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CNN Live At Daybreak

U.N. Envoy Lakhdar Brahimi's Message to Iraqi People; Comments by Saudi Arabia's Oil Minister

Aired June 02, 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: Good morning to you.
From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining DAYBREAK.

Here's what's happening right now.

U.N. special envoy Lakhdar Brahimi has a message for the Iraqi people -- give the new government a chance. Speaking to reporters just over an hour ago, Brahimi says the way the government conducts itself over the critical months ahead is the key to winning the people's trust.

Washington and Saudi Arabia are trying to get some major anti- terrorism help from the U.N. Security Council. They want the Council to help freeze the assets of a Muslim charity accused of backing terrorist groups, including al Qaeda.

In money news, get ready -- you could soon be paying even more at the gas pump. U.S. crude oil hits a new all time high -- $42.45 a barrel.

In sports, the Detroit Pistons beat the Indiana Pacers 68-65 in the Eastern Conference finals. They now head to the NBA finals to face the Los Angeles Lakers. Game one scheduled for Sunday.

In culture, and the winner is Miss. Australia. Model and dancer Jennifer Hawkins is the new Miss. Universe. Miss. USA Shandy Finnessey was named first runner-up. Both, Chad, want to be news anchors. Now, I'm just making that up. They usually do, though.

CHAD MYERS, CNN CORRESPONDENT: I'm glad your making that up, because I was going to go have a chat with them.

Hey, good morning, everybody.

(WEATHER REPORT)

COSTELLO: It's up to the Iraqi people to judge now. Those words from U.N. envoy Lakhdar Brahimi. He held a news conference this morning to talk about how the Iraqi public will accept the brand new interim government.

Let's head live to D.C., though, with more of what Brahimi had to say. Bill Prasad has that for us -- good morning.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

It is an urgent plea from the top unofficial. He is asking Iraqis to give this new government a chance. U.S. officials say this is the first step toward democracy in Iraq.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): The road is long and difficult, but U.N. special envoy Lakhdar Brahimi says Iraq must stand behind a new prime minister and his cabinet.

LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY: It is a government that can effectively lead this great country during this critical seven month period.

PRASAD: With elections set next year, yesterday a new interim government was formed four weeks before sovereignty is transferred back to Iraqis. The government is composed mostly of Iraqi exiles, some with close ties to Washington. But the Bush administration was quick to say it did not exert influence.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I had no role in picking. Zero.

PRASAD: National Security Adviser Condoleezza Rice reinforced the point.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: These are not America's puppets.

PRASAD: But still unclear when and how unfriendly militias will be disbanded, who will control U.S. combat operations and when will U.S. troops leave? The questions lingered as another car bomb rocked Baghdad yesterday, evidence the president says that bloodshed will not end soon.

BUSH: There are still violent people who want to stop progress.

PRASAD: Sovereignty will be transferred June 30. Elections follow in January. But all of this may mean little to U.S. troops, who are expected to remain in Iraq through next year.

(END VIDEOTAPE)

PRASAD: A U.S.-backed U.S. resolution is calling for other countries to send troops to Iraq. But so far those other countries, like France and Germany, are still reluctant. Mr. Bush says in the near future, he doesn't expect any significant military help -- Carol, back to you.

COSTELLO: Bill Prasad live in D.C.

And bill mentioned a car bomb yesterday. There was another suicide car bombing in Baghdad this morning. Reuters is reporting at least four people were killed and there were many injuries. When we get new information on this latest car bombing, we'll pass it along to you.

You heard Bill mention that U.N. resolution. Well, is there a new exit strategy for U.S. troops in Iraq? They could be out of there by the end of next year, December of 2005. That bit of information in that U.N. resolution that is being co-sponsored and written by Britain and the United States.

The revision also sets up the time frame for U.S. and other forces to leave Iraq, as I said, and that could be December of 2005, when there is a new Iraqi constitution and a freely elected government.

More allegations of spying against Ahmad Chalabi. That's what the "New York Times" is reporting this morning. Apparently he gave Iran the information that America was able to break its intelligence code. Chalabi denies it and now the hunt is on for the person who allegedly told him about breaking the secret code.

As you know, Chalabi provided information about weapons of mass destruction to the Bush administration, which was used to justify the war. That information, too, has now come under suspicion.

The new Iraqi government, the June 30 handover -- you can get the U.S. perspective on this on "American Morning" in the seven o'clock Eastern hour. Dan Senor, spokesman for the coalition, talks with Bill and Heidi this morning.

The defense gives its opening statements today in the Scott Peterson double murder trial. Prosecutors in their presentation showed jurors photos of the bodies of Peterson's wife Laci and her unborn son. Their bodies washed ashore in San Francisco Bay in April of 2003.

In other stories across America this Wednesday, regardless of what was on the ballot, the Alabama primary turns out to be a referendum on former state Chief Justice Roy Moore. You remember, he was the judge who defied a federal court order to remove his Ten Commandments monument from a state judicial building. Moore's former aide, Tom Parker, waltzed away with the Republican nomination for Alabama's high court. He defeated an incumbent. Three other candidates who backed Moore, though, lost.

Democrats have picked up another seat in Congress. Lawyer Stephanie Herseth won the special election to fill out the seven months remaining in former Republican Congressman Bill Janklow's term. Janklow resigned back in January. You may recall he went to jail for a manslaughter conviction involving a fatal highway accident.

In Virginia, an update on the, "Waiter, there's a mouse in my soup!" story. Prosecutors have charged a woman and her son with attempted extortion, which is a felony. The woman claims she found a mouse in her soup at a Cracker Barrel restaurant. But the restaurant chain says the woman dropped the rodent into her own soup. And why do they think that, you ask? Well, the company says the mouse died from a fractured skull, had no soup in its lungs and had not been cooked. She's in big trouble this morning.

Oil scare -- what terror attacks overseas are doing to the price of oil. We'll have a live report for you out of Beirut.

Plus, the Justice Department details new accusations against Jose Padilla. Is he being tried in the court of public opinion? Some legal analysis for you.

And cyber security -- who's lurking at your computer's door.

This is DAYBREAK for Wednesday, June 2.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz now. With border control and airport security constantly being tightened, a controversial new multi-billion dollar contract has just been given the green light by the Department of Homeland Security.

Carrie Lee has more on that for you live from the NASDAQ market site -- good morning, Carrie.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

This is a very big deal. This is a contract worth as much as $10 billion and it's been awarded by the Department of Homeland Security to Accenture, the company formerly known as Andersen Consulting. It's a technology and management consulting firm and basically the idea here is to develop and expand biometric technology for checking identities of foreigners visiting America.

The technology is known as U.S. Visit. It requires foreigners to be fingerprinted and photographed upon arrival in the U.S. and at a major airport or seaport. And the technology can also be used for iris scans, to identify people.

Accenture won out over Lockheed Martin and Computer Sciences. The fact that the company is based in Bermuda kind of rubbing some people the wrong way. They feel the contract should have been awarded to a U.S.-based company. But still, they actually started implementing this early this year. The system started operating in 115 airports, 14 seaports in January and by the end of this year, Carol, the Department is expecting to have a similar system in place at land borders. A little bit more difficult to do, but a big deal. And this is something that's happening as we speak.

COSTELLO: Very interesting.

A quick look at the futures, especially the oil futures.

LEE: Yes, oil prices hitting a new record yesterday, finishing above $42 a barrel. Futures right now looking flat to slightly higher. Of course, some people waiting for the OPEC meeting tomorrow and then we get the big May jobs report on Friday.

So we could see some people waiting on the sidelines until we get some more details on the economy.

COSTELLO: Good enough.

Carrie Lee live from the NASDAQ market site this morning.

Your news, money, weather and sports.

It is 6:11 Eastern.

Here's what's all new this morning.

Just a short time ago, there was an explosion on a crowded street in Baghdad in a Sunni Muslim neighborhood. Wire services are reporting there are casualties and we'll bring you more details as we get them into CNN.

Palestinian sources say Israeli troops are back in the Rafah Refugee Camp demolishing homes. Last week, Israel withdrew its forces after an operation to find and destroy tunnels used to smuggle weapons.

In money news, Sony says it plans to stop selling its PDAs, or personal digital assistants, in the United States. The demand for handheld computers has dropped dramatically because now cell phones can do everything a PDA does.

In sports, Indiana Pacers' All Star Jermaine O'Neal says he's probably not going to play in the Athens Olympics. O'Neal says he'll need four to six months to recover from a knee injury.

In culture, Michael Moore's film "Fahrenheit 911" will hit theaters after all on June 25. The film is being released by a partnership that includes the Weinstein brothers, who run Miramax Films -- Chad.

(WEATHER REPORT)

COSTELLO: Chad, did you notice that penny drop in gas prices?

MYERS: I did. In fact, the gas station I drove by was $1.87. On the weekend it was $1.93. So I got a $0.05 drop.

COSTELLO: Ooh, good for you.

MYERS: Yes.

COSTELLO: Thank you, Chad.

Those are the latest headlines.

Talking about that slight break at the pump, the government says the price of gas did fall $0.013, to an average $2.05 a gallon. It is the first decline in five weeks. But you'd better fill up fast, because it might not last long. Crude oil prices have spiked at an all time high of more than $42 a barrel. And you can blame that deadly terrorist attack on oil workers in Saudi Arabia over the weekend, although Saudi Arabia's oil minister says that violence is not affecting his country's ability to produce oil and gas.

Ali Al-Nuaimi said earlier today the attacks have caused few foreigners to flee the kingdom. He spoke on the eve of that OPEC ministerial meeting in Beirut.

We want to get more on what he had to say and that OPEC meeting coming up tomorrow, so let's head live to Beirut and Brent Sadler -- Brent, tell us what he said.

BRENT SADLER, CNN CORRESPONDENT: Good morning, Carol.

Yes, well, Saudi Arabia's point man on the ground, the oil minister, Ali Al-Nuaimi, made it quite clear that Saudi Arabia was determined to maintain oil supplies and determined to get those skyrocketing prices down. Record highs well over $40 a barrel, $42 a barrel over the last few hours on some exchanges, and really having an important impact on the world economy.

Now, the Saudis are pushing very hard here at a crucial meeting of OPEC that will take place Thursday to try and get a consensus within the 11 nation oil cartel to bring prices down, not at the target level of months ago of around $25 to $28 a barrel, but perhaps $30. But that's still $10 a barrel less than at current prices. And whether or not that is going to make your gas prices any lower, that does remain to be seen. Because many analysts in this region believe that there is already sufficient supplies of oil around and that extra production won't necessarily mean a reduction of prices in the long- term.

There are other factors. You know, you have China requiring more oil supplies, a booming recovery, the recovering U.S. economy, high speculation by oil traders on future markets skewing prices, says the Saudi oil minister. It's not just about instability, although, he said, that is a factor.

Other members of OPEC say the fear factor within the oil business, not least those weekend terror attacks against non-Saudis in Khobar, in the oil hub of Saudi Arabia, is again having a negative impact on prices. But the fear factor alone could mean as much as $10 premium within that $42 price tag that now is attached to a price of a barrel of oil. So don't expect any alleviation to last for very long, even though you're seeing just a slight reduction in prices at the pumps in the U.S. at the moment -- Carol.

COSTELLO: Yes, that penny, that penny decrease in the price for a gallon of gas.

In listening to the news conference this morning, is there any way you can maybe make a prediction for us what they're going to say in the OPEC meeting tomorrow and if anything will come of it?

SADLER: Well, it's looking like whatever OPEC decides formally, that individual nations, Saudi Arabia leading the way, will already push up oil production. Saudi Arabia unilaterally doing that. Other members of the cartel, not least the United Arab Emirates and Qatar, they have extra production capacity they can boost.

But, you know, Carol, this is all figures, really. What really matters is that OPEC is already producing, it's thought by analysts, in excess of an extra two million barrels of oil per day above OPEC's quotas. So if they go, say, another two, two and a half million barrels a day, that's only going to legitimize the so-called cheating that's going on now. So, you know, power, politics, oil production, U.S. presidential year, important for President George Bush to see prices come down in these critical months ahead. And, of course, you have the continuing problems of securing from Iraq in that very unstable environment. Many, many problems with this -- Carol.

COSTELLO: Lots of ingredients in the recipe for lower gas prices.

Brent Sadler live from Beirut this morning.

Many thanks to you.

Gearing up for the Games, an ancient tradition takes its first step. Details on the travels of the torch.

Plus, how pesky are they really? We'll ask a Washington insider about her experiences with cicadas.

And our DAYBREAK Photo of the Day. What is it?

MYERS: Eyeball.

COSTELLO: That's not an eyeball.

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: The Olympic Torch will be lit today in Greece and it will be run through the streets of Greece and then it will board a plane...

MYERS: For?

COSTELLO: Not by itself, but someone will be carrying it.

MYERS: Someone will -- 33 cities, 34 days, and you get to carry it.

COSTELLO: I do. I'm running it through the streets of Atlanta on June 19 and I'm very excited about it.

MYERS: You get 200 yards, I heard. So don't drop it.

COSTELLO: That's my biggest fear is I'll drop the Olympic Torch and it'll go out. MYERS: Now, this is not like where you have to pass it to the next guy. This is not a relay. You just kind of hand it gently to the next guy.

COSTELLO: Well, apparently they have like 15 security people around you just to make sure they'll catch it.

MYERS: Nice.

COSTELLO: But it's quite an honor.

MYERS: It is. Congratulations.

COSTELLO: Thirty-three cities in 34 days, including, of course, Atlanta.

Photo of the Day?

MYERS: I told you it was an eyeball.

COSTELLO: I think you're right. It was an eyeball.

MYERS: We'll see.

COSTELLO: Is it time for our Photo of the Day?

MYERS: It's -- it's something red.

COSTELLO: It's something red.

MYERS: It's a little panda.

COSTELLO: But it's so secret we're not going to show folks just yet.

MYERS: OK.

COSTELLO: We're going to read our DAYBREAK Eye-Openers.

MYERS: Fair enough.

COSTELLO: OK, let's read about our DAYBREAK Eye-Openers.

How about a little snack with a definite crunch?

MYERS: Absolutely not.

COSTELLO: I know. The once every 17 year invasion of cicadas has some people bringing out their recipes, Chad. Yes, that's what these people in Knoxville, Tennessee are chewing on. The cook says the recipe is easy. It's a dusting of flour and lots and lots and lots of salt, because then it like, you know, buries the taste of the cicadas. Why do we do that to people in the morning who are eating breakfast?

MYERS: Sure. COSTELLO: We just like to rile you up out there.

In Hawaii, streams of lava from the Kilauea volcano are pouring into the Pacific. It's the first time the lava has reached the ocean since July of last year. The U.S. Geological Survey also has detected some low frequency earthquakes, but no noticeable tremors from the summit, and that's definitely good news.

The first high speed ferry on the Great Lakes has completed her maiden voyage.

MYERS: Wow!

COSTELLO: The Lake Express started operations with a cross lake trip between Milwaukee, Wisconsin and Muskegon, Michigan. The ferry travels up to 40 miles per hour and it can carry up to 250 passengers and 46 cars.

MYERS: Wow. They used to have a big ferry there, a big boat, but it was a slow boat. And it was the slow boat to Milwaukee.

COSTELLO: This is a faster boat.

Now it's time for the Photo of the Day.

MYERS: We did get it. It's an eyeball.

COSTELLO: It is an eyeball.

MYERS: It's kind of scary looking now, but when you zoom out, it's kind of furry. Kind of fuzzy.

COSTELLO: And it's...

MYERS: Aw!

COSTELLO: Look. That's a red panda. I didn't know there was such a thing, but there is, indeed, a very rare red panda and it's at the zoo in Boise, Idaho?

MYERS: Yes, Zoo Boise. They had to do a huge, huge rigorous training exercise to get this thing, to prove to all the other zoo officials that they could keep this thing alive, make sure they had a great habitat for it. And they got to have it, Zoo Boise, if you're ever up there.

COSTELLO: That's wonderful.

MYERS: It's a little guy. It's not nearly as big as the big one. It's only about this big.

COSTELLO: Well, it's a baby yet.

MYERS: Well, it's not going to be big.

COSTELLO: It's just going to be this big? MYERS: Yes, right.

COSTELLO: Thank you, Chad.

MYERS: OK.

COSTELLO: Here's what's all new in the next half hour of DAYBREAK.

The government details a chilling case against dirty bomb figure Jose Padilla. So why isn't he being taken to criminal court? We'll have some legal analysis for you just ahead.

Plus, cyber threats -- what's being done to protect your computer.

And turning to an energy drink for that morning workout, you know, that Red Bull stuff? Well, it could be a health mistake. The safety of energy drinks, when CNN DAYBREAK continues.

(COMMERCIAL BREAK)

COSTELLO: And good morning to you.

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

Here are the latest headlines now.

U.S. officials are labeling this man, Ahmad Chalabi, a turncoat and a spy. According to published and broadcast reports, Chalabi told Iranian officials that U.S. intelligence was monitoring top secret communications by Tehran's chief spy service. There's Chalabi now.

The U.S. and Saudi Arabia are joining forces. They're lobbying the U.N. Security Council to block the assets of a Muslim charity. They say the Islamic Foundation helps terrorist groups like al Qaeda.

In money news, oil prices hit an all time record high. Sweet crude oil, light sweet crude oil has toped $42 a barrel. Analysts say it's the fear factor, the worry that terrorists will disrupt oil supplies.

In sports, the Williams sisters are not feeling the love at the French Open. Venus and Serena were knocked out of the quarter finals within a half hour of each other. Jennifer Capriati and Anastasia Mysinka advanced to the semis.

In culture, she's just the latest jewel in Australia's sparkling crown. Jennifer Hawkins is the new Miss. Universe. She's a 20-year- old model and choreographer. Miss. USA, by the way, was the first runner-up -- Chad.

(WEATHER REPORT)

COSTELLO: Some call Jose Padilla the dirty bomber. And for two years the government has only said Jose Padilla was planning to detonate a radioactive bomb on U.S. soil. But now the Justice Department says Padilla and another alleged terrorist had plans to blow up as many as 20 high rise apartment buildings.

(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY ATTORNEY GENERAL: KSM suggested that they enter the United States by way of Mexico or by way of Puerto Rico and that once in the country, they locate high rise apartment buildings that had natural gas supplied to all floors, that they rent two apartments in each building, seal those apartments, turn on the gas and set timers to detonate and destroy the buildings simultaneously at a later time. This was precisely the mission that Padilla and Jafar had trained for.

(END VIDEO CLIP)

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


Aired June 2, 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: Good morning to you.
From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining DAYBREAK.

Here's what's happening right now.

U.N. special envoy Lakhdar Brahimi has a message for the Iraqi people -- give the new government a chance. Speaking to reporters just over an hour ago, Brahimi says the way the government conducts itself over the critical months ahead is the key to winning the people's trust.

Washington and Saudi Arabia are trying to get some major anti- terrorism help from the U.N. Security Council. They want the Council to help freeze the assets of a Muslim charity accused of backing terrorist groups, including al Qaeda.

In money news, get ready -- you could soon be paying even more at the gas pump. U.S. crude oil hits a new all time high -- $42.45 a barrel.

In sports, the Detroit Pistons beat the Indiana Pacers 68-65 in the Eastern Conference finals. They now head to the NBA finals to face the Los Angeles Lakers. Game one scheduled for Sunday.

In culture, and the winner is Miss. Australia. Model and dancer Jennifer Hawkins is the new Miss. Universe. Miss. USA Shandy Finnessey was named first runner-up. Both, Chad, want to be news anchors. Now, I'm just making that up. They usually do, though.

CHAD MYERS, CNN CORRESPONDENT: I'm glad your making that up, because I was going to go have a chat with them.

Hey, good morning, everybody.

(WEATHER REPORT)

COSTELLO: It's up to the Iraqi people to judge now. Those words from U.N. envoy Lakhdar Brahimi. He held a news conference this morning to talk about how the Iraqi public will accept the brand new interim government.

Let's head live to D.C., though, with more of what Brahimi had to say. Bill Prasad has that for us -- good morning.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

It is an urgent plea from the top unofficial. He is asking Iraqis to give this new government a chance. U.S. officials say this is the first step toward democracy in Iraq.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): The road is long and difficult, but U.N. special envoy Lakhdar Brahimi says Iraq must stand behind a new prime minister and his cabinet.

LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY: It is a government that can effectively lead this great country during this critical seven month period.

PRASAD: With elections set next year, yesterday a new interim government was formed four weeks before sovereignty is transferred back to Iraqis. The government is composed mostly of Iraqi exiles, some with close ties to Washington. But the Bush administration was quick to say it did not exert influence.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I had no role in picking. Zero.

PRASAD: National Security Adviser Condoleezza Rice reinforced the point.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: These are not America's puppets.

PRASAD: But still unclear when and how unfriendly militias will be disbanded, who will control U.S. combat operations and when will U.S. troops leave? The questions lingered as another car bomb rocked Baghdad yesterday, evidence the president says that bloodshed will not end soon.

BUSH: There are still violent people who want to stop progress.

PRASAD: Sovereignty will be transferred June 30. Elections follow in January. But all of this may mean little to U.S. troops, who are expected to remain in Iraq through next year.

(END VIDEOTAPE)

PRASAD: A U.S.-backed U.S. resolution is calling for other countries to send troops to Iraq. But so far those other countries, like France and Germany, are still reluctant. Mr. Bush says in the near future, he doesn't expect any significant military help -- Carol, back to you.

COSTELLO: Bill Prasad live in D.C.

And bill mentioned a car bomb yesterday. There was another suicide car bombing in Baghdad this morning. Reuters is reporting at least four people were killed and there were many injuries. When we get new information on this latest car bombing, we'll pass it along to you.

You heard Bill mention that U.N. resolution. Well, is there a new exit strategy for U.S. troops in Iraq? They could be out of there by the end of next year, December of 2005. That bit of information in that U.N. resolution that is being co-sponsored and written by Britain and the United States.

The revision also sets up the time frame for U.S. and other forces to leave Iraq, as I said, and that could be December of 2005, when there is a new Iraqi constitution and a freely elected government.

More allegations of spying against Ahmad Chalabi. That's what the "New York Times" is reporting this morning. Apparently he gave Iran the information that America was able to break its intelligence code. Chalabi denies it and now the hunt is on for the person who allegedly told him about breaking the secret code.

As you know, Chalabi provided information about weapons of mass destruction to the Bush administration, which was used to justify the war. That information, too, has now come under suspicion.

The new Iraqi government, the June 30 handover -- you can get the U.S. perspective on this on "American Morning" in the seven o'clock Eastern hour. Dan Senor, spokesman for the coalition, talks with Bill and Heidi this morning.

The defense gives its opening statements today in the Scott Peterson double murder trial. Prosecutors in their presentation showed jurors photos of the bodies of Peterson's wife Laci and her unborn son. Their bodies washed ashore in San Francisco Bay in April of 2003.

In other stories across America this Wednesday, regardless of what was on the ballot, the Alabama primary turns out to be a referendum on former state Chief Justice Roy Moore. You remember, he was the judge who defied a federal court order to remove his Ten Commandments monument from a state judicial building. Moore's former aide, Tom Parker, waltzed away with the Republican nomination for Alabama's high court. He defeated an incumbent. Three other candidates who backed Moore, though, lost.

Democrats have picked up another seat in Congress. Lawyer Stephanie Herseth won the special election to fill out the seven months remaining in former Republican Congressman Bill Janklow's term. Janklow resigned back in January. You may recall he went to jail for a manslaughter conviction involving a fatal highway accident.

In Virginia, an update on the, "Waiter, there's a mouse in my soup!" story. Prosecutors have charged a woman and her son with attempted extortion, which is a felony. The woman claims she found a mouse in her soup at a Cracker Barrel restaurant. But the restaurant chain says the woman dropped the rodent into her own soup. And why do they think that, you ask? Well, the company says the mouse died from a fractured skull, had no soup in its lungs and had not been cooked. She's in big trouble this morning.

Oil scare -- what terror attacks overseas are doing to the price of oil. We'll have a live report for you out of Beirut.

Plus, the Justice Department details new accusations against Jose Padilla. Is he being tried in the court of public opinion? Some legal analysis for you.

And cyber security -- who's lurking at your computer's door.

This is DAYBREAK for Wednesday, June 2.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz now. With border control and airport security constantly being tightened, a controversial new multi-billion dollar contract has just been given the green light by the Department of Homeland Security.

Carrie Lee has more on that for you live from the NASDAQ market site -- good morning, Carrie.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

This is a very big deal. This is a contract worth as much as $10 billion and it's been awarded by the Department of Homeland Security to Accenture, the company formerly known as Andersen Consulting. It's a technology and management consulting firm and basically the idea here is to develop and expand biometric technology for checking identities of foreigners visiting America.

The technology is known as U.S. Visit. It requires foreigners to be fingerprinted and photographed upon arrival in the U.S. and at a major airport or seaport. And the technology can also be used for iris scans, to identify people.

Accenture won out over Lockheed Martin and Computer Sciences. The fact that the company is based in Bermuda kind of rubbing some people the wrong way. They feel the contract should have been awarded to a U.S.-based company. But still, they actually started implementing this early this year. The system started operating in 115 airports, 14 seaports in January and by the end of this year, Carol, the Department is expecting to have a similar system in place at land borders. A little bit more difficult to do, but a big deal. And this is something that's happening as we speak.

COSTELLO: Very interesting.

A quick look at the futures, especially the oil futures.

LEE: Yes, oil prices hitting a new record yesterday, finishing above $42 a barrel. Futures right now looking flat to slightly higher. Of course, some people waiting for the OPEC meeting tomorrow and then we get the big May jobs report on Friday.

So we could see some people waiting on the sidelines until we get some more details on the economy.

COSTELLO: Good enough.

Carrie Lee live from the NASDAQ market site this morning.

Your news, money, weather and sports.

It is 6:11 Eastern.

Here's what's all new this morning.

Just a short time ago, there was an explosion on a crowded street in Baghdad in a Sunni Muslim neighborhood. Wire services are reporting there are casualties and we'll bring you more details as we get them into CNN.

Palestinian sources say Israeli troops are back in the Rafah Refugee Camp demolishing homes. Last week, Israel withdrew its forces after an operation to find and destroy tunnels used to smuggle weapons.

In money news, Sony says it plans to stop selling its PDAs, or personal digital assistants, in the United States. The demand for handheld computers has dropped dramatically because now cell phones can do everything a PDA does.

In sports, Indiana Pacers' All Star Jermaine O'Neal says he's probably not going to play in the Athens Olympics. O'Neal says he'll need four to six months to recover from a knee injury.

In culture, Michael Moore's film "Fahrenheit 911" will hit theaters after all on June 25. The film is being released by a partnership that includes the Weinstein brothers, who run Miramax Films -- Chad.

(WEATHER REPORT)

COSTELLO: Chad, did you notice that penny drop in gas prices?

MYERS: I did. In fact, the gas station I drove by was $1.87. On the weekend it was $1.93. So I got a $0.05 drop.

COSTELLO: Ooh, good for you.

MYERS: Yes.

COSTELLO: Thank you, Chad.

Those are the latest headlines.

Talking about that slight break at the pump, the government says the price of gas did fall $0.013, to an average $2.05 a gallon. It is the first decline in five weeks. But you'd better fill up fast, because it might not last long. Crude oil prices have spiked at an all time high of more than $42 a barrel. And you can blame that deadly terrorist attack on oil workers in Saudi Arabia over the weekend, although Saudi Arabia's oil minister says that violence is not affecting his country's ability to produce oil and gas.

Ali Al-Nuaimi said earlier today the attacks have caused few foreigners to flee the kingdom. He spoke on the eve of that OPEC ministerial meeting in Beirut.

We want to get more on what he had to say and that OPEC meeting coming up tomorrow, so let's head live to Beirut and Brent Sadler -- Brent, tell us what he said.

BRENT SADLER, CNN CORRESPONDENT: Good morning, Carol.

Yes, well, Saudi Arabia's point man on the ground, the oil minister, Ali Al-Nuaimi, made it quite clear that Saudi Arabia was determined to maintain oil supplies and determined to get those skyrocketing prices down. Record highs well over $40 a barrel, $42 a barrel over the last few hours on some exchanges, and really having an important impact on the world economy.

Now, the Saudis are pushing very hard here at a crucial meeting of OPEC that will take place Thursday to try and get a consensus within the 11 nation oil cartel to bring prices down, not at the target level of months ago of around $25 to $28 a barrel, but perhaps $30. But that's still $10 a barrel less than at current prices. And whether or not that is going to make your gas prices any lower, that does remain to be seen. Because many analysts in this region believe that there is already sufficient supplies of oil around and that extra production won't necessarily mean a reduction of prices in the long- term.

There are other factors. You know, you have China requiring more oil supplies, a booming recovery, the recovering U.S. economy, high speculation by oil traders on future markets skewing prices, says the Saudi oil minister. It's not just about instability, although, he said, that is a factor.

Other members of OPEC say the fear factor within the oil business, not least those weekend terror attacks against non-Saudis in Khobar, in the oil hub of Saudi Arabia, is again having a negative impact on prices. But the fear factor alone could mean as much as $10 premium within that $42 price tag that now is attached to a price of a barrel of oil. So don't expect any alleviation to last for very long, even though you're seeing just a slight reduction in prices at the pumps in the U.S. at the moment -- Carol.

COSTELLO: Yes, that penny, that penny decrease in the price for a gallon of gas.

In listening to the news conference this morning, is there any way you can maybe make a prediction for us what they're going to say in the OPEC meeting tomorrow and if anything will come of it?

SADLER: Well, it's looking like whatever OPEC decides formally, that individual nations, Saudi Arabia leading the way, will already push up oil production. Saudi Arabia unilaterally doing that. Other members of the cartel, not least the United Arab Emirates and Qatar, they have extra production capacity they can boost.

But, you know, Carol, this is all figures, really. What really matters is that OPEC is already producing, it's thought by analysts, in excess of an extra two million barrels of oil per day above OPEC's quotas. So if they go, say, another two, two and a half million barrels a day, that's only going to legitimize the so-called cheating that's going on now. So, you know, power, politics, oil production, U.S. presidential year, important for President George Bush to see prices come down in these critical months ahead. And, of course, you have the continuing problems of securing from Iraq in that very unstable environment. Many, many problems with this -- Carol.

COSTELLO: Lots of ingredients in the recipe for lower gas prices.

Brent Sadler live from Beirut this morning.

Many thanks to you.

Gearing up for the Games, an ancient tradition takes its first step. Details on the travels of the torch.

Plus, how pesky are they really? We'll ask a Washington insider about her experiences with cicadas.

And our DAYBREAK Photo of the Day. What is it?

MYERS: Eyeball.

COSTELLO: That's not an eyeball.

We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: The Olympic Torch will be lit today in Greece and it will be run through the streets of Greece and then it will board a plane...

MYERS: For?

COSTELLO: Not by itself, but someone will be carrying it.

MYERS: Someone will -- 33 cities, 34 days, and you get to carry it.

COSTELLO: I do. I'm running it through the streets of Atlanta on June 19 and I'm very excited about it.

MYERS: You get 200 yards, I heard. So don't drop it.

COSTELLO: That's my biggest fear is I'll drop the Olympic Torch and it'll go out. MYERS: Now, this is not like where you have to pass it to the next guy. This is not a relay. You just kind of hand it gently to the next guy.

COSTELLO: Well, apparently they have like 15 security people around you just to make sure they'll catch it.

MYERS: Nice.

COSTELLO: But it's quite an honor.

MYERS: It is. Congratulations.

COSTELLO: Thirty-three cities in 34 days, including, of course, Atlanta.

Photo of the Day?

MYERS: I told you it was an eyeball.

COSTELLO: I think you're right. It was an eyeball.

MYERS: We'll see.

COSTELLO: Is it time for our Photo of the Day?

MYERS: It's -- it's something red.

COSTELLO: It's something red.

MYERS: It's a little panda.

COSTELLO: But it's so secret we're not going to show folks just yet.

MYERS: OK.

COSTELLO: We're going to read our DAYBREAK Eye-Openers.

MYERS: Fair enough.

COSTELLO: OK, let's read about our DAYBREAK Eye-Openers.

How about a little snack with a definite crunch?

MYERS: Absolutely not.

COSTELLO: I know. The once every 17 year invasion of cicadas has some people bringing out their recipes, Chad. Yes, that's what these people in Knoxville, Tennessee are chewing on. The cook says the recipe is easy. It's a dusting of flour and lots and lots and lots of salt, because then it like, you know, buries the taste of the cicadas. Why do we do that to people in the morning who are eating breakfast?

MYERS: Sure. COSTELLO: We just like to rile you up out there.

In Hawaii, streams of lava from the Kilauea volcano are pouring into the Pacific. It's the first time the lava has reached the ocean since July of last year. The U.S. Geological Survey also has detected some low frequency earthquakes, but no noticeable tremors from the summit, and that's definitely good news.

The first high speed ferry on the Great Lakes has completed her maiden voyage.

MYERS: Wow!

COSTELLO: The Lake Express started operations with a cross lake trip between Milwaukee, Wisconsin and Muskegon, Michigan. The ferry travels up to 40 miles per hour and it can carry up to 250 passengers and 46 cars.

MYERS: Wow. They used to have a big ferry there, a big boat, but it was a slow boat. And it was the slow boat to Milwaukee.

COSTELLO: This is a faster boat.

Now it's time for the Photo of the Day.

MYERS: We did get it. It's an eyeball.

COSTELLO: It is an eyeball.

MYERS: It's kind of scary looking now, but when you zoom out, it's kind of furry. Kind of fuzzy.

COSTELLO: And it's...

MYERS: Aw!

COSTELLO: Look. That's a red panda. I didn't know there was such a thing, but there is, indeed, a very rare red panda and it's at the zoo in Boise, Idaho?

MYERS: Yes, Zoo Boise. They had to do a huge, huge rigorous training exercise to get this thing, to prove to all the other zoo officials that they could keep this thing alive, make sure they had a great habitat for it. And they got to have it, Zoo Boise, if you're ever up there.

COSTELLO: That's wonderful.

MYERS: It's a little guy. It's not nearly as big as the big one. It's only about this big.

COSTELLO: Well, it's a baby yet.

MYERS: Well, it's not going to be big.

COSTELLO: It's just going to be this big? MYERS: Yes, right.

COSTELLO: Thank you, Chad.

MYERS: OK.

COSTELLO: Here's what's all new in the next half hour of DAYBREAK.

The government details a chilling case against dirty bomb figure Jose Padilla. So why isn't he being taken to criminal court? We'll have some legal analysis for you just ahead.

Plus, cyber threats -- what's being done to protect your computer.

And turning to an energy drink for that morning workout, you know, that Red Bull stuff? Well, it could be a health mistake. The safety of energy drinks, when CNN DAYBREAK continues.

(COMMERCIAL BREAK)

COSTELLO: And good morning to you.

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

Here are the latest headlines now.

U.S. officials are labeling this man, Ahmad Chalabi, a turncoat and a spy. According to published and broadcast reports, Chalabi told Iranian officials that U.S. intelligence was monitoring top secret communications by Tehran's chief spy service. There's Chalabi now.

The U.S. and Saudi Arabia are joining forces. They're lobbying the U.N. Security Council to block the assets of a Muslim charity. They say the Islamic Foundation helps terrorist groups like al Qaeda.

In money news, oil prices hit an all time record high. Sweet crude oil, light sweet crude oil has toped $42 a barrel. Analysts say it's the fear factor, the worry that terrorists will disrupt oil supplies.

In sports, the Williams sisters are not feeling the love at the French Open. Venus and Serena were knocked out of the quarter finals within a half hour of each other. Jennifer Capriati and Anastasia Mysinka advanced to the semis.

In culture, she's just the latest jewel in Australia's sparkling crown. Jennifer Hawkins is the new Miss. Universe. She's a 20-year- old model and choreographer. Miss. USA, by the way, was the first runner-up -- Chad.

(WEATHER REPORT)

COSTELLO: Some call Jose Padilla the dirty bomber. And for two years the government has only said Jose Padilla was planning to detonate a radioactive bomb on U.S. soil. But now the Justice Department says Padilla and another alleged terrorist had plans to blow up as many as 20 high rise apartment buildings.

(BEGIN VIDEO CLIP)

JAMES COMEY, DEPUTY ATTORNEY GENERAL: KSM suggested that they enter the United States by way of Mexico or by way of Puerto Rico and that once in the country, they locate high rise apartment buildings that had natural gas supplied to all floors, that they rent two apartments in each building, seal those apartments, turn on the gas and set timers to detonate and destroy the buildings simultaneously at a later time. This was precisely the mission that Padilla and Jafar had trained for.

(END VIDEO CLIP)

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