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CNN Live At Daybreak

Tornadoes Hit Midwest; Reaction to President Bush's Speech on Iraq

Aired May 25, 2004 - 06:00   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.


CAROL COSTELLO, CNN ANCHOR: With a little over a month to go until the handover, President Bush outlines a five step plan for Iraq.
This is DAYBREAK for May 25.

And good morning to you.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Let me bring you up to date with what's happening right now.

A car bomb goes off in front of a Baghdad hotel. It happened this morning. Four Iraqis are hurt, including a small boy. Iraqi officials suspect the nearby Australian embassy may have been the target.

A natural disaster in the Dominican Republic. One hundred people have been killed in flooding caused by heavy rains near the border with Haiti. Authorities fear the death toll could rise because nearly 200 people are still missing.

In money news, oil prices have eased somewhat in early trading. Still, the peak demand for gas in the United States isn't expected until this weekend's Memorial Day holiday, so don't expect gas prices to be going down.

In sports, the Detroit Pistons 72, the Indiana Pacers 67. The Pistons had 19 blocks, one away from the NBA play-off record. The conference playoffs are now tied at one game apiece.

In culture, the Kennedy Profile In Courage Awards go to an Afghan doctor and two former law makers. The doctor defied the Taliban to provide health care and education to women. The former law makers were cited for their environmental stands.

And in the weather bulls eye this morning, northwest Missouri and parts of Kansas were raked by several tornadoes. Some damage. Fortunately, no deaths -- Rob.

ROB MARCIANO, CNN CORRESPONDENT: Wow! Those are, we call those amatis clouds (ph) and obviously the tornado in the first part of that video. Amazing there are no fatalities there, Carol.

Over 50 tornadoes touched down in really this area right here. I mean it was such a narrow area and they pretty much fired off along the same line. It's just amazing how that was concentrated like that. We don't expect it to be quite as bad today, thankfully, as this line of storms pushes off to the east.

(WEATHER REPORT)

COSTELLO: Reaction coming into us this morning to President Bush's address last night on Iraq. Polls show support for the war falling off at a time when the president could really use as much as he can get.

Let's head live to D.C. and Bill Prasad for more -- good morning, Bill.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

With the handing over of sovereignty five weeks away and an election five months away, the president put it all on the table last night, talking about his plan for Iraq and saying that plan will work.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): A warm reception for a president whose reelection campaign may be in hot water due to his Iraq policies. At the Army War College in Pennsylvania, Mr. Bush vowed to stay the course.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No power of the enemy will stop Iraq's progress.

PRASAD: The president outlined five steps, some detailed in a new United Nations resolution circulated Monday. It calls for a sovereign interim government by June 30, elections to pick a transitional government no later than January of 2005, promises to train new Iraqi military and police forces, rebuilding the country's infrastructure and encouraging more international support -- all goals aimed at establishing a democracy.

BUSH: And the sooner this goal is achieved, the sooner our job will be done.

PRASAD: Missing from a speech, the U.S. troop withdrawal deadline, Mr. Bush saying that he would send more troops if necessary. After the speech, one Democratic senator said he was disappointed.

UNIDENTIFIED MALE: And I didn't hear a strategy. I heard a rationale. I heard a goal. I didn't hear any fundamental change in strategy. And, quite frankly, I don't think there was a full leveling with the American public.

(END VIDEOTAPE)

PRASAD: Critics charge they heard just one new promise last night, that the scene of prisoner abuse could be demolished. Abu Ghraib Prison might be torn down -- Carol, back to you.

COSTELLO: If the Iraqis agree. Bill Prasad live in D.C. this morning.

Now let's take a look at developments in Iraq in our situation report.

Intense fighting in Najaf this morning has slightly damaged the holiest shrine in the Shiite region. Several people have been injured.

A car bomb goes off outside of a hotel in Baghdad this morning. At least four Iraqis were hurt, one of them a small boy. Iraqi officials suspect the nearby Australian embassy may have been the target.

Janis Karpinski, the Army general in charge of the U.S. prison guards accused of abusing Iraqis, has now been suspended. But she has not been charged with any offense.

And the top U.S. commander in Iraq, Lieutenant General Ricardo Sanchez, is being replaced. Pentagon officials say it's part of a normal rotation and is not a no confidence vote.

A bump in the road already for a U.S.-sponsored resolution on Iraq. France's foreign minister says the U.N. resolution needs improvements and he hopes to involve Iraqi leaders in talks before voting on the proposal. The U.S. and Britain co-sponsored the resolution, which calls for a U.S.-led multinational peacekeeping force.

Here's more from CNN's Richard Roth.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT (voice-over): One year later, the United States returned to the Security Council for urgent help in Iraq. This time, Washington is not threatening to go it alone. Instead, it's desperately requesting United Nations' involvement as control is turned over to Iraqi authorities.

JAMES CUNNINGHAM, U.S. DEPUTY AMBASSADOR TO THE UNITED NATIONS: The resolution looks forward to the end of the Coalition Provisional Authority and the occupation and a leading role for the United Nations in Iraq.

ROTH: Knowing the U.S. is in a tight spot, Security Council members such as France and Germany angle to get as much authority for the Iraqis as possible and place limits on the extent of the U.S. political and military role.

GUNTER PLEUGER, GERMAN AMBASSADOR TO THE UNITED STATES: We will have to make sure that this process provides Iraqi ownership for the political process, as well as for the process of economic reconstruction.

ROTH: So will there be the same showdown as before the war? HERALDO MUNOZ, CHILEAN AMBASSADOR TO THE UNITED NATIONS: There are differences, but at the same time, I have seen progress and growing agreements over the meetings that we have had informally.

ROTH: Debate is likely on key points in the resolution. A U.S.- led multinational force stays for a year only to then be reviewed, not necessarily withdrawn. The international military and the Iraqi military plan cooperation, but left unsaid is whether Iraqi troops can refuse an order from an American commander. And oil revenues will be controlled by Iraq, but an international monitoring board will remain in place to look for corruption.

(END VIDEOTAPE)

COSTELLO: For more information about the handover deadline and the key players who are working to make it happen, head to our Web site. Of course, that's cnn.com.

I'm sorry -- the FBI is saying it's sorry for a mistake in evidence that led to an Oregon lawyer being locked up in connection with the terrorist bombings in Madrid, Spain. Brandon Mayfield was detained for two weeks after the FBI received fingerprints from the bombing scene. FBI computers matched Mayfield to the prints, but the agency later determined the prints were not his. So, Mayfield was released from custody.

(BEGIN VIDEO CLIP)

BRANDON MAYFIELD, FORMER SUSPECT IN MADRID BOMBINGS: I'm, what, two or three days out of the detention center and I'm just now starting to not shake. My blood pressure has, you know, risen. My pulse has risen. My heart hurts. They're going to cause somebody a heart attack. Maybe they have, I don't know. Do they pay for that afterwards? I don't think so.

(END VIDEO CLIP)

COSTELLO: As I said, the FBI issued an apology to Mayfield and has launched an investigation into the failure of the fingerprint evidence.

(BEGIN VIDEO CLIP)

KARIN IMMERCUT, U.S. ATTORNEY: Although it is regrettable that the new information came to light only now, I can assure you that we moved immediately to remedy the situation.

(END VIDEO CLIP)

COSTELLO: The FBI's special agent in charge of the case says the FBI hopes to meet with Mayfield to apologize in person.

Here are more stories making news across America this Tuesday.

In Washington State, a 400 mile fuel pipeline is expected to reopen today, two days after it was shut down following an explosion and fire. The break in the pipeline shot flames 20 feet into the air. The pipeline handles 12 million gallons of gasoline, diesel fuel and jet fuel every day.

The California Supreme Court is scheduled to hear arguments this morning over same-sex marriages in San Francisco. The court is expected to determine if Mayor Gavin Newsome overstepped his authority. San Francisco has issued more than 4,000 marriage licenses to same sex couples.

A tentative agreement has now been reached between SBC Communications and their union employees. The workers' four day strike ended as planned at midnight. The union says the new deal improves wages for the nearly 100,000 union workers.

"American Morning" is coming up at 7:00 a.m. Eastern.

Still to come on DAYBREAK, though, could Wal-Mart make a jump across the pond? And why has the mega company been so darned successful? A new report on the corporate giant could explain. That's ahead in our business buzz.

Plus, how is President Bush's message playing in Iraq this morning?

And it was a war fought by the greatest generation and covered by some of the most courageous journalists of our time. A look at their work in pictures.

This is DAYBREAK for May 25.

(COMMERCIAL BREAK)

COSTELLO: Welcome back to DAYBREAK.

6:12 Eastern time.

Our Ben Wedeman has been in some real hot spots overseas.

He's with us this morning in Atlanta to talk about life as a journalist in Iraq, how he travels around Baghdad, the places he visits, how he cultivates relationships, sources, all of that.

Welcome to Atlanta, Ben. BEN WEDEMAN, CNN CORRESPONDENT: Good morning, Carol.

Nice to be here.

COSTELLO: Is it good to be out of Iraq for a while?

WEDEMAN: It's a bit of a relief. I mean Baghdad is a very heavy place, lots going on and you don't really have time to sit back and look at it.

COSTELLO: And relax.

WEDEMAN: And relax, yes. COSTELLO: Now, the impression I have is that you're holed up in a hotel and you can never leave it.

WEDEMAN: No, that's wrong. In Baghdad, we can get out. There are certain parts of the city where you don't go, Sadr City, which is the Shiite stronghold; Azumia (ph), which is the Sunni stronghold, you don't go there. But by and large we get out. We -- I speak to a lot of people.

COSTELLO: So you don't travel by yourself, though, when you go out?

WEDEMAN: No, no, of course not. We go with what's called a security adviser as well as, you know, the normal crew, a producer and a cameraman. But...

COSTELLO: And are they Iraqi?

WEDEMAN: Sometimes they are, sometimes they aren't. Really in Baghdad, the best way to function is to be very open. You go out and everybody obviously knows what you're doing and why you're doing it, and you just speak to people and you make contact and you be friendly and they're friendly back.

COSTELLO: So the Iraqis receive you well, at least the Iraqis on the streets.

Do they come up and say hello to you? Do you have to kind of approach them?

WEDEMAN: We did a little bit of both, actually. When we're going out with the camera, obviously, we want people to speak to us on camera. And so you have to sort of talk to them and convince them that they should share their opinion with us. But by and large it's no problem. And, you know, I covered Iraq under Saddam, as well. And the nice thing is that now people will come up to you, they'll talk and they'll tell you how they really feel, as opposed to how they think they should talk to you, saying things that, you know, would not be offensive to the regime.

So the pleasure in Baghdad now, compared to the old days, is people are honest. When you ask them an opinion -- you don't have to agree with the opinion, but they'll tell you what they think.

COSTELLO: OK, as far as how the Iraqis really feel about Americans, do they tell you in no uncertain terms how they feel? Are they more -- I mean do they like us more than we think they do?

WEDEMAN: I think the Iraqis have a very complicated view of the United States and it's -- the history goes back many years. They will tell you, for instance, that under Saddam, after the last Gulf War, there was a lot of bitterness that the Americans didn't come in and topple the regime at the time. And there's also resentment that the Americans kept in place this system of sanctions, which ordinary Iraqis really suffered. And there's no -- you cannot understate the amount of difficulty that ordinary Iraqis suffered. And now, you know, after the -- in the immediate aftermath of the fall of the regime, people were optimistic. They were hopeful. A year later, there's a lot of disappointment, a lot of resentment, a lot of anger that the American experiment in Iraq has not turned out very well for them. There's no security, there are no jobs, the future is very uncertain.

COSTELLO: This idea that President Bush outlined last night in his speech to destroy the Abu Ghraib Prison, will that resonate with Iraqis?

WEDEMAN: I think it comes a year late. If they had destroyed Abu Ghraib Prison immediately after the fall of the regime, people would have applauded it. But now, a year later, and prompted by this horrendous abuse scandal, people think it's probably a little too late for that. In fact, I was outside Abu Ghraib Prison just a week ago and a woman told me we don't want the Americans to destroy it. We want to turn it into a housing complex, a place to live.

COSTELLO: Oh, man.

WEDEMAN: So it's...

COSTELLO: Interesting.

So you're headed back to Iraq?

WEDEMAN: Not in the immediate future. But obviously eventually I will be back.

COSTELLO: Have you eaten at Costello's in Baghdad? There's a restaurant called Costello's in Iraq.

WEDEMAN: I'm unfamiliar with that.

COSTELLO: You're going to have to look that up.

Ben Wedeman, thank you for joining DAYBREAK.

WEDEMAN: My pleasure.

COSTELLO: We appreciate it.

Your news, money, weather and sports.

It's 6:17 Eastern.

Here's what's all new this morning.

A sacred shrine in Najaf was damaged during clashes between U.S. troops and Iraqi militiaman. Supporters of cleric Muqtada al-Sadr say American troops fired mortars at a Imam Ali Shrine.

Former New York Stock Exchange CEO Richard Grasso is being sued by New York Attorney General Eliot Spitzer. Spitzer argues Grasso's $188 million pay package was just too high and he wants Grasso to give back $100 million of it.

In money news, the nearly 100-year-old Spiegel catalog business is being sold to an investment firm for $31 million. Spiegel filed for Chapter 11 bankruptcy protection last year.

And in sports, former French Open champ Andre Agassi -- ooh, it was embarrassing -- he was unceremoniously bounced in the tournament's first round. Agassi, the six seed, lost in straight sets to French qualifier Jerome Haehnel, an unknown.

In culture, Madonna kicks off her world tour. It happened last night in Los Angeles. Her Reinvention Tour stops in 13 U.S. cities before heading to Europe. It is her first world tour in three years -- Rob.

MARCIANO: As always, Madonna looking good.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you this morning.

Time for a little business buzz right now.

You will not be winking back that yellow smiley face after you hear this story. You know that yellow smiley face in those (COMMERCIAL BREAK)s for Wal-Mart? That's what I'm talking about.

Carrie Lee joining us live from the NASDAQ market site with the tale of how one mega company may have profited from your tax dollars. Oooh, tell us -- Carrie.

CARRIE LEE, CNN CORRESPONDENT: OK, Carol.

There's a company out there, a research company in Washington called Good Jobs First. And they found that over the past few decades, as Wal-Mart has expanded into the world's largest retailer, the company has received over a billion dollars worth of subsidies, things like tax breaks, property tax rebates and state income tax credits. And they say that there's nothing illegal here, not even anything unusual. But kind of rubbing the authors of this report the wrong way, because they're arguing that the low wages paid by Wal- Mart, as well as its negative effect on small businesses in the communities where it's located really puts the value of these subsidies in question.

Now, for its part, Wal-Mart says that the subsidies have actually been a good investment. The company says that over the last 10 years, it's collected over $52 billion in sales tax, paid nearly $200 million in work related taxes and over $4 million in local property taxes. So Wal-Mart saying that the investment or the subsidies have been a good thing.

Keep in mind Wal-Mart, the world's largest retailer, the world's largest employer already, and now the CEO says the company has set its sights more and more on expanding in Europe.

So it looks like, Carol, the company is going to get even bigger.

COSTELLO: So there's going to be Wal-Marts throughout the world?

LEE: Right. Exactly.

COSTELLO: Unbelievable.

LEE: Well, they have a little bit of a presence in Europe. They have bought an Azda (ph) supermarket chain there. But now they're to really, it looks like, get more aggressively into other countries.

COSTELLO: Interesting.

Carrie Lee live from the NASDAQ market site.

We'll be back with more of DAYBREAK right after this.

(COMMERCIAL BREAK)

COSTELLO: Time for our DAYBREAK Eye-Openers.

Usually firefighters have to climb trees to rescue wayward kittens, but this time they had to go down the drain. The crying kitten was stuck in a storm drain for five days before firefighters were called in. They had to flood the drain and that forced the feline to the surface. And she was a little mad and wet, but she's alive and safe and sound this morning. There you see here.

Here's a bizarre story from Kansas. A man broke down the door of a house in Wichita and pointed a gun at the homeowner. The intruder then realized he had the wrong house and then he said I'm sorry for the mistake. He even offered to repair the door. The suspect is still on the loose and still has not cut a check for the damages.

Some people may be taking "American Idol" a bit too seriously. The governors of Georgia and North Carolina are urging residents to vote for their favorite daughters for the "Idol" finals. Diana DeGarmo and Fantasia Barrino is from North Carolina. The two face off in tonight's finale and then viewers will be given four hours after the show to cast their vote.

Retired General Tommy Franks will receive an honorary knighthood from the British later today, and that is not exactly sitting well with some Brits. A statement from the Ministry of Defense calls Franks "a sterling friend of the United Kingdom during a period of turbulence in world affairs." As you know, Franks retired last summer after leading coalition forces into battle in Afghanistan and Iraq. Those in Tony Blair's Labor Party, however, say it is the ultimate in bad taste.

Here's what's all new in the next half hour of DAYBREAK. We take you live to Baghdad, where another car bomb has exploded this morning. We'll also find out what Iraqis are saying about President Bush's speech last night.

Plus, who do you blame for the high price of gas? We'll hear America's voice.

And find out what Michael Jackson's father is doing to make sure his family stays informed about the case against his son.

We'll be back.

(COMMERCIAL BREAK)

COSTELLO: Thirty-six days to go until the handover and President Bush outlines a plan to make it happen. But this is the image coming out of Iraq this morning -- another car bombing in Baghdad.

This is DAYBREAK for May 25.

And good morning to you.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining us.

Let me bring you up to date.

Israel's week long raid in a Gaza refugee camp is now over. Officials say they destroyed three tunnels used to smuggle arms. The offensive left more than 40 Palestinians dead and many homes destroyed.

The Army general in charge of the U.S. prison guards accused of abusing Iraqis has now been suspended. But Janis Karpinski has not been charged with any offense.

This is happening right now -- the area around a chemical fire in Conyers, Georgia now being evacuated. Officials cleared a open mile radius around this warehouse fire. Look at that smoke. The warehouse is used by a company that makes pool chemicals.

In money news, gas prices hit another record high. I know you feel it at the pump. Across the country, the average price for a gallon of gas, $2.06.

In sports, teen golf star Michelle Wie is being allowed to play in the U.S. Women's Open. She's the first amateur to be awarded the qualifying exemption into the event and she's only 14.

In culture, Vermeer's 1670 painting "Young Woman Seated At the Virginals" is expected to sell for more than $5 million at a Sotheby's auction in July. The piece was once dismissed as a fake.

And in weather, take a look at this twister. Tornadoes hit northwest Missouri and parts of Kansas, blowing some homes off of their foundations. A lot of damage, but no deaths and only minor injuries to report this morning -- Rob.

ROB MARCIANO, CNN CORRESPONDENT: Amazing no deaths were reported and once again amazing video. Storm chasers were out in full force yesterday and lots of warning in advance of this particular system. We've talked about it. The storm prediction center putting out a high risk for that bulls eye, and that's where most of the thunderstorms were.

(WEATHER REPORT)

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Aired May 25, 2004 - 06:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: With a little over a month to go until the handover, President Bush outlines a five step plan for Iraq.
This is DAYBREAK for May 25.

And good morning to you.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Let me bring you up to date with what's happening right now.

A car bomb goes off in front of a Baghdad hotel. It happened this morning. Four Iraqis are hurt, including a small boy. Iraqi officials suspect the nearby Australian embassy may have been the target.

A natural disaster in the Dominican Republic. One hundred people have been killed in flooding caused by heavy rains near the border with Haiti. Authorities fear the death toll could rise because nearly 200 people are still missing.

In money news, oil prices have eased somewhat in early trading. Still, the peak demand for gas in the United States isn't expected until this weekend's Memorial Day holiday, so don't expect gas prices to be going down.

In sports, the Detroit Pistons 72, the Indiana Pacers 67. The Pistons had 19 blocks, one away from the NBA play-off record. The conference playoffs are now tied at one game apiece.

In culture, the Kennedy Profile In Courage Awards go to an Afghan doctor and two former law makers. The doctor defied the Taliban to provide health care and education to women. The former law makers were cited for their environmental stands.

And in the weather bulls eye this morning, northwest Missouri and parts of Kansas were raked by several tornadoes. Some damage. Fortunately, no deaths -- Rob.

ROB MARCIANO, CNN CORRESPONDENT: Wow! Those are, we call those amatis clouds (ph) and obviously the tornado in the first part of that video. Amazing there are no fatalities there, Carol.

Over 50 tornadoes touched down in really this area right here. I mean it was such a narrow area and they pretty much fired off along the same line. It's just amazing how that was concentrated like that. We don't expect it to be quite as bad today, thankfully, as this line of storms pushes off to the east.

(WEATHER REPORT)

COSTELLO: Reaction coming into us this morning to President Bush's address last night on Iraq. Polls show support for the war falling off at a time when the president could really use as much as he can get.

Let's head live to D.C. and Bill Prasad for more -- good morning, Bill.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

With the handing over of sovereignty five weeks away and an election five months away, the president put it all on the table last night, talking about his plan for Iraq and saying that plan will work.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): A warm reception for a president whose reelection campaign may be in hot water due to his Iraq policies. At the Army War College in Pennsylvania, Mr. Bush vowed to stay the course.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No power of the enemy will stop Iraq's progress.

PRASAD: The president outlined five steps, some detailed in a new United Nations resolution circulated Monday. It calls for a sovereign interim government by June 30, elections to pick a transitional government no later than January of 2005, promises to train new Iraqi military and police forces, rebuilding the country's infrastructure and encouraging more international support -- all goals aimed at establishing a democracy.

BUSH: And the sooner this goal is achieved, the sooner our job will be done.

PRASAD: Missing from a speech, the U.S. troop withdrawal deadline, Mr. Bush saying that he would send more troops if necessary. After the speech, one Democratic senator said he was disappointed.

UNIDENTIFIED MALE: And I didn't hear a strategy. I heard a rationale. I heard a goal. I didn't hear any fundamental change in strategy. And, quite frankly, I don't think there was a full leveling with the American public.

(END VIDEOTAPE)

PRASAD: Critics charge they heard just one new promise last night, that the scene of prisoner abuse could be demolished. Abu Ghraib Prison might be torn down -- Carol, back to you.

COSTELLO: If the Iraqis agree. Bill Prasad live in D.C. this morning.

Now let's take a look at developments in Iraq in our situation report.

Intense fighting in Najaf this morning has slightly damaged the holiest shrine in the Shiite region. Several people have been injured.

A car bomb goes off outside of a hotel in Baghdad this morning. At least four Iraqis were hurt, one of them a small boy. Iraqi officials suspect the nearby Australian embassy may have been the target.

Janis Karpinski, the Army general in charge of the U.S. prison guards accused of abusing Iraqis, has now been suspended. But she has not been charged with any offense.

And the top U.S. commander in Iraq, Lieutenant General Ricardo Sanchez, is being replaced. Pentagon officials say it's part of a normal rotation and is not a no confidence vote.

A bump in the road already for a U.S.-sponsored resolution on Iraq. France's foreign minister says the U.N. resolution needs improvements and he hopes to involve Iraqi leaders in talks before voting on the proposal. The U.S. and Britain co-sponsored the resolution, which calls for a U.S.-led multinational peacekeeping force.

Here's more from CNN's Richard Roth.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN SR. U.N. CORRESPONDENT (voice-over): One year later, the United States returned to the Security Council for urgent help in Iraq. This time, Washington is not threatening to go it alone. Instead, it's desperately requesting United Nations' involvement as control is turned over to Iraqi authorities.

JAMES CUNNINGHAM, U.S. DEPUTY AMBASSADOR TO THE UNITED NATIONS: The resolution looks forward to the end of the Coalition Provisional Authority and the occupation and a leading role for the United Nations in Iraq.

ROTH: Knowing the U.S. is in a tight spot, Security Council members such as France and Germany angle to get as much authority for the Iraqis as possible and place limits on the extent of the U.S. political and military role.

GUNTER PLEUGER, GERMAN AMBASSADOR TO THE UNITED STATES: We will have to make sure that this process provides Iraqi ownership for the political process, as well as for the process of economic reconstruction.

ROTH: So will there be the same showdown as before the war? HERALDO MUNOZ, CHILEAN AMBASSADOR TO THE UNITED NATIONS: There are differences, but at the same time, I have seen progress and growing agreements over the meetings that we have had informally.

ROTH: Debate is likely on key points in the resolution. A U.S.- led multinational force stays for a year only to then be reviewed, not necessarily withdrawn. The international military and the Iraqi military plan cooperation, but left unsaid is whether Iraqi troops can refuse an order from an American commander. And oil revenues will be controlled by Iraq, but an international monitoring board will remain in place to look for corruption.

(END VIDEOTAPE)

COSTELLO: For more information about the handover deadline and the key players who are working to make it happen, head to our Web site. Of course, that's cnn.com.

I'm sorry -- the FBI is saying it's sorry for a mistake in evidence that led to an Oregon lawyer being locked up in connection with the terrorist bombings in Madrid, Spain. Brandon Mayfield was detained for two weeks after the FBI received fingerprints from the bombing scene. FBI computers matched Mayfield to the prints, but the agency later determined the prints were not his. So, Mayfield was released from custody.

(BEGIN VIDEO CLIP)

BRANDON MAYFIELD, FORMER SUSPECT IN MADRID BOMBINGS: I'm, what, two or three days out of the detention center and I'm just now starting to not shake. My blood pressure has, you know, risen. My pulse has risen. My heart hurts. They're going to cause somebody a heart attack. Maybe they have, I don't know. Do they pay for that afterwards? I don't think so.

(END VIDEO CLIP)

COSTELLO: As I said, the FBI issued an apology to Mayfield and has launched an investigation into the failure of the fingerprint evidence.

(BEGIN VIDEO CLIP)

KARIN IMMERCUT, U.S. ATTORNEY: Although it is regrettable that the new information came to light only now, I can assure you that we moved immediately to remedy the situation.

(END VIDEO CLIP)

COSTELLO: The FBI's special agent in charge of the case says the FBI hopes to meet with Mayfield to apologize in person.

Here are more stories making news across America this Tuesday.

In Washington State, a 400 mile fuel pipeline is expected to reopen today, two days after it was shut down following an explosion and fire. The break in the pipeline shot flames 20 feet into the air. The pipeline handles 12 million gallons of gasoline, diesel fuel and jet fuel every day.

The California Supreme Court is scheduled to hear arguments this morning over same-sex marriages in San Francisco. The court is expected to determine if Mayor Gavin Newsome overstepped his authority. San Francisco has issued more than 4,000 marriage licenses to same sex couples.

A tentative agreement has now been reached between SBC Communications and their union employees. The workers' four day strike ended as planned at midnight. The union says the new deal improves wages for the nearly 100,000 union workers.

"American Morning" is coming up at 7:00 a.m. Eastern.

Still to come on DAYBREAK, though, could Wal-Mart make a jump across the pond? And why has the mega company been so darned successful? A new report on the corporate giant could explain. That's ahead in our business buzz.

Plus, how is President Bush's message playing in Iraq this morning?

And it was a war fought by the greatest generation and covered by some of the most courageous journalists of our time. A look at their work in pictures.

This is DAYBREAK for May 25.

(COMMERCIAL BREAK)

COSTELLO: Welcome back to DAYBREAK.

6:12 Eastern time.

Our Ben Wedeman has been in some real hot spots overseas.

He's with us this morning in Atlanta to talk about life as a journalist in Iraq, how he travels around Baghdad, the places he visits, how he cultivates relationships, sources, all of that.

Welcome to Atlanta, Ben. BEN WEDEMAN, CNN CORRESPONDENT: Good morning, Carol.

Nice to be here.

COSTELLO: Is it good to be out of Iraq for a while?

WEDEMAN: It's a bit of a relief. I mean Baghdad is a very heavy place, lots going on and you don't really have time to sit back and look at it.

COSTELLO: And relax.

WEDEMAN: And relax, yes. COSTELLO: Now, the impression I have is that you're holed up in a hotel and you can never leave it.

WEDEMAN: No, that's wrong. In Baghdad, we can get out. There are certain parts of the city where you don't go, Sadr City, which is the Shiite stronghold; Azumia (ph), which is the Sunni stronghold, you don't go there. But by and large we get out. We -- I speak to a lot of people.

COSTELLO: So you don't travel by yourself, though, when you go out?

WEDEMAN: No, no, of course not. We go with what's called a security adviser as well as, you know, the normal crew, a producer and a cameraman. But...

COSTELLO: And are they Iraqi?

WEDEMAN: Sometimes they are, sometimes they aren't. Really in Baghdad, the best way to function is to be very open. You go out and everybody obviously knows what you're doing and why you're doing it, and you just speak to people and you make contact and you be friendly and they're friendly back.

COSTELLO: So the Iraqis receive you well, at least the Iraqis on the streets.

Do they come up and say hello to you? Do you have to kind of approach them?

WEDEMAN: We did a little bit of both, actually. When we're going out with the camera, obviously, we want people to speak to us on camera. And so you have to sort of talk to them and convince them that they should share their opinion with us. But by and large it's no problem. And, you know, I covered Iraq under Saddam, as well. And the nice thing is that now people will come up to you, they'll talk and they'll tell you how they really feel, as opposed to how they think they should talk to you, saying things that, you know, would not be offensive to the regime.

So the pleasure in Baghdad now, compared to the old days, is people are honest. When you ask them an opinion -- you don't have to agree with the opinion, but they'll tell you what they think.

COSTELLO: OK, as far as how the Iraqis really feel about Americans, do they tell you in no uncertain terms how they feel? Are they more -- I mean do they like us more than we think they do?

WEDEMAN: I think the Iraqis have a very complicated view of the United States and it's -- the history goes back many years. They will tell you, for instance, that under Saddam, after the last Gulf War, there was a lot of bitterness that the Americans didn't come in and topple the regime at the time. And there's also resentment that the Americans kept in place this system of sanctions, which ordinary Iraqis really suffered. And there's no -- you cannot understate the amount of difficulty that ordinary Iraqis suffered. And now, you know, after the -- in the immediate aftermath of the fall of the regime, people were optimistic. They were hopeful. A year later, there's a lot of disappointment, a lot of resentment, a lot of anger that the American experiment in Iraq has not turned out very well for them. There's no security, there are no jobs, the future is very uncertain.

COSTELLO: This idea that President Bush outlined last night in his speech to destroy the Abu Ghraib Prison, will that resonate with Iraqis?

WEDEMAN: I think it comes a year late. If they had destroyed Abu Ghraib Prison immediately after the fall of the regime, people would have applauded it. But now, a year later, and prompted by this horrendous abuse scandal, people think it's probably a little too late for that. In fact, I was outside Abu Ghraib Prison just a week ago and a woman told me we don't want the Americans to destroy it. We want to turn it into a housing complex, a place to live.

COSTELLO: Oh, man.

WEDEMAN: So it's...

COSTELLO: Interesting.

So you're headed back to Iraq?

WEDEMAN: Not in the immediate future. But obviously eventually I will be back.

COSTELLO: Have you eaten at Costello's in Baghdad? There's a restaurant called Costello's in Iraq.

WEDEMAN: I'm unfamiliar with that.

COSTELLO: You're going to have to look that up.

Ben Wedeman, thank you for joining DAYBREAK.

WEDEMAN: My pleasure.

COSTELLO: We appreciate it.

Your news, money, weather and sports.

It's 6:17 Eastern.

Here's what's all new this morning.

A sacred shrine in Najaf was damaged during clashes between U.S. troops and Iraqi militiaman. Supporters of cleric Muqtada al-Sadr say American troops fired mortars at a Imam Ali Shrine.

Former New York Stock Exchange CEO Richard Grasso is being sued by New York Attorney General Eliot Spitzer. Spitzer argues Grasso's $188 million pay package was just too high and he wants Grasso to give back $100 million of it.

In money news, the nearly 100-year-old Spiegel catalog business is being sold to an investment firm for $31 million. Spiegel filed for Chapter 11 bankruptcy protection last year.

And in sports, former French Open champ Andre Agassi -- ooh, it was embarrassing -- he was unceremoniously bounced in the tournament's first round. Agassi, the six seed, lost in straight sets to French qualifier Jerome Haehnel, an unknown.

In culture, Madonna kicks off her world tour. It happened last night in Los Angeles. Her Reinvention Tour stops in 13 U.S. cities before heading to Europe. It is her first world tour in three years -- Rob.

MARCIANO: As always, Madonna looking good.

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COSTELLO: Those are the latest headlines for you this morning.

Time for a little business buzz right now.

You will not be winking back that yellow smiley face after you hear this story. You know that yellow smiley face in those (COMMERCIAL BREAK)s for Wal-Mart? That's what I'm talking about.

Carrie Lee joining us live from the NASDAQ market site with the tale of how one mega company may have profited from your tax dollars. Oooh, tell us -- Carrie.

CARRIE LEE, CNN CORRESPONDENT: OK, Carol.

There's a company out there, a research company in Washington called Good Jobs First. And they found that over the past few decades, as Wal-Mart has expanded into the world's largest retailer, the company has received over a billion dollars worth of subsidies, things like tax breaks, property tax rebates and state income tax credits. And they say that there's nothing illegal here, not even anything unusual. But kind of rubbing the authors of this report the wrong way, because they're arguing that the low wages paid by Wal- Mart, as well as its negative effect on small businesses in the communities where it's located really puts the value of these subsidies in question.

Now, for its part, Wal-Mart says that the subsidies have actually been a good investment. The company says that over the last 10 years, it's collected over $52 billion in sales tax, paid nearly $200 million in work related taxes and over $4 million in local property taxes. So Wal-Mart saying that the investment or the subsidies have been a good thing.

Keep in mind Wal-Mart, the world's largest retailer, the world's largest employer already, and now the CEO says the company has set its sights more and more on expanding in Europe.

So it looks like, Carol, the company is going to get even bigger.

COSTELLO: So there's going to be Wal-Marts throughout the world?

LEE: Right. Exactly.

COSTELLO: Unbelievable.

LEE: Well, they have a little bit of a presence in Europe. They have bought an Azda (ph) supermarket chain there. But now they're to really, it looks like, get more aggressively into other countries.

COSTELLO: Interesting.

Carrie Lee live from the NASDAQ market site.

We'll be back with more of DAYBREAK right after this.

(COMMERCIAL BREAK)

COSTELLO: Time for our DAYBREAK Eye-Openers.

Usually firefighters have to climb trees to rescue wayward kittens, but this time they had to go down the drain. The crying kitten was stuck in a storm drain for five days before firefighters were called in. They had to flood the drain and that forced the feline to the surface. And she was a little mad and wet, but she's alive and safe and sound this morning. There you see here.

Here's a bizarre story from Kansas. A man broke down the door of a house in Wichita and pointed a gun at the homeowner. The intruder then realized he had the wrong house and then he said I'm sorry for the mistake. He even offered to repair the door. The suspect is still on the loose and still has not cut a check for the damages.

Some people may be taking "American Idol" a bit too seriously. The governors of Georgia and North Carolina are urging residents to vote for their favorite daughters for the "Idol" finals. Diana DeGarmo and Fantasia Barrino is from North Carolina. The two face off in tonight's finale and then viewers will be given four hours after the show to cast their vote.

Retired General Tommy Franks will receive an honorary knighthood from the British later today, and that is not exactly sitting well with some Brits. A statement from the Ministry of Defense calls Franks "a sterling friend of the United Kingdom during a period of turbulence in world affairs." As you know, Franks retired last summer after leading coalition forces into battle in Afghanistan and Iraq. Those in Tony Blair's Labor Party, however, say it is the ultimate in bad taste.

Here's what's all new in the next half hour of DAYBREAK. We take you live to Baghdad, where another car bomb has exploded this morning. We'll also find out what Iraqis are saying about President Bush's speech last night.

Plus, who do you blame for the high price of gas? We'll hear America's voice.

And find out what Michael Jackson's father is doing to make sure his family stays informed about the case against his son.

We'll be back.

(COMMERCIAL BREAK)

COSTELLO: Thirty-six days to go until the handover and President Bush outlines a plan to make it happen. But this is the image coming out of Iraq this morning -- another car bombing in Baghdad.

This is DAYBREAK for May 25.

And good morning to you.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining us.

Let me bring you up to date.

Israel's week long raid in a Gaza refugee camp is now over. Officials say they destroyed three tunnels used to smuggle arms. The offensive left more than 40 Palestinians dead and many homes destroyed.

The Army general in charge of the U.S. prison guards accused of abusing Iraqis has now been suspended. But Janis Karpinski has not been charged with any offense.

This is happening right now -- the area around a chemical fire in Conyers, Georgia now being evacuated. Officials cleared a open mile radius around this warehouse fire. Look at that smoke. The warehouse is used by a company that makes pool chemicals.

In money news, gas prices hit another record high. I know you feel it at the pump. Across the country, the average price for a gallon of gas, $2.06.

In sports, teen golf star Michelle Wie is being allowed to play in the U.S. Women's Open. She's the first amateur to be awarded the qualifying exemption into the event and she's only 14.

In culture, Vermeer's 1670 painting "Young Woman Seated At the Virginals" is expected to sell for more than $5 million at a Sotheby's auction in July. The piece was once dismissed as a fake.

And in weather, take a look at this twister. Tornadoes hit northwest Missouri and parts of Kansas, blowing some homes off of their foundations. A lot of damage, but no deaths and only minor injuries to report this morning -- Rob.

ROB MARCIANO, CNN CORRESPONDENT: Amazing no deaths were reported and once again amazing video. Storm chasers were out in full force yesterday and lots of warning in advance of this particular system. We've talked about it. The storm prediction center putting out a high risk for that bulls eye, and that's where most of the thunderstorms were.

(WEATHER REPORT)

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