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CNN&Time

Falling Apart; The Fate of the Wild; Off Track

Aired October 15, 2000 - 9:00 p.m. ET

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

ANNOUNCER: "Falling Apart." It began seven years ago with a handshake and a promise. Now it's all unraveling. The deepening crisis in the Holy Land. Did the peace process ever stand a chance?

(BEGIN VIDEO CLIP)

PROF. EDWARD SAID, COLUMBIA UNIVERSITY: You can create agreements like Oslo. You can go for another five years. You can give Nobel Peace Prizes. You can have ceremonies and so on and so forth. But the reality is that occupation is occupation.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

URI SAVIR, ISRAELI NEGOTIATOR: I still think it will succeed. What we see now is not Oslo. It's the alternative to Oslo.

(END VIDEO CLIP)

ANNOUNCER: "The Fate of the Wild." Natural resources versus natural beauty, the battle lines are drawn over Alaska's bounty.

(BEGIN VIDEO CLIP)

KEN BOYD, DIRECTOR, ALASKAN OIL AND GAS DIVISION: I think it's time to open ANWR to oil and gas exploration and development.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MARK POTTER, CNN CORRESPONDENT: So when you hear someone say, "Let's go there and drill for oil," what's your gut reaction?

JAMIE RAPPAPORT CLARK, DIRECTOR, U.S. FISH AND WILDLIFE SERVICE: No way. That can't happen.

(END VIDEO CLIP)

ANNOUNCER: With sticker shock at the gas pump and politicians scrambling, an oil-hungry nation eyes a pristine wilderness. But is the reward worth the risk?

"Off Track." They're off. And then they're gone.

(BEGIN VIDEO CLIP)

RANDY SHRIDER, DOG RACER: If you have one that made it three years, you've done well.

(END VIDEO CLIP)

ANNOUNCER: A $3 billion industry rides on their legs. But what happens when their racing days are through?

(BEGIN VIDEO CLIP)

KATHY SLOBOGIN, CNN CORRESPONDENT: You just trusted that he would find homes for these dogs?

SHRIDER: Right. I had every reason to believe that he would.

SHERRY COTNER, VOLUNTEER IN PLACEMENT OF GREYHOUNDS: They are being dumped into research labs in huge numbers.

(END VIDEO CLIP)

ANNOUNCER: CNN & TIME with Jeff Greenfield and Bernard Shaw.

JEFF GREENFIELD, CO-HOST: Good evening.

How often have these words been uttered over the last half- century, "New violence in the Middle East, hopes for peace dimmed by bloodshed"?

For every handshake you've seen on the White House lawn, for every promise of peace you've heard, there is a sense these days of just another chapter in a very long, dispiriting story.

BERNARD SHAW, CO-HOST: As gun ships and angry mobs take the place of diplomacy and cooler heads, are we seeing the end of the Israeli-Palestinian peace process? The situation in the Middle East certainly is not what the framers of the Oslo Peace Accords had in mind back in 1993. And yet there are those who say that violent confrontation and disappointment are the only things that could have come from the Oslo pact.

Here's Charles Glass.

(BEGIN VIDEOTAPE)

CHARLES GLASS, CNN CORRESPONDENT (voice-over): The violence that has pitted Israeli against Palestinian for the last two weeks did not surprise Edward Said.

SAID: I think it will go on for some time.

GLASS: The Columbia University literature professor and former member of the Palestine National Council has from the beginning criticized the American-backed peace process as doomed to failure. SAID: I think we were misled by the Americans. We were certainly misled by our leaders. And above all, we were misled by the Israelis.

GLASS (on camera): In 1993, when Oslo was announced and its details were released, some of its details were released, you condemned it then. Do you feel exonerated now?

SAID: It's not that I feel exonerated. I'm filled with a tremendous amount of sadness because I think a lot of people had hope.

GLASS (voice-over): Hope for peace was what the Palestinians and Israelis who secretly negotiated in Oslo, Norway, seven years ago promised their two peoples.

UNIDENTIFIED MALE: Mr. Savir, can we stop you just for two seconds?

GLASS: Uri Savir led the Israeli diplomatic team.

SAVIR: There is no perfect peace. I can tell you that in the Oslo negotiation that I was involved in, we had a very clear understanding that what counts is not the balance of forces, but the balance of interests.

GLASS: The accords allotted the Palestinians some autonomy in parts of Gaza and the West Bank. But it left many issues, including the return of Palestinian refugees and East Jerusalem, for future discussion.

(on camera): What happened to that optimism that came immediately after the Oslo Peace Accords in 1993?

SAID: Well, I think the optimism was manufactured as part of a great public relations stunt whereby these warring parties were brought together as if equals by Clinton on the White House lawn in September of '93. In fact, the Palestinians were at their lowest ebb.

Basically what came about was the extension of Israeli occupation rather than the end of it by different means. This way, the Palestinians would be part of rule of the West Bank and Gaza under Israeli tutelage.

The armies would remain in different places. The settlements would remain. There was nothing said about the stopping of settlement building.

It was quite clear that it was an untenable situation. It would take only time before it would unravel.

SAVIR: It's very easy at this point to come and say, "I told you so." Anybody who wants to engage in a non-risky peace process in the Middle East should try and make peace between Canada and the United States.

An agreement that says from an Israeli point of view, it was our first open operative declaration that we don't want to run the lives of the Palestinians. We don't want to occupy the West Bank and Gaza, or most of it. We need our security interests taken care of.

SAID: When you have to every time go through an Israeli checkpoint and submit to searches and have to have a permit to move from one end to the other of your own town, that's not giving up control.

This is why one of the most surprising things today is Israelis say, "Why are the Palestinians so ungrateful?" And Palestinians say, "Ungrateful for what? For continuing to control us in this way?"

UNIDENTIFIED MALE: Mr. Clinton, how is it going, Mr. Clinton?

GLASS: President Clinton sees the United States as the honest broker in the Middle East. If the United States is not used as the broker between these two sides, where else can you go?

SAID: Well, there is the United Nations. And let me just say something about the honest broker because the image of the United States that is being sort of broadcast by the candidates and by President Clinton is unacceptably dishonest. The United States has backed Israel.

Israel is a sacred cow in American politics. Clinton, whose knowledge of the Middle East is based on his born again Christian basically fundamentalist Zionism -- he doesn't know anything about the Arab world -- has decided the Palestinians should have accepted because he wanted it, Barak wanted it, and that's it.

SAVIR: There is no administration in the world that has helped the Palestinian cause so much like the Clinton administration by trying to lead and help the Palestinians into peace with Israel.

YASSER ARAFAT, CHAIRMAN, PALESTINIAN AUTHORITY: For this, we have spent all these nights and days.

GLASS (voice-over): Uri Savir and Edward Said disagree as well about Yasser Arafat. Savir defends him as a brave negotiator.

SAVIR: Arafat in the middle of negotiations had to make certain decisions related to Hebron, for instance. Thank Arafat and Rabin. The decision Arafat had to take in Hebron was a tough one. Because of the issue of the holy places in Hebron, it remained under our jurisdiction.

I saw him sitting there for two, three hours not saying a word. And you saw this person was torn between the feelings of his people and the necessity of peace with us. And I rarely saw such a solitude. And he took the right decision.

GLASS: Professor Said's criticisms of Arafat for running a brutal and corrupt bureaucracy have resulted in some of his books being banned in areas under Arafat's control. Most of all, Said condemns Arafat for responding more to Israel and the U.S. than to his own Palestinian people. SAID: I think his greatest mistake, for which I don't think there's any excuse, is that he never really took his people into his confidence. But had he appealed to his people and said, "Listen, this is the situation. It's dire. And I need your help," I'm sure that his people would respond. I think that's what he hasn't done.

GLASS (on camera): Even now.

SAID: Even now. He hasn't -- I mean, he is a symbol of sort of Palestinianism in a way. And it's a paradoxical thing. He's a tragic figure.

ARAFAT: Mr. President, thank you, thank you, thank you.

GLASS (voice-over): To Said, Arafat's tragedy is that by accepting Israeli settlements and continued occupation of parts of the West Bank and Gaza, he is divorcing himself from the demands of his people.

SAID: I don't think there's a Palestinian alive today who would accept anything less than, number one, a full Israeli withdrawal from the occupied territories, every inch of them.

That includes the settlements. It includes Jerusalem, East Jerusalem. It includes the settlements in the West Bank and Gaza.

GLASS (on camera): What's your prediction now?

SAID: But I think some kind of security arrangement will come about on the ground. And then I think we're in for a period of long unsettlement. I think Palestinians realize that there has to be a new strategy to deal with Israel, that we can't go along as we did in the last seven years signing papers and hoping for the best.

I mean, you can paper it over. You can create agreements like Oslo. You can go for another five years. You can give Nobel Peace Prizes. You can have ceremonies and so on and so forth. But the reality is that occupation is occupation.

I think that there can be no peace, in my opinion. It's very simple. Peace has to be made between equals.

SAVIR: I still think it will succeed because what we see now is not Oslo. It's the alternative to Oslo. But whenever we'll get back to the table, if it's in one month or one year, I assure you it will be on the basis of the agreement signed in '93.

(END VIDEOTAPE)

ANNOUNCER: Coming up on CNN & TIME, gunfire rips through a peace process. Anger flares in the Middle East. But who is fueling the flames?

(BEGIN VIDEO CLIP)

JOHANNA MCGEARY, "TIME" CORRESPONDENT: If Arafat thought there was a logic in calling Palestinians to the street, it's gotten way beyond him at this point. Rage is feeding rage.

(END VIDEO CLIP)

ANNOUNCER: As CNN & TIME continues.

(COMMERCIAL BREAK)

GREENFIELD: Their natural speed and grace has made them the breed of kings. But for the greyhound, royalty has given way to racing and to an uncertain future off the track.

(BEGIN VIDEO CLIP)

COTNER: Twenty-six hundred were dumped into Colorado State University in just a few-year time.

(END VIDEO CLIP)

GREENFIELD: Promised a home, but headed to a lab. Dog racing's dirty little secret ahead on CNN & TIME.

ANNOUNCER: Also ahead, two native cultures at odds, and right in the heart of the country's biggest land battle.

(BEGIN VIDEO CLIP)

FENTON REXFORD, INUPIAT ESKIMO: I want the oil. I want the natural gas. If I had the power to do that, I'd go out and drill right now.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I don't see why they have to bother it. It's just going to ruin a lot of people's lives.

(END VIDEO CLIP)

ANNOUNCER: When CNN & TIME continues.

(COMMERCIAL BREAK)

SHAW: Whether or not the peace process can be saved has become secondary to just halting the violence inside Israel, violence that was ratcheted up to the brink of war. While both sides are blaming the other for starting it, there seem to be forces at work to make sure it never ends.

Violence breeding further violence, who stands to gain from the chaos in the Middle East? Tonight in "Dispatches."

(BEGIN VIDEOTAPE)

MCGEARY: There are a lot of people who think Arafat started this violence because he saw that he was losing the support of the Palestinians in the street. They were frankly fed up with the peace process. And he was the man who represented it to them.

From all of our reporting, we certainly come away with the sense that he did intend a certain display of Palestinian rage. It's a tactic he's used in the past when negotiations have reached an impasse. And he's often won some concessions from the Israelis by doing that.

But he's discovered this time that judicious violence is very hard to calibrate. Rage is feeding rage. Funerals are sparking renewed violence.

A sizeable portion of what's going on is something else. It's the spontaneous rage of Palestinians who are profoundly frustrated with the failure of the peace process so far to deliver them anything other than a few crumbs.

I don't think Arafat knows, and we certainly don't know, whether anybody can order that kind of spontaneous rage to a halt. And when it gets so far out of hand, instead of forcing the Israelis to give in, it forces the Israelis to get tough.

UNIDENTIFIED MALE: What we see, Israeli sniper, Israeli sharpshooter, Israeli tanks, Israeli helicopters attacking Palestinians who are armed with stones.

MCGEARY: Part of the problem with Yasser Arafat is that he doesn't have an army. When he wants to bring Palestinians out into the street, he has to rely on a whole crazy array of people with agendas and weapons and even factional leaders of their own.

This time around, he certainly hoped that a group that has come to be known as the Tunzime (ph), which means the organization, would be able to muster a certain amount of firepower. But the men who run the Tunzime have interests of their own and seek power on their own.

So while they listen to Arafat while it suits then, they don't necessarily listen to him when it doesn't. And they have largely decided it seems that violence in the street enhances their power more than giving in.

DOUG WALLER, "TIME" CORRESPONDENT: In Washington, there is wide disagreement over what kind of power and what kind of control Arafat has. The State Department still believes he can exercise control over these forces or that he should be able to exercise more control than he has.

At the CIA, there is growing skepticism that Arafat can control the violence there. One CIA source told me that it wasn't reasonable to expect that he could stop the violence, that there were too many actors within the Palestinian hierarchy that were pushing Arafat one way or the other, and that he had too many constituencies to satisfy within his leadership, which explains why Arafat has been reluctant to issue orders so far because he's worried that nobody will follow them.

EHUD BARAK, PRIME MINISTER OF ISRAEL: We repeatedly have said that Arafat is responsible to this wave of violence. WALLER: Israelis are rallying behind Barak. But what Barak is losing this week is the support for the peace process. For example, Massad (ph) agents in Israel's intelligence service have been calling their CIA contacts and worrying that the Israeli peace bloc that had supported the peace process is now moving right, and the country is becoming more hardened on the idea of peace and moving more to the view that maybe peace can't be achieved with these Palestinians.

UNIDENTIFIED MALE: To Mr. Arafat and to the leaders of the Palestinian Authority, don't mess with us. Stop messing with us. Stop inciting your own people and causing them the casualties. And stop the violence.

MCGEARY: It's pretty obvious that the Israelis want to make Arafat the man who's responsible. It gives them a person to blame and a phone number to call to get things under control.

They win if they say he did it on purpose. And they win again if they say he can't control it.

(END VIDEOTAPE)

ANNOUNCER: For more on the crisis in the Middle East, read "Time" magazine this week.

Next, when it comes to this Alaskan refuge, there are those who want to preserve this national treasure and those who want to tap the riches that lie below.

(BEGIN VIDEO CLIP)

CLARK: I can't imagine what this incredible landscape would look like with roads, with garbage dumps.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. FRANK MURKOWSKI (R), ALASKA: We know an awful lot about the Arctic that we can take the necessary precautions.

(END VIDEO CLIP)

ANNOUNCER: Oil and the fate of the wild when CNN & TIME continues.

(COMMERCIAL BREAK)

GREENFIELD: One big reason why the tremors in the Middle East are felt in America is oil. The United States is more dependent on imported oil than ever. And right now, we are paying for that dependence.

Consumer frustration over fuel prices could affect the vote in November. And that's why a piece of land far away from most of us has become a centerpiece of both the Gore and Bush campaigns. That land is the Arctic National Wildlife Reserve, or ANWR as it's sometimes known. It's an Alaskan refuge as coveted as it is protected. Here's Mark Potter.

(BEGIN VIDEOTAPE)

POTTER (voice-over): Fenton Rexford, an Inupiat Eskimo, prepares for the autumn whale hunt in the Arctic Ocean. Like many villagers in Kaktovik, Alaska, he still clings to the age-old tradition of hunting for food.

But in other ways, Kaktovik is very different now than it was just a few decades ago, when it was a collection of unheated shacks with no electricity or running water. There are new homes, a police department, a modern school, health care and other services. The reason: oil.

(on camera): So how do you look at oil?

REXFORD: Keeps me warm. Keeps me warm and keeps my outboard motor running to go after our food from the sea, from the ocean.

POTTER (voice-over): In fact, Fenton Rexford is not only a whale hunter, he's chairman of Kaktovik's village corporation, an Eskimo company that owns 92,000 acres of coastal tundra, which Rexford wants to develop.

REXFORD: I want the oil, I want the gas, natural gas. If I had the power to do it, I'd go out and drill right now.

POTTER: And that has put Rexford and his fellow Eskimos at odds with another native Alaskan culture, the Gwich'in Indians, who live 100 miles away on the south edge of the refuge. They, too, are hunters and fear oil development will threaten their way of life and ruin the land they hold sacred.

UNIDENTIFIED FEMALE: In our language, we call it the sacred place where life begins.

POTTER: The Inupiat Eskimos and the Gwich'in Indians find themselves in the heart of the country's biggest land battle, over a pristine wilderness environmentalists call America's Serengeti.

With its braided rivers, rugged mountains, and coastal plain, the Arctic National Wildlife Refuge, known as ANWR, is one of America's most spectacular and untamed places, still barely touched by man. It is the size of South Carolina, 19 million acres, in the remote northeast corner of Alaska.

ANWR is home to polar bears, musk oxen, wolves, and flocks of migratory birds. Its narrow coastal plain is also the calving ground for a 130,000-strong migratory caribou herd.

CLARK: The Arctic National Wildlife Refuge is just an incredible jewel. It is the wildest place left in America. It is an incredible natural area. POTTER: The battle lines are clearly drawn. Drilling in the Arctic is a big issue this election season.

(BEGIN VIDEO CLIP)

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: When that field is online, it will produce a million barrels a day.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

VICE PRES. AL GORE, DEMOCRATIC PRESIDENTIAL CANDIDATE: I don't think it's a fair price to pay to destroy precious parts of America's environment.

(END VIDEO CLIP)

BOYD: It's the last great place to look in North America. And I think the country needs the oil.

UNIDENTIFIED FEMALE: There is no compromise for our people. We don't want to lose anything.

POTTER: Congress created the refuge 20 years ago. At the time, it set aside 1.5 million acres of coastal plain within ANWR to study its oil and gas potential. Seismic tests suggest ANWR's coastal plain may hold billions of barrels of oil. Estimates range between a six- and 30-month supply for the country.

But nobody really knows for sure. And only Congress can approve further testing and development in the refuge.

Republican Senator Frank Murkowski of Alaska says it's time to find out how much oil actually exists there as domestic supplies decline and imports rise.

MURKOWSKI: I think the American people have to know and be prepared for the train wreck that's coming because the American people are going to get that gas bill. They're going to get that electric bill. They're going to blame government.

We've always been concerned about our increasing dependence on imported oil.

POTTER: Murkowski chairs the Senate Energy Committee. He is leading the drive on Capitol Hill to open the coastal plain.

MURKOWSKI: Do we do it domestically? Or do we do it overseas? Are we better off to come to my state, open up the Arctic coastal plain to oil and gas exploration where we've already got an 800-mile pipeline that's only operating at half capacity, keep the jobs, keep the dollars at home?

POTTER: For the past two decades, nearly a quarter of America's oil production has come from the north slope of Alaska, mostly Prudhoe Bay, 60 miles from the refuge. Industry supporters say it would be easy to revive production by pumping oil from the wildlife refuge. That outrageous environmentalists and government officials like Jamie Clark, the director of the U.S. Fish and Wildlife Service.

CLARK: It's fragile. And it's a place where wildlife comes first.

POTTER (on camera): So when you hear someone say, "Let's go there and drill for oil," what's your gut reaction?

CLARK: It would be irreparable damage for little to no gain.

MURKOWSKI: They don't accept the responsibility of where our oil is going to come from. Well, is it going to come from Colombia? Or is it going to come from Saddam Hussein? That's not in their ballpark. It happens to be in mine.

POTTER (voice-over): Polls show most Alaskans favor drilling in the refuge.

BOYD: Oil remains still the most important thing for us, our natural resource.

POTTER: Ken Boyd is the director of the state's oil and gas division. He says oil drives Alaska's economy.

BOYD: Oil has been the lifeblood of Alaska if you like. You know, 70 to 80 percent of our income comes from royalties and taxes and rents and bonuses and what have you.

POTTER: The Alaskan oil industry has generated $45 billion for the state since 1978. Each year, every Alaskan gets an oil dividend check from the state, this year worth nearly $2,000.

OLIVER LEVITT, CHAIRMAN, ARCTIC SLOPE REGIONAL CORPORATION: Before the oil, the north slope was like a big ghetto. It was worse than Third World countries.

POTTER: Oliver Levitt (ph) is chairman of the Arctic Slope Regional Corporation, a company owned by all 7,000 Eskimos on Alaska's north slope. The company provides support services to the Alaskan oil industry at reported revenues of nearly $900 million in 1998 alone.

LEVITT: Our big fear of that is that one day the oil runs out and we don't have another industry. There is nothing to take over and maintain our schools, our hospitals, our fire protection, our police protection. There's nothing else to -- and there will be no more jobs.

POTTER: The Eskimos stand to reap a potential windfall is drilling is allowed to proceed within ANWR. But as it stands now, their land in the refuge cannot be developed.

REXFORD: We're locked out of our resource. We're refugees. We're refugees of our resources. We can't even touch our own land.

POTTER: But ANWR is federal land, not state land.

CLARK: The Arctic National Wildlife Refuge is one of America's finest national wildlife refuges. It doesn't belong to Alaska alone. It belongs to all of us.

POTTER: Including the Gwich'in Indians, who have joined environmentalists to oppose drilling in ANWR. The word Gwich'in means "people of the caribou." They are subsistence hunters who rely on caribou meat to survive the harsh winter.

The Gwich'in fear oil development in the refuge will shrink the herd and cause it to shift its migration routes away from native settlements.

UNIDENTIFIED MALE: I don't see why they have to bother it. It is going to ruin a lot of people's lives.

UNIDENTIFIED FEMALE: What will happen if there's something that will damage the herd?

POTTER: The caribou play a central role in the Gwich'in's spiritual beliefs. And Faith Gimmel (ph) says without caribou, the Gwich'in culture would wither away.

FAITH GIMMEL, GWICH'IN INDIAN: It's the same as with the plains Indian tribes. When they lost the buffalo, they lost many aspects of their culture that were vital to their survival as a people. That's what we feel will happen to our people.

Our social problems would rise. And we'd be a broken people.

POTTER: Supporters of oil drilling say environmental concerns are overstated. They say the animals have learned to adapt to oil development.

BOYD: I don't buy the caribou argument because I've been up there when there's just caribou running all through Dead Horse and through the Prudhoe Bay oil field.

POTTER: The oil industry says exploration would be done in winter when few animals are around.

MURKOWSKI: We know an awful lot about the arctic. We know how to drill and build ice roads that we didn't know 30 years ago. We can take the necessary precautions. We have enough science and technology to know in advance that we can manage this resource.

BOYD: Over 20 years of development on the slope, I think the companies have learned how to do things right. They've shrunk the footprint of development.

POTTER: But critics believe that so-called footprint will inevitably lead to industrial sprawl spoiling the land forever.

(on camera): The oil drillers say that they can go in there, take what they can get as much as it might be, and then eventually roll it all back as if they were never there. Do you believe them?

CLARK: No. I don't. Developing the coastal plain drives a stake right the heart of the Arctic National Wildlife Refuge.

POTTER (voice-over): The argument boils down to values, the value of wilderness, the value of oil in a refuge where geologists aren't even sure how much lies beneath the coastal plain.

BOYD: Everybody knows the arguments. It's now, "I don't like it, and I'm never going to like it," versus, "I think we need to develop it."

(END VIDEOTAPE)

GREENFIELD: As a quick fix to our current oil shortage, the Arctic National Wildlife Reserve doesn't hold much promise. Even if drilling got the go-ahead tomorrow, we wouldn't see the first barrel from ANWR for years.

(COMMERCIAL BREAK)

ANNOUNCER: Next, from winners to losers.

(BEGIN VIDEO CLIP)

COTNER: I knew that he had access to hundreds of greyhounds.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SHRIDER: Everybody was using him. And he is operating an adoption program to give these dogs a home. And nobody disbelieved that.

(END VIDEO CLIP)

ANNOUNCER: Broken promises, why greyhounds are disappearing, when CNN & TIME continues.

(COMMERCIAL BREAK)

GREENFIELD: For those who like to let it ride, the next best thing to playing the ponies is playing the pups. Dog racing is in fact a multi-billion-dollar enterprise in this country with as many as 65,000 greyhounds running every year.

The dogs' racing careers are short, their lives beyond the track anything but certain. Now there are individuals in groups dedicated to placing retired greyhounds in adoptive homes.

But, as Kathy Slobogin finds, in the world of greyhound racing, sometimes the promise of adoption is an empty one.

(BEGIN VIDEOTAPE)

SHRIDER: Oh, you good girl.

UNIDENTIFIED FEMALE: She missed you.

SHRIDER: You good girl, yes you are, yes you are.

SLOBOGIN (voice-over): Ten years ago, a greyhound race track opened near Randy Shrider's (ph) home in St. Paul, Minnesota.

SHRIDER: You haven't changed at all since I saw you.

SLOBOGIN: Shrider was drawn to the dogs that were once the breed of royalty.

SHRIDER: You want to be the ninth dog. Went out there, and my first thing was I wanted to adopt a retired racer, which my wife wasn't real happy with, but I talked her into it anyway.

Come on, five, stay with them.

SLOBOGIN: Shrider, a retired insurance adjuster, soon found his interests turning from adopting dogs to racing them.

SHRIDER: It's a great sport.

SLOBOGIN: Over the years, Shrider has owned and raced more than 30 dogs. He's part of a $3 billion industry with about 65,000 dogs racing each year at tracks around the country. Shrider's dogs, like most greyhounds, only race for two to three years.

SHRIDER: If you have one that made it three years, you've done well.

SLOBOGIN: Shrider says he and other owners can't afford to pay for kennel space and upkeep for dogs that no longer bring in prize money. He's brought a few of his retired racers, like Blender (ph), home to live with him.

SHRIDER: She's got quite a breeding on her. Her dad ran in Kansas City, ran out over a quarter of a million dollars.

SLOBOGIN: But Shrider says he and other owners often have to rely on dog trainers and kennel operators to find homes for most of their greyhounds. That's how he first heard about a man named Daniel Shonka.

SHRIDER: I had seen him once or twice. I really didn't know him.

SLOBOGIN: Shonka, who was a scout for the Philadelphia Eagles, ran a kennel at the St. Croix Meadows Race Track in Wisconsin.

Seen here at his farm in Cedar Rapids, Iowa, Shonka also told greyhound owners that he ran an adoption service for retired racers. He handed out brochures and claimed that he had helped get over 500 greyhounds adopted. SHRIDER: Everybody was using him. I mean, he came across to other kennel owners that he was operating an adoption program to give these dogs a home. And nobody disbelieved that.

SLOBOGIN: In October, 1999, Shrider gave Shonka three of his dogs to place for adoption, including this one, Rattlesnake Dobe (ph).

(on camera): You just trusted that he would find homes for these dogs?

SHRIDER: Right. I had every reason to believe that he would.

SLOBOGIN (voice-over): Halfway across the country, Sherry Cotner, a homemaker in Ashville, North Carolina, was also concerned about what happened to greyhounds who were past their racing prime. She is part of a network of volunteers who discovered a dark side of the greyhound business.

COTNER: They are being dumped into research labs in huge numbers.

SLOBOGIN: Cotner and other advocates believe that as many as 20,000 greyhounds a year are disappearing, not adopted, not sent to breeding farms, and not returned to their owners. Tracking greyhounds through the identification numbers tattooed in their ears, Cotner found the dogs showing up in the records of medical labs where they were used for research.

COTNER: Twenty-six hundred were dumped into Colorado State University in just a few-year time, 500 at Iowa State, several hundred at Kansas State, 250 Auburn. It's just overwhelming, the number.

SLOBOGIN: Five months after Randy Shrider gave his dogs up for adoption, Sherry Cotner came across the name Shodan Enterprises in the records of a Minneapolis research lab. Shodan Enterprises had sold the lab five greyhounds.

COTNER: I looked under Shodan Enterprises and found it was owned by a man named Daniel Shonka.

SLOBOGIN: Cotner found that Shonka was licensed by the U.S. Department of Agriculture to sell animals for medical research. She also found him listed as a kennel owner at a greyhound racetrack.

COTNER: I knew that he had access to hundreds of greyhounds.

SLOBOGIN: Government records show that in one year alone, Shonka made more than $100,000 selling animals to research facilities at the same time he was running an adoption service.

SCOTT SAPONTIAC, WISCONSIN DIVISION OF GAMING: We've even talked to individuals that since had sent him money for his adoption program.

SLOBOGIN (on camera): Donations?

SAPONTIAC: Donations. That's correct. SLOBOGIN (voice-over): Scott Sapontiac (ph) runs Wisconsin's Division of Gaming. He says Wisconsin authorities had no idea Shonka had been selling greyhounds for more than three years until Sherry Cotner tipped them off.

(on camera): How many dogs are we talking about?

SAPONTIAC: Our records show that 1,037 dogs during that period.

SLOBOGIN (voice-over): This wasn't supposed to happen in Wisconsin. It's against state regulations for animal dealers to sell greyhounds to research labs.

In fact, Wisconsin is the only state in the country which has a tracking system requiring a slip for every greyhound that leaves the track detailing where the dog is going. But Shonka found a way around the system.

(on camera): He was essentially saying he was adopting all these dogs.

SAPONTIAC: That is correct.

SLOBOGIN (voice-over): Scott Sapontiac says Shonka lied about where he was taking the dogs.

(on camera): Adoption. Adoption.

SAPONTIAC: We found instances on the same day that they were chucked out of the kennel compound at the racetrack saying that they were going to his farm in Cedar Rapids, Iowa, they were showing up at a research facility.

SLOBOGIN: Is there a system in place to spot check? Or do you just have to basically trust the honesty of the paperwork?

SAPONTIAC: We really have to trust the honesty of the paperwork that we deal with because over this time period there's probably been over than 21,000 removal from premise slips that have been filed.

COTNER: You could write down a destination for a greyhound. And it could be any destination. You could just make something up. Wisconsin is not checking to make sure that dog is actually going to the destination.

SLOBOGIN (voice-over): Shonka also managed to slip through the federal system. The U.S. Department of Agriculture licenses animal dealers like Shonka and inspected his business twice a year. But the USDA allowed Shonka to stay in operation for about three years despite potential trouble signs.

In Shonka's first year as an animal dealer, a USDA inspector found that out of 290 dogs, fully 207 adult dogs are not accounted for. There were no records of the dogs' owners. That's a USDA violation for which dealers may be fined or have their licenses revoked. But Shonka was never sanctioned. Dr. Ron Dehaven (ph) runs the USDA unit which is supposed to police dealers like Shonka.

(on camera): Here you have 207 dogs that are unaccounted for. And the inspector knows that. Why is a dealer like that allowed to stay in business?

DR. RON DEHAVEN, U.S. DEPARTMENT OF AGRICULTURE: To answer generically, we consider the records that we require all of these dealers to keep to be paramount. They need to be complete. And they need to be accurate.

On the other hand, to the extent that there was no intentional fraud in keeping incomplete or inaccurate records, we would simply require those records to be brought up to date and be accurate.

SLOBOGIN (voice-over): While the USDA may not have known where Shonka was getting his dogs, it did know where he was selling them.

More than 1,000 went to the Guidant Corporation in St. Paul, Minnesota, according to authorities. Guidant used the greyhounds, which have large chests, to test pacemakers. Wires were threaded through their veins and inserted into their hearts. After the tests were finished, the dogs were euthanized.

By the time Wisconsin authorities contacted Guidant, nearly 900 of the 1,000 greyhounds Shonka had sold were dead, according to the attorney representing many of the greyhound owners. One of them was Randy Shrider's dog, Rattlesnake Dobe.

SHRIDER: It infuriates me is what it does. They deserve better. They're a pet. And if for some reason they couldn't run or their racing career was over, I would want them in somebody's house.

SLOBOGIN: Guidant declined an on-camera interview request by CNN & TIME, but said off camera that the company had no reason not to buy research animals from Shonka, who was a federally licensed dealer.

According to Scott Sapontiac, Guidant has cooperated fully with Wisconsin authorities.

SAPONTIAC: They stopped the research of these animals. They sent us the tattoo numbers of each of the greyhounds so that we could identify who the owners were so they could start contacting the owners and returning them.

SLOBOGIN (on camera): CNN & TIME talked to 17 other owners whose dogs Shonka had sold to Guidant Corporation. They all said they never gave permission for their dogs to be sold as research animals.

(voice-over): Daniel Shonka is now under criminal investigation in Wisconsin. Neither Shonka nor his attorneys would comment to CNN & TIME. In April of this year, Shonka voluntarily surrendered his USDA animal dealer license.

(on camera): Daniel Shonka was in business for three years, licensed by your agency, getting inspected all that time. How did he slip through?

DEHAVEN: Only because we have an investigation pending, I really can't comment specifically on the Shonka investigation.

UNIDENTIFIED MALE: The thought of these animals in research laboratories is understandably upsetting.

SLOBOGIN (voice-over): The USDA has come under fire in the past for lax enforcement. In congressional hearings in the mid-1990s, animal advocates charged that crooked dealers selling stolen pets were operating with impunity.

But Dehaven says the USDA has improved its monitoring of animal dealers.

DEHAVEN: In fact, there were 104 such dealers at the time selling to research. Today, there's only 28 left. I think that's largely due because of our very aggressive enforcement actions. We've suspended or revoked over 20 licenses. We've imposed over $500,000 in civil penalties.

SLOBOGIN: Dehaven says to make sure dealers aren't selling stolen animals to research labs, USDA inspectors trace back a dealer's records to the animal's original owners. But the track backs are random, two or three dogs per inspection.

In Shonka's case, no trace backs were done at all. Dehaven says that's because USDA policy only required traces on animals from shelters and pounds. Now the policy has been changed to cover dealers like Shonka.

(on camera): You had the USDA with all of its nice, neat paperwork, it didn't work. The man was selling dogs without owners' consent allegedly. What good is the paperwork?

DEHAVEN: The paperwork was there. We need to do good follow-up on that paperwork. But at the same time, we're not going to find the violator the first time he violates the law any more than the state police are likely to catch a speeder the first time they speed.

But if we are periodically doing our job, checking those records, validating that the records accurately reflect where the animals came from, we'll eventually catch those violators.

SLOBOGIN: If you hadn't discovered Shonka's operation, would he still be in business?

COTNER: Oh, he definitely would be.

SLOBOGIN (voice-over): Only about 100 of the dogs sold by Shonka to Guidant survived. They still bear the scars of their time in the lab.

Those that have been released are going to adoptive homes found by greyhound advocates.

COTNER: Oh, you're strong.

SLOBOGIN: But Sherry Cotner worries about all the other greyhounds who may fall prey to dealers like Shonka despite her efforts to track them down.

COTNER: We've only just hit the tip of the iceberg. There is over 1,200 research labs licensed in the United States. And we've not even covered just a tiny, tiny, tiny little bit of research labs.

There are 49 tracks in the United States. At each track, there's probably over 1,000 greyhounds any one day. And it's like a revolving door. Dogs are coming in. Dogs are going out. It happens every day.

(END VIDEOTAPE)

GREENFIELD: So far, 96 greyhounds from the Guidant lab have been released. Many of the dogs are now in adoptive homes. Others, they're still waiting.

And that's this edition of CNN & TIME. Coming up next, out of sight is out of mind when it comes to nuclear weapons. The Cold War may be over. But we've still got ours, and they've still got theirs. Join me for "Rehearsing for Doomsday," part five of "Democracy in America."

I'm Jeff Greenfield. Bernie, I'll see you next week.

SHAW: Thanks, Jeff. I'm Bernard Shaw. For everyone at CNN & TIME, thanks for joining us.

ANNOUNCER: To find out more on what happens to greyhound dogs when they stop racing, log on to CNN.com/chat following the show at 10:00 p.m. Eastern and chat live with greyhound adoption representative Sherry Cotner.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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