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CNN Live At Daybreak

Hundreds Released from Abu Ghraib Prison; Veepstakes; Terrorism Online

Aired May 14, 2004 - 06:30   ET

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

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


CAROL COSTELLO, CNN ANCHOR: In sports, a hostile crowd in Philadelphia didn't shake up Tampa Bay. The Lightning skate past the Flyers 4-1, taking a 2-1 lead in the NHL Eastern Conference Finals.
In culture, Miramax film studio cofounder Harvey Weinstein is writing his memoirs. He will document the founding of the premier independent movie studio. Publisher Harper Collins says the book is due out in two years.

(WEATHER BREAK)

COSTELLO: More accusations of prison abuse this morning; this time, from the hundreds of Iraqis being freed from the Abu Ghraib prison.

Our Ben Wedeman is at the notorious facility, and he has this report for you.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT: The first large batch of prisoners was released from Abu Ghraib today -- a total of 315, according to a senior coalition source.

Now, they left -- the first bus left Abu Ghraib prison at about 9:20 in the morning local time. Rather than stopping outside the gates of the prison, however, it headed east towards Baghdad, much to the disappointment of hundreds of people who had assembled outside the prison, having heard rumors that there would be a prisoner release.

In total, five buses left the prison, one apparently heading towards Fallujah, three to the northwest of Baghdad.

Now, already from those who have emerged from the prison, reports that they were abused, humiliated and mistreated. At this point, it is difficult to confirm those stories, but what seems to be clear is that those coming out are bringing with them a good deal of resentment against the U.S.-led coalition.

I'm Ben Wedeman, CNN, reporting from Baghdad.

(END VIDEOTAPE)

COSTELLO: Deputy Secretary of Defense Paul Wolfowitz will speak today at an Armed Services Day ceremony at Andrews Air Force Base. He's fresh from Capitol Hill, where the focus was more money. Wolfowitz was requesting 25 billion additional dollars for military operations in Iraq and Afghanistan, and he does admit it's a giant request.

(BEGIN AUDIO CLIP)

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: We're not pretending that this is -- not only are we not pretending this is not the supplemental, we're not pretending this is six months of the supplemental. It is very likely -- you can do the arithmetic, Senator. We're not hiding the ball on what we're spending now. It's roughly -- and I'm not using the precise 4.4. It's roughly 4.5 billion, or if you add some other things, pushing closer to 5 billion a month. It is $50 to $60 billion if you look at all of our operations in Iraq and in Afghanistan. It's a big bill.

(END VIDEOTAPE)

COSTELLO: Democratic and Republican senators say they will support the $25 billion, but they oppose giving the White House free rein in spending it.

This programming note for you: Jonathan Davis, father of Sergeant Javal Davis, one of the soldiers implicated in the Iraqi prisoner abuse scandal, will be a guest on "AMERICAN MORNING." Of course, that comes your way at 7:00 a.m. Eastern.

President Bush campaigns in the Midwest today before heading to Camp David for the weekend. The president headlines a Republican fund-raiser in Missouri, and then heads to Wisconsin to deliver a commencement address at Concordia University.

Senator John Kerry is in Washington today, where he viewed the latest prisoner abuse photos from Iraq. He didn't comment on them, though. This afternoon, Kerry will address the International Brotherhood of Police Officers, and then he heads home to Massachusetts.

Suspense builds regarding the Democratic vice presidential candidate, the only suspense left at the national level in this year's nominating process.

Our Kelly Wallace reports on the speculation about Senator Kerry's short list.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN CORRESPONDENT (voice-over): So, who is getting John Kerry's attention? We set out to find the ideal vice presidential candidate. Joining us: presidential historian Allan Lichtman.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: Kerry's got gravitas, but he doesn't have the swing. He doesn't have the music. Pick someone who is a great crooner out there on the campaign trail.

WALLACE: With that in mind, there's North Carolina Senator John Edwards and, of course, the junior senator from New York.

(on camera): What does a Hillary Clinton give to John Kerry?

LICHTMAN: Instant celebrity. Everybody knows who Hillary Clinton is.

WALLACE (voice over): And that could be a problem. Senator Clinton might overshadow Senator Kerry.

So, the presumptive Democratic nominee might tap someone who can help win a battleground state, like Missouri Congressman Dick Gephardt, Iowa's Governor Tom Vilsack, Governor Bill Richardson of New Mexico, or Senator Evan Bayh of Indiana.

LICHTMAN: Evan Bayh is about as close as you're going to get to Ohio since there are hardly any Democrats there.

WALLACE: And then there is the let's-maximize-strength theory, a decorated Vietnam veteran choosing another veteran at a time of uncertainty about the war in Iraq.

LICHTMAN: I can give you Wesley Clark's appeal in one word: he's a general.

WALLACE: And, of course, if Kerry wants to surprise those who think he is not one to take chances, there is the man who keeps saying no, Republican Senator John McCain.

LICHTMAN: He was willing.

WALLACE: The first rule of thumb, make sure the candidate does you no harm. Paul Brountas headed the 1988 search for Governor Michael Dukakis' running mate.

PAUL BROUNTAS, HEADED DUKAKIS CAMPAIGN VICE PRESIDENTIAL SEARCH: We learned from the mistakes of the past. Acting too quickly can cause terrible results.

WALLACE: Brountas refers to 1984, when vice presidential nominee Geraldine Ferraro was a surprise choice. Her husband's business dealings became an issue. Since then, the background checks have become more intense.

BROUNTAS: Everything has to be on the table. Otherwise, all you need is one -- what you don't want is a surprise in the middle of the campaign.

WALLACE: So while the Kerry team scours the records of contenders and we keep talking about who might be ideal, the only thing we know for sure is, only John Kerry knows what he will do.

Kelly Wallace, CNN, New York.

(END VIDEOTAPE)

COSTELLO: Who do you think John Kerry will choose as his running mate? Play along in this political guessing game at CNN.com/veepstakes. The final round of online voting begins today, and the winner will be announced on Tuesday night. I didn't even know we were conducting that contest.

CHAD MYERS, CNN METEOROLOGIST: I didn't either.

COSTELLO: I'm going to have to, like, participate.

Terrorists on the Internet have to get serious now. How radical groups are using the worldwide Web to get their anti-Western message to millions. We'll have more on that story just ahead.

Plus, pricey pads, the most expensive housing markets in the entire country. We'll have them for you next.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz. If you want to buy a home before interest rates rise, be aware that prices are climbing.

Carrie Lee has how much live from the Nasdaq Marketsite.

Good morning.

CARRIE LEE, CNN FINANCIAL NEWS: Hi, Carol.

Well, existing home prices remain near record levels. About $171,000 was the median for an existing home price in the first quarter of 2004. The prices in individual metro markets were actually a mixed bag. Strong sales in some markets saw huge price gains -- strong markets, rather, saw huge price gains. Weaker markets, though, experienced sharper declines than seen in recent quarters.

Take a look at some examples: Prices in Riverside and San Bernardino Counties, both near Los Angeles, increased 33 percent to about $259,000 between the year-ago first quarter and this current quarter. Prices in Las Vegas up 31 percent.

But then take a look at median prices in Springfield, Illinois, down 10 percent to about $84,000. Also in Charleston, West Virginia, prices sunk 10 percent as well.

Why the price declines in those areas? Really weak local economies rather than a housing market decline.

Now, keep in mind that mortgages rates have been rising. They're at about 6.344 percent right now, the highest levels we've seen in August. Conventional wisdom dictates than when mortgage rates go up, housing prices come down. The problem in this market is that we are having more -- we are seeing more home buyers than sellers. So, inventories are tight, and that, at least for now, Carol, is keeping prices petty high.

So, that's the latest from here.

COSTELLO: I only with that were true in Atlanta, where the housing market is not good for those who are selling.

LEE; It's very tough to -- hard for those who are selling. Yes, it's interesting. There is so much variation, depending on where you live, depending on what the economy is looking like.

COSTELLO: True. Carrie Lee live from the Nasdaq Marketsite.

Terrorism on the Web. We all know by now the decapitation of Nick Berg was posted on the Web. That Web site has now been closed down. Apparently, it had so many hits it was interfering with other clients.

We want to talk more about terrorists using the Web. Joining us from D.C., James Carafono from the Heritage Foundation.

Good morning.

JAMES CARAFONO, HERITAGE FOUNDATION: Good to be with you.

COSTELLO: Apparently, a Malaysian company hosted the al Qaeda- linked Web site that had Nick Berg's decapitation on it, but it denies it was aware that al Qaeda was using the Web site -- its Web site. Is that possible?

CARAFONO: Absolutely. I mean, there is a worldwide presence of terrorists on the Web, and this has been a phenomenon that's been growing for a decade now. The State Department has a list of what we list as terrorist organizations. There are several dozen of them. All of them have a presence on the Web.

And they move around a lot. They jump from place to place. So, it's not unusual -- and they're all over the world. So, it's not unusual that somebody might post something on a Web site and nobody would know that it's run by a terrorist group.

COSTELLO: But is it possible -- I don't know. They don't have to rent the site, because this Malaysian company said whoever posted those pictures of Nick Berg's decapitation rented the site. If that's true, why not just say who did it?

CARAFONO: Well, again, you can have fronts on these things. You can route them through different places. They jump up. They pop up. They disappear. So, it's not hard to move around a lot. It's how they maintain their presence on the Web.

COSTELLO: So -- see, I'm struggling to understand, because...

CARAFONO: You have to understand -- I mean, the laws in this area are very immature. I mean, international cyber law is not really a well-established field. And so, what you have is, you know, you could have something in one country that's a crime and in another country posting this stuff on the Web is not even a crime. So, it's difficult to keep up with this.

On the other hand, the government knows about this. Our government looks at it. Other intelligence agencies look at it. So, they track these things. This is in part how we get a lot of information.

And terrorists use these things for a wide variety of purposes. They use them for propaganda, like the murder of Berg. They also use them for recruiting. They use them to talk to journalists. ETA (ph), which is the Bosque (ph) Web site in Spain, they publish their Web site in several different languages so reporters can go there and get information about them.

So, they're very sophisticated when they use these.

COSTELLO: But can't the companies who host these Web sites, can't they police their own Web sites?

CARAFONO: Well, you could. But, I mean, think of the millions and millions and millions of Web pages that are out there and the thousands of companies who are operating these things. It's just a vast amount of information that it would be difficult for even if you were really serious about it, if you were an Internet service provider or a hosting company, to really, you know, go through these things and find these things.

And, again, a lot of these things tread the line between legitimate free speech and real terrorist activities. So, how do you make a decision on when to pull something or not? So, it's not an easy problem to deal with.

COSTELLO: But if you really sat down to investigate, could you come up with the person who posted that on the Web site? Could you find that person?

CARAFONO: Sometimes they do. I mean, the intelligence groups that look at these things are very sophisticated. Some of these sites have very unique characteristics. So, sometimes you can track them down.

There are also a lot of imitation sites. There are a lot of people that throw stuff on the Web that are trying to imitate al Qaeda and other things. And a person just looking at it might not be able to tell. People who really practice this can do this. But think about it. To do this really well, you have to be fluent in several different languages, you have to know an awful lot about culture, you have to know a lot of intelligence about these things. So, it's not the easiest thing to do to track these things.

COSTELLO: James Carafono, live from D.C. from the Heritage Foundation. Thank you for joining DAYBREAK.

CARAFONO: Thanks for having me.

COSTELLO: Your news, money, weather and sports. It's 6:45 Eastern Time. Here's what's all new this morning.

U.S. forces have begun releasing more than 300 Iraqis from the Abu Ghraib prison in Iraq. It comes a day after a surprise visit to Baghdad by Defense Secretary Donald Rumsfeld. For 37 cents you can celebrate explorers Meriwether Lewis and William Clark, who launched their famous expedition 200 years ago. The Postal Service commemorates the expedition with the release today of a Lewis and Clark stamp.

In money news, Delta Airlines says not to worry about the number of pilots who could soon be retiring. It says it's reached an agreement with the Pilots Association, and flight schedules will not be affected.

In sports, she's 47 years old and she's coming back. Martina Navratilova will play at the French Open a decade after her last grand slam singles match.

In culture, one of the greatest stars of stage and screen is coming to Virginia. Judy Duensch (ph) participates in a day of festivities tomorrow and will be honored at Black Freyer's (ph) Playhouse.

(WEATHER BREAK)

COSTELLO: Those are the latest headlines.

Let's head live to New York City to check in with Bill and Soledad to see what's coming up on "AMERICAN MORNING."

Good morning.

BILL HEMMER, CNN ANCHOR: Good morning, Carol. Happy Friday. How about Marina, huh? Forty-seven, the new 21.

COSTELLO: Oh, you go.

HEMMER: Young forever.

SOLEDAD O'BRIEN, CNN ANCHOR: I am so glad to hear that.

HEMMER: I'm telling you.

Listen, we're going to go live to Baghdad in a moment. Dan Senor is with us. Brigadier General Mark Kimmitt is our guest as well. A number of topics to get to regarding Iraq. We'll take you there live at the top of the hour.

O'BRIEN: And we continue to talk about Nicholas Berg, the young man, of course, who was beheaded in Iraq. We're talking this morning about the investigation. His family has mentioned this. A coincidental, an accidental meeting of an associate of terrorist Zacarias Moussaoui. How strange is that?

Also, we'll talk to a friend of Nicholas Berg, who will tell us about his last days in Iraq.

HEMMER: Also, election 2004. Bush, Kerry, the polls, and what do they mean now in May? Ron Brownstein of the "L.A. Times" stops in to talk about that and sharing his thoughts with us here on a Friday morning.

Jack Cafferty, too. The whole gang is loaded and ready to go in 12 minutes, Carol. We'll see you then, and have a great weekend.

COSTELLO: Thank you. You, too.

HEMMER: All right.

O'BRIEN: Thanks.

HEMMER: A pit stop at the Cannes Film Festival. Just ahead, live to France, where the war epic, "Troy," and its well-known lead actor are causing quit a frenzy.

(COMMERCIAL BREAK)

COSTELLO: Welcome back to DAYBREAK.

In the south of France, our own Chris Burns is deeply embedded in the 57th Cannes Film Festival, and no doubt he is loving every minute of it. We'd like to join him again live on the phone from Cannes.

Chris -- describe what you're doing at this moment. Where are you? Are you on a beautiful beach?

CHRIS BURNS, CBS CORRESPONDENT: At this moment, I'm sort of standing on top of the palace overlooking -- it's just an amazing scene -- thousands of journalists, thousands of fans, wannabes, all just filling the streets and filling the beaches today. It's quite a colorful scene. Posters are all over the place. And, of course, the red steps nearby where we saw Brad Pitt with Jennifer Anistan on his arm walking up the steps. As Achilles in the movie, "Troy, he storms Troy, and here he storms Cannes. He really took a lot of attention, just really the darling of Cannes of the last 24 hours

More excitement up ahead, though. There's a lot of suspense for those part-time French actors who have been threatening to disrupt the whole film festival are threatening again if their demands aren't met by today. So, there could be more suspense.

And you've got to look ahead to tomorrow, Saturday, when "Shrek 2" walks up the steps with all kinds of stars like Eddie Murphy, Cameron Diaz, Mike Myers, Antonio Banderas, Julie Andrews. They're going to be walking up the steps tomorrow night, and hopefully they won't be disrupted by these part-time workers who are demanding more unemployment benefits -- Carol.

COSTELLO: So, what will the part-time workers do? Will they just pull the plug and the movie houses will go dark?

BURNS: Well, that's a good question. They're leaving that a big mystery of what they're going to do. It could be some kind of a stunt they might try to pull. But otherwise, really pretty much everybody here realizes it's in their interest to keep the world's biggest movie circus going right through May 23. They really want to do that. And more excitement also on Saturday. Alex Kerry, who is the daughter -- Alexandra Kerry, the daughter of John Kerry, the senator and the likely presidential candidate for the Democratic side, is going to be showing her "Last Full Measure," it's called. It's a movie about -- a short film about a Vietnam vet veteran and the relationship with his daughter. That's going to be shown tomorrow down in the Lubi (ph) market, where you've got thousands of films there for sale. It's quite an amazing scene there.

COSTELLO: Oh, it sounds amazing to me. Chris Burns, you stay safe in Cannes.

BURNS: I'm trying to. Thanks.

COSTELLO: That sounds great, doesn't it?

MYERS: It's so nice to send a reporter to a nice location after we send to all of these bad places all the time, isn't it?

COSTELLO: Oh! That's true. That's a good way to look at it.

MYERS: My, oh, my! At least a couple of days off anyway.

Hey, let me show you what's going on here for your DAYBREAK quiz now. Thursday's questions, yesterday's, former Iraq hostage Thomas Hamill threw out the first pitch at a baseball game. Who was playing? Florida Marlins and the Houston Astros.

And the air leakage around your windows and doors can increase your energy bills by how much? Thirty percent.

COSTELLO: Wow!

MYERS: The winner from Pennsylvania, Lisa Curtis. Good morning, Lisa. Congratulations. You can win again if you like, because here is your next chance. Here you go, type, type, type.

Martina Navratilova requested a wild card to play in what tournament? We just had that story.

And a little bit ago, Julie Valise had a report on totaling the family car. What is the average cost of car repairs?

Type in Daybreak@CNN.com, put in there your address as well, give us all of the answers, and we'll get to the winner...

COSTELLO: That's right, Daybreak@CNN.com.

MYERS: I love it.

COSTELLO: You're going to miss the contest when you're on vacation next week, aren't you?

MYERS: I am going to miss it, but I'll be watching.

COSTELLO: You can call in. Yes, sure you will. Chad will join me for "The Lightning Round" coming up, but first the latest headlines for you.

(COMMERCIAL BREAK)

MYERS: And we've got a weatherman!

COSTELLO: There were question marks where your age should have been.

MYERS: Forty-one.

COSTELLO: Oh, man! It's all downhill from here, baby.

MYERS: It certainly is.

COSTELLO: But, you know, Bill was right. Forty is the new 30. When you hit 50, it'll be the new 40.

MYERS: Correct.

COSTELLO: It's OK.

MYERS: I'll keep working on it.

COSTELLO: All right, let's head into our "Lightning Round" right now.

Riding into the record books, some horse riders are traveling 2,700 miles from Turkmenistan -- I think that's somewhere left of Boise, isn't it? No.

MYERS: Yes, it's just outside of Boise.

COSTELLO: No, actually this is in Central Asia. They're riding all the way to Moscow, trying to break the record of 84 days set in 1935, and that's, again, 2,700 miles.

In Australia, men are learning to take it off. Take it all off. Yes, this is a class for stripping for men, and it's supposed to help men get in touch with their sensuality, which I never really knew a man who had trouble with that. Chad?

MYERS: Yes.

COSTELLO: Some researchers in Israel are helping to clear things up literally. They're using new technology to make underwater photographs clearer.

MYERS: And, you know, they found a new volcano under the water as well. Maybe they could take some pictures of the volcano.

COSTELLO: Where did they find a new volcano under the water?

MYERS: Out in the Pacific.

COSTELLO: Really?

MYERS: Yes.

COSTELLO: You're going to go to Hawaii and try to find that, aren't you?

MYERS: I might go diving down there.

COSTELLO: It sounds good.

MYERS: OK.

COSTELLO: Chad will be away next week on vacation.

MYERS: I will.

COSTELLO: We will miss you. Happy birthday.

MYERS: Thank you.

COSTELLO: "AMERICAN MORNING" starts right now.

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


Aired May 14, 2004 - 06:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: In sports, a hostile crowd in Philadelphia didn't shake up Tampa Bay. The Lightning skate past the Flyers 4-1, taking a 2-1 lead in the NHL Eastern Conference Finals.
In culture, Miramax film studio cofounder Harvey Weinstein is writing his memoirs. He will document the founding of the premier independent movie studio. Publisher Harper Collins says the book is due out in two years.

(WEATHER BREAK)

COSTELLO: More accusations of prison abuse this morning; this time, from the hundreds of Iraqis being freed from the Abu Ghraib prison.

Our Ben Wedeman is at the notorious facility, and he has this report for you.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT: The first large batch of prisoners was released from Abu Ghraib today -- a total of 315, according to a senior coalition source.

Now, they left -- the first bus left Abu Ghraib prison at about 9:20 in the morning local time. Rather than stopping outside the gates of the prison, however, it headed east towards Baghdad, much to the disappointment of hundreds of people who had assembled outside the prison, having heard rumors that there would be a prisoner release.

In total, five buses left the prison, one apparently heading towards Fallujah, three to the northwest of Baghdad.

Now, already from those who have emerged from the prison, reports that they were abused, humiliated and mistreated. At this point, it is difficult to confirm those stories, but what seems to be clear is that those coming out are bringing with them a good deal of resentment against the U.S.-led coalition.

I'm Ben Wedeman, CNN, reporting from Baghdad.

(END VIDEOTAPE)

COSTELLO: Deputy Secretary of Defense Paul Wolfowitz will speak today at an Armed Services Day ceremony at Andrews Air Force Base. He's fresh from Capitol Hill, where the focus was more money. Wolfowitz was requesting 25 billion additional dollars for military operations in Iraq and Afghanistan, and he does admit it's a giant request.

(BEGIN AUDIO CLIP)

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: We're not pretending that this is -- not only are we not pretending this is not the supplemental, we're not pretending this is six months of the supplemental. It is very likely -- you can do the arithmetic, Senator. We're not hiding the ball on what we're spending now. It's roughly -- and I'm not using the precise 4.4. It's roughly 4.5 billion, or if you add some other things, pushing closer to 5 billion a month. It is $50 to $60 billion if you look at all of our operations in Iraq and in Afghanistan. It's a big bill.

(END VIDEOTAPE)

COSTELLO: Democratic and Republican senators say they will support the $25 billion, but they oppose giving the White House free rein in spending it.

This programming note for you: Jonathan Davis, father of Sergeant Javal Davis, one of the soldiers implicated in the Iraqi prisoner abuse scandal, will be a guest on "AMERICAN MORNING." Of course, that comes your way at 7:00 a.m. Eastern.

President Bush campaigns in the Midwest today before heading to Camp David for the weekend. The president headlines a Republican fund-raiser in Missouri, and then heads to Wisconsin to deliver a commencement address at Concordia University.

Senator John Kerry is in Washington today, where he viewed the latest prisoner abuse photos from Iraq. He didn't comment on them, though. This afternoon, Kerry will address the International Brotherhood of Police Officers, and then he heads home to Massachusetts.

Suspense builds regarding the Democratic vice presidential candidate, the only suspense left at the national level in this year's nominating process.

Our Kelly Wallace reports on the speculation about Senator Kerry's short list.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN CORRESPONDENT (voice-over): So, who is getting John Kerry's attention? We set out to find the ideal vice presidential candidate. Joining us: presidential historian Allan Lichtman.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: Kerry's got gravitas, but he doesn't have the swing. He doesn't have the music. Pick someone who is a great crooner out there on the campaign trail.

WALLACE: With that in mind, there's North Carolina Senator John Edwards and, of course, the junior senator from New York.

(on camera): What does a Hillary Clinton give to John Kerry?

LICHTMAN: Instant celebrity. Everybody knows who Hillary Clinton is.

WALLACE (voice over): And that could be a problem. Senator Clinton might overshadow Senator Kerry.

So, the presumptive Democratic nominee might tap someone who can help win a battleground state, like Missouri Congressman Dick Gephardt, Iowa's Governor Tom Vilsack, Governor Bill Richardson of New Mexico, or Senator Evan Bayh of Indiana.

LICHTMAN: Evan Bayh is about as close as you're going to get to Ohio since there are hardly any Democrats there.

WALLACE: And then there is the let's-maximize-strength theory, a decorated Vietnam veteran choosing another veteran at a time of uncertainty about the war in Iraq.

LICHTMAN: I can give you Wesley Clark's appeal in one word: he's a general.

WALLACE: And, of course, if Kerry wants to surprise those who think he is not one to take chances, there is the man who keeps saying no, Republican Senator John McCain.

LICHTMAN: He was willing.

WALLACE: The first rule of thumb, make sure the candidate does you no harm. Paul Brountas headed the 1988 search for Governor Michael Dukakis' running mate.

PAUL BROUNTAS, HEADED DUKAKIS CAMPAIGN VICE PRESIDENTIAL SEARCH: We learned from the mistakes of the past. Acting too quickly can cause terrible results.

WALLACE: Brountas refers to 1984, when vice presidential nominee Geraldine Ferraro was a surprise choice. Her husband's business dealings became an issue. Since then, the background checks have become more intense.

BROUNTAS: Everything has to be on the table. Otherwise, all you need is one -- what you don't want is a surprise in the middle of the campaign.

WALLACE: So while the Kerry team scours the records of contenders and we keep talking about who might be ideal, the only thing we know for sure is, only John Kerry knows what he will do.

Kelly Wallace, CNN, New York.

(END VIDEOTAPE)

COSTELLO: Who do you think John Kerry will choose as his running mate? Play along in this political guessing game at CNN.com/veepstakes. The final round of online voting begins today, and the winner will be announced on Tuesday night. I didn't even know we were conducting that contest.

CHAD MYERS, CNN METEOROLOGIST: I didn't either.

COSTELLO: I'm going to have to, like, participate.

Terrorists on the Internet have to get serious now. How radical groups are using the worldwide Web to get their anti-Western message to millions. We'll have more on that story just ahead.

Plus, pricey pads, the most expensive housing markets in the entire country. We'll have them for you next.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz. If you want to buy a home before interest rates rise, be aware that prices are climbing.

Carrie Lee has how much live from the Nasdaq Marketsite.

Good morning.

CARRIE LEE, CNN FINANCIAL NEWS: Hi, Carol.

Well, existing home prices remain near record levels. About $171,000 was the median for an existing home price in the first quarter of 2004. The prices in individual metro markets were actually a mixed bag. Strong sales in some markets saw huge price gains -- strong markets, rather, saw huge price gains. Weaker markets, though, experienced sharper declines than seen in recent quarters.

Take a look at some examples: Prices in Riverside and San Bernardino Counties, both near Los Angeles, increased 33 percent to about $259,000 between the year-ago first quarter and this current quarter. Prices in Las Vegas up 31 percent.

But then take a look at median prices in Springfield, Illinois, down 10 percent to about $84,000. Also in Charleston, West Virginia, prices sunk 10 percent as well.

Why the price declines in those areas? Really weak local economies rather than a housing market decline.

Now, keep in mind that mortgages rates have been rising. They're at about 6.344 percent right now, the highest levels we've seen in August. Conventional wisdom dictates than when mortgage rates go up, housing prices come down. The problem in this market is that we are having more -- we are seeing more home buyers than sellers. So, inventories are tight, and that, at least for now, Carol, is keeping prices petty high.

So, that's the latest from here.

COSTELLO: I only with that were true in Atlanta, where the housing market is not good for those who are selling.

LEE; It's very tough to -- hard for those who are selling. Yes, it's interesting. There is so much variation, depending on where you live, depending on what the economy is looking like.

COSTELLO: True. Carrie Lee live from the Nasdaq Marketsite.

Terrorism on the Web. We all know by now the decapitation of Nick Berg was posted on the Web. That Web site has now been closed down. Apparently, it had so many hits it was interfering with other clients.

We want to talk more about terrorists using the Web. Joining us from D.C., James Carafono from the Heritage Foundation.

Good morning.

JAMES CARAFONO, HERITAGE FOUNDATION: Good to be with you.

COSTELLO: Apparently, a Malaysian company hosted the al Qaeda- linked Web site that had Nick Berg's decapitation on it, but it denies it was aware that al Qaeda was using the Web site -- its Web site. Is that possible?

CARAFONO: Absolutely. I mean, there is a worldwide presence of terrorists on the Web, and this has been a phenomenon that's been growing for a decade now. The State Department has a list of what we list as terrorist organizations. There are several dozen of them. All of them have a presence on the Web.

And they move around a lot. They jump from place to place. So, it's not unusual -- and they're all over the world. So, it's not unusual that somebody might post something on a Web site and nobody would know that it's run by a terrorist group.

COSTELLO: But is it possible -- I don't know. They don't have to rent the site, because this Malaysian company said whoever posted those pictures of Nick Berg's decapitation rented the site. If that's true, why not just say who did it?

CARAFONO: Well, again, you can have fronts on these things. You can route them through different places. They jump up. They pop up. They disappear. So, it's not hard to move around a lot. It's how they maintain their presence on the Web.

COSTELLO: So -- see, I'm struggling to understand, because...

CARAFONO: You have to understand -- I mean, the laws in this area are very immature. I mean, international cyber law is not really a well-established field. And so, what you have is, you know, you could have something in one country that's a crime and in another country posting this stuff on the Web is not even a crime. So, it's difficult to keep up with this.

On the other hand, the government knows about this. Our government looks at it. Other intelligence agencies look at it. So, they track these things. This is in part how we get a lot of information.

And terrorists use these things for a wide variety of purposes. They use them for propaganda, like the murder of Berg. They also use them for recruiting. They use them to talk to journalists. ETA (ph), which is the Bosque (ph) Web site in Spain, they publish their Web site in several different languages so reporters can go there and get information about them.

So, they're very sophisticated when they use these.

COSTELLO: But can't the companies who host these Web sites, can't they police their own Web sites?

CARAFONO: Well, you could. But, I mean, think of the millions and millions and millions of Web pages that are out there and the thousands of companies who are operating these things. It's just a vast amount of information that it would be difficult for even if you were really serious about it, if you were an Internet service provider or a hosting company, to really, you know, go through these things and find these things.

And, again, a lot of these things tread the line between legitimate free speech and real terrorist activities. So, how do you make a decision on when to pull something or not? So, it's not an easy problem to deal with.

COSTELLO: But if you really sat down to investigate, could you come up with the person who posted that on the Web site? Could you find that person?

CARAFONO: Sometimes they do. I mean, the intelligence groups that look at these things are very sophisticated. Some of these sites have very unique characteristics. So, sometimes you can track them down.

There are also a lot of imitation sites. There are a lot of people that throw stuff on the Web that are trying to imitate al Qaeda and other things. And a person just looking at it might not be able to tell. People who really practice this can do this. But think about it. To do this really well, you have to be fluent in several different languages, you have to know an awful lot about culture, you have to know a lot of intelligence about these things. So, it's not the easiest thing to do to track these things.

COSTELLO: James Carafono, live from D.C. from the Heritage Foundation. Thank you for joining DAYBREAK.

CARAFONO: Thanks for having me.

COSTELLO: Your news, money, weather and sports. It's 6:45 Eastern Time. Here's what's all new this morning.

U.S. forces have begun releasing more than 300 Iraqis from the Abu Ghraib prison in Iraq. It comes a day after a surprise visit to Baghdad by Defense Secretary Donald Rumsfeld. For 37 cents you can celebrate explorers Meriwether Lewis and William Clark, who launched their famous expedition 200 years ago. The Postal Service commemorates the expedition with the release today of a Lewis and Clark stamp.

In money news, Delta Airlines says not to worry about the number of pilots who could soon be retiring. It says it's reached an agreement with the Pilots Association, and flight schedules will not be affected.

In sports, she's 47 years old and she's coming back. Martina Navratilova will play at the French Open a decade after her last grand slam singles match.

In culture, one of the greatest stars of stage and screen is coming to Virginia. Judy Duensch (ph) participates in a day of festivities tomorrow and will be honored at Black Freyer's (ph) Playhouse.

(WEATHER BREAK)

COSTELLO: Those are the latest headlines.

Let's head live to New York City to check in with Bill and Soledad to see what's coming up on "AMERICAN MORNING."

Good morning.

BILL HEMMER, CNN ANCHOR: Good morning, Carol. Happy Friday. How about Marina, huh? Forty-seven, the new 21.

COSTELLO: Oh, you go.

HEMMER: Young forever.

SOLEDAD O'BRIEN, CNN ANCHOR: I am so glad to hear that.

HEMMER: I'm telling you.

Listen, we're going to go live to Baghdad in a moment. Dan Senor is with us. Brigadier General Mark Kimmitt is our guest as well. A number of topics to get to regarding Iraq. We'll take you there live at the top of the hour.

O'BRIEN: And we continue to talk about Nicholas Berg, the young man, of course, who was beheaded in Iraq. We're talking this morning about the investigation. His family has mentioned this. A coincidental, an accidental meeting of an associate of terrorist Zacarias Moussaoui. How strange is that?

Also, we'll talk to a friend of Nicholas Berg, who will tell us about his last days in Iraq.

HEMMER: Also, election 2004. Bush, Kerry, the polls, and what do they mean now in May? Ron Brownstein of the "L.A. Times" stops in to talk about that and sharing his thoughts with us here on a Friday morning.

Jack Cafferty, too. The whole gang is loaded and ready to go in 12 minutes, Carol. We'll see you then, and have a great weekend.

COSTELLO: Thank you. You, too.

HEMMER: All right.

O'BRIEN: Thanks.

HEMMER: A pit stop at the Cannes Film Festival. Just ahead, live to France, where the war epic, "Troy," and its well-known lead actor are causing quit a frenzy.

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COSTELLO: Welcome back to DAYBREAK.

In the south of France, our own Chris Burns is deeply embedded in the 57th Cannes Film Festival, and no doubt he is loving every minute of it. We'd like to join him again live on the phone from Cannes.

Chris -- describe what you're doing at this moment. Where are you? Are you on a beautiful beach?

CHRIS BURNS, CBS CORRESPONDENT: At this moment, I'm sort of standing on top of the palace overlooking -- it's just an amazing scene -- thousands of journalists, thousands of fans, wannabes, all just filling the streets and filling the beaches today. It's quite a colorful scene. Posters are all over the place. And, of course, the red steps nearby where we saw Brad Pitt with Jennifer Anistan on his arm walking up the steps. As Achilles in the movie, "Troy, he storms Troy, and here he storms Cannes. He really took a lot of attention, just really the darling of Cannes of the last 24 hours

More excitement up ahead, though. There's a lot of suspense for those part-time French actors who have been threatening to disrupt the whole film festival are threatening again if their demands aren't met by today. So, there could be more suspense.

And you've got to look ahead to tomorrow, Saturday, when "Shrek 2" walks up the steps with all kinds of stars like Eddie Murphy, Cameron Diaz, Mike Myers, Antonio Banderas, Julie Andrews. They're going to be walking up the steps tomorrow night, and hopefully they won't be disrupted by these part-time workers who are demanding more unemployment benefits -- Carol.

COSTELLO: So, what will the part-time workers do? Will they just pull the plug and the movie houses will go dark?

BURNS: Well, that's a good question. They're leaving that a big mystery of what they're going to do. It could be some kind of a stunt they might try to pull. But otherwise, really pretty much everybody here realizes it's in their interest to keep the world's biggest movie circus going right through May 23. They really want to do that. And more excitement also on Saturday. Alex Kerry, who is the daughter -- Alexandra Kerry, the daughter of John Kerry, the senator and the likely presidential candidate for the Democratic side, is going to be showing her "Last Full Measure," it's called. It's a movie about -- a short film about a Vietnam vet veteran and the relationship with his daughter. That's going to be shown tomorrow down in the Lubi (ph) market, where you've got thousands of films there for sale. It's quite an amazing scene there.

COSTELLO: Oh, it sounds amazing to me. Chris Burns, you stay safe in Cannes.

BURNS: I'm trying to. Thanks.

COSTELLO: That sounds great, doesn't it?

MYERS: It's so nice to send a reporter to a nice location after we send to all of these bad places all the time, isn't it?

COSTELLO: Oh! That's true. That's a good way to look at it.

MYERS: My, oh, my! At least a couple of days off anyway.

Hey, let me show you what's going on here for your DAYBREAK quiz now. Thursday's questions, yesterday's, former Iraq hostage Thomas Hamill threw out the first pitch at a baseball game. Who was playing? Florida Marlins and the Houston Astros.

And the air leakage around your windows and doors can increase your energy bills by how much? Thirty percent.

COSTELLO: Wow!

MYERS: The winner from Pennsylvania, Lisa Curtis. Good morning, Lisa. Congratulations. You can win again if you like, because here is your next chance. Here you go, type, type, type.

Martina Navratilova requested a wild card to play in what tournament? We just had that story.

And a little bit ago, Julie Valise had a report on totaling the family car. What is the average cost of car repairs?

Type in Daybreak@CNN.com, put in there your address as well, give us all of the answers, and we'll get to the winner...

COSTELLO: That's right, Daybreak@CNN.com.

MYERS: I love it.

COSTELLO: You're going to miss the contest when you're on vacation next week, aren't you?

MYERS: I am going to miss it, but I'll be watching.

COSTELLO: You can call in. Yes, sure you will. Chad will join me for "The Lightning Round" coming up, but first the latest headlines for you.

(COMMERCIAL BREAK)

MYERS: And we've got a weatherman!

COSTELLO: There were question marks where your age should have been.

MYERS: Forty-one.

COSTELLO: Oh, man! It's all downhill from here, baby.

MYERS: It certainly is.

COSTELLO: But, you know, Bill was right. Forty is the new 30. When you hit 50, it'll be the new 40.

MYERS: Correct.

COSTELLO: It's OK.

MYERS: I'll keep working on it.

COSTELLO: All right, let's head into our "Lightning Round" right now.

Riding into the record books, some horse riders are traveling 2,700 miles from Turkmenistan -- I think that's somewhere left of Boise, isn't it? No.

MYERS: Yes, it's just outside of Boise.

COSTELLO: No, actually this is in Central Asia. They're riding all the way to Moscow, trying to break the record of 84 days set in 1935, and that's, again, 2,700 miles.

In Australia, men are learning to take it off. Take it all off. Yes, this is a class for stripping for men, and it's supposed to help men get in touch with their sensuality, which I never really knew a man who had trouble with that. Chad?

MYERS: Yes.

COSTELLO: Some researchers in Israel are helping to clear things up literally. They're using new technology to make underwater photographs clearer.

MYERS: And, you know, they found a new volcano under the water as well. Maybe they could take some pictures of the volcano.

COSTELLO: Where did they find a new volcano under the water?

MYERS: Out in the Pacific.

COSTELLO: Really?

MYERS: Yes.

COSTELLO: You're going to go to Hawaii and try to find that, aren't you?

MYERS: I might go diving down there.

COSTELLO: It sounds good.

MYERS: OK.

COSTELLO: Chad will be away next week on vacation.

MYERS: I will.

COSTELLO: We will miss you. Happy birthday.

MYERS: Thank you.

COSTELLO: "AMERICAN MORNING" starts right now.

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