updated 1/25/2005 3:41:42 PM ET 2005-01-25T20:41:42

Guests: Mickey Sherman, William “Rusty” Hubbarth, Lisa Fox, David Chasteen, Tim Burger, Steve Emerson, Andrew Ross Sorkin, Robert Crandall, Phyllis Diller

DAN ABRAMS, HOST:  Coming up live from Los Angeles, a woman kidnapped from a Wal-Mart shopping center is brutally murdered—the suspect, a U.S.  Marine just back from Iraq.  Might he blame the war? 

(BEGIN VIDEOTAPE)

ABRAMS (voice-over):  His family says Johnny Lee Williams came back from Iraq a different person, possibly suffering from Post-Traumatic Stress Disorder and not getting the mental health treatment he needed from the military.  We talk to an attorney whose client got off with a defense like that. 

And years after their companies lost billions, flamboyant CEOs from Tyco and WorldCom go to trial.  But they say they were duped just like their investors.  Will the “I was just the CEO” defense work? 

Plus Johnny Carson made America laugh for decades right here in this building in Burbank, California.  Comedienne and “Tonight Show” regular Phyllis Diller joins me to remember Johnny. 

The program about justice starts now. 

(END VIDEOTAPE)

ABRAMS:  Hi everyone.  Fist up on the docket:  Could the war help a man avoid a murder conviction?  Nineteen-year-old Megan Holden abducted as she left work at a Texas Wal-Mart just before midnight last Wednesday.  Her abduction caught by the store‘s surveillance camera and her body recovered days later on the side of a highway.  Johnny Lee Williams, who is a Marine, now sits in prison facing the possibility of a death sentence if he‘s convicted in her death while his parents appeared on ABC this morning and said they saw a change in their son after his yearlong service in Iraq, where they say he killed three people, including a child. 

His mother saying—quote—“When he came back, he was different.  He was quiet.  He was off to himself.  He couldn‘t sleep.  He slept in his clothes, had nightmares.  We recently learned that he would ask friends to come over and just stay while he went to sleep because it had changed him.”

Some experts might say that sounds like someone suffering from Post-Traumatic Stress Disorder.  And according to the “New England Journal of Medicine”, 15 to 17 percent of servicemen and women returning from Iraq suffer from depression, generalized anxiety or Post-Traumatic Stress Disorder. 

“My Take”—there‘s a lot of sympathy out there for Iraq war veterans but probably not enough to have this sort of defense work.  Joining me now, an attorney who made it work in another case, criminal defense attorney Mickey Sherman who got Vietnam veteran Roger Ligon acquitted of manslaughter using the Post-Traumatic Stress Disorder defense and attorney, former Marine and Vietnam veteran, William “Rusty” Hubbarth, who also worked in the Texas Attorney General‘s Office and Dallas Judge Lisa Fox who is a member of the National Association of Mental Illness. 

Thank you all for joining us.  Appreciate it.  All right, Mickey, how did you do it in your case? 

MICKEY SHERMAN, CRIMINAL DEFENSE ATTORNEY:  Great lawyering Dan. 

Really I can stay all night talking about a case that I won here frankly. 

No, it is a very difficult defense and I think you really touched upon it.  I think you‘re either going to get a lot of sympathy and it sounds from the little I know at this point that he probably is someone suffering from Post-Traumatic Stress Disorder from, in fact, Iraq.  But the problem is to build that bridge from Iraq to California to replicate the crime is going to be very difficult. 

ABRAMS:  How did you do it in your case with Vietnam? 

SHERMAN:  Well it took a lot of work.  First of all, I was able to show that 20 years ago that very day, my client was under the same, what they call stressor circumstances.  He had felt threatened by the North Vietnamese, his friend had died, in fact, won the Congressional Medal of Honor that day, that he was attacked by a man who was working with his boys, with the young Vietnamese who were laying mines and were booby-trapping his company and that 20 years later, same heat situation—the temperature was important—that he again was threatened.

This time it was by an alleged drug dealer who threatened his life and said I‘m going to come back with my boys and get you.  And then I was able to bring back the men that he served with in Vietnam, about 20 years ago, together with some doctors, psychiatrists to explain the syndrome and it showed that in Stanford, Connecticut 20 years later he felt the same fears and the same anxiety that he felt in Vietnam 20 years earlier and shot and killed a man who again we claimed was a drug dealer. 

ABRAMS:  And the jury acquitted?

SHERMAN:  The jury found him not guilty by reason of insanity.  He spent 45 years being observed in an institution and is out and has been a free man ever since.  Never committed a crime before, never since.  In fact, I‘m the godfather to his grandson. 

ABRAMS:  William—Mr. Hubbarth, what do you make of this kind of defense in the context of this case?  Basically saying I came back from Iraq so messed up that, you know, in the state of Texas you‘re going to have to basically say you didn‘t understand what you were doing. 

WILLIAM “RUSTY” HUBBARTH, ATTORNEY & VIETNAM VETERAN:  I think he‘s grasping—their parents are grasping at straws in regards to trying to say that this is mitigation for a calculating kidnapping of a young girl, carjacking and murder and a subsequent attempt to kill someone else.  I think it‘s a long way from saying that a drug dealer who was attacking a veteran as opposed to someone who is setting out to commit this crime are even in the same code book.  And there‘s a long way from a manslaughter conviction and an acquittal and a capital murder conviction, which I‘m sure that that will take place and that if the jury sentences him to death, I feel that Mr. Williams needs to be executed. 

ABRAMS:  All right, Judge Fox, how does the law work in Texas?  I mean you‘re on the Mental Illness Association there.  How does it work in terms of post-traumatic stress and how it would play into a defense? 

HON. LISA FOX, DALLAS COUNTY JUDGE:  Well first of all, there is no defense for a post-traumatic stress syndrome or disorder.  It would also fall under the insanity defense.  So in Texas, under the insanity defense, first of all, you‘d have to determine that there was a mental disease or mental defect.  And because of that mental disease and defect, that person did not know right from wrong at the time that they are committing the offense.  So once the person has been examined and they‘re going to use the insanity defense, they must give the state and the prosecutor‘s notice at least 10 days before trial that that‘s what they‘re going to do and then a jury would have to decide if that time during the trial three options on their verdict, either guilty or not guilty or not guilty by reason of insanity. 

ABRAMS:  Do you expect we‘re going to see that kind of defense here? 

FOX:  It sounds like they‘re laying the groundwork for that right now, so—but based on the video and the surveillance, I mean (UNINTELLIGIBLE) totally different than your example earlier of the individual that got off for the drug deal transaction.  But we really don‘t know the facts and the circumstances behind the abduction other than just seeing the video.  So we don‘t know what he was thinking, what he was going through or any of the defenses up to this point. 

ABRAMS:  And Mr. Hubbarth, I mean basically what the family is also saying is he was screaming out for help.  I mean it almost sounds like they‘re laying the foundation for a lawsuit against the government, I mean which is almost impossible, but anyway saying that he was screaming out for help and here‘s number—let‘s put up number three here—this is from ABC this morning. 

Patricia and the Reverend John Williams say their son came back from Iraq troubled and begging the military for mental treatment, which he never received.  My understanding of the reason that he never received it is because he was dismissed because of a marijuana charge and as a result, does that mean you‘re not entitled to any psychological assistance, either? 

HUBBARTH:  Well, I didn‘t know that he‘d been discharged based upon marijuana.  The papers here reported that it was an honorable discharge as opposed to a dishonorable...

ABRAMS:  Right.

HUBBARTH:  ... or undesirable discharge. 

ABRAMS:  Right. 

HUBBARTH:  So I did not know that.  I know he‘s had a cocaine possession charge since his return and since his discharge from the Marine Corps and I think that his parents are grasping, again, at straws.  As the judge said, they‘re laying groundwork in order to attempt any futile attempt to keep him from being executed. 

SHERMAN:  Yes but Dan, you know, the marijuana charge also kind of fits into the defense.  Because a lot of people, a lot of PTSD veterans, PTSD people who experience that go to—self medicate themselves, either heavy, heavy drinking or drug use.  Why?  So they can go to sleep at night. 

And just for the record, my client‘s case was not a drug deal gone bad.  He was telling the other person not to park in a fire zone.  There was no drug dealing going on, at least not involving my client and I‘ve got to say Mr. Hubbarth‘s opinions are important because most veterans, especially World War II, Korea, World War I veterans do not buy into this defense and many Vietnam veterans don‘t as well.  When you‘re trying this case, oddly enough you do not want veterans on this case. 

(CROSSTALK)

HUBBARTH:  Obviously. 

ABRAMS:  Even though, Mr. Hubbarth, you got 15 to 17 percent of these people returning, according to the “New England Journal of Medicine”, with some sort of mental disease? 

HUBBARTH:  Sir, that‘s just one study whether or not—and I don‘t think we‘ve had enough time yet to determine the effects of the Iraqi war and the incidences of PTSD.  However, in regards to whether veterans should sit on the jury, I will say this at this point in time, Mr. Williams has dishonored the state of Texas and he has dishonored the Marine Corps and to use his combat, alleged combat experiences...

ABRAMS:  Yes.

HUBBARTH:  ... in attempt to mitigate this horrible crime is a continuing insult...

SHERMAN:  And that‘s why we don‘t want veterans on the jury...

ABRAMS:  Very quickly...

SHERMAN:  ... because they see it as a personal...

ABRAMS:  Very quickly...

SHERMAN:  ... to them.

ABRAMS:  Very quickly, Judge Fox, do you agree with that?  If you were trying this case and using this defense, you want to keep the veterans off the jury?

FOX:  Well, I‘d have to just - it‘s a case-by-case basis and an individual-by individual type of questioning because there are individuals that are going to be out there that probably have been suffering the same type of symptoms that Mr. Williams had...

ABRAMS:  But in the end, they would say but we didn‘t go and kill someone.  But, you know, look...

FOX:  But you also have to look at individuals, though, that have mental illness in the family.  I mean Mr. Williams might not only be suffering from Post-Traumatic Stress Disorder.  He might also be suffering from some other mental disorder and doing the self-medicating with marijuana...

ABRAMS:  Yes.

FOX:  ... and cocaine and stuff.  Those are all...

(CROSSTALK)

FOX:  ... dual diagnoses...

ABRAMS:  We‘ve got to be very careful - I mean where there‘s no evidence that this is self-medicating.  I mean I know Mickey is referring to it as a possibility, but all we know is that he was according to the Marines dismissed for—quote—“a bad conduct discharge” on February 26, 2004 for wrongfully use of marijuana.  So, I don‘t know if there‘s any indication if that for self-medication. 

HUBBARTH:  So he‘d been back almost a year from Iraq...

ABRAMS:  Yes.

HUBBARTH:  That takes out the coming just back from Iraq...

ABRAMS:  I‘ve got to wrap it up.  Mickey Sherman, Rusty Hubbarth, Judge Lisa Fox, thanks a lot. 

FOX:  Thank you. 

(CROSSTALK)

ABRAMS:  Coming up next, how is Iraq really affecting our troops‘ state of mind?  We‘re going to talk to someone who would know. 

And it could soon be double or nothing in the hunt for Osama bin Laden.  The White House expected to raise the bounty on his head from 25 million to 50 million.  Is that really going to make any difference? 

And for 30 years Johnny Carson made us laugh about politics, wars, scandals, you name it.  One of his frequent guests, comedienne Phyllis Diller joins us. 

Your e-mails abramsreport@msnbc.com.  Please include your name and where you‘re writing from.  I respond at the end of the show.

(COMMERCIAL BREAK)

ABRAMS:  Coming up, nearly 20 percent of servicemen and women in Iraq say they suffer from Post-Traumatic Stress Disorder.  We‘re going to talk to someone who knows a lot about it coming up. 

(COMMERCIAL BREAK)

(NEWS BREAK)

ABRAMS:  We‘re back.  Marine and Iraq war veteran Johnny Lee Williams now charged with aggravated kidnapping and murder of Megan Holden and we‘re talking about whether Post-Traumatic Stress Disorder may end up playing a role in his defense.  His parents going on morning television this morning suggesting that he was a different person when he returned from Iraq. 

Joining me now is David Chasteen, who is with the organization Operation Truth, which is a watchdog group, which looks out, they say, for soldiers and those in the armed services.  Thanks a lot for coming up—on the program.  Appreciate it.

CAPT. DAVID CHASTEEN (RET.), U.S. ARMY:  Thanks, Dan. 

ABRAMS:  All right, so you heard our conversation there, people talking about not wanting veterans on this type of jury.  What do you make of this type of defense?  What do you make of that kind of statement? 

CHASTEEN:  Well you know, I mean obviously the defense attorney has a job to defend his clients as best he can and I understand that.  You know, just hearing the story as described, do I think it‘s possible that PTSD could be a factor in why this individual and why this Marine decided to do what he did?  I think it‘s possible.  Obviously it‘s a long way from saying that it was a factor to saying that it‘s an excuse, which is what the lawyer is going to try to play... 

ABRAMS:  How serious is it?  I mean give us a sense generally.  I mean we refer to this “New England Journal of Medicine” study, but give us a sense, you know, you‘re talking to these people when they‘re coming back.  I mean we can talk numbers here and statistics, but give me a sense of how much is being in Iraq affecting most of, many of, some of the soldiers that you‘re talking to? 

CHASTEEN:  Well, I‘d say the numbers that you saw in the “New England Journal of Medicine” study, they sound about right just based on the guys that I know who are in combat.  Obviously the guys who saw more actual combat situations are more likely to be affected more seriously and a number of my friends have had serious problems.  I‘ve seen marriages end.  I‘ve seen people get out of the military and have difficulty getting on with their normal lives.  You know, I‘ve got...

ABRAMS:  But what does that mean?  Explain to us what that means.

CHASTEEN:  Well, you know, the problem—PTSD mostly manifests itself as people reliving vividly memories of, you know, things that have happened to them in the past and the way it interferes with their life.  You know, I‘ve got a friend who swerved off the road, off a highway in California because he thought he saw an IED or a land mine in the road, you know, and there are a lot of—obviously this is an extreme example, but also folks who are diagnosed with PTSD often show up with secondary symptoms or with secondary conditions that are either brought about or encouraged by the PTSD, you know, drug abuse, obviously, you know, addiction-type problems are very common. 

ABRAMS:  So do those who sort of laugh off this defense and they say, come on.  Don‘t give me that when you‘re talking about someone being killed, someone being murdered, your response is what? 

CHASTEEN:  Well, you know, we don‘t know all the facts of the situation.  That‘s what the jury is there for and a state like Texas has the insanity defense for a reason.  Obviously there are individuals who are so affected by disorder that they don‘t know right from wrong.  Do I think that it‘s possible that PTSD could have contributed to some sort of more severe kind of condition?  Well, you know, again, that‘s for a judge and jury and the experts to decide. 

ABRAMS:  David Chasteen, thanks a lot for taking the time to come on the program.

CHASTEEN:  Thanks for having me on.

ABRAMS:  Appreciate it.  Coming up, a $25 million bounty hasn‘t turned up any good leads on Osama bin Laden‘s whereabouts, so how about this?  Will another 25 million make the difference meaning 50?  Some seem to think so.

And two big trials get under way for two big CEOs.  The defense in one of them at least, well, you know, I‘m only the CEO.  I talk to the former CEO who helped turn American Airlines into the world‘s biggest airline about the “I‘m only the CEO” defense.

(COMMERCIAL BREAK)

ABRAMS:  The U.S. may be about to double the reward money for information leading to the capture of the world‘s most hunted man.  According to “TIME” magazine, the price on Osama bin Laden‘s head is expected to go from 25 to $50 million next month.  And a media blitz has been started in Pakistan with newspaper and soon radio and TV ads publicizing U.S. rewards for bin Laden and other terrorists.  While multimillion dollar rewards have been out there since shortly after 9/11, so far, it seems not a single major al Qaeda figure has been turned in for the money.  Though the State Department says it‘s not all about capturing the terrorists, keeping them in the public eye and on the run is important as well. 

“My Take”—I get the increased advertising and awareness, but I can‘t imagine more money is going to make the difference when it comes to al Qaeda leaders.  Who knows?  Maybe it will lead some bounty hunters to decide it‘s worth their while but the difference between 25 million and 50 million, I just can‘t see someone saying oh you know for 25 it wasn‘t worth it to me, but for 50 -- I don‘t know. 

Joining me now Tim Burger, Washington correspondent for “TIME” magazine and MSNBC analyst and terrorism expert Steve Emerson.  Gentlemen, thanks very much.  Appreciate it. 

All right, Mr. Burger, does the—are you getting the sense that the government thinks that the increase or those who support this think that the increase is actually going to make a difference? 

TIM BURGER, “TIME” MAGAZINE:  Well, they obviously think it‘s a good idea.  If an extra 25 million happens to get him caught, it‘s certainly worth the money.  I think in part what it does is dramatize—I mean $25 million is a whole lot of money and 50 million is a vast amount of money and it‘s getting a whole round of stories that you know, we‘re all paying attention to it now and I think what they may hope is that it will sort of rivet people‘s eyes.  Plus one more thing—I mean as you point out, no one appears to have turned in an al Qaeda leader for the money although we can‘t be 100 percent certain of that, but maybe this huge fortune would be enough to get someone to do it.

ABRAMS:  And it‘s fair to say that in Iraq it worked a little bit.  I mean Uday and Qusay Hussein, it seems were turned over possibly for the money -- $30 million in that case.  All right, here‘s a quote from your article, from Illinois Republican Mark Kirk who wrote the bill boosting the reward. 

“We‘re looking for some young Pashtun living in a town who knows the value of 25 million and can figure out how to reach us safely.” 

Steve Emerson, look, you spend your life following these things.  Is this doubling of the reward going to make a difference? 

STEVE EMERSON, TERRORISM EXPERT:  You know, Dan, 25 million just doesn‘t buy what it used to buy, so somebody is obviously just waiting for that $50 million figure.  Look, probably you know, if they give him a slot on “The Apprentice” having them guest a talk show host on MSNBC or the ratings aren‘t that high, they‘d probably be induced more. 

I don‘t think the money is the issue here.  It‘s the advertising blitz and the publicity as Tim has pointed out rightfully.  But raising it 50 million --  you could raise it to $1 billion, it won‘t make any difference.  That‘s not going to induce someone to turn him in.  The issue really is getting to the hearts and minds of the people.  The radio advertising I think is very significant.  I‘m surprised it wasn‘t done before, Dan. 

ABRAMS:  Why did it work in Iraq, Steve, and not when it comes to these al Qaeda leaders elsewhere? 

EMERSON:  Well two things.  One, in Iraq there really isn‘t the same

level of loyalty and tribal protectionism.  Also I‘m not so sure that those

who turned in Uday and Qusay were actually lured by the reward.  I think

that actually that was an afterthought after they turned them in for other

reasons, including possible type of family animosities.  Clearly this is a

situation where nobody has turned in Osama for the last three and a half

years -- 25 million, 50 million, 100 million, $1 billion.  You could have -

·         you know “America‘s Most Wanted” probably should have its own Pashtun story and its own show there and they could have John Walsh who speaks (UNINTELLIGIBLE) somebody take field calls because that‘s the only way it‘s going to happen.

ABRAMS:  Yes, let me—this is another quote from the State Department deputy spokesperson. 

“I don‘t know if it‘s fair to say the fact that not everybody has been turned over so far means the program isn‘t working.  These sort of things take time.”

You know, Tim, it seems to me that‘s not really—that doesn‘t really address the issue here, again, because as we‘re discussing it seems that very few of the people who have been turned in have been turned in for money.  Why is that?  Is that the culture?  Is that—any explanation for that? 

BURGER:  Well, this group of Islamist terrorists that Osama bin Laden is sort of the spiritual leader of at this point is really a band of brothers that are together, they think, under the aegis of a great religion.  They think that they‘re supposed to be doing it for that reason.  Also, some of them are probably insane.  So they have this ethos that‘s very different from us and some of those who know where he is have been, you know, gone around with him in caves and having to hide anyway...

ABRAMS:  Yes.

BURGER:  ... so for them, the hardship really doesn‘t feel like a hardship I suppose. 

ABRAMS:  Look, I think we all—I think Tim said at the beginning of the show, if it works, great.  You know, we shall see.  Tim Burger, Steve Emerson, thanks a lot. 

Coming up, sure the CEO‘s at WorldCom and Tyco and Enron didn‘t know everything that went on in their billion-dollar corporations.  Will a jury really believe either that they were duped just like their investors or they just don‘t know everything that was going on with this unscrupulous accountants or whatever or maybe in the case of Tyco that everything was just legit they thought.

(COMMERCIAL BREAK)

ABRAMS:  Coming up, flamboyant CEOs from Tyco and WorldCom go on trial after their companies lost billions.  They say they were duped just like everyone else.  Will the “I was just the CEO” defense work?  First the headlines. 

(NEWS BREAK)

ABRAMS:  We‘re back.  It‘s sort of the gold standard of a white-collar crime, an accounting scandal four times the size of Enron‘s.  Former WorldCom head Bernie Ebbers‘ trial now getting started.  His lawyers expected to tell the jury he shouldn‘t be held accountable for the biggest bankruptcy in history back in 2002.  Ebbers is charged with fraud and conspiracy.  Prosecutors saying he intentionally deceived investors about WorldCom‘s financial condition, which company officials then tried to cover up with creative accounting. 

And in yet another trial, former Tyco CEO, Dennis Kozlowski and Chief Financial Officer Mark Swartz entered the courtroom for a second time last week after their first trial ended in a mistrial.  Both charged with stealing 600 million from the company, some of it to pay for Kozlowski‘s now infamous $6,000 shower curtain and other amenities in his lavish Fifth Avenue apartment. 

In two cases combined, nearly $12 billion in cash and stock said to have been stolen, inflated or created.  And in both cases the CEOs are expected to try and deflect blames to executives below them—the “I was only the CEO” defense.  Earlier I spoke to Andrew Ross Sorkin, a reporter for “The New York Times” who recently interviewed Kozlowski and Robert Crandall, former American Airlines CEO, started by asking Sorkin if both defense teams are going to use either an ignorance or effectively a negligence defense. 

ANDREW ROSS SORKIN, “THE NEW YORK TIMES”:  I think you‘re exactly right.  This is the negligence defense more than anything.  I was negligent but I didn‘t intend to do this, both for Kozlowski and Ebbers.  They‘re two very different cases, but two similar in the sense that these were giants in the business world in the 1990‘s.  But when you really look at each case, Kozlowski basically is being accused of robbing the place and Ebbers is being accused of a massive accounting fraud. 

They‘re both saying we didn‘t really know exactly what was going on below us.  One other difference, though, which is important, Kozlowski is saying, because he‘s being accused of stealing, that he knew what was going on to the extent he knew he was getting the money and that it was approved.  He‘s just saying he didn‘t know how it was being spent.  He didn‘t know that his decorator was buying the $6,000 shower curtain. 

ABRAMS:  Right.  He was saying that the use of the money was legitimate.

SORKIN:  Right.

ABRAMS:  All right, let me just play one more piece of sound from Bernie Ebbers talking about managing a company. 

(BEGIN VIDEO CLIP)

BERNIE EBBERS, FORMER HEAD OF WORLDCOM:  Well, I‘m not going to say that I was the best manager in the world.  There may have been somebody that could have done a better job.  I don‘t know the answer to that, but I don‘t think that was the reason for the downfall of the company.

(END VIDEO CLIP) 

ABRAMS:  Mr. Crandall, what do you make of the various CEOs, some of them saying I couldn‘t have known, I shouldn‘t have known.  Others saying I didn‘t do it.  Is it fair to sort of tar them all who are being charged here with this kind of defense of the don‘t blame me, I was just the CEO? 

(LAUGHTER)

ROBERT CRANDALL, FORMER AMERICAN AIRLINES CEO:  Well, I think the bottom line, of course, is that most of the CEOs that I know indeed, I think, all of the CEOs about whom I know anything on a day-to-day basis would—wouldn‘t dream of making such a defense.  They do know what‘s going on in their companies and therefore, the—their footprints would be al over this kind of thing. 

As, for example, in my case.  If you looked at transactions that took place at American Airlines, you‘d find little handwritten notes on the margins of hundreds of memos and the fact of the matter is it would be quite obvious that I knew what was going on and I think most CEOs did.  Now, the precise facts here are going to be determined by these trials. 

But I think, of course, it is this circumstance, which has created...

ABRAMS:  Right...

CRANDALL:  ... Sarbanes-Oxley.  In effect Congress has said you can‘t do this. 

ABRAMS:  Right, the law has changed as a result of this to say look we‘re going to make sure the CEOs are accountable by effectively saying CEOs have to sign off on everything.  But when it comes to accounting, for example, is it fair for a CEO to say look, I‘m not an accountant.  I relied on my CFO. 

CRANDALL:  No, it‘s absolutely not fair.  The fact of the mater is the chief executive is just that, the chief executive.  He is the chief executive.  And in fact, you are not qualified to be the chief executive of a major corporation if you cannot understand—you may not be able to make the entries but you can certainly understand the basic ebbs and flows of cash and accounting transactions and you are expected to do so.  Sarbanes-Oxley now makes that explicit.  Quite frankly I think it was an implicit understanding of the vast majority of CEOs for many years.  You are the boss.  You are in charge. 

ABRAMS:  And yet this is some of Bernie Ebbers defense.  He‘s expected to argue that he knew little about the accounting.  He‘ll allege financial wrongdoing at WorldCom was largely orchestrated by the chief witness against him, former CFO Scott Sullivan.  The defense expected to attack Sullivan‘s credibility as a witness and suggest he‘s just trying to save himself. 

This is the same sort of thing that we expect to happen in the Enron case and so Mr. Crandall, if you‘re at a cocktail party with another CEO from a major company and they say to you come on, what do I know about accounting?  Your response to them is going to be what? 

CRANDALL:  My response is going to be wait a minute now.  Every month

I assume you and your chief financial officer sit down together and go

through the balance sheet.  And you look at changes in the balance sheet

from last month and from last year and if you don‘t understand what—why

the numbers have changed, you start to ask a lot of questions.  And if you

·         as you continue to ask those questions, it will soon become clear to you what has happened.  Now, you‘re the boss.  You‘re in charge. 

ABRAMS:  So Andrew...

CRANDALL:  I don‘t...

ABRAMS:  I‘m sorry.  I apologize.

CRANDALL:  I don‘t think that—I‘m sorry—I don‘t think that defense is very realistic but the reality is those people may have run their corporations that way and the trial will sort out the facts.  But what‘s happened is, I think, the public and the Congress have made it clear that is not an acceptable way too run a corporation and Sarbanes-Oxley is the signing off requirements are the consequence...

ABRAMS:  Andrew...

CRANDALL:  ... of that sort of behavior. 

ABRAMS:  ... is this considered a risky defense?  Let‘s start with Ebbers.  Is this considered a risky defense to say look that was his job.  Not my job.  You heard—you know you hear Robert Crandall...

SORKIN:  Well I think it‘s a very hard defense.  I think the argument has to be that the game has changed.  That Sarbanes-Oxley is new and that these rules maybe didn‘t apply then.  You know, this defense did not work, for example, with the Rigases in the Adelphia case.  Those were—that was a family that just like Ebbers didn‘t have an accounting background, didn‘t use e-mail, you know, didn‘t have the education. 

You look at Ebbers who was not a man who knew this stuff and I think he can say that legitimately.  The better question is should he have known that stuff and what the jury is going to really take away from that in terms of what standard they‘re going to hold him to. 

ABRAMS:  And don‘t they have to be kind of careful not to get in there and say what it sounds like they‘re saying, which is you know, don‘t blame me.  I just ran the company.

SORKIN:  Right.  Right and that‘s a very hard defense to follow.  You know, when we interviewed jurors after the Tyco case, everyone said, you know, this guy had all of his hands on all of the blood and there‘s just no way he couldn‘t have known every single thing.  And so I think it is a very difficult defense but to be terribly frank, without being an apologist for these guys, there‘s not much else...

ABRAMS:  Yes.

SORKIN:  ... there‘s not a great defense otherwise. 

ABRAMS:  Very quickly, Kozlowski, this is his retrial.  Are people thinking it‘s an advantage for him or an advantage for prosecutors that we‘re in round two? 

SORKIN:  I think it‘s a slight advantage for him, but I think he has a very steep hill to climb. 

ABRAMS:  Andrew Ross Sorkin, you‘ve been doing some great work. 

Thanks a lot for coming on the show. 

SORKIN:  Thank you.

ABRAMS:  And Robert Crandall, it‘s a real pleasure to have you on the program.  Appreciate it. 

CRANDALL:  Thanks very much.  Enjoyed being with you. 

ABRAMS:  Coming up, if Johnny Carson were on the air today, we might hear him poke fun at the president, the war in Iraq, even the Scott Peterson trial all with the same charm and wit.  We take a look how Johnny could make us laugh at just about anything going on in the world with comedienne and “Tonight Show” regular, Phyllis Diller—take a look back at his life.

And the judge in the Michael Jackson case is taking secrecy to absurd new levels.  Why is he now censoring U.S. Supreme Court opinions?   

(COMMERCIAL BREAK)

(NEWS BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I‘ve had a fun weekend.  I‘ve been reading President Nixon‘s book. 

(LAUGHTER)

UNIDENTIFIED MALE:  The book does not exactly contain any new revelations, although Nixon did admit that during the time of the Watergate break-in, he was the president. 

(LAUGHTER)

UNIDENTIFIED MALE:  Complete title of the book is “Richard Nixon‘s Memoirs as told to Hans Christian Andersen”...

(LAUGHTER)

(END VIDEO CLIP)

ABRAMS:  Johnny Carson giving his viewers a little taste of politics with the late night career spanning three decades.  Carson‘s monologues could be studied in history class.  He covered political figures, newsmakers, tragedy, triumph from the very building where I am now.  Johnny Carson for decades broadcast “The Tonight Show” to the nation reinventing late night TV.  From his well known, much anticipated skits to his frequent four legged guests to the countless new comics he anointed on his show, Johnny Carson is a legend.  He died this weekend. 

Joining me now, comedienne and frequent guest on “The Tonight Show” Phyllis Diller.  Thanks very much, Ms. Diller, for coming on the program and taking the time.  We appreciate it.  So let me ask you about Johnny Carson and news.  Do you think that he changed comedy when it comes to news? 

PHYLLIS DILLER, COMEDIENNE:  Well, I think he was one of the first to use it as comedy regularly and did it so well.  In fact, that quote that was just on the show, I laughed out loud and that‘s the test of true comedy.  Is it funny?  If you laugh, it‘s funny. 

ABRAMS:  You know, now we have all these different late night shows and these different formats.  You know, we‘ve got, you know, David Letterman doing one thing.  We‘ve got Jay Leno doing something else.  Conan O‘Brien doing something slightly different.  They‘re all these sort of nuances to late night TV.  But, you know, Johnny Carson was—he wasn‘t the first.  I mean you know, Jack Paar came before him, et cetera, but he really did pioneer this type of TV, didn‘t he? 

DILLER:  Oh, yes I think he did.  In fact, one of the funniest things he did was when he played Reagan in the Oval Office and had that fabulous conversation with an aide where the language thing was so funny, back and forth and back and forth and back and forth.  It was like the old thing who is on first. 

ABRAMS:  What was it that made him, do you think, appointment—I remember my grandparents, I‘d sit there with my grandparents and every night they‘d come home and watch Johnny Carson, at least they‘d watch the beginning of Johnny Carson.

DILLER:  The monologue. 

ABRAMS:  Yes, the monologue.  It was a special treat for me to get to stay up and watch it with them. 

DILLER:  Oh yes.  Well, he was one of the greatest stand-up comics with that monologue every night.  I mean imagine what that took. 

ABRAMS:  And is it fair to say that when Johnny Carson invited someone on the program, a new comic and sort of gave his—effectively his stamp of approval, that was a career changing moment for the person? 

DILLER:  Well my dear, it changed the career of Seinfeld, Jay Leno, David Letterman and Ellen DeGeneres and Roseanne Barr.  You talk about changing, it was the turning point in the lives of those comics. 

ABRAMS:  What was it like to be a guest on the show with Johnny? 

DILLER:  It was a great honor and always fun and it was just - well, I considered him sexy and a gentleman and I—and he had such class and such taste and I wish we had more of it today. 

ABRAMS:  And it wasn‘t—it was never seemingly mean spirited humor, right? 

DILLER:  Never, never, never.  He was not that kind of man.  He was a perfect gentleman and it showed in everything he did.  Plus he was hands-on.  It was his show and he cared about it and made it so perfect. 

ABRAMS:  How would he want to be remembered?  I mean I‘m sure if you‘d asked him that question, he‘d say I don‘t want people to talk about me or I don‘t know what he‘d say, but it seems that he kept to himself so much but how do you think he‘d want to be remembered? 

DILLER:  I think he would be thrilled with the way he is remembered as a beloved comic and gentleman. 

ABRAMS:  Phyllis Diller, thank you so much for coming on and sharing your thoughts about that.  I really appreciate it.  Great to have you on the program. 

DILLER:  Thank you. 

ABRAMS:  Remember to tune in MSNBC tonight at 9:00 p.m. Eastern, a special hour, “Remembering Johnny Carson”. 

Coming up, landmark Supreme Court rulings are quoted all the time in high profile cases, but the judge in the Michael Jackson case rules some of the words of those decisions cannot be released to the public in the case.  I wonder how the justices would feel about being censored by the Michael Jackson judge.  My “Closing Argument” is next. 

(COMMERCIAL BREAK)

ABRAMS:  Coming up, why the latest move by the judge in the Michael Jackson case sounds more like a “Saturday Night Live” skit than a legal ruling.  My “Closing Argument” is next.

(COMMERCIAL BREAK)

ABRAMS:  My “Closing Argument”—the judge in the Michael Jackson case sure does take everyone not involved in the case for a bunch of dummies.  In an effort to take secrecy in this case to new absurd levels, the judge has removed certain words from a motion filed by the defense.  The problem?  The word such as obscenity, pornographic and sexual conduct comes from landmark Supreme Court opinions, which are quoted all the time.  So anyone who is even a casual follower of the court knows exactly what the excised words were. 

This is not FCC type censoring so that these naughty words won‘t be uttered.  No, this is just an effort to prevent the public from getting access to information that you, we are in constitutionally entitled to hear.  An example, in its historic 1973 opinion about obscenity, the court wrote no majority of the court has at any time been able to agree on a standard to determine what constitutes obscene, pornographic material.

Well, the judge in the Jackson case cut out the words obscene and pornographic from that sentence as if that accomplishes something.  This is the illegal equivalent of what or should become a “Saturday Night Live” skit.  Jackson‘s defense team is trying to prevent prosecutors from characterizing items found in Jackson‘s home as pornographic or obscene.

They stay those words have specific legal meanings and that it would be unfair to describe the items in that manner.  I guess the defense would rather have prosecutors use words like smut, dirty or raunchy.  Regardless, I bet the Supreme Court justices never imagined that their own publicly reported opinions would be considered too sensitive to include in a pretrial motion.  The judge should be ashamed, the public should be insulted. 

Coming up—take a break I think.  We‘ll be back in a minute.

(COMMERCIAL BREAK)

ABRAMS:  I‘ve had my say, now it‘s time for “Your Rebuttal”.  On Friday, I asked why we don‘t have a national database of sex offenders, particularly those who have preyed on children. 

This comes to us, “You‘re kidding—that‘s from Ken Ashe—You think that people wake up every day and say hey honey, let‘s go check the child offender list today.  Such a list is good for political reasons, but virtually non effective for preventing child abuse.”

You know, Ken, I‘m not so sure.  Remember, many child predators have trouble staying away even after they‘ve served their time.  It‘s a unique crime in that way.  So even if they know they could or will be watched more closely, that in and of itself could be a deterrent for them to commit future acts of violence. 

Also on Friday, the largest liquor liability award in U.S. history.  A young girl and her family awarded 135 million after she was paralyzed by a drunk driver leaving a New York Giants football game.  Most of the award coming from ARAMARK, the company that served beer to the driver.  Remember, I said first and foremost, the drive is responsible.  Sounds like the vendor violated certain rules and so they should have to pay something, but I said there‘s no chance this side award will survive an appeal. 

Linda Tabor writes, “Abrams‘ comments about whether the 135 million will hold up on appeal demonstrate his total lack of compassion for a person injured in a totally avoidable horrible crime.  If Abrams wants his opinions to be considered of any value, then maybe it would be better if he would have encouraged the court system to uphold the lower courts jury award.”

No, Linda, the only way my opinions will be considered of any value is not if I give the politically correct answer on every issue, but if you know I am being straight with you and that I believe what I say. 

Your e-mails abramsreport—one word -- @msnbc.com. We go through them at the end of the show. 

“OH PLEAs!”  -- in Delaware, one thief seems to have confused those books on how to pick up a woman even though you‘re broke with how to pick up a pizza even though you‘re broke.  According to police, Brent Brown of New Castle, Delaware, ordered two pizzas from Domino‘s last week.  When they arrived, he and two of his friends surrounded the delivery woman and stole her cash and two pizzas. 

Well it seems Brown thought he saw a twinkle in her eye as she handed over her hard earned loot.  A few minutes later, he called her from his cell phone to apologize and yes, ask her out on a date.  The Domino‘s employee handed the phone over to the police and using the cell phone number, they quickly traced the call back to that love struck fool who had robbed her.  He was arrested the next morning, charged with second-degree robbery.  Oh and shocker, she‘s not interested in him either.  This may redefine the term extra cheese with that order. 

Finally today, my producer Falguni Lakhani final day here at the show.  Falguni has been my eyes and ears on many of the best stories and the toughest guests.  She‘ll be missed by everyone here, but maybe most by me.  She‘s off to the West Coast to work for “Dateline”.  We wish her all the best of luck.  Bye Falguni.

That‘s it for us tonight.  Coming up next, “HARDBALL” with Chris Matthews.  Thanks for watching.

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

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