUN OWNER TO KEEP THOSE FIREARMS LOCKED AWAY FROM HER SON WHO SHE KNEW TO HAVE SERIOUS MENTAL HEALTH ISSUES. WE THINK THERE'S SADLY NOT A SUFFICIENT DISCUSSION GOING ON IN WASHINGTON RIGHT NOW ABOUT ADDRESSING THE FAILURES OF THE MENTAL HEALTH SYSTEM. COMMONALITY OF THE LAST HORRIFIC SHOOTINGS WE BELIEVE IS THE MENTAL HEALTH OF THE SHOOTER. AND WE THINK THAT'S NOT BEING ADDRESSED AND THAT'S NOT PART OF THIS DISCUSSION.

>> Woodruff: THOSE ARE ISSUES WE WANT TO LOOK AT HERE TONIGHT. THE FOCUS HAS BEEN ON THE BACKGROUND CHECKS AND WE THANK YOU BOTH VERY MUCH, LAWRENCE KEANE AND CHIEF JIM JOHNSON. THANK YOU.

>> THANK YOU.

>> Ifill: ONLINE YOU CAN FIND A STATE-BY-STATE LOOK AT EFFORTS TO EXPAND AND RESTRICT GUN LAWS. STILL TO COME ON THE NEWSHOUR, INSIDE SYRIA'S WAR; KEEPING TEENS OUT OF JAIL; AND THATCHER'S CONTROVERSIAL POLICIES. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: A STUDENT ALLEGEDLY STABBED AT LEAST 14 PEOPLE TODAY AT A TEXAS COLLEGE, JUST OUTSIDE HOUSTON. TWO WERE CRITICALLY WOUNDED. POLICE SAID THE ATTACKER RAN FROM BUILDING TO BUILDING AT LONE STAR COMMUNITY COLLEGE. THEY SAID LATER THEY HAVE A MALE SUSPECT IN CUSTODY. THERE WAS NO WORD ON WHAT KIND OF WEAPON WAS USED, OR WHAT THE MOTIVE WAS. EXXONMOBIL HAS BEEN ORDERED TO PAY $236 MILLION TO THE STATE OF NEW HAMPSHIRE FOR CONTAMINATING GROUNDWATER. A STATE COURT JURY FOUND THE OIL GIANT LIABLE TODAY FOR DAMAGE DONE BY THE GASOLINE ADDITIVE M.T.B.E. AFTER A THREE-MONTH TRIAL, IT TOOK THE JURY LESS THAN TWO HOURS TO AGREE ON A VERDICT AND DAMAGES. NEW HAMPSHIRE SUED EXXONMOBIL TEN YEARS AGO. THE COMPANY PLANS TO APPEAL THE VERDICT. NORTH KOREA POUNDED OUT A NEW NOTE TODAY IN ITS DRUM BEAT OF WAR WARNINGS. THIS TIME, THE MESSAGE WAS AIMED AT FOREIGNERS IN THE SOUTH: LEAVE WHILE YOU CAN. WE HAVE A REPORT FROM JOHN SPARKS OF INDEPENDENT TELEVISION NEWS.

>> Reporter: IN THIS FRENZIED WAR OF WORDS THE NORTH KOREANS TODAY DELIVERED A WARNING, ISSUED, AS EVER, IN FEVERISH TONES.

>> ( translated ): FOREIGNERS IN SOUTH KOREA SHOULD SEEK SHELTER OR EVACUATE BECAUSE THE REGION IS ON THE BRINK OF WAR.

>> Reporter: THE CITY OF SEOUL, THE SOUTH KOREAN CAPITAL, SEEMED TO SHRUG OFF THE THREAT OF THERMO NUCLEAR WAR. THE TRAFFIC MOVED, PEDESTRIANS SHOPPED AS NORMAL. YET THIS TIME THE REGIME HAS PICKED A NEW TARGET: FOREIGN TRAVELERS AND COMPANIES, NEW GROUPS TO LECTURE AND UNNERVE.

>> GIVEN HOW CLOSE WE ARE TO THE BORDER YOU JUST HAVE TO GRIN AND BEAR IT. YES, THERE'S A SMALL CHANCE THAT SOMETHING DRAMATIC HAPPENS AND IF THAT HAPPENS WE WON'T HAVE A WHOLE LOT OF WARNING.

>> Reporter: THE SOUTH KOREAN MILITARY IS TAKING THE THREAT SERIOUSLY. AN ARTILLERY UNIT FIRED LIVE ROUNDS IN A DRILL WITH THE U.S. TODAY AND SEOUL HAS PROMISED TO RETALIATE FORCEFULLY IN THE EVENT OF AN ATTACK. THE JAPANESE AREN'T TAKING ANY CHANCES, MOVING PATRIOT MISSILES INTO THE CAPITAL, TOKYO. THE FEAR: THAT THE NORTH KOREANS ARE NOW READY TO TEST A MEDIUM-RANGE BALLISTIC MISSILE. JAPAN SAYS IT WILL SHOOT IT DOWN EVEN IF IT'S PASSING OVER THE COUNTRY INTO THE PACIFIC. "SUCH PROVOCATIVE ACTS WON'T HELP YOU" SAID THE COUNTRY'S CABINET SECRETARY. NOT EVERYONE'S BEEN PUT OFF BY THE TROUBLE. THE NORTH KOREANS OPENED THE DOORS TO A GROUP OF FOREIGN TOURISTS AND BUSINESSMEN TODAY AND THEY SEEMED HAPPY TO MAKE THE TRIP. THEY'RE WELCOMING IN THE CAPITAL AND IT SITS UNEASILY WITH THE ADVICE GIVEN TO THE NORTH KOREANS LAST FRIDAY. DIPLOMATS WERE TOLD TO EVACUATE. FROM TOMORROW THEIR SAFETY CAN NO LONGER BE GUARANTEED, SAID THE REGIME. YET THE STREETS OF PYONGYANG SEEMED PEACEFUL. THIS IS NOT A NATION OUTWARDLY PREPARING FOR CONFLICT.

>> Sreenivasan: ALSO TODAY, THE TOP AMERICAN COMMANDER IN THE PACIFIC, ADMIRAL SAMUEL LOCKLEAR, SAID TENSIONS WITH NORTH KOREA ARE THE WORST SINCE THE KOREAN WAR. BUT HE TOLD A SENATE HEARING THAT THE U.S. HAS THE CAPABILITY TO INTERCEPT A NORTH KOREAN MISSILE, IF IT NEEDS TO. IRAN ANNOUNCED TODAY IT'S UPGRADING TWO URANIUM SITES RELATED TO ITS NUCLEAR PROGRAM. THE NEWS CAME JUST DAYS AFTER THE LATEST NUCLEAR TALKS WITH WORLD POWERS FELL FLAT. PRESIDENT MAHMOUD AHMADINEJAD ORDERED THE EXPANSION OF A URANIUM MINE AND PROCESSING FACILITY VIA VIDEO-CONFERENCE, AND HE SOUNDED A NEW NOTE OF DEFIANCE.

>> ( translated ): YOU DID ALL YOU COULD TO PREVENT IRAN FROM GOING NUCLEAR. WELL, NOW IRAN HAS GONE NUCLEAR. DO YOU WANT TO TAKE IT AWAY FROM US? IT'S GOOD TO USE YOUR WISDOM IN POLITICS. YOU COULD NOT BLOCK OUR ACCESS TO NUCLEAR TECHNOLOGY WHEN WE DIDN'T HAVE IT, HOW CAN YOU TAKE IT FROM OUR HANDS NOW THAT WE HAVE IT?

>> Sreenivasan: ALSO TODAY, AN EARTHQUAKE STRUCK IN THE VICINITY OF A NUCLEAR SITE IN SOUTHERN IRAN. THE QUAKE KILLED AT LEAST 32 PEOPLE AND INJURED AT LEAST 800 MORE, BUT THE GOVERNMENT SAID THE NUCLEAR FACILITY WAS UNDAMAGED. TWO U.S. TROOPS HAVE DIED IN A HELICOPTER CRASH IN AFGHANISTAN. THE NATO AIRCRAFT WENT DOWN TODAY IN THE EASTERN NANGARHAR PROVINCE. OFFICIALS SAID THERE WAS NO ENEMY ACTIVITY IN THE AREA AT THE TIME. IN SOUTH SUDAN, ARMED REBELS AMBUSHED A U.N. CONVOY TODAY, KILLING FIVE PEACEKEEPERS FROM INDIA AND SEVEN CIVILIANS. IT HAPPENED IN JONGLEI STATE. A SPOKESMAN FOR SOUTH SUDAN'S ARMY BLAMED A MILITIA BACKED BY THE GOVERNMENT OF SUDAN. SOUTH SUDAN BECAME ITS OWN COUNTRY IN 2011, SIX YEARS AFTER ENDING A DECADES-LONG CIVIL WAR WITH SUDAN. A SPRING SNOWSTORM BROUGHT BACK WINTER TO LARGE PARTS OF THE U.S. TODAY. WYOMING HAD A RECORD LOW OF 14 DEGREES, PLUS MORE THAN A FOOT OF SNOW AND WINDS THAT GUSTED TO 71 MILES AN HOUR. ELSEWHERE, SOME 500 FLIGHTS WERE CANCELED AT DENVER INTERNATIONAL AIRPORT, AND MANY DEPARTURES WERE DELAYED SO PLANES COULD BE DE-ICED. FREEZING RAIN, SNOW, AND STRONG WINDS ALSO HIT KANSAS, SOUTH DAKOTA, AND MINNESOTA. THE UNIVERSITY OF LOUISVILLE BASKED IN THE GLOW TODAY OF A NATIONAL BASKETBALL CHAMPIONSHIP. THE LOUISVILLE MEN BEAT MICHIGAN LAST NIGHT IN ATLANTA, 82-76. IT WAS THE THIRD NATIONAL TITLE OVERALL FOR THE CARDINALS, AND THEIR FIRST SINCE 1986. LOUISVILLE GETS ANOTHER CHANCE TO CELEBRATE TONIGHT, WHEN THE WOMEN'S TEAM PLAYS CONNECTICUT FOR THE WOMEN'S NATIONAL CHAMPIONSHIP. ON WALL STREET, A SURGE IN THE PRICE OF COMMODITIES HELPED PUSH STOCKS HIGHER. THE DOW JONES INDUSTRIAL AVERAGE GAINED NEARLY 60 POINTS TO CLOSE AT 14,673. THE NASDAQ ROSE 15 POINTS TO CLOSE NEAR 3238. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO GWEN.

>> Ifill: WE RETURN TO THE CONFLICT IN SYRIA. EARLIER TODAY, AL QAEDA IN IRAQ ANNOUNCED THAT IT WILL MERGE WITH THE SYRIAN MILITANT GROUP AL-NUSRA FRONT. THE AL QAEDA OFFSHOOT COULD BECOME THE DOMINANT PLAYER IN THE FIGHT TO TOPPLE SYRIAN PRESIDENT BASHAR AL ASSAD. THE COUNTRY'S CIVIL WAR IS THE SUBJECT OF TONIGHT'S "FRONTLINE" DOCUMENTARY, "SYRIA: BEHIND THE LINES." JEFFREY BROWN HAS MORE ON THE STORY AND MAKING OF THE FILM. A WARNING TO VIEWERS: SOME IMAGES ARE DISTURBING

>> Brown: IT'S A WAR, AS THIS FILM SAYS, OF COMMUNITY AGAINST COMMUNITY AND SOMETIMES NEIGHBOR AGAINST NEIGHBOR. DOCUMENTARY FILM MAKE YEAR OLLY LAMBERT TRAVELED TO SYRIA TWICE LAST YEAR WHERE SUNNIS LIVE ON ONE SIDE OF THE RIVER AND ALAWITES ON THE OTHER. ONCE PEACEFULLY, NOW AMID VIOLENCE. HE WAS ABLE TO FOLLOW AND TALK WITH PEOPLE LOYAL TO PRESIDENT BASHAR AL-ASSAD AND ALSO WITH MEMBERS OF THE FREE SYRIAN ARMY. HERE ARE TWO TWO EXCERPTS. THE MAIN PROTAGONIST, SYRIAN ARMY LIEUTENANT ALI GAZI AND A FORMER POLICEMAN WHO DEFECTED TO THE OPPOSITION NAMED AHMED.

>> ACROSS THE RIVER OUR REGIME -- ARE REGIME FORCES, USUALLY OFF LIMITS TO WESTERN MEDIA. THEIR POSITIONS DEFEND SYRIA'S ALAWITE HEARTLAND. THIS ARMY CHECKPOINT FACES ACHMED'S VILLAGE AND IS ONE OF THE LAUNCHING SITES FOR REGIME ATTACKS. THE PLATOON COMMANDER IS LIEUTENANT ALI GAZI.

>> ( translated ): WE ARE THE SYRIAN ARAB ARM AND OUR DUTY IS TO DEFEND THIS HOMELAND, TO PROTECT UNARMED CIVILIANS AND TO ATTACK MILITANTS AND DESTROY THE ARMED MERCENARIES.

>> REBEL-HELD SUNNI VILLAGES ARE LESS THAN A MILE AWAY. THIS IS PRESIDENT ASSAD'S FRONT LINE.

>> ( translated ): THERE ARE A LOT OF ARMED GROUPS OVER THERE. THEY'RE PARTICULARLY ACTIVE AT NIGHT OR AT DAWN WHEN THEY'RE PREPARING TO CARRY OUT ARMED ATTACKS. THERE USED TO BE A SNIPER IN THE DOME OF THAT MOSQUE. ONE OF MY SOLDIERS WAS SHOT IN THE CHEST BY THIS SNIPER. THEY WERE USING ARMOR-PIERCING BULLETS BUT WE DEALT WITH THE THREAT.

>> ( translated ): I GREW UP IN THIS VALLEY. I USED TO MIX WITH THE ALAWITES A LOT. WE WERE LIKE BROTHERS BEFORE THIS REVOLUTION. WE USED TO GO TO THEIR HOMES UNTIL THE EARLY HOURS OF THE MORNING AND THEY'D VISIT US, TOO IF THE ALAWITES DON'T WANT TO FIGHT US WE'LL SOLVE THIS PROBLEM PEACEFULLY. BUT IF THEY WANT TO CONFRONT US THEN WE'LL RESPONSIBILITY WITH DEADLY FORCE.

>> Reporter: THREE MILES FROM ACHMED'S VILLAGE IN THE SETTLEMENT OF AL BAR RAJA MALL MAAROUF MEETS HIS COMMANDERS. THEY'RE PLANNING THE NEXT ATTACK AT AN ARMY BASE. A REGIME JET HAS DROPPED A BOMB AN AL BAR A. IT'S LANDED THREE HUNDRED YARDS FROM JAMAL AND HIS COMMANDERS. THEY FEAR THEY ARE BEING TARGETED AND FLEE TO SAFE HOUSES A BOMB HAS DESTROYED HOMES FILLED WITH VILLAGERS AND REFUGEES.

>> Brown: WITH ME NOW IS THE PRODUCER OF SYRIA'S BEHIND THE FRONT LINES OLLY LAMBERT. TELL ME WHAT HAPPENED WHEN YOU WERE SPENDING TIME WITH PROTAGONISTS ON BOTH SIDES OF THE CIVIL WAR?

>> THERE'S BEEN A LOT OF COVERAGE ON THE REBEL SIDE OF THE CONFLICT AND IT'S RELATIVELY EASY TO GET INTO REBEL HELD AREAS AROUND ALEPPO AND THE CONFLICT IS NOW ENTERING ITS THIRD YEAR AND WE'RE INTERESTED IN LOOKING AT NOT JUST THE UP CLOSE WHAT THE CONFLICT IS LOOKING FROM BOTH SIDES BUT IT WAS A WAY OF BEING ABLE TO SEE THE WAY THE CONFLICT MIGHT GO IN THE FUTURE AND THE FORCES THAT ARE ACTING ON IT AND THE MOTIVATIONS OF BOTH SIDES A MIGHT GIVE SOME INDICATION OF WHERE THINGS ARE GOING TO GO IN THE MONTHS AND YEARS WHICH IS LOOKING LIKE THIS CONFLICT IS GOING TO TAKE.

>> Brown: HOW HARD WAS IT TO FIND THE TWO PROTAGONISTS ON EITHER SIDE TO GAIN THEIR TRUSTS AND CAPTURE THEIR SENSE OF THE WAR?

>> THE HARD THING WAS GETTING TO THAT LOCATION ONCE I WAS THERE IT WAS RELATIVELY EASY TO -- LIKE WITH ANY DOCUMENTARY YOU WANT TO MEET PEOPLE AS QUICKLY AS YOU CAN AND YOU CAN EXPLAIN IT CLEARLY AS YOU CAN ABOUT WHO YOU ARE AND WHAT YOU'RE DOING. AND YOU WANT THEM TO TRUST YOU AND ULTIMATELY WHEN PEOPLE TRUST YOU THEN BOTH SIDES WERE VERY, VERY KEEN TO TELL THEIR STORIES AND GIVE THEIR PERSPECTIVE ON WHERE THE CONFLICT WAS GOING THE HARDEST BIT WAS GETTING TO THAT LOCATION. IT WAS A VERY COMPLEX PROCEDURE. I WAS FILMING IN TWO AREAS IN PLACES LESS THAN A MILE BETWEEN THEM AND YET I HAD TO DO A 3,000 OR 4,000 ROUND TRIP TO GET TO THOSE TWO PLACES. IT WAS IMPOSSIBLE TO CROSS JUST ONE FROM ONE PLACE TO THE OTHER.

>> Brown: WELL, THE CAMERA TAKES US RIGHT INTO THE WAR, RIGHT INTO THE VIOLENCE. CAN YOU GIVE US AN ANECDOTE OR A KEY MOMENT FOR YOU IN FILMING THIS AND KIND OF GETTING A REAL SENSE OF WHAT WAS GOING ON?

>> WELL, I MEAN, I'VE MADE DOCUMENTARIES IN AREAS OF CONFLICT FOR -- ON AND OFF FOR ABOUT TEN YEARS NOW AND THIS WAS FAR AND AWAY THE MOST BITTER AND MOST VIOLENT CONFLICT ZONE I'VE EVER BEEN TO BY A VERY LONG MARGIN. EVERYDAY I WAS WITNESSING DEATH AND BLOODSHED. I WAS EITHER SEEING PEOPLE GET KILLED OR I WAS SEEING THE AFTERMATH OF WHO WERE BEING KILLED OR I WAS SEEING PEOPLE BEING BURIED. NOTHING REALLY RAMMED IT HOME HOW AWFUL THIS CONFLICT HAS BECOME THAN THE AIR STRIKES. IT WAS A SIGNIFICANT PART OF THE FILM. I WAS ACTUALLY FILMING WITH A REBEL COMMANDER CALLED JAMAL MAAROUF, HE WAS ONE OF THE MOST POWERFUL REBEL LEADERS IN THE REGION THAT I WAS STAYING IN AND WHILE I WAS FILMING HIM AS THE CAMERA WAS RUNNING A REGIME JET FLEW OVERHEAD AND DROPPED WHAT WAS CLEARLY A VERY LARGE BOMB ON THE VERY VILLAGE THAT I WAS IN AND IT LANDED JUST LESS THAN THREE HUNDRED METERS FROM WHERE I WAS SITTING. THE FORCE OF IT STREAMING TO THE GROUND AND IT KILLED 17 PEOPLE AND THERE ARE MANY MORE INJURED AND THERE WEREN'T ANY OTHER JOURNALISTS -- ARAB OR WESTERN, FOR MANY, MANY MILES. AND TO WITNESS THE DESTRUCTION AND THE BLOODSHED ON THAT SCALE WAS QUITE HORRIFIC. MORE THAN THAT, IT WAS THE INDISCRIMINATE ATTACKS ON CIVILIANS AND THE CIVILIAN POPULATION, MANY OF WHOM WERE ACTUALLY REFUGEES, THE PEOPLE IN THE VILLAGES THAT I WAS STAYING IN, MANY OF THEM HAD FLED TO THESE VILLAGES FROM THE CITY THEY THOUGHT THE VILLAGES WERE SAFER AND THEN THEIR WORLDS ARE LITERALLY BLOWN APART IN FRONT OF THEM. IT WAS A REALLY SHOCKING EXPERIENCE. I NEVER REALLY WITNESSED OR EXPERIENCED ANYTHING LIKE THAT.

>> Brown: I WANT TO ASK YOU FINALLY. WE HEAR SO MUCH ABOUT STEAL MATE. THAT'S THE WORD USED IN OUR COVERAGE HERE AND THAT'S -- I WONDER WHAT SENSE YOU CAME AWAY WITH WITH THE RELATIVE STATE OF PLAY, THE STRENGTHS AND WEAKNESSES OF BOTH SIDES AND THEIR DESIRE AND ABILITY TO CARRY ON WITH THIS FIGHT, WHAT IS YOUR SENSE OF IT?

>> IT'S A GOOD QUESTION BECAUSE IT'S A PARADOX, REALLY. ON THE SURFACE WHEN YOU LOOK AT THIS CONFLICT IT SEEMS VERY KINETIC. VERY ENERGETIC. THERE ARE LOTS OF THINGS HAPPENING, MUNITIONS FALLING, A LOT OF WEAPONRY BEING USED UP. MANY, MANY PEOPLE HAVE DIED, A STAGGERING NUMBER OF PEOPLE ARE GETTING KILLED YET SOMEHOW THIS IS ALSO A STALEMATE. ALTHOUGH BOTH SIDES ARE FIGHTING VERY, VERY HEAVILY AND TAKING CASUALTIES ON BOTH SIDES EVERYDAY, WHAT WE'RE ACTUALLY SEEING IS THE STEAL MATE BECAUSE NEITHER SIDE CAN WIN AND NEITHER SIDE IS ACTUALLY GOING TO LOSE AT THE MOMENT AND THIS WILL JUST CONTINUE LIKE A SORT OF CHURN ON BOTH SIDES OF HUMAN LIVES. AND THERE'S LOTS OF TALK ABOUT WHETHER WE SHOULD IN THE WEST -- WHETHER WE SHOULD OR SHOULD NOT ARM THE REBELS AND TO MY MIND SEEING IT UP CLOSE YOUR FIRST INSTINCT IS ON THE REBEL SIDE THEY ARE TAKING SUCH A PUNISHING THAT ONES INSTINCT IS THAT WE SHOULD BE GIVING THEM WEAPONS TO DEFEND THEMSELVES AND YET THE MORE YOU THINK ABOUT THAT AND YOU PULL BACK-- AND I'M NO MILITARY STRATEGIST-- BUT IT DID SEEM CLEAR THAT PUMPING IN LOTS OF WEAPONS TO TRY AND FORCE A CHANGE, GIVING WEAPONS TO ONE SIDE WILL PROBABLY NOT SOLVE ANYTHING BECAUSE THE REGIME ITSELF HAS ABSOLUTELY NO SHORTAGE OF WEAPONS. IT'S GETTING WEAPONS QUITE EASILY FROM IRAN AND TRAINING FROM IRAN AND ALSO FROM RUSSIA SO IT WOULD MERELY UP THE ANTE ON BOTH SIDES. HOW TO FORCE THE REGIME AND PRESIDENT ASSAD TO COME TO THE NEGOTIATING TABLE, INDEED, HOW TO MAKE THE REBELS REALLY ACCEPT ANY KIND OF CONVERSATION WITH HIM GIVING THE DESTRUCTION THAT HE'S WREAKED ON HIS OWN PEOPLE, THESE ARE IMPOSSIBLE QUESTIONS AND I REALLY HAVE NO IDEA. IT'S -- USUALLY ONE COMES OUT OF THESE SITUATIONS, OF ANY SITUATION AS A FILM MAKE WE ARE SOME IDEA OF HOW THINGS MIGHT BE CLEANED UP OR MIGHT BE RESOLVED BUT I CAME AWAY EVERYDAY THAT I SPENT THERE I JUST FELT MORE AND MORE BLEAK ABOUT IT. IT'S -- I THINK THE COUNTRY, A VERY CIVILIZED COUNTRY WITH A GREAT DEAL OF HISTORY IS FACING AN INCREDIBLY BLEAK FUTURE.

>> Brown: "FRONTLINE" DOCUMENTARY "SYRIA BEHIND THE LINES." OLLY LAMBERT, THANK YOU SO MUCH.

>> A PLEASURE, THANKS FOR HAVING ME.

>> Ifill: YOU CAN WATCH MORE VIDEOS AND HEAR MORE SYRIAN VOICES ON OUR HOMEPAGE, WHERE WE HAVE A LINK TO "FRONTLINE'S" WEB SITE. "SYRIA BEHIND THE LINES" AIRS ON MOST PBS STATIONS LATER THIS EVENING.

>> Woodruff: ONE WOULD BE HARD PRESSED TO THINK OF ANY CONNECTION LINKING RIKER'S ISLAND, GOLDMAN SACHS, AND A PRIVATE CHARITABLE FOUNDATION. BUT THEY'RE ALL PART OF A NEW WAY TO FINANCE GOVERNMENT SOCIAL SERVICES THROUGH PRIVATE INVESTMENT. THE NEWSHOUR'S ECONOMICS CORRESPONDENT, PAUL SOLMAN, LOOKED INTO THE PROJECT AS PART OF HIS ONGOING REPORTING, "MAKING SENSE OF FINANCIAL NEWS."

>> Solman: NEW YORK CITY'S INFAMOUS RIKER'S ISLAND JAIL, RESPONSIBLE FOR THE BULK OF THE CITY'S BILLION-DOLLAR CORRECTIONS BUDGET. IT'S HOME TO 88,000 INMATES A YEAR, MANY OF THEM REGULAR REPEAT OFFENDERS.

>> COMPLETE TURNSTILE.

>> Solman: ROCKEFELLER FOUNDATION PRESIDENT JUDITH RODIN HAS BEEN AS DESPAIRING AS MOST SOCIAL REFORMERS ABOUT SO- CALLED TURNSTILE RECIDIVISM AND ITS COSTS, BOTH TO THE TAXPAYER AND TO SOCIETY.

>> THESE PEOPLE DON'T GET PUT BACK IN PRISON FOR DOING NOTHING, SO THERE'S ALL THE SOCIAL COST OF WHAT NEXT CRIME THEY COMMIT DURING THIS PERIOD AND THROUGHOUT THE REMAINING PERIODS THAT MAKE THEM GO BACK, AND BACK, AND BACK NUMEROUS TIMES.

>> Solman: BUT IN 2010, RODIN HEARD ABOUT A NEW FINANCIAL APPROACH TO RECIDIVISM: SOCIAL IMPACT BONDS.

>> THIS TEAM OF INVESTMENT BANKERS FORMED AN ORGANIZATION IN THE U.K. CALLED SOCIAL FINANCE AND ASKED THEMSELVES THE QUESTION: COULD WE CREATE A BOND JUST LIKE A TYPICAL BOND STRUCTURE, BUT WHERE THE PAYOUT WOULD BE BASED ON A SOCIAL OUTCOME AND PERFORMANCE?

>> Solman: HERE'S HOW IT WORKS. INVESTORS LEND MONEY TO A SOCIAL SERVICE NONPROFIT WITH A SUCCESSFUL TRACK RECORD. THEY GET AN INTEREST-PAYING BOND IN RETURN. THE NON-PROFIT THEN USES THE INVESTORS' MONEY TO EXPAND ITS PROGRAM. IF THE PROGRAM MEETS ITS GOALS-- SAVING THE GOVERNMENT MONEY BY, SAY, KEEPING PEOPLE OUT OF JAIL-- THE GOVERNMENT PAYS BACK THE INVESTORS OUT OF THE MONEY IT HAS SAVED. JUDITH RODIN LOVED THE IDEA. SO HER FOUNDATION JOINED THE BANKERS AND INVESTED IN A SIX- YEAR BOND TO REDUCE RECIDIVISM AT THE UNITED KINGDOM'S PETERBOROUGH PRISON.

>> WE BELIEVE THAT WE WILL MAKE 9% ON THIS, AND WE'RE NOT DOING IT TO BE CHARITABLE. WE'RE DOING IT BECAUSE IT'S AN INVESTMENT.

>> Solman: DORA SCHRIRO RUNS NEW YORK CITY'S HUGE CORRECTIONS SYSTEM.

>> THIS OPPORTUNITY TO FIND A NEW FUNDING STREAM IS EXCEPTIONAL.

>> Solman: ONE OF HER MOST COSTLY PROBLEMS: YOUNG REPEAT OFFENDERS.

>> THE ADOLESCENTS, THEY MAKE UP ABOUT 6% OF OUR POPULATION. PERSON-TO-PERSON, THEY REPRESENT SOME OF THE MOST SERIOUS FELONY CHARGES THAT WE ADMIT INTO OUR SYSTEM IN THE COURSE OF A YEAR. FOUR OUT OF FIVE ARE CHARGED WITH VIOLENT FELONY CRIMES, AND THEY'RE YOUNG. AND ON TOP OF THAT, DESPITE THE SEVERITY OF THE CHARGES, RELATIVELY FEW END UP BEING SENTENCED TO THE STATE'S CORRECTIONAL SYSTEM.

>> Solman: THAT'S BECAUSE TEENAGE OFFENDERS RECEIVE LESSER SENTENCES THAN ADULTS.

>> WHICH MEANS THEY'RE BACK ON THE STREET IN A RELATIVELY SHORT PERIOD OF TIME. AND HOW WELL THEY FARE AND SO HOW WELL THE CITY FARES WHEN THEY COME BACK INTO OUR NEIGHBORHOODS REALLY RIDES ON WHAT WE CAN DO WITH THEM IN THE AMOUNT OF TIME THAT WE HAVE.

>> Solman: ENTER HIGH FINANCES' DO-GOOD INNOVATION, THE SOCIAL IMPACT BOND TO SUPPORT PROGRAMS LIKE THIS ONE, TO REDUCE RECIDIVISM.

>> THE MISTAKES THAT YOU DID TO GET HERE, DID YOU LEARN FROM THAT?

>> YES.

>> Solman: SO INVESTORS ARE FUNDING HERE THE OSBORNE ASSOCIATION, A PROVEN EXPERT IN SUCCESSFUL COGNITIVE THERAPY, ALSO KNOWN AS BEHAVIOR MODIFICATION. AND THE KEY TO THIS SCHEME IS THAT NONPROFITS LIKE OSBORNE HAVE DEMONSTRATED THEY CAN ACTUALLY REDUCE RECIDIVISM. BUT THEY HAVEN'T HAD THE FUNDING TO TRY TO DO SO ON A LARGE SCALE.

>> IT DOES TAKE COURAGE TO STAND DOWN WHEN YOU HAVE THOSE EMOTIONS TO THINK, STOP AND THINK, AND NOT JUST ACT OUT OF PASSION.

>> IT'S ONE-ON-ONE, COSTLY, AND THERE'S NO LEGAL OBLIGATION.

>> THE CITY OF NEW YORK IS NOT REQUIRED TO PROVIDE THERAPY TO KIDS WHO ARE ON RIKER'S ISLAND.

>> Solman: BUT ALICIA GLEN, WHO WORKED IN LEGAL AID AND NEW YORK'S HOUSING AUTHORITY, IS NOW A PARTNER AT GOLDMAN SACHS. SHE SAW AN INVESTMENT OPPORTUNITY FOR THE FIRM THAT PROMISED A DOUBLE PAYOFF: SOCIAL AND FINANCIAL.

>> WE ARE FUNDING $9.6 MILLION TO A NONPROFIT. WE ARE MAKING A LOAN TO THEM. THE REPAYMENT OF THAT LOAN AND OUR RETURN, OUR INTEREST, IS ENTIRELY DEPENDENT ON WHETHER OR NOT THE ACTUAL PROGRAM WORKS. IF THE PROGRAM DOESN'T WORK, THE CITY IS NOT OBLIGATED TO PAY. THAT IS A HUGE SHIFT IN THE WAY YOU WOULD FINANCE A SOCIAL SERVICES PROGRAM. THAT IS REALLY GROUNDBREAKING.

>> Solman: AND THE THINKING ON THE PART OF THE CITY IS THAT IF IT WORKS, THEY'LL SAVE SO MUCH MONEY THAT THEY CAN PAY YOU BACK?

>> CORRECT. IF 10% FEWER KIDS GO BACK TO PRISON, WE GET OUR CAPITAL BACK, OUR $9.6 MILLION. BETWEEN A 10% REDUCTION AND AN OVERALL 20% REDUCTION, WE GET OUR CAPITAL BACK AND A RETURN. THAT RETURN IS CAPPED AT A TOTAL OF $2.1 MILLION ON TOP OF OUR PRINCIPAL.

>> Solman: SO AGAIN, INVESTORS PONY UP TO EXPAND A PROVEN PROGRAM THAT COULD SAVE THE CITY BIG MONEY-- AN ESTIMATED $20 MILLION IF RECIDIVISM DROPS BY 20%, AND, GLEN POINTS OUT...

>> ANY SAVINGS THE CITY REALIZES ABOVE THAT. SO IF THERE'S A 25% REDUCTION IN RECIDIVISM, A 30% REDUCTION IN RECIDIVISM-- IN OTHER WORDS, IF THE PROGRAM WE'VE FINANCED REALLY, REALLY WORKS-- THEN WE DO NOT CAPTURE ANY OF THAT SAVINGS. THAT ALL GOES BACK TO THE CITY OF NEW YORK.

>> Solman: IF IT WORKS?

>> IF IT WORKS. IF IT DOESN'T WORK, THEY DON'T HAVE TO PAY SO IT REALLY IS A WIN-WIN FOR THE TAXPAYER.

>> Solman: WIN-WIN-WIN-WIN, ROCKEFELLER'S JUDITH RODIN HOPES.

>> THE GOVERNMENT GETS A PROVEN INTERVENTION. THE SECOND WIN IS, THE SOCIAL ORGANIZATION GETS TO GO TO SCALE BECAUSE THE GOVERNMENT IS BUYING THEIR SERVICES WHOLESALE RATHER THAN THEM RUNNING LITTLE BOUTIQUE PROGRAMS. SO THAT'S THE WIN FOR THE SOCIAL SERVICE. WIN NUMBER THREE, GOVERNMENT IS ALWAYS SEEKING NEW SOURCES OF CAPITAL.

>> Solman: CAPITAL TO AUGMENT ITS OWN MONEY?

>> CORRECT, AND MAYBE ALLOWS IT TO DEPLOY SOME OF THE MONEY IT WAS SPENDING THERE TOWARDS OTHER THINGS THAT WOULD BE HARDER TO CAPITALIZE FROM OUTSIDE. THE FOURTH WIN IS FOR THE INVESTOR. INNOVATIVE FINANCE, PAUL, I THINK, IS THE NEXT BIG STEP IN SOLVING SOCIAL PROBLEMS.

>> Solman: BUT WAIT A SECOND. THIS IS TOO GOOD TO BE TRUE, RIGHT? THERE MUST BE SKEPTICS. AND, AS IF ON CUE, HERE'S PROFESSOR MARC ROSENMAN, AN EXPERT ON CHARITABLE GIVING.

>> IF THE CONCERN IS CRIMINAL ACTIVITY AND A POSSIBLE REPEAT OF IT, WHY NOT PREVENT ITS EMERGENCE? WHY NOT INVEST IN BETTER EARLY CHILDHOOD EDUCATION AND PUBLIC SCHOOLING AND JOB TRAINING?

>> Solman: WELL, BECAUSE WE ARE SHORTSIGHTED AND WE'RE STRAPPED, AND GIVEN THOSE FACTS, THIS IS BETTER THAN NOTHING.

>> IF YOU ARE PERPETUATING A MODEL THAT IS DYSFUNCTIONAL AT ITS CORE, I DON'T BELIEVE THAT IT IS BETTER THAN NOTHING, ALTHOUGH IT'S A GREAT WAY FOR A NEW INDUSTRY TO MAKE MONEY. THESE SOCIAL IMPACT BONDS WILL CREATE AN INDUSTRY OF INTERMEDIARIES AND DEAL MAKERS AND BROKERS AND ACCOUNTANTS AND LAWYERS. AND THEY'LL BE MAKING A LOT OF MONEY AND I'M SURE TAKING THAT MONEY OFF THE TOP BEFORE IT EVER MAKES IT TO UNDERPAID NONPROFIT WORKERS OR THE BENEFICIARIES OF THE PROGRAM.

>> Solman: THERE ARE OTHER REASONS FOR SKEPTICISM AS WELL. YES, THIS IS A RADICAL INNOVATION. BUT ISN'T GOLDMAN SACHS' LOAN GUARANTEED BY THE MAYOR OF NEW YORK, MICHAEL BLOOMBERG, THROUGH HIS PRIVATE FOUNDATION, A LUXURY OTHER CITIES ARE UNLIKELY TO BOAST?

>> WELL, YES, THE BLOOMBERG FOUNDATION IS PROVIDING A 75% PRINCIPLE GUARANTEE OF OUR LOAN THAT IS PART OF OUR COLLATERAL PACKAGE. NEVER, REALLY, IN THE HISTORY OF DOING PUBLIC-PRIVATE PARTNERSHIPS TO EXPERIMENT WITH INTERESTING FINANCIAL VEHICLES HAVE PEOPLE NOT SOUGHT AND/OR HAD SOME FORM OF CREDIT ENHANCEMENT IN A TRANSACTION.

>> Solman: COLLATERAL?

>> COLLATERAL. AT THE END OF THE DAY, IF, IN FACT, THE INTERVENTION DOES NOT WORK, WE CAN STILL LOSE 25% OF OUR CAPITAL. SO WE HAVE REAL SKIN IN THE GAME.

>> Solman: BUT PEOPLE IN OUR AUDIENCE ARE GOING TO BE WATCHING YOU AND THINKING, "I KNOW WHY GOLDMAN SACHS IS DOING THIS: FOR PUBLICITY." THEY'VE BEEN TARRED AND FEATHERED FOR YEARS NOW.

>> WELL, I'M SURE THERE ARE A WHOLE SUBSET OF PEOPLE WHO WOULD THINK THAT, BUT, YOU KNOW, THAT ACTUALLY DOESN'T SQUARE WITH WHAT THE HISTORY OF OUR BUSINESS HAS BEEN. WE HAVE OVER $2 BILLION OF OUR OWN CAPITAL INVESTED IN IMPACT INVESTING. BUT I KNOW AS A HUMAN BEING WHO HAS BEEN A LIFELONG NEW YORKER THAT I CAN'T SLEEP AT NIGHT THINKING THAT 50% OF KIDS WHO GO TO RIKER'S, MANY OF WHOM HAVEN'T EVEN BEEN CONVICTED, ARE WINDING UP COMING BACK INTO JAIL BECAUSE NOBODY IS DOING ANYTHING ABOUT IT. AND IF WE CAN FIGURE OUT WAYS TO FINANCE SERVICES TO MAKE A DIFFERENT OUTCOME FOR THOSE KIDS, THEN THAT'S WHAT WE NEED TO BE DOING.

>> Solman: BUT WILL THE OUTCOME ACTUALLY BE DIFFERENT? ON THAT QUESTION HINGES THE FUTURE OF A BRAND-NEW AND POTENTIALLY POSITIVE DEVELOPMENT IN MODERN FINANCE: THE SOCIAL IMPACT BOND.

>> Woodruff: IN HIS NEXT PIECE, PAUL TAKES A CLOSER LOOK AT THE PROGRAM AT RIKER'S ISLAND.

>> Ifill: AS PREPARATIONS FOR AN APRIL 17 FUNERAL GET UNDER WAY, THE PASSING OF MARGARET THATCHER, BRITAIN'S FIRST FEMALE LEADER AND THE COUNTRY'S LONGEST SERVING PRIME MINISTER IN THE 20th CENTURY, IS ELICITING A MIXED RESPONSE FROM THE BRITISH PUBLIC. ALEX THOMSON OF INDEPENDENT TELEVISION NEWS REPORTS. SPISHGS I LATE LAST NIGHT, HER BODY WAS REMOVED FROM THE IT ARE HOTEL IN THE CENTER OF LONDON. READY TO BEGIN A CAREFULLY MANAGED PROCESS. TONY BLAIR DUBBED PRINCESS DIANA THE PEOPLE'S PRINCESS, DAVID CAMERON CALLED MARGARET THATCHER THE PATRIOT PRIME MINISTER. BOTH END UP WITH WHAT LOOKS AND FEELS LIKE A STATE FUNERAL BUT ISN'T.

>> SHE WAS A GREAT PRIME MINISTER. SHE WAS PRIME MINISTER FOR 11 YEARS AND WAS TOTALLY TRANSFORMATIONAL FOR THE COUNTRY AND I THINK THERE'S A HUGE AMOUNT OF PEOPLE WHO WILL WANT TO NOT JUST IN BRITAIN BUT AROUND THE WORLD WHO WILL WANT TO PAY THEIR RESPECTS TO HER.

>> Reporter: IN DEATH AND LIFE THE THATCHER STORY IS TWO STORIES OF LOVE AND HATRED, THEY WILL BE THERE FOR THE JEWEL JIS NEXT WEEK BUT ACROSS BRITAIN MANY, MANY OTHER PEOPLE WILL BE SINGING VERY DIFFERENT SONGS AND FEELING VERY DIFFERENT EMOTIONS SO TODAY A RUSH OF U.K. DOWN LOADS OF "THE WIZARD OF OZ" SONG JULIE GARLAND'S "DING-DONG THE WITCH IS DEAD." THE DAILY TELEGRAPH'S ONLINE COMMENTS PAGE SHUT DOWN AFTER IT WAS INUNDATED WITH MESSAGES OF HATE FOR MARGARET THATCHER. STREET PARTIES LAST NIGHT CELEBRATING HER DEATH. THIS WAS BRISTOL WHERE RIOT POLICE ATTEMPTED TO BREAK UP THE PARTY. BELFAST, GLASGOW AND LONDON SAW SIMILAR EVENTS. POLICE IN LONDON SAY THEY'RE AWARE OF A GATHERING PLAN THIS WEEKEND. THE PUBLIC CAN LINE THE ROUTE TO ST. PAUL'S NEXT WEDNESDAY UNDER A PLAN NOW BEING CODE NAMED "OPERATION TRUE BLUE."

>> Ifill: FOR ANOTHER LOOK AT THE CONTROVERSIAL LOOK AT THE IRON LADY I'M JOINED BY RANA FORHOAR AND JOHN BURNS, LONDON BUREAU CHIEF OF THE "NEW YORK TIMES." WELCOME TO YOU BOTH. JOHN, IN THE UNITED STATES MARGARET THATCHER IS BEING EMBRACED AND THIS TRANSFORMATIONAL FIGURE, KIND OF A REAGAN ACROSS THE POND. IS SHE BEING SEEN THE SAME WAY THERE?

>> WELL, OF COURSE, THERE'S A SIGNIFICANT THOUGH I THINK MINORITY OPINION IN THIS COUNTRY THAT JUST DISLIKED MRS. THATCHER AND IN SOME QUARTERS EVEN HATED HER BUT I THINK THE OVERWHELMING OPINION IN THIS COUNTRY AND IN WIDELY DISTINCT POLITICAL QUARTERS SHE IS VIEWED AS SO MANY HAVE SAID IN THE LAST 24 HOURS AS ONE OF THE GREATEST PRIME MINISTERS THIS COUNTRY HAS HAD AND POSSIBLY THE GREATEST PEACETIME PRIME MINISTER OF THE 20th CENTURY.

>> Ifill: RAN, THAT YOU NOT ONLY COVER ECONOMICS AND BUSINESS BUT YOU ALSO LIVED IN GREAT BRITAIN FOR NINE YEARS. HOW DIVIDED IS OPINION ABOUT HER?

>> WELL, I'VE ALWAYS SEEN THATCHER AS A VERY DIVISIVE CATEGORY AND I THINK HER ECONOMIC LEGACY ROSIEST OUTSIDE OF BRITAIN. THE COMMENTARY, OF COURSE, WITH HER PASSING HAS BEEN, AS JOHN SAID, VERY POSITIVE IN MANY WAYS BUT I THINK THAT INSIDE BRITAIN, PARTICULARLY ON THE LEFT, SHE WAS A VERY, VERY POLARIZING FIGURE. YOU KNOW, SHE DID SOME VERY IMPORTANT THINGS TO MODERNIZE THE COUNTRY, TO MAKE THE LABOR MARKETS MORE FLEXIBLE, TO BETTER PREPARE BRITAIN FOR GLOBALIZATION BUT IT WAS A VERY, VERY PAINFUL PROCESS. I THINK CONSERVATIVES IN THE U.S. HAVE PAIRED HER WITH RONALD REAGAN ALTHOUGH I SEE THEM IN VERY DIFFERENT LIGHTS. I THINK IN SOME WAYS MRS. THATER WAS MUCH BETTERS A AUSTERITY. SHE CUT THE BUDGETS IN PUBLIC SPENDING AS A PERCENTAGE OF THE ECONOMY IN BRITAIN WHEREAS SPENDING WENT UP UNDER REAGAN. THEY WERE TAX CUTTERS BUT SHE WAS MORE SUCCESSFUL, PERHAPSS AT AUSTERITY.

>> Ifill: LET'S TALK ABOUT THAT, JOHN, BURNS, FOR BETTER OR FOR WORSE ON LEGACY?

>> YOU HAVE TO HAVE A BASELINE AND THE BASELINE WOULD BE THE MID TO LATE 1970s. THIS COUNTRY WAS IN A TRULY TERRIBLE STATE. IN A STATE THAT MOST AMERICANS OF MY AGE WOULD SIMPLY NOT RECOGNIZE PEOPLE WOULD HAVE TO GO BACK TO THE GREAT DEPRESSION. INFLATION RATES WERE RUNNING AT OVER 20%. THERE WERE ENDLESS STRIKES. THERE WERE THREE-DAY WORKING WEEKS. THE NATIONALIZED INDUSTRIES: COAL, POWER, STEEL, THE RAILWAYS TELECOMMUNICATIONS WERE VASTLY OVERMANNED, HUGELY INEFFICIENT. THE AUTOMOBILE INDUSTRY WHICH HAD ONCE BEEN ONE OF THE GREAT EXPORTERS AND ONE OF THE GREAT PRIDES OF THIS COUNTRY WAS ON ITS KNEES. THE BIGGEST IN THE COUNTRY HAD COME INTO PUBLIC OWNERSHIP. THE COUNTRY WAS IN A REALLY, TRULY, DIRE STATE AND I THINK THE RADICALISM OF MRS. THATCHER WHO, BY THE WAY, HAD TO DEFY OPINION. I'VE BEEN TRYING TO SAY THE MAJORITY OF OPINION IN THEIR OWN CABINET TO MAKE THE CHANGES THAT SHE DID AND THE BRITAIN THAT I LIVE IN TODAY IS JUST UNRECOGNIZABLE AND I THINK IF PEOPLE TOOK A HARD LOOK BACK OVER THOSE 35 OR MORE YEARS THEY WILL AGREE THAT NOBODY WOULD WANT TO RETURN TO THAT CHAOS. SHE PUT THE COUNTRY BACK ON A TRAJECTORY, AN UPWARD TRAJECTORY. THE BRITAIN I GREW UP IN IN THE WAKE OF THE SECOND WORLD WAR WAS A COUNTRY WHICH WAS IN PRECIPITOUS DECLINE WHICH HAD ENTIRELY LOST ITS NATIONAL SELF-CONFIDENCE AND MRS. THATCHER PUT THAT RIGHT.

>> Ifill: RAN, THAT I'M CURIOUS, WAS SHE EVER WRONG? THE RIGHT OR THE WRONG HISTORY ON THINGS LIKE SOUTH AFRICA.

>> WELL, I THINK SOME SOUTH AFRICANS WOULD CERTAINLY SAY SHE WAS ON THE WRONG SIDE. YOU KNOW, AGAIN, SHE WAS A VERY POLARIZING FIGURE AS JOHN SAID, HER LEGACY OF THE BENCHMARK AT THAT TIME. ONE OF THE THINGS THAT I THINK IS MOST FASCINATING RIGHT NOW IS HER VIEW ON EUROPE. SHE WAS VERY FORWARD MINDED IN TERMS OF SAYING THAT EUROPE HAD A CHOICE TO MAKE ABOUT WHETHER IT WAS GOING TO BE DEEPER OR BROADER IN TERMS OF HOW IT EXPANDED OR INTEGRATED AND I THINK THAT WAS PRESCIENT. I THINK MRS. THATCHER ITSELF WOULD HAVE GONE FOR BROADER AND SHE FELT POLITICALLY THAT THE EASTERN BLOCK COUNTRIES SHOULD BE TAKEN INTO THE E.U. MANY PEOPLE TODAY FEEL THAT TE U IS TOO LARGE. THAT THERE ARE TOO MANY COUNTRIES WITH DIVERSE AGENDAS AND THAT IT REALLY CAN'T BE MAINTAINED WITH THE SIZE IT IS NOW AND THAT THE EURO ZONE CRISIS IS PART AND PARCEL OF THAT. SO IT'S INTERESTING. HER OPINIONS ABOUT AUSTERITY, ABOUT EUROPE, ABOUT GLOBALIZATION ARE AS RELEVANT, CERTAINLY, FOR DISCUSSION AS THEY EVER WERE.

>> Ifill: WE TALK ABOUT LEGACY AFTER THE SUBSTANCE PASSED AWAY AND I WONDER AS WHO YOU WOULD IDENTIFY AS THE HEIRS TO HER WORLD VIEW. NOW THAT SHE'S GONE, WHAT SHE BELIEVED IN, DOES IT STILL SUSTAIN?

>> IT'S INTERESTING. I THINK THAT IN SOME WAY IT IS HEIRS MAY BE IN THE EMERGING MARKETS AND THE DEVELOPING WORLD BECAUSE THOSE COUNTRIES, COUNTRIES LIKE CHINA, BRAZIL, INDIA, SOUTH AFRICA EVEN ARE AT THE STAGE IN DEVELOPMENT WHERE MANY OF HER ECONOMIC IDEAS ABOUT PRIVATIZATION ABOUT THE PUSH FORWARD OF MARKETS AND THE ROLL BACK OF THE STATE ARE MORE RELEVANT. THE PUSH SBAK THAT THE STATE IS BROKEN AND WE NEED MORE PUSHBACK BUT IN CHINA AND BRAZIL THERE IS STILL A ROLE FOR MORE OPENING, MORE LIBERALIZATION AND PRIVATIZATION. SO I THINK SHE WOULD HAVE A LOT TO SAY ABOUT WHAT WAS GOING ON IN THOSE COUNTRIES TODAY.

>> Ifill: FINAL THOUGHT ON THAT, JOHN BURNS?

>> I THINK RANA IS CORRECT. THERE WAS BOUND TO BE A CORRECTION. THE THATCHER/REAGAN MODEL OF FREE MARKET DEVELOPMENT DEFINITELY, AS WE SAW OVER THE LAST TEN YEARS BROUGHT WITH IT A LOT OF IRRESPONSIBLE BEHAVIOR WHICH IS NOW CAUSED THE KIND OF CHAOS THAT WE SEE ACROSS MUCH OF THE DEVELOPED WORLD AND CERTAINLY MUCH OF EUROPE SO THERE WAS A CORRECTION.

>> Ifill: JOHN BURNS OF THE "NEW YORK TIMES," RANA FOROOHAR OF "TIME" MAGAZINE, THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. SENATE DEMOCRATS MOVED TO SET UP A SHOWDOWN OVER GUN LEGISLATION LATER THIS WEEK, AS SUPPORTERS STEPPED UP THE PRESSURE FOR ACTION. AND POLICE NEAR HOUSTON SAID A STUDENT AT A TEXAS COMMUNITY COLLEGE STABBED AT LEAST 14 PEOPLE BEFORE BEING SUBDUED. TWO OF THE VICTIMS WERE CRITICALLY WOUNDED.

>> Ifill: HOW HAS TECHNOLOGY EMPOWERED DEMOCRACY TO FLOURISH OUTSIDE OF MAJOR POWER STRUCTURES LIKE GOVERNMENT? HARI SREENIVASAN TELLS US MORE.

>> Sreenivasan: POLITICAL EDITOR CHRISTINA BELLANTONI TALKS TO AUTHOR NICKO MEELEE ABOUT HIS NEW BOOK, "THE END OF BIG: HOW THE INTERNET MAKES DAVID THE NEW GOLIATH." TEN YEARS AFTER BAGHDAD'S FALL, WE'VE COMPILED A VIDEO SYNOPSIS OF THE IRAQ WAR. LOOK BACK ON THAT CONFLICT ON OUR WORLD PAGE. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON WEDNESDAY, WE'LL LOOK AT FIRST LADY MICHELLE OBAMA'S RETURN TO CHICAGO TO TACKLE YOUTH VIOLENCE. I'M JUDY WOODRUFF.

>> Ifill: AND I'M GWEN IFILL. WE'LL SEE YOU ONLINE, AND AGAIN HERE TOMORROW EVENING. THANK YOU, AND GOOD NIGHT.

>> MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: MOVING OUR ECONOMY FOR 160 YEARS. BNSF, THE ENGINE THAT CONNECTS US.

>> AND BY BP.

>> AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21st CENTURY.

>> AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND...

>> THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org >>> ANOTHER RECORD DAY ON WALL STREET. THE DOW HITTING A NEW HIGH. THE S&P JUST SHY OF A NEW ONE.

>> CONSUMER PROTECTION. WHAT JC PENNEY SHOPPERS REALLY THINK OF THE STRUGGLINGRY TAYLOR AND WHAT THE NEW CEO MUST DO TO WIN OVER MORE OF THEM.

>> AND SIR RICHARD BRANSON, THE OUTSPOKEN CEO OF VIRGIN GROUP TALKS TO US ABOUT EVERYTHING FROM CHEAP TICKETS TO THE GLOBAL ECONOMY.

>> ALL THAT AND MORE COMING UP ON IF NIGHTLY BUSINESS R REPORT.

>> MORE MILESTONES ON WALL STREET AND NOT JUST FOR THE ARCH AVERAGES, BUT FOR INDIVIDUALS.

>> THE WEATHER WARMED UP ON WALL STREET TODAY AND SO DID STOCKS. RECORDS APLENTY. LET'S START WITH SOME OF THOSE BIG NAME COMPANIES. ALL DOW MEMBERS EACH TOUCHING ALL TIME HIGHS TODAY. DISNEY, HOME DEPOT, TRAVELERS, UNITEDED TECHNOLOGIES AND WALMART. THOSE ARE ONLY THE DOW STOCKS. THOSE GAINS DID HELP POWER THE DOW TO A NEW ALL TIME CLOSING HIGH OF 14673. THE S&P NIPPED ABOVE ITS CLOSING HIGH, TOO, BUT IT FADED LATE AND FINISHED TWO POINTS SHY OF A RECORD CLOSE. THE NASDAQ WAS UP 15. STOCKS GOT A BOOST FROM MATERIALS COMPANIES ON RISING DEMAND FOR MATERIALS. THROW IN SOME FRESH OPTIMISM ABOUT CORPORATE EARNINGS, THEN ADD A DASH OF SOME FED SPEAK INDICATING THE CENTRAL BANK ISN'T LIKELY TO TIGHTEN SOON AND YOU'VE GOT A RECIPE FOR ANOTHER DAY OF STOCK MARKET RECORDS.

>> AND OUR NEXT GUEST TONIGHT DOESN'T SEE OBSTACLES FOR STOCKS TO GO HIGHER. JIM PAULSON, YOU KNOW, WHAT AMAZES ME IS NO MATTER HOW MUCH