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American Morning

U.S. Military Raids Ahmed Chalabi's Home; Interview With Senator Carl Levin; Abandoned Girl

Aired May 20, 2004 - 9:00   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.


SOLEDAD O'BRIEN, CNN ANCHOR: U.S. forces and Iraqi police burst into the home of a prominent Iraqi politician and a onetime U.S. ally.
Israel refusing to back down in Gaza even after worldwide criticism. More fighting, more deaths today.

And authorities plead for any information about this little girl abandoned in Baltimore.

Those stories all ahead on this AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Soledad O'Brien and Bill Hemmer.

BILL HEMMER, CNN ANCHOR: Good morning, everybody. Nine o'clock here in New York. Don't mind us.

In a few moments, we'll talk to Democratic Senator Carl Levin about yesterday's hearing on prisoner abuse. The general in charge of Iraq promising the investigation will go up the chain of command. How far, we do not know. We'll talk about what that means and who could ultimately be responsible.

O'BRIEN: Also this morning, an important meeting going on between President Bush and Republican members of Congress. Some disagreements starting to become a little more public among Republicans. We'll take a look at why today's get-together is pretty important.

HEMMER: All right. Just two days away from "IN THE MONEY" this weekend.

JACK CAFFERTY, CNN ANCHOR: There you go. The air is thick with anticipation.

HEMMER: We're going to get you Malcolm on the show this weekend.

CAFFERTY: Malcolm? My guy.

Coming up a bit later, we're reading e-mails on a meeting yesterday between John Kerry and Ralph Nader. Nader could be a bigger problem to Kerry than President Bush. It's generally perceived that Mr. Nader may have cost Al Gore the election four years ago. And he's back in the race again.

Is he a spoiler again? It remains to be seen. But the question is, what should John Kerry do about Mr. Nader?

HEMMER: It is a juicy subplot.

CAFFERTY: Yes. And that whole question of, you know, if you don't like President Bush -- and according to the polls, a lot of people don't -- then why would you vote for someone who has virtually no chance to win the election? That would be Ralph Nader.

Why wouldn't you vote for the only candidate who has a possibly of defeating President Bush, which would be John Kerry. I personally don't care who you vote for, but it seems silly to me. I don't understand the logic for voting for Ralph Nader if you don't like President Bush. That escapes me. I don't understand that part.

O'BRIEN: Well, we'll see what the viewers think.

CAFFERTY: That's why they're there, is to help me through the day.

O'BRIEN: Despite an international outcry, violence escalating as Israeli moves ahead with intense operations in Gaza. At least seven Palestinians killed in overnight violence. This, after Israeli strikes left at least 10 more dead during a protest in Rafah yesterday. Israel says its forces have encountered Palestinian machine gunfire in response to the action. Meanwhile, the White House growing increasingly critical of Israeli actions as the administration continues to urge restraint in the region.

The Pentagon denying reports that a U.S. air strike in western Iraq targeted a wedding party near the Syrian border. Funerals are being held today as Iraqi officials say more than 40 people, including children, were killed in the attack yesterday. U.S. military officials says the target was a suspected foreign fighter safe House. We're expecting coalition officials to hold a briefing out of Baghdad at 10:00 a.m. Eastern Time. We'll have live coverage of that when it happens.

New photos have surfaced in the Iraqi prisoner abuse scandal. They appear to show American soldiers smiling over a dead body. In one, Specialist Charles Graner of the military police seen smiling, giving the thumb's up. In the other photo, Specialist Sabrina Harmon, a member of the same unit, is in a very similar pose. While the pictures have not been authenticated, the soldiers who appear in them are among those who already face charges in the prisoner abuse scandal.

American sprinter Kelly White has accepting a drug ban which is costing her a trip to the summer Olympic games. White accepted the ban after officials accused her of using performance-enhancing drugs. She faces a loss of medals that she won over the past four years. She tested positive for the drug which is called modafinal (ph), which she says was prescribed for a sleeping disorder.

Heavy rain caused flash flooding in Missouri, where many drivers actually had to be resting from the rising water. In Kansas, police got at least 30 phone calls from stuck drivers who couldn't get out of their cars or their trucks because of the high water. Firefighters used boats to rescue a few folks from their flooded homes.

(WEATHER REPORT)

HEMMER: Iraqi leader Ahmed Chalabi expected to meet with the media at this hour, responding to a raid at his home earlier today by U.S. forces and the Iraqi police. A rather surprising development. So close to the handover of power in the end of June. Harris Whitbeck is live in Baghdad to take us through.

What do we know, Harris, about this raid?

HARRIS WHITBECK, CNN CORRESPONDENT: Well, Bill, we know that U.S. military personnel and members of the Iraqi national police force did raid the compound that houses the offices for the Iraqi National Council. CNN staff on the ground saw an SUV parked in the garage of that compound and saw how lots of documents, boxes full of documents were being loaded into that vehicle.

Now, an aide for Ahmed Chalabi, the head of the INC, said that they consider the taking of those files and the computers to be theft because there was no warrant served when the documents were taken. And Chalabi's aides here say that they consider this latest act a part of a smear campaign. They say that CPA and particularly U.S. Administrator Paul Bremer is trying to intimidate Chalabi because of his call for full Iraqi sovereignty after June 30.

Now, We are expecting Mr. Chalabi to give a press conference. That should happen within the next half-hour or so. We're also expecting to hear from senior U.S. officials here in Iraq about these charges -- Bill.

HEMMER: In addition to that, Harris, a story that crossed earlier in the week. The U.S. is cutting off money for his party. What's happening on that? Is there any connection you can draw to the action today and the movement earlier this week?

WHITBECK: Well, the cutting off of money apparently comes from the fact that, as of June 30, Iraq will have, at least on paper, full sovereignty over its affairs. The money that had been given to Mr. Chalabi's group was part of a law that States that was put forth to promote democracy in Iraq. And they say -- U.S. officials say that that law is now moot since Iraq will, in fact, be sovereign as of June 30. But he was receiving more than $300,000 a month, and, again, those funds were cut off just a few weeks ago.

HEMMER: We'll see what he has to say with reporters momentarily. Thanks, Harris. Harris Whitbeck in Baghdad -- Soledad.

O'BRIEN: American military leaders testified before a Senate committee yesterday about the abuse of Iraqi prisoners by U.S. soldiers. The top U.S. commander said they accepted responsibility for what happened at Abu Ghraib prison.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, CENTRAL COMMAND: Every officer is responsible for what his or her unit does or fails to do. I accept that responsibility for the United States Central Command.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEN. RICARDO SANCHEZ, COALITION GROUND FORCES: As a senior commander in Iraq, I accept responsibility for what happened at Abu Ghraib. And I accept, as a solemn obligation, the responsibility to ensure that it does not happen again.

(END VIDEO CLIP)

O'BRIEN: Joining us this morning from Capitol Hill, the ranking member of the Armed Services Committee, Democratic Senator Carl Levin of Michigan.

Nice to see you, Senator. Thanks for being with us.

SEN. CARL LEVIN (D), MICHIGAN: Good morning.

O'BRIEN: Good morning to you.

When asked if the problems at Abu Ghraib prison were fixed, Colonel Warren, who is the attorney apparently for General Sanchez said, "I don't think we know." What is your reaction to that kind of answer?

LEVIN: I'm sorry. I didn't hear your question, Soledad.

O'BRIEN: Forgive me. I'll repeat it for you. We must be having a little audio difficulty. And I think there is a plane flying over your head, so I'll try again.

When he was asked if the problems at Abu Ghraib prison had been fixed, Colonel Warren, who is General Sanchez's attorney, said, "I don't think we know." That's a quote. What was your reaction to that statement?

LEVIN: I think it's that they don't know whether or not the problems have been fixed, particularly the ones that they identified. We know about the problems of the enlisted personnel who carried out these abuses. We don't know how high up the chain it goes in terms of the intelligence personnel there, who were clearly involved in some way or another.

I mean, there there's no way these are just a bunch of privates acting spontaneously. They were clearly -- and there is a lot of testimony now to this effect -- doing this in order to soften up prisoners. So we don't know how high up that effort was supported by the intelligence people there in order to extract information from those prisoners.

And we don't know whether or not they fixed an underlying problem, which is that we had Red Cross reports all throughout last year outlining these abuses. And those reports fell through cracks, they were not acted upon. And we had yesterday General Sanchez and General Abizaid talking about the fact that that part of the system is broken and needs to be fixed.

O'BRIEN: The testimony seemed to show confusion, some disorder. Where do you think the blame ultimately does, in fact, lie? The general seemed to say that the Pentagon does not have to approve, in any way, the rules for interrogation of prisoners, that that's left to commanders in the field.

LEVIN: There's a lot of responsibility that has to be shared for this. But clearly, there's people in the intelligence effort there, the forces that were being utilized to gain intelligence, who bear some responsibility here for using those MPs to help gather intelligence in way which is clearly illegal, clearly abusive, and which endangers our own troops.

The reason for these rules is not just that it's the right thing to do, to handle prisoners of war properly, but also it protects prisoners of the United States, our people when they're captured. And so the responsibility here clearly will go up to the intelligence people in some way or another. But beyond that, what was the climate set by the commanders, how much did they know about what was going on and do nothing about it, even though it was their responsibility?

And if you want to look farther up the chain, there is a climate all the way up, it seems to me, about the confusion in the Pentagon as to whether or not the Geneva Convention rules apply or don't apply. You even had Secretary Rumsfeld saying that, well, the rules areply for the most part, or they partially apply.

Well, that's not true. Those Geneva rules apply totally in Iraq, and there should not have been the creation of this climate of confusion and uncertainty about that.

O'BRIEN: Carl Levin is ranking member of the Senate Armed Services Committee, joining us this morning. Sir, thanks for being with us.

LEVIN: Good being with you, Soledad.

O'BRIEN: Thank you.

Bill?

HEMMER: In a moment here, from the Middle East, violence flaring again in Gaza. The U.S. now under mounting pressure to distance itself from Israeli tactics. We'll get to that topic in a moment from the Middle East.

O'BRIEN: Also this morning, a young girl found abandoned, and her name is about the only detail she knows. We're going to hear about the search for her family.

HEMMER: Also, gas prices are up, airlines are raising ticket prices. Why then are so many people expected to travel this summer? Memorial Weekend just a few short days away.

Back in a moment here on AMERICAN MORNING. (COMMERCIAL BREAK)

HEMMER: Fifteen minutes now past the hour. Three-year-old Courtney needs help fast. She was abandoned in Baltimore two weeks ago, and a man believed to be her father left her with a stranger and never came back.

She says her name is Courtney. She's three years old and lives in Brooklyn, New York. Nothing else, though, is known about her.

Baltimore officials appealing to the public for help. A bit earlier today, I talked with Christopher McCabe, the secretary of Maryland's Department of Human Resources, asking him if anyone has come forward yet with any more credible information about this young girl.

(BEGIN VIDEOTAPE)

CHRISTOPHER MCCABE, SECRETARY, MARYLAND DEPT. OF HUMAN RESOURCES: We are delighted at the exposure that Courtney and her life story is receiving here in Maryland and across the country. And as a result of that exposure, we've received a number of calls from a variety of different individuals, including New York City, where we have some reason to believe that she is from, based on her own account, and based on other information we had. We believe to be her father is from New York City.

Based on this yesterday, I can tell you that we did receive a phone call from a shelter in New York City where someone recognized or believed they recognized Courtney from the pictures on TV. And we received contact from that shelter.

They believe that they recognize her, and perhaps the father that was also with her. And so we are tracking down that lead as we speak. We also understand from New York City authorities that her picture is being placed in other shelters in New York City.

So we're still at a relatively early stage, but I cannot thank enough the media for providing the attention to this story. You should know that here in Maryland, Courtney is, by all accounts, happy, healthy. She is living with a foster family in Baltimore City that is caring for her.

She's very verbal, and she wants to see her mommy. And we're doing everything here. Governor Robert Ehrlich, the governor of our state, and me, and our employees from the Baltimore City Department of Social Services, are doing everything we can to find information that would lead us to her family.

HEMMER: What has Courtney told you?

MCCABE: Well, she's told us that she's from Brooklyn, New York, that she wants to see her mommy, and that she really doesn't have too much more information to provide for us. And -- I mean, I'm not privy, Bill, to all of the background information.

HEMMER: How is she doing, then, Mr. McCabe?

MCCABE: Well, from the accounts that I've received, that she's well nourished, she's happy and healthy, and living in a good family foster care setting. But like all little kids, they want to find their parents. And we are dedicated here in our state to try to find a permanent and positive outcome for Courtney. And that will take some time, but without the help of CNN and other media outlets, we really rely on the community to come forward with the information that can help Courtney.

HEMMER: You say you've attracted an awful lot of interest across the country about the fate of this little girl. Give me an idea about who is calling and why.

MCCABE: Well, we get a number of different leads. And kind of like the police when there is an incident that occurred, they're getting a lot of leads that have to be tracked down. But we received a phone call just yesterday from a woman in Salt Lake City who saw the picture of Courtney and volunteered to adopt her. And while we're very grateful for that, it's really premature to say that we're looking for her to be adopted. I would encourage anyone across the country who volunteered to do that to think about children in their own state that really need help and need a permanent home.

HEMMER: If I could, a phone number, if anyone has any information or recognizes this girl, where do they call?

MCCABE: Sure. It's area code 410-361-2235. Let me repeat that. Area code 410-361-2235.

(END VIDEOTAPE)

HEMMER: Christopher McCabe, from Baltimore a bit earlier today.

Also, an update today on that abandoned child we told you about a year ago. Adoption proceedings for the California boy who became known as Mateo reportedly near completion. He was found wandering the streets of Bakers Field, California, around this time last year. A human services official telling us he's very happy and that he's a very lovely boy who is flourishing in his new surroundings. And good for him. There has been no word yet from any family members.

Soledad?

O'BRIEN: A cute little boy there.

Well, an amazing act of heroism saved the life of a truck driver yesterday in Miami. He lost control of a big rig on Florida's Interstate 75, clipping a minivan, splashing then into a waterway. Well, two good samaritans jumped in to save the driver, and then a pair of police officers actually weren't far behind as well.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was just a life saving thing that we had to do. That's what we're here for. We didn't hesitate. We knew what we had to do, and we had to do it.

(END VIDEO CLIP)

O'BRIEN: They did it all right. The truck driver, shaken and confused, is now recovering. And he is in stable condition.

Bill?

HEMMER: Soledad, in a moment here, some are suggesting Israeli's actions in Gaza could actually hurt the U.S. in Iraq. That topic in a moment.

Senator John Kerry trying to deal with one of his biggest obstacles on the road to the White House: Ralph Nader. Back with Jack with that on this on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: These pictures from just moments ago, President Bush on Capitol Hill this morning. You can see that he is walking with House speaker, Dennis Hastert. Also, Senator Bill Frist with him as well this morning.

Dennis Hastert was actually part of some political infighting between high-profile Republicans yesterday. The House speaker started the exchange while speaking to a reporter questioning the GOP credentials of Senator John McCain.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I heard a speech by John McCain the other day, and he was...

DENNIS HASTERT, HOUSE SPEAKER: Who?

UNIDENTIFIED MALE: John McCain, sir.

HASTERT: Where is he from?

UNIDENTIFIED MALE: He's a Republican from Arizona.

HASTERT: He's a Republican?

UNIDENTIFIED MALE: Anyway, his observation was, "Never before when we've been at war have we been worrying about cutting taxes." And his question was, "Where is the sacrifice?" So we have the war in Iraq, and...

HASTERT: If you want to see the sacrifice, John McCain ought to visit our young men and women at Walter Reed in Bethesda. There's the sacrifice in this country. We're trying to make sure that they have the ability to fight this war.

(END VIDEO CLIP)

O'BRIEN: Well, in a written statement, Senator McCain said, "What all lawmakers are called upon to do is not send the country into bankruptcy while U.S. soldiers are risking their lives." And he continued, "I fondly remember a time when real Republicans stood for fiscal responsibility. Apparently, those days are long gone for some in our party."

HEMMER: So now we have another subplot to election 2004.

CAFFERTY: What is the line of that old song, you don't mess around with slim or Jim, or whatever it is? Don't mess around with John McCain. He's probably the most popular member of either chamber of the Congress right now, political party aside. People like him. And it's probably not a good idea for Mr. Hastert or anybody else...

O'BRIEN: Talk about a guy who knows about taking risks and laying his life on the line. Please.

HEMMER: How about subplot number two today?

CAFFERTY: Well, the other one is not bad. This is the John Kerry-Ralph Nader subplot Bill's referring to.

They met yesterday. Nader didn't offer to drop out; Kerry apparently didn't ask him. They say they're going to keep communications open.

But it's potentially a problem for Mr. Kerry. The question is, what should John Kerry do about Ralph Nader?

Judy writes this: "There's nothing Kerry can do about Nader. In Nader's relentless and self-centered quest for center stage, no matter what the cost to America, it's obvious that Nader's ego rules."

Joan in Cumberland, Wisconsin, "Jack I'm here to help you understand." Thank you, Joan. "There are a lot of people who don't like either candidate. And they feel if enough people vote for Nader, he can be recognized as viable and gather funding to create that third party."

Holly in Augusta, Georgia, where they play that very cool golf tournament every spring, "What should John Kerry do about Ralph Nader? Offer him more than Bush is paying."

And Fred in Detroit, Michigan, "It's good to see that Jack does have passion and is human, qualities I doubted existed in him." What are you laughing about? "The scariest development is I'm in complete agreement with him. Too bad he won't have his job long, expressing such views."

Hey, Fred, you heard something I don't know about? Drop me -- call me, Fred. Let me see if -- no point of blowing the whole day here. Do you know what I mean?

O'BRIEN: Did your ID not work when you tried to come in the building this morning?

CAFFERTY: Yes. HEMMER: The bottom line is, Ralph Nader is saying that U.S. troops should be out of Iraq today. That's a clear alternative to anything that President Bush or Senator Kerry have said to this point. And that's why some would vote for him.

CAFFERTY: Yes, but it's only an alternative, if he'll ever be in a position to exercise his judgement on what will happen with the troops in Iraq.

(CROSSTALK)

O'BRIEN: Or, as Joan said, to try to show that he's a viable candidate. I think Joan actually was pretty smart in that response.

CAFFERTY: You do?

O'BRIEN: I do, actually.

Still to come this morning, the bloody Israeli crackdown in the Gaza Strip. How could it affect U.S. troops in Iraq? We're going to examine that and the future of the roadmap to peace in just a moment on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody -- 9:30 here in New York here on AMERICAN MORNING. Good to have you with us along today.

President Bush meeting Republican members of Congress at this hour. We'll look at some cracks that are starting to appear in that unity on the Republican side and the president hopes to patch them up in a moment. So stay tuned for more.

O'BRIEN: Also this morning, the pop culture phenomenon, "American Idol," has reached its inevitable moment of truth. Two finalists, millions of fans, big bucks in advertising. We're going to take a look at the upcoming voting pandemonium just ahead.

HEMMER: And the gal from Hawaii is out, right?

O'BRIEN: Yes, she's gone. But she's...

HEMMER: State population wasn't high enough to keep her in?

O'BRIEN: ... a nice girl. Yes, exactly. No. Couldn't sing that well.

HEMMER: Got it. Top stories here at the half-hour.

Onetime Pentagon favorite Ahmed Chalabi, and member of the Iraqi Governing Council, due to hold a briefing perhaps at this hour. This after U.S. military personnel and Iraqi police surrounded the compound of the Iraqi National Congress. That's his party.

They also raided the nearby home of Ahmed Chalabi. His nephew claims that forces entered his uncle's home with weapons drawn and threatened Chalabi. More on this as we go throughout the day.

An Israeli court convicted a Palestinian man charged with overseeing attacks that they say killed more than two dozen Israelis. Marwan Bargudi (ph) said to be the West Bank leader of Yasser Arafat's Fatah faction, was found guilty on three counts of murder. His scheduled sentencing now June 6.

Finally, on a much lighter note, talking about an amazing animal discovery. More than a month after a family abandoned hopes of ever finding their pet dog, he turns up. The family was hiking in Death Valley with their dog Shadow when he apparently fell into a hole. They eventually left, losing hope of ever finding the dog alive.

Thirty-five days later, two hikers heard the barking, called the number on his tag. Shadow lost five pounds, but back with his family and doing fine.

O'BRIEN: He only lost five pounds in 35 days? He must have been eating something down in the big hole. That's good news. That must be terrible for the family.

(WEATHER REPORT)

O'BRIEN: Well, as we mentioned just moments ago, President Bush has arrived on Capitol Hill to hold a rare meeting with Republican lawmakers there. Several items are expected to be on the agenda, including the chaotic situation in Iraq, the situation in the Middle East, and perhaps political infighting among Republicans.

Congressional correspondent Ed Henry is live for us on Capitol Hill this morning. Good morning to you.

ED HENRY, CNN CORRESPONDENT: Good morning, Soledad. The Republicans up here expecting a pep rally of sorts from the president. There is great nervousness here about the president' low approval ratings, how that might affect the Republican hold not only on the White House, but also the House of Representatives and the Senate.

Let's set the scene very quickly. Basically, the president is right now in a room with all Republican members of the House and Senate, a room underneath the west front of the Capitol, the very spot where he was sworn into office at his inauguration in 2001.

A White House official told CNN this will last about an hour. The issue, as you mentioned, Iraq. But also, the president wants to talk about what he believes to be some good news on the economy. He wants to give an update on the general war on terror beyond Iraq, also Afghanistan, good things he thinks the administration has accomplished on foreign policy.

Also, a Republican staffer up here told CNN that they're expecting the president to talk about the energy bill, which is stalled right now at a time when Americans are very nervous about rising gas prices. Also, about the president's budget plan, which passed the House yesterday but is sort of stalled in the Senate, expected to come back up. Also, the bottom line is that Republicans are concerned that this good news on the economy that the president wants to talk about is being crowded out by the prison abuse scandal in Iraq -- Soledad.

O'BRIEN: Lots of things obviously on the agenda. We've been reporting, Ed, this morning about the political infighting, specifically between the House speaker, Hastert, and also Senator McCain. How is that, for lack of a better phrase, tit for tat playing on the Hill today?

HENRY: Well, the bottom line is that the president also is coming here not just for a pep rally but to try to talk about shared priorities between the Republican Congress and the White House. And I think obviously he's concerned about the fact there has been this bickering that you reported on.

This started a couple of days ago, when the House Armed Services chairman, Duncan Hunter, took a swipe at his Senate counterpart, John Warner, for holding all these hearings about the prisoner abuse scandal. House Republicans, by and large, want to wrap up this investigation. Senate Republicans are split on it. Some more conservative members of Warner's committee want to slow down the hearings, whereas more moderates, like John McCain, Susan Collins, want to keep the investigation going.

Also, this really picked up steam yesterday when McCain was on the receiving end of that swipe from Speaker Hastert. McCain respond to Hastert by saying that he remembers a time when Rpublicans really cared about physical discipline. You can see obviously there are a lot of frayed nerves, and tempers are flaring right now -- Soledad.

O'BRIEN: Swiping and then swiping back. Ed Henry for us this morning on the Hill. Thanks, Ed. Appreciate it.

HENRY: Thank you.

O'BRIEN: Bill?

O'BRIEN: Well, as we mentioned just moments ago, President Bush has arrived on Capitol Hill to hold a rare meeting with Republican lawmakers there. Several items are expected to be on the agenda, including the chaotic situation in Iraq, the situation in the Middle East, and perhaps political infighting among Republicans.

Congressional correspondent Ed Henry is live for us on Capitol Hill this morning. Good morning to you.

ED HENRY, CNN CORRESPONDENT: Good morning, Soledad. The Republicans up here expecting a pep rally of sorts from the president. There is great nervousness here about the president' low approval ratings, how that might affect the Republican hold not only on the White House, but also the House of Representatives and the Senate.

Let's set the scene very quickly. Basically, the president is right now in a room with all Republican members of the House and Senate, a room underneath the west front of the Capitol, the very spot where he was sworn into office at his inauguration in 2001. A White House official told CNN this will last about an hour. The issue, as you mentioned, Iraq. But also, the president wants to talk about what he believes to be some good news on the economy. He wants to give an update on the general war on terror beyond Iraq, also Afghanistan, good things he thinks the administration has accomplished on foreign policy.

Also, a Republican staffer up here told CNN that they're expecting the president to talk about the energy bill, which is stalled right now at a time when Americans are very nervous about rising gas prices. Also, about the president's budget plan, which passed the House yesterday but is sort of stalled in the Senate, expected to come back up. Also, the bottom line is that Republicans are concerned that this good news on the economy that the president wants to talk about is being crowded out by the prison abuse scandal in Iraq -- Soledad.

O'BRIEN: Lots of things obviously on the agenda. We've been reporting, Ed, this morning about the political infighting, specifically between the House speaker, Hastert, and also Senator McCain. How is that, for lack of a better phrase, tit for tat playing on the Hill today?

HENRY: Well, the bottom line is that the president also is coming here not just for a pep rally but to try to talk about shared priorities between the Republican Congress and the White House. And I think obviously he's concerned about the fact there has been this bickering that you reported on.

This started a couple of days ago, when the House Armed Services chairman, Duncan Hunter, took a swipe at his Senate counterpart, John Warner, for holding all these hearings about the prisoner abuse scandal. House Republicans, by and large, want to wrap up this investigation. Senate Republicans are split on it. Some more conservative members of Warner's committee want to slow down the hearings, whereas more moderates, like John McCain, Susan Collins, want to keep the investigation going.

Also, this really picked up steam yesterday when McCain was on the receiving end of that swipe from Speaker Hastert. McCain respond to Hastert by saying that he remembers a time when Rpublicans really cared about physical discipline. You can see obviously there are a lot of frayed nerves, and tempers are flaring right now -- Soledad.

O'BRIEN: Swiping and then swiping back. Ed Henry for us this morning on the Hill. Thanks, Ed. Appreciate it.

HENRY: Thank you.

O'BRIEN: Bill?

HEMMER: Soledad, overseas today, Israel continued its offensive in Gaza. Palestinians say seven more are dead in Rafah. The army today apologizing for firing a tank barrage into a crowd of protesters yesterday. Ten Palestinians are dead there.

The U.S. later condemned that attack. And TIME Magazine world editor Romesh Ratnesar is here to talk more about it.

Nice to see you, Romesh. And good morning to you.

ROMESH RATNESAR, TIME MAGAZINE: Nice to see you.

HEMMER: The statement that came from the White House contrary to the U.S. vote that that abstained from the U.N. Security Council condemning what happened in Gaza yesterday. A change in approach, change in tactics in word or in action from the White House?

RATNESAR: Well, the White House very rarely gets involved with Security Council resolutions condemning Israel. It's very unusual for the United States to ever vote with the rest of the Security Council. But I think the White House is probably a little more nervous right now than we might have been in the past about what seems to be Israeli aggression. I think the problems that the United States is having in Iraq, and the reputation of the U.S. in the Arab world, is at such a low point that I think the U.S. felt that it had to come out much stronger than it might have done in other circumstances to condemn the Israeli action, even if it didn't vote for the Security Council resolution.

HEMMER: There are those now suggest -- and you used that word "nervous" right now, categorizing how the White House believes -- or how you believe, rather -- they feel about what is happening in the Middle East. There are those who suggest that the Middle East situation and the peace process, or lack of it now, folds itself into the Iraqi conflict.

You touched on it. Do you see it that way? And, if so, how?

RATNESAR: Well, I think in the eyes of a lot of people in the Arab world, the conflicts have come to mesh together in some ways. The American occupation in Iraq has come to be equated with the Israeli occupation in the Palestinian areas. And the more that Israel is seen to be an aggressor and doing things that are targeting civilians in the eyes of a lot of Arabs, I think the more that harms the American effort in Iraq, because the two seem to be almost equated with each other.

HEMMER: So as these two parallel tracks roll on, perhaps forward, perhaps not, can the Middle East peace process go forward unless there is peace in Iraq ultimately? In other words, do you have to go through Baghdad to get peace in Jerusalem?

RATNESAR: Well, I think it's unlikely we're going to see a major American effort on the peace process until we manage to at least stabilize Iraq. I think Iraq is taking so many of the resources and time, both among diplomatic people, but also the attention of the White House, that is going to be very difficult to actually sit down and broker a -- some kind of beginning of peace talks again between Israel and the Palestinians.

HEMMER: Thanks for coming in. Romesh Ratnesar, from TIME Magazine. Good to see you here.

RATNESAR: Thank you.

HEMMER: Soledad?

O'BRIEN: Still to come this morning, cell phone junkies rejoice. You're going to soon have a way to find all those important mobile numbers. Andy is ahead with more on the national cell phone directory and why some folks aren't too pleased about it.

Also, airline ticket prices on the rise. So how come more folks are expected to take to the skies this summer? We'll explain just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Travel experts say vacation travel is expected to increase by about 3 percent this summer. But yesterday, Continental Airlines announced an increase in fares because of higher few costs. And with the average price of gasoline topping $2 a gallon, it will take some work to plan your summer vacation this year.

Let's get some help from the senior consulting editor of Travel & Leisure Magazine, Mark Orwoll.

Nice to see you as always.

MARK ORWOLL, TRAVEL & LEISURE MAGAZINE: Thank you, Soledad.

O'BRIEN: Thanks for coming in. You know, when you look at how high the gas prices are, the fact that the airlines are starting to charge more money because, of course, it's being reflected in the jet fuel prices, as well, explain to me this increase. I mean, I get it's only 3 percent, but I would have suspected going downward, not upward.

ORWOLL: Well, the -- I think the 3 percent that I've heard of, 3.2 increase in the number of people who are traveling, but actual prices across the board in travel have gone up about 7 percent since December. The prices for airfare in particular, I mean, who knows where the ceiling is going to be on that, because they're increased every single day. With each new increase in the jet fuel prices, the airfares are going up.

O'BRIEN: So how much do you expect by the end of the summer -- let's talk really about summer travel, because I think, frankly, for Memorial Day, too late to be talking about that. How much will that affect how much I'm going to have to pay on my ticket, the way the hikes are going up?

ORWOLL: Well, you know, we have -- you have a lot of different things that are going on here. For example, Southwest Airlines, they have long-term contracts on their jet fuel. So they're not going to be as impacted by today's increases in jet fuel.

Other airlines, especially overseas and Europe, they're tacking on fuel surcharges. British Air just came out with an increase of $8 for a fuel surcharge on their round trip tickets. Continental I think has increased as much as $20 on some of their roundtrip airfares in the United States.

O'BRIEN: But that could potentially go up?

ORWOLL: They could potentially go up considerably more, that's right. That's why you don't want to wait around too long to see how high they go.

O'BRIEN: Which kind of brings us to your first tip for folks who are trying to travel this summer. Let's get right to it. You say make your airfare plans now, because that is a reality, that those surcharges could go up. You really want to do it before...

ORWOLL: Soledad, I don't know a single person who thinks that airfare prices are going to go down. So the idea is, on any single flight there are a whole variety of prices on one single airline. And the most -- the cheapest prices are always going to sell out first.

So if you can pin down your date and your destination, don't wait around for better prices. Go to the sites like Orbitz or Expedia and talk to a travel agent. Do some homework, but don't wait too long.

O'BRIEN: You also say consider alternative airports. When you consider the gas prices, does it really necessarily save you money if you're driving a hundred miles to get to the airport?

ORWOLL: Well, you know, in many cases, if you can save a hundred dollars by driving a hundred miles, on your airfare, that is, spending the extra 10 bucks on gas is meaningless. But don't just look at alternative airports.

Look at alternative days of the week. In other words, flying Tuesday or Wednesday or Thursday might not be as convenient as flying on the weekend, but you can often get much cheaper flights on those days. Flying at 6:00 in the morning or 11:00 at night you can get much better prices than if you want to fly at noon. So consider all the alternatives.

O'BRIEN: And be a little more flexible and you'll have more flexibility in the long run.

ORWOLL: Right.

O'BRIEN: You also say look into package deals. Look where?

ORWOLL: Well, you can go -- again, you can go on to the major booking sites, like the ones I mentioned, go to a travel agent. But the package deal is where you have your airfare and your hotels put into one price.

And what happens here is that the airlines and the hotels are able to discount their regular prices pretty steeply in some cases without advertising the fact, which could harm their normal pricing structure. So you as a consumer can benefit oftentimes to a great extent by buying a package.

O'BRIEN: You mentioned earlier travel agents. And I always thought that travel agents were good at sort of helping you craft your vacation but they actually weren't necessarily going to get you a great deal. Can they really get you some good deals?

ORWOLL: Oh, absolutely. They have more information at their fingertips than the average person could have even after a week of doing their own homework.

In some cases, if you just want to book your airfare, and that's all you really need, or just get a rental car, you can do that yourself. But if you're having a pretty complex vacation and you need a lot of help planning that, the travel agent can get you the best vacation for your money. Whether it's always the cheapest is not the most important thing. What you want is the best vacation for the money you're willing to spend.

O'BRIEN: Where are you going this summer?

ORWOLL: Actually, I'm going down to the beach in Jersey for a week. Then I'm taking the family down to Puerto Rico for about 12 days.

O'BRIEN: Oh. Have you already planned it?

ORWOLL: We are really looking forward to this.

O'BRIEN: Oh, all right. Mark Orwoll, nice to see you, from Travel & Leisure Magazine.

ORWOLL: Thanks.

O'BRIEN: Bill?

HEMMER: All right.

Listen, a developing story from Iraq as the two of you were talking. We continue to follow the latest with Ahmed Chalabi. He is meeting with reporters at this moment. But this is what we understand from earlier. Apparently, the U.S. coalition, along with the Iraqi police, went to his home, raiding that earlier today, carrying out some sort of inspection.

Also at the headquarters for his political party, the INC. That's the Iraqi National Congress. Ahmed Chalabi has been critical about the handover set for the 30th of June, saying the U.S. should turn complete sovereignty over to the Iraqis at that time. There seems to be some sort of tit for tat, and possibly larger than that that's happening between Chalabi and the U.S. coalition.

In a moment here, we'll let you know what he says about that raid at his home and his compound for his political party a bit earlier today. Ahmed Chalabi, that story continues to develop at this hour in Baghdad. More in a moment.

Also in a moment here, ever forget a friend's cell phone number? Help may be closer than you think. Andy has that and market action, early on anyway, right after this. (COMMERCIAL BREAK)

HEMMER: All right. Welcome back, everybody. Another strike delivered to Martha Stewart. Plus, coming soon, a national cell phone directory, maybe.

A check of the market action, too. Andy Serwer is 'Minding Your Business,' back with us.

Good morning, Drew.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: Good morning, again.

HEMMER: Still being nice, huh?

SERWER: Really cheerful, still. Let's check out the market.

Yesterday was toad's wild ride. What's going on today? Well, just sort of settling in. Up about eight points. Not a whole lot of action.

One stock that's moving to the upside, Hormel. Big increase in profits out of Austin, Minnesota. Yes, they make Spam. Yes, they make Dinty Moore beef stew.

They're raising prices on that, though. Meat is a commodity that has been going up a lot, and that stock is on the move. Also, MARRAKESH EXPRESS couscous. Did you know they made that?

(CROSSTALK)

SERWER: Yes, I thought you needed to know that.

Anyway, coming soon, perhaps, a national directory for cell phone numbers. A lot of people think this is needed. You know, what is your cell phone number? The only way to know is if someone gives it to you, right?

Now, the Cellular Telecommunications Internet Association is going to put together a list. They say they already have 75 percent of the 163 million cell phones out there. Obviously, a lot of people not happy with this.

They don't want -- privacy issues. What about telemarketers? There are several congressmen are lobbying against this. Verizon is against this. I think we're going to see a lot of action on this over the next couple of months.

HEMMER: You think it's going to happen or not?

SERWER: I think it will happen in some form, yes, because you can also put a cell phone number on a do not call list. So you can opt out, but it's going to be very interesting to see what happens with that. Let's talk about Martha Stewart, though. More trouble, can you believe it? Yes, more trouble for Martha Stewart. This from the theater of the absurd, though.

I mean, K-mart yesterday announcing a recall on one of her products, Martha Stewart Everyday Matches. And you won't believe what the problem with these matches are. Get this.

HEMMER: They don't light?

SERWER: No, they do light. I'm just at a loss here. Well, maybe there's a little spontaneous combustion, Soledad. But it says "Hazard, these matches may ignite upon impact." Posing a fire hazard.

That's what matches do. I don't really understand what is going on. Not exactly clear here.

But, you know, Martha Stewart has to feel snake bitten. I mean, she has some matches, they work really well. K-mart is saying apparently they work too well. So they're withdrawing them, recalling matches.

HEMMER: It's your favorite topic.

SERWER: Martha Stewart every day.

HEMMER: Soledad?

O'BRIEN: Jack has the Question of the Day.

Hello.

CAFFERTY: How are you doing?

The question has to do with John Kerry's dilemma when it come to that Ralph Nader fellow. Nader is thought by many to have cost Al Gore the election four years ago, and he's back in the race again. The two men met yesterday, they talked, Nader didn't quit, Kerry didn't ask him to quit, and said they'll talk about again. But it could be a problem for John Kerry.

O'BRIEN: Coming up this morning on CNN, President Bush heads to Capitol Hill as lawmakers get set to head out of town. What he was there to say coming up on the next hour with Daryn Kagan on "CNN LIVE TODAY."

AMERICAN MORNING is back in just a moment.

(COMMERCIAL BREAK)

HEMMER: We've got to run. See you Friday. Daryn Kagan at the CNN Center, taking you through the next hour.

Daryn, good morning.

O'BRIEN: Hey, Daryn. DARYN KAGAN, CNN ANCHOR: Good morning to my friends in New York City. You guys have a great day. We'll get started.

We're at CNN headquarters in Atlanta. I'm Daryn Kagan. As always, we start with the headlines at this hour.

The U.S. military and Iraqi police raid the home of Iraqi Governing Council member Ahmed Chalabi.


Aired May 20, 2004 - 9:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: U.S. forces and Iraqi police burst into the home of a prominent Iraqi politician and a onetime U.S. ally.
Israel refusing to back down in Gaza even after worldwide criticism. More fighting, more deaths today.

And authorities plead for any information about this little girl abandoned in Baltimore.

Those stories all ahead on this AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Soledad O'Brien and Bill Hemmer.

BILL HEMMER, CNN ANCHOR: Good morning, everybody. Nine o'clock here in New York. Don't mind us.

In a few moments, we'll talk to Democratic Senator Carl Levin about yesterday's hearing on prisoner abuse. The general in charge of Iraq promising the investigation will go up the chain of command. How far, we do not know. We'll talk about what that means and who could ultimately be responsible.

O'BRIEN: Also this morning, an important meeting going on between President Bush and Republican members of Congress. Some disagreements starting to become a little more public among Republicans. We'll take a look at why today's get-together is pretty important.

HEMMER: All right. Just two days away from "IN THE MONEY" this weekend.

JACK CAFFERTY, CNN ANCHOR: There you go. The air is thick with anticipation.

HEMMER: We're going to get you Malcolm on the show this weekend.

CAFFERTY: Malcolm? My guy.

Coming up a bit later, we're reading e-mails on a meeting yesterday between John Kerry and Ralph Nader. Nader could be a bigger problem to Kerry than President Bush. It's generally perceived that Mr. Nader may have cost Al Gore the election four years ago. And he's back in the race again.

Is he a spoiler again? It remains to be seen. But the question is, what should John Kerry do about Mr. Nader?

HEMMER: It is a juicy subplot.

CAFFERTY: Yes. And that whole question of, you know, if you don't like President Bush -- and according to the polls, a lot of people don't -- then why would you vote for someone who has virtually no chance to win the election? That would be Ralph Nader.

Why wouldn't you vote for the only candidate who has a possibly of defeating President Bush, which would be John Kerry. I personally don't care who you vote for, but it seems silly to me. I don't understand the logic for voting for Ralph Nader if you don't like President Bush. That escapes me. I don't understand that part.

O'BRIEN: Well, we'll see what the viewers think.

CAFFERTY: That's why they're there, is to help me through the day.

O'BRIEN: Despite an international outcry, violence escalating as Israeli moves ahead with intense operations in Gaza. At least seven Palestinians killed in overnight violence. This, after Israeli strikes left at least 10 more dead during a protest in Rafah yesterday. Israel says its forces have encountered Palestinian machine gunfire in response to the action. Meanwhile, the White House growing increasingly critical of Israeli actions as the administration continues to urge restraint in the region.

The Pentagon denying reports that a U.S. air strike in western Iraq targeted a wedding party near the Syrian border. Funerals are being held today as Iraqi officials say more than 40 people, including children, were killed in the attack yesterday. U.S. military officials says the target was a suspected foreign fighter safe House. We're expecting coalition officials to hold a briefing out of Baghdad at 10:00 a.m. Eastern Time. We'll have live coverage of that when it happens.

New photos have surfaced in the Iraqi prisoner abuse scandal. They appear to show American soldiers smiling over a dead body. In one, Specialist Charles Graner of the military police seen smiling, giving the thumb's up. In the other photo, Specialist Sabrina Harmon, a member of the same unit, is in a very similar pose. While the pictures have not been authenticated, the soldiers who appear in them are among those who already face charges in the prisoner abuse scandal.

American sprinter Kelly White has accepting a drug ban which is costing her a trip to the summer Olympic games. White accepted the ban after officials accused her of using performance-enhancing drugs. She faces a loss of medals that she won over the past four years. She tested positive for the drug which is called modafinal (ph), which she says was prescribed for a sleeping disorder.

Heavy rain caused flash flooding in Missouri, where many drivers actually had to be resting from the rising water. In Kansas, police got at least 30 phone calls from stuck drivers who couldn't get out of their cars or their trucks because of the high water. Firefighters used boats to rescue a few folks from their flooded homes.

(WEATHER REPORT)

HEMMER: Iraqi leader Ahmed Chalabi expected to meet with the media at this hour, responding to a raid at his home earlier today by U.S. forces and the Iraqi police. A rather surprising development. So close to the handover of power in the end of June. Harris Whitbeck is live in Baghdad to take us through.

What do we know, Harris, about this raid?

HARRIS WHITBECK, CNN CORRESPONDENT: Well, Bill, we know that U.S. military personnel and members of the Iraqi national police force did raid the compound that houses the offices for the Iraqi National Council. CNN staff on the ground saw an SUV parked in the garage of that compound and saw how lots of documents, boxes full of documents were being loaded into that vehicle.

Now, an aide for Ahmed Chalabi, the head of the INC, said that they consider the taking of those files and the computers to be theft because there was no warrant served when the documents were taken. And Chalabi's aides here say that they consider this latest act a part of a smear campaign. They say that CPA and particularly U.S. Administrator Paul Bremer is trying to intimidate Chalabi because of his call for full Iraqi sovereignty after June 30.

Now, We are expecting Mr. Chalabi to give a press conference. That should happen within the next half-hour or so. We're also expecting to hear from senior U.S. officials here in Iraq about these charges -- Bill.

HEMMER: In addition to that, Harris, a story that crossed earlier in the week. The U.S. is cutting off money for his party. What's happening on that? Is there any connection you can draw to the action today and the movement earlier this week?

WHITBECK: Well, the cutting off of money apparently comes from the fact that, as of June 30, Iraq will have, at least on paper, full sovereignty over its affairs. The money that had been given to Mr. Chalabi's group was part of a law that States that was put forth to promote democracy in Iraq. And they say -- U.S. officials say that that law is now moot since Iraq will, in fact, be sovereign as of June 30. But he was receiving more than $300,000 a month, and, again, those funds were cut off just a few weeks ago.

HEMMER: We'll see what he has to say with reporters momentarily. Thanks, Harris. Harris Whitbeck in Baghdad -- Soledad.

O'BRIEN: American military leaders testified before a Senate committee yesterday about the abuse of Iraqi prisoners by U.S. soldiers. The top U.S. commander said they accepted responsibility for what happened at Abu Ghraib prison.

(BEGIN VIDEO CLIP)

GEN. JOHN ABIZAID, CENTRAL COMMAND: Every officer is responsible for what his or her unit does or fails to do. I accept that responsibility for the United States Central Command.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

GEN. RICARDO SANCHEZ, COALITION GROUND FORCES: As a senior commander in Iraq, I accept responsibility for what happened at Abu Ghraib. And I accept, as a solemn obligation, the responsibility to ensure that it does not happen again.

(END VIDEO CLIP)

O'BRIEN: Joining us this morning from Capitol Hill, the ranking member of the Armed Services Committee, Democratic Senator Carl Levin of Michigan.

Nice to see you, Senator. Thanks for being with us.

SEN. CARL LEVIN (D), MICHIGAN: Good morning.

O'BRIEN: Good morning to you.

When asked if the problems at Abu Ghraib prison were fixed, Colonel Warren, who is the attorney apparently for General Sanchez said, "I don't think we know." What is your reaction to that kind of answer?

LEVIN: I'm sorry. I didn't hear your question, Soledad.

O'BRIEN: Forgive me. I'll repeat it for you. We must be having a little audio difficulty. And I think there is a plane flying over your head, so I'll try again.

When he was asked if the problems at Abu Ghraib prison had been fixed, Colonel Warren, who is General Sanchez's attorney, said, "I don't think we know." That's a quote. What was your reaction to that statement?

LEVIN: I think it's that they don't know whether or not the problems have been fixed, particularly the ones that they identified. We know about the problems of the enlisted personnel who carried out these abuses. We don't know how high up the chain it goes in terms of the intelligence personnel there, who were clearly involved in some way or another.

I mean, there there's no way these are just a bunch of privates acting spontaneously. They were clearly -- and there is a lot of testimony now to this effect -- doing this in order to soften up prisoners. So we don't know how high up that effort was supported by the intelligence people there in order to extract information from those prisoners.

And we don't know whether or not they fixed an underlying problem, which is that we had Red Cross reports all throughout last year outlining these abuses. And those reports fell through cracks, they were not acted upon. And we had yesterday General Sanchez and General Abizaid talking about the fact that that part of the system is broken and needs to be fixed.

O'BRIEN: The testimony seemed to show confusion, some disorder. Where do you think the blame ultimately does, in fact, lie? The general seemed to say that the Pentagon does not have to approve, in any way, the rules for interrogation of prisoners, that that's left to commanders in the field.

LEVIN: There's a lot of responsibility that has to be shared for this. But clearly, there's people in the intelligence effort there, the forces that were being utilized to gain intelligence, who bear some responsibility here for using those MPs to help gather intelligence in way which is clearly illegal, clearly abusive, and which endangers our own troops.

The reason for these rules is not just that it's the right thing to do, to handle prisoners of war properly, but also it protects prisoners of the United States, our people when they're captured. And so the responsibility here clearly will go up to the intelligence people in some way or another. But beyond that, what was the climate set by the commanders, how much did they know about what was going on and do nothing about it, even though it was their responsibility?

And if you want to look farther up the chain, there is a climate all the way up, it seems to me, about the confusion in the Pentagon as to whether or not the Geneva Convention rules apply or don't apply. You even had Secretary Rumsfeld saying that, well, the rules areply for the most part, or they partially apply.

Well, that's not true. Those Geneva rules apply totally in Iraq, and there should not have been the creation of this climate of confusion and uncertainty about that.

O'BRIEN: Carl Levin is ranking member of the Senate Armed Services Committee, joining us this morning. Sir, thanks for being with us.

LEVIN: Good being with you, Soledad.

O'BRIEN: Thank you.

Bill?

HEMMER: In a moment here, from the Middle East, violence flaring again in Gaza. The U.S. now under mounting pressure to distance itself from Israeli tactics. We'll get to that topic in a moment from the Middle East.

O'BRIEN: Also this morning, a young girl found abandoned, and her name is about the only detail she knows. We're going to hear about the search for her family.

HEMMER: Also, gas prices are up, airlines are raising ticket prices. Why then are so many people expected to travel this summer? Memorial Weekend just a few short days away.

Back in a moment here on AMERICAN MORNING. (COMMERCIAL BREAK)

HEMMER: Fifteen minutes now past the hour. Three-year-old Courtney needs help fast. She was abandoned in Baltimore two weeks ago, and a man believed to be her father left her with a stranger and never came back.

She says her name is Courtney. She's three years old and lives in Brooklyn, New York. Nothing else, though, is known about her.

Baltimore officials appealing to the public for help. A bit earlier today, I talked with Christopher McCabe, the secretary of Maryland's Department of Human Resources, asking him if anyone has come forward yet with any more credible information about this young girl.

(BEGIN VIDEOTAPE)

CHRISTOPHER MCCABE, SECRETARY, MARYLAND DEPT. OF HUMAN RESOURCES: We are delighted at the exposure that Courtney and her life story is receiving here in Maryland and across the country. And as a result of that exposure, we've received a number of calls from a variety of different individuals, including New York City, where we have some reason to believe that she is from, based on her own account, and based on other information we had. We believe to be her father is from New York City.

Based on this yesterday, I can tell you that we did receive a phone call from a shelter in New York City where someone recognized or believed they recognized Courtney from the pictures on TV. And we received contact from that shelter.

They believe that they recognize her, and perhaps the father that was also with her. And so we are tracking down that lead as we speak. We also understand from New York City authorities that her picture is being placed in other shelters in New York City.

So we're still at a relatively early stage, but I cannot thank enough the media for providing the attention to this story. You should know that here in Maryland, Courtney is, by all accounts, happy, healthy. She is living with a foster family in Baltimore City that is caring for her.

She's very verbal, and she wants to see her mommy. And we're doing everything here. Governor Robert Ehrlich, the governor of our state, and me, and our employees from the Baltimore City Department of Social Services, are doing everything we can to find information that would lead us to her family.

HEMMER: What has Courtney told you?

MCCABE: Well, she's told us that she's from Brooklyn, New York, that she wants to see her mommy, and that she really doesn't have too much more information to provide for us. And -- I mean, I'm not privy, Bill, to all of the background information.

HEMMER: How is she doing, then, Mr. McCabe?

MCCABE: Well, from the accounts that I've received, that she's well nourished, she's happy and healthy, and living in a good family foster care setting. But like all little kids, they want to find their parents. And we are dedicated here in our state to try to find a permanent and positive outcome for Courtney. And that will take some time, but without the help of CNN and other media outlets, we really rely on the community to come forward with the information that can help Courtney.

HEMMER: You say you've attracted an awful lot of interest across the country about the fate of this little girl. Give me an idea about who is calling and why.

MCCABE: Well, we get a number of different leads. And kind of like the police when there is an incident that occurred, they're getting a lot of leads that have to be tracked down. But we received a phone call just yesterday from a woman in Salt Lake City who saw the picture of Courtney and volunteered to adopt her. And while we're very grateful for that, it's really premature to say that we're looking for her to be adopted. I would encourage anyone across the country who volunteered to do that to think about children in their own state that really need help and need a permanent home.

HEMMER: If I could, a phone number, if anyone has any information or recognizes this girl, where do they call?

MCCABE: Sure. It's area code 410-361-2235. Let me repeat that. Area code 410-361-2235.

(END VIDEOTAPE)

HEMMER: Christopher McCabe, from Baltimore a bit earlier today.

Also, an update today on that abandoned child we told you about a year ago. Adoption proceedings for the California boy who became known as Mateo reportedly near completion. He was found wandering the streets of Bakers Field, California, around this time last year. A human services official telling us he's very happy and that he's a very lovely boy who is flourishing in his new surroundings. And good for him. There has been no word yet from any family members.

Soledad?

O'BRIEN: A cute little boy there.

Well, an amazing act of heroism saved the life of a truck driver yesterday in Miami. He lost control of a big rig on Florida's Interstate 75, clipping a minivan, splashing then into a waterway. Well, two good samaritans jumped in to save the driver, and then a pair of police officers actually weren't far behind as well.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was just a life saving thing that we had to do. That's what we're here for. We didn't hesitate. We knew what we had to do, and we had to do it.

(END VIDEO CLIP)

O'BRIEN: They did it all right. The truck driver, shaken and confused, is now recovering. And he is in stable condition.

Bill?

HEMMER: Soledad, in a moment here, some are suggesting Israeli's actions in Gaza could actually hurt the U.S. in Iraq. That topic in a moment.

Senator John Kerry trying to deal with one of his biggest obstacles on the road to the White House: Ralph Nader. Back with Jack with that on this on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: These pictures from just moments ago, President Bush on Capitol Hill this morning. You can see that he is walking with House speaker, Dennis Hastert. Also, Senator Bill Frist with him as well this morning.

Dennis Hastert was actually part of some political infighting between high-profile Republicans yesterday. The House speaker started the exchange while speaking to a reporter questioning the GOP credentials of Senator John McCain.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I heard a speech by John McCain the other day, and he was...

DENNIS HASTERT, HOUSE SPEAKER: Who?

UNIDENTIFIED MALE: John McCain, sir.

HASTERT: Where is he from?

UNIDENTIFIED MALE: He's a Republican from Arizona.

HASTERT: He's a Republican?

UNIDENTIFIED MALE: Anyway, his observation was, "Never before when we've been at war have we been worrying about cutting taxes." And his question was, "Where is the sacrifice?" So we have the war in Iraq, and...

HASTERT: If you want to see the sacrifice, John McCain ought to visit our young men and women at Walter Reed in Bethesda. There's the sacrifice in this country. We're trying to make sure that they have the ability to fight this war.

(END VIDEO CLIP)

O'BRIEN: Well, in a written statement, Senator McCain said, "What all lawmakers are called upon to do is not send the country into bankruptcy while U.S. soldiers are risking their lives." And he continued, "I fondly remember a time when real Republicans stood for fiscal responsibility. Apparently, those days are long gone for some in our party."

HEMMER: So now we have another subplot to election 2004.

CAFFERTY: What is the line of that old song, you don't mess around with slim or Jim, or whatever it is? Don't mess around with John McCain. He's probably the most popular member of either chamber of the Congress right now, political party aside. People like him. And it's probably not a good idea for Mr. Hastert or anybody else...

O'BRIEN: Talk about a guy who knows about taking risks and laying his life on the line. Please.

HEMMER: How about subplot number two today?

CAFFERTY: Well, the other one is not bad. This is the John Kerry-Ralph Nader subplot Bill's referring to.

They met yesterday. Nader didn't offer to drop out; Kerry apparently didn't ask him. They say they're going to keep communications open.

But it's potentially a problem for Mr. Kerry. The question is, what should John Kerry do about Ralph Nader?

Judy writes this: "There's nothing Kerry can do about Nader. In Nader's relentless and self-centered quest for center stage, no matter what the cost to America, it's obvious that Nader's ego rules."

Joan in Cumberland, Wisconsin, "Jack I'm here to help you understand." Thank you, Joan. "There are a lot of people who don't like either candidate. And they feel if enough people vote for Nader, he can be recognized as viable and gather funding to create that third party."

Holly in Augusta, Georgia, where they play that very cool golf tournament every spring, "What should John Kerry do about Ralph Nader? Offer him more than Bush is paying."

And Fred in Detroit, Michigan, "It's good to see that Jack does have passion and is human, qualities I doubted existed in him." What are you laughing about? "The scariest development is I'm in complete agreement with him. Too bad he won't have his job long, expressing such views."

Hey, Fred, you heard something I don't know about? Drop me -- call me, Fred. Let me see if -- no point of blowing the whole day here. Do you know what I mean?

O'BRIEN: Did your ID not work when you tried to come in the building this morning?

CAFFERTY: Yes. HEMMER: The bottom line is, Ralph Nader is saying that U.S. troops should be out of Iraq today. That's a clear alternative to anything that President Bush or Senator Kerry have said to this point. And that's why some would vote for him.

CAFFERTY: Yes, but it's only an alternative, if he'll ever be in a position to exercise his judgement on what will happen with the troops in Iraq.

(CROSSTALK)

O'BRIEN: Or, as Joan said, to try to show that he's a viable candidate. I think Joan actually was pretty smart in that response.

CAFFERTY: You do?

O'BRIEN: I do, actually.

Still to come this morning, the bloody Israeli crackdown in the Gaza Strip. How could it affect U.S. troops in Iraq? We're going to examine that and the future of the roadmap to peace in just a moment on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody -- 9:30 here in New York here on AMERICAN MORNING. Good to have you with us along today.

President Bush meeting Republican members of Congress at this hour. We'll look at some cracks that are starting to appear in that unity on the Republican side and the president hopes to patch them up in a moment. So stay tuned for more.

O'BRIEN: Also this morning, the pop culture phenomenon, "American Idol," has reached its inevitable moment of truth. Two finalists, millions of fans, big bucks in advertising. We're going to take a look at the upcoming voting pandemonium just ahead.

HEMMER: And the gal from Hawaii is out, right?

O'BRIEN: Yes, she's gone. But she's...

HEMMER: State population wasn't high enough to keep her in?

O'BRIEN: ... a nice girl. Yes, exactly. No. Couldn't sing that well.

HEMMER: Got it. Top stories here at the half-hour.

Onetime Pentagon favorite Ahmed Chalabi, and member of the Iraqi Governing Council, due to hold a briefing perhaps at this hour. This after U.S. military personnel and Iraqi police surrounded the compound of the Iraqi National Congress. That's his party.

They also raided the nearby home of Ahmed Chalabi. His nephew claims that forces entered his uncle's home with weapons drawn and threatened Chalabi. More on this as we go throughout the day.

An Israeli court convicted a Palestinian man charged with overseeing attacks that they say killed more than two dozen Israelis. Marwan Bargudi (ph) said to be the West Bank leader of Yasser Arafat's Fatah faction, was found guilty on three counts of murder. His scheduled sentencing now June 6.

Finally, on a much lighter note, talking about an amazing animal discovery. More than a month after a family abandoned hopes of ever finding their pet dog, he turns up. The family was hiking in Death Valley with their dog Shadow when he apparently fell into a hole. They eventually left, losing hope of ever finding the dog alive.

Thirty-five days later, two hikers heard the barking, called the number on his tag. Shadow lost five pounds, but back with his family and doing fine.

O'BRIEN: He only lost five pounds in 35 days? He must have been eating something down in the big hole. That's good news. That must be terrible for the family.

(WEATHER REPORT)

O'BRIEN: Well, as we mentioned just moments ago, President Bush has arrived on Capitol Hill to hold a rare meeting with Republican lawmakers there. Several items are expected to be on the agenda, including the chaotic situation in Iraq, the situation in the Middle East, and perhaps political infighting among Republicans.

Congressional correspondent Ed Henry is live for us on Capitol Hill this morning. Good morning to you.

ED HENRY, CNN CORRESPONDENT: Good morning, Soledad. The Republicans up here expecting a pep rally of sorts from the president. There is great nervousness here about the president' low approval ratings, how that might affect the Republican hold not only on the White House, but also the House of Representatives and the Senate.

Let's set the scene very quickly. Basically, the president is right now in a room with all Republican members of the House and Senate, a room underneath the west front of the Capitol, the very spot where he was sworn into office at his inauguration in 2001.

A White House official told CNN this will last about an hour. The issue, as you mentioned, Iraq. But also, the president wants to talk about what he believes to be some good news on the economy. He wants to give an update on the general war on terror beyond Iraq, also Afghanistan, good things he thinks the administration has accomplished on foreign policy.

Also, a Republican staffer up here told CNN that they're expecting the president to talk about the energy bill, which is stalled right now at a time when Americans are very nervous about rising gas prices. Also, about the president's budget plan, which passed the House yesterday but is sort of stalled in the Senate, expected to come back up. Also, the bottom line is that Republicans are concerned that this good news on the economy that the president wants to talk about is being crowded out by the prison abuse scandal in Iraq -- Soledad.

O'BRIEN: Lots of things obviously on the agenda. We've been reporting, Ed, this morning about the political infighting, specifically between the House speaker, Hastert, and also Senator McCain. How is that, for lack of a better phrase, tit for tat playing on the Hill today?

HENRY: Well, the bottom line is that the president also is coming here not just for a pep rally but to try to talk about shared priorities between the Republican Congress and the White House. And I think obviously he's concerned about the fact there has been this bickering that you reported on.

This started a couple of days ago, when the House Armed Services chairman, Duncan Hunter, took a swipe at his Senate counterpart, John Warner, for holding all these hearings about the prisoner abuse scandal. House Republicans, by and large, want to wrap up this investigation. Senate Republicans are split on it. Some more conservative members of Warner's committee want to slow down the hearings, whereas more moderates, like John McCain, Susan Collins, want to keep the investigation going.

Also, this really picked up steam yesterday when McCain was on the receiving end of that swipe from Speaker Hastert. McCain respond to Hastert by saying that he remembers a time when Rpublicans really cared about physical discipline. You can see obviously there are a lot of frayed nerves, and tempers are flaring right now -- Soledad.

O'BRIEN: Swiping and then swiping back. Ed Henry for us this morning on the Hill. Thanks, Ed. Appreciate it.

HENRY: Thank you.

O'BRIEN: Bill?

O'BRIEN: Well, as we mentioned just moments ago, President Bush has arrived on Capitol Hill to hold a rare meeting with Republican lawmakers there. Several items are expected to be on the agenda, including the chaotic situation in Iraq, the situation in the Middle East, and perhaps political infighting among Republicans.

Congressional correspondent Ed Henry is live for us on Capitol Hill this morning. Good morning to you.

ED HENRY, CNN CORRESPONDENT: Good morning, Soledad. The Republicans up here expecting a pep rally of sorts from the president. There is great nervousness here about the president' low approval ratings, how that might affect the Republican hold not only on the White House, but also the House of Representatives and the Senate.

Let's set the scene very quickly. Basically, the president is right now in a room with all Republican members of the House and Senate, a room underneath the west front of the Capitol, the very spot where he was sworn into office at his inauguration in 2001. A White House official told CNN this will last about an hour. The issue, as you mentioned, Iraq. But also, the president wants to talk about what he believes to be some good news on the economy. He wants to give an update on the general war on terror beyond Iraq, also Afghanistan, good things he thinks the administration has accomplished on foreign policy.

Also, a Republican staffer up here told CNN that they're expecting the president to talk about the energy bill, which is stalled right now at a time when Americans are very nervous about rising gas prices. Also, about the president's budget plan, which passed the House yesterday but is sort of stalled in the Senate, expected to come back up. Also, the bottom line is that Republicans are concerned that this good news on the economy that the president wants to talk about is being crowded out by the prison abuse scandal in Iraq -- Soledad.

O'BRIEN: Lots of things obviously on the agenda. We've been reporting, Ed, this morning about the political infighting, specifically between the House speaker, Hastert, and also Senator McCain. How is that, for lack of a better phrase, tit for tat playing on the Hill today?

HENRY: Well, the bottom line is that the president also is coming here not just for a pep rally but to try to talk about shared priorities between the Republican Congress and the White House. And I think obviously he's concerned about the fact there has been this bickering that you reported on.

This started a couple of days ago, when the House Armed Services chairman, Duncan Hunter, took a swipe at his Senate counterpart, John Warner, for holding all these hearings about the prisoner abuse scandal. House Republicans, by and large, want to wrap up this investigation. Senate Republicans are split on it. Some more conservative members of Warner's committee want to slow down the hearings, whereas more moderates, like John McCain, Susan Collins, want to keep the investigation going.

Also, this really picked up steam yesterday when McCain was on the receiving end of that swipe from Speaker Hastert. McCain respond to Hastert by saying that he remembers a time when Rpublicans really cared about physical discipline. You can see obviously there are a lot of frayed nerves, and tempers are flaring right now -- Soledad.

O'BRIEN: Swiping and then swiping back. Ed Henry for us this morning on the Hill. Thanks, Ed. Appreciate it.

HENRY: Thank you.

O'BRIEN: Bill?

HEMMER: Soledad, overseas today, Israel continued its offensive in Gaza. Palestinians say seven more are dead in Rafah. The army today apologizing for firing a tank barrage into a crowd of protesters yesterday. Ten Palestinians are dead there.

The U.S. later condemned that attack. And TIME Magazine world editor Romesh Ratnesar is here to talk more about it.

Nice to see you, Romesh. And good morning to you.

ROMESH RATNESAR, TIME MAGAZINE: Nice to see you.

HEMMER: The statement that came from the White House contrary to the U.S. vote that that abstained from the U.N. Security Council condemning what happened in Gaza yesterday. A change in approach, change in tactics in word or in action from the White House?

RATNESAR: Well, the White House very rarely gets involved with Security Council resolutions condemning Israel. It's very unusual for the United States to ever vote with the rest of the Security Council. But I think the White House is probably a little more nervous right now than we might have been in the past about what seems to be Israeli aggression. I think the problems that the United States is having in Iraq, and the reputation of the U.S. in the Arab world, is at such a low point that I think the U.S. felt that it had to come out much stronger than it might have done in other circumstances to condemn the Israeli action, even if it didn't vote for the Security Council resolution.

HEMMER: There are those now suggest -- and you used that word "nervous" right now, categorizing how the White House believes -- or how you believe, rather -- they feel about what is happening in the Middle East. There are those who suggest that the Middle East situation and the peace process, or lack of it now, folds itself into the Iraqi conflict.

You touched on it. Do you see it that way? And, if so, how?

RATNESAR: Well, I think in the eyes of a lot of people in the Arab world, the conflicts have come to mesh together in some ways. The American occupation in Iraq has come to be equated with the Israeli occupation in the Palestinian areas. And the more that Israel is seen to be an aggressor and doing things that are targeting civilians in the eyes of a lot of Arabs, I think the more that harms the American effort in Iraq, because the two seem to be almost equated with each other.

HEMMER: So as these two parallel tracks roll on, perhaps forward, perhaps not, can the Middle East peace process go forward unless there is peace in Iraq ultimately? In other words, do you have to go through Baghdad to get peace in Jerusalem?

RATNESAR: Well, I think it's unlikely we're going to see a major American effort on the peace process until we manage to at least stabilize Iraq. I think Iraq is taking so many of the resources and time, both among diplomatic people, but also the attention of the White House, that is going to be very difficult to actually sit down and broker a -- some kind of beginning of peace talks again between Israel and the Palestinians.

HEMMER: Thanks for coming in. Romesh Ratnesar, from TIME Magazine. Good to see you here.

RATNESAR: Thank you.

HEMMER: Soledad?

O'BRIEN: Still to come this morning, cell phone junkies rejoice. You're going to soon have a way to find all those important mobile numbers. Andy is ahead with more on the national cell phone directory and why some folks aren't too pleased about it.

Also, airline ticket prices on the rise. So how come more folks are expected to take to the skies this summer? We'll explain just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Travel experts say vacation travel is expected to increase by about 3 percent this summer. But yesterday, Continental Airlines announced an increase in fares because of higher few costs. And with the average price of gasoline topping $2 a gallon, it will take some work to plan your summer vacation this year.

Let's get some help from the senior consulting editor of Travel & Leisure Magazine, Mark Orwoll.

Nice to see you as always.

MARK ORWOLL, TRAVEL & LEISURE MAGAZINE: Thank you, Soledad.

O'BRIEN: Thanks for coming in. You know, when you look at how high the gas prices are, the fact that the airlines are starting to charge more money because, of course, it's being reflected in the jet fuel prices, as well, explain to me this increase. I mean, I get it's only 3 percent, but I would have suspected going downward, not upward.

ORWOLL: Well, the -- I think the 3 percent that I've heard of, 3.2 increase in the number of people who are traveling, but actual prices across the board in travel have gone up about 7 percent since December. The prices for airfare in particular, I mean, who knows where the ceiling is going to be on that, because they're increased every single day. With each new increase in the jet fuel prices, the airfares are going up.

O'BRIEN: So how much do you expect by the end of the summer -- let's talk really about summer travel, because I think, frankly, for Memorial Day, too late to be talking about that. How much will that affect how much I'm going to have to pay on my ticket, the way the hikes are going up?

ORWOLL: Well, you know, we have -- you have a lot of different things that are going on here. For example, Southwest Airlines, they have long-term contracts on their jet fuel. So they're not going to be as impacted by today's increases in jet fuel.

Other airlines, especially overseas and Europe, they're tacking on fuel surcharges. British Air just came out with an increase of $8 for a fuel surcharge on their round trip tickets. Continental I think has increased as much as $20 on some of their roundtrip airfares in the United States.

O'BRIEN: But that could potentially go up?

ORWOLL: They could potentially go up considerably more, that's right. That's why you don't want to wait around too long to see how high they go.

O'BRIEN: Which kind of brings us to your first tip for folks who are trying to travel this summer. Let's get right to it. You say make your airfare plans now, because that is a reality, that those surcharges could go up. You really want to do it before...

ORWOLL: Soledad, I don't know a single person who thinks that airfare prices are going to go down. So the idea is, on any single flight there are a whole variety of prices on one single airline. And the most -- the cheapest prices are always going to sell out first.

So if you can pin down your date and your destination, don't wait around for better prices. Go to the sites like Orbitz or Expedia and talk to a travel agent. Do some homework, but don't wait too long.

O'BRIEN: You also say consider alternative airports. When you consider the gas prices, does it really necessarily save you money if you're driving a hundred miles to get to the airport?

ORWOLL: Well, you know, in many cases, if you can save a hundred dollars by driving a hundred miles, on your airfare, that is, spending the extra 10 bucks on gas is meaningless. But don't just look at alternative airports.

Look at alternative days of the week. In other words, flying Tuesday or Wednesday or Thursday might not be as convenient as flying on the weekend, but you can often get much cheaper flights on those days. Flying at 6:00 in the morning or 11:00 at night you can get much better prices than if you want to fly at noon. So consider all the alternatives.

O'BRIEN: And be a little more flexible and you'll have more flexibility in the long run.

ORWOLL: Right.

O'BRIEN: You also say look into package deals. Look where?

ORWOLL: Well, you can go -- again, you can go on to the major booking sites, like the ones I mentioned, go to a travel agent. But the package deal is where you have your airfare and your hotels put into one price.

And what happens here is that the airlines and the hotels are able to discount their regular prices pretty steeply in some cases without advertising the fact, which could harm their normal pricing structure. So you as a consumer can benefit oftentimes to a great extent by buying a package.

O'BRIEN: You mentioned earlier travel agents. And I always thought that travel agents were good at sort of helping you craft your vacation but they actually weren't necessarily going to get you a great deal. Can they really get you some good deals?

ORWOLL: Oh, absolutely. They have more information at their fingertips than the average person could have even after a week of doing their own homework.

In some cases, if you just want to book your airfare, and that's all you really need, or just get a rental car, you can do that yourself. But if you're having a pretty complex vacation and you need a lot of help planning that, the travel agent can get you the best vacation for your money. Whether it's always the cheapest is not the most important thing. What you want is the best vacation for the money you're willing to spend.

O'BRIEN: Where are you going this summer?

ORWOLL: Actually, I'm going down to the beach in Jersey for a week. Then I'm taking the family down to Puerto Rico for about 12 days.

O'BRIEN: Oh. Have you already planned it?

ORWOLL: We are really looking forward to this.

O'BRIEN: Oh, all right. Mark Orwoll, nice to see you, from Travel & Leisure Magazine.

ORWOLL: Thanks.

O'BRIEN: Bill?

HEMMER: All right.

Listen, a developing story from Iraq as the two of you were talking. We continue to follow the latest with Ahmed Chalabi. He is meeting with reporters at this moment. But this is what we understand from earlier. Apparently, the U.S. coalition, along with the Iraqi police, went to his home, raiding that earlier today, carrying out some sort of inspection.

Also at the headquarters for his political party, the INC. That's the Iraqi National Congress. Ahmed Chalabi has been critical about the handover set for the 30th of June, saying the U.S. should turn complete sovereignty over to the Iraqis at that time. There seems to be some sort of tit for tat, and possibly larger than that that's happening between Chalabi and the U.S. coalition.

In a moment here, we'll let you know what he says about that raid at his home and his compound for his political party a bit earlier today. Ahmed Chalabi, that story continues to develop at this hour in Baghdad. More in a moment.

Also in a moment here, ever forget a friend's cell phone number? Help may be closer than you think. Andy has that and market action, early on anyway, right after this. (COMMERCIAL BREAK)

HEMMER: All right. Welcome back, everybody. Another strike delivered to Martha Stewart. Plus, coming soon, a national cell phone directory, maybe.

A check of the market action, too. Andy Serwer is 'Minding Your Business,' back with us.

Good morning, Drew.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: Good morning, again.

HEMMER: Still being nice, huh?

SERWER: Really cheerful, still. Let's check out the market.

Yesterday was toad's wild ride. What's going on today? Well, just sort of settling in. Up about eight points. Not a whole lot of action.

One stock that's moving to the upside, Hormel. Big increase in profits out of Austin, Minnesota. Yes, they make Spam. Yes, they make Dinty Moore beef stew.

They're raising prices on that, though. Meat is a commodity that has been going up a lot, and that stock is on the move. Also, MARRAKESH EXPRESS couscous. Did you know they made that?

(CROSSTALK)

SERWER: Yes, I thought you needed to know that.

Anyway, coming soon, perhaps, a national directory for cell phone numbers. A lot of people think this is needed. You know, what is your cell phone number? The only way to know is if someone gives it to you, right?

Now, the Cellular Telecommunications Internet Association is going to put together a list. They say they already have 75 percent of the 163 million cell phones out there. Obviously, a lot of people not happy with this.

They don't want -- privacy issues. What about telemarketers? There are several congressmen are lobbying against this. Verizon is against this. I think we're going to see a lot of action on this over the next couple of months.

HEMMER: You think it's going to happen or not?

SERWER: I think it will happen in some form, yes, because you can also put a cell phone number on a do not call list. So you can opt out, but it's going to be very interesting to see what happens with that. Let's talk about Martha Stewart, though. More trouble, can you believe it? Yes, more trouble for Martha Stewart. This from the theater of the absurd, though.

I mean, K-mart yesterday announcing a recall on one of her products, Martha Stewart Everyday Matches. And you won't believe what the problem with these matches are. Get this.

HEMMER: They don't light?

SERWER: No, they do light. I'm just at a loss here. Well, maybe there's a little spontaneous combustion, Soledad. But it says "Hazard, these matches may ignite upon impact." Posing a fire hazard.

That's what matches do. I don't really understand what is going on. Not exactly clear here.

But, you know, Martha Stewart has to feel snake bitten. I mean, she has some matches, they work really well. K-mart is saying apparently they work too well. So they're withdrawing them, recalling matches.

HEMMER: It's your favorite topic.

SERWER: Martha Stewart every day.

HEMMER: Soledad?

O'BRIEN: Jack has the Question of the Day.

Hello.

CAFFERTY: How are you doing?

The question has to do with John Kerry's dilemma when it come to that Ralph Nader fellow. Nader is thought by many to have cost Al Gore the election four years ago, and he's back in the race again. The two men met yesterday, they talked, Nader didn't quit, Kerry didn't ask him to quit, and said they'll talk about again. But it could be a problem for John Kerry.

O'BRIEN: Coming up this morning on CNN, President Bush heads to Capitol Hill as lawmakers get set to head out of town. What he was there to say coming up on the next hour with Daryn Kagan on "CNN LIVE TODAY."

AMERICAN MORNING is back in just a moment.

(COMMERCIAL BREAK)

HEMMER: We've got to run. See you Friday. Daryn Kagan at the CNN Center, taking you through the next hour.

Daryn, good morning.

O'BRIEN: Hey, Daryn. DARYN KAGAN, CNN ANCHOR: Good morning to my friends in New York City. You guys have a great day. We'll get started.

We're at CNN headquarters in Atlanta. I'm Daryn Kagan. As always, we start with the headlines at this hour.

The U.S. military and Iraqi police raid the home of Iraqi Governing Council member Ahmed Chalabi.