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American Morning

Crude Awakening: Gas Consumption: Scott Peterson Trial; New Iraqi Government

Aired June 02, 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.


BILL HEMMER, CNN ANCHOR: Good morning. Markets driven by fear; no easy answers out there. Will this be another day of skyrocketing oil prices? We'll find out.
The Scott Peterson trial: the defense gets its turn today. How to explain away the circumstantial evidence against him.

And those wildfires, all it takes is one look and you know the Everglades in Florida need an awful lot of help on this AMERICAN MORNING.

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

HEMMER: Welcome, everybody. Heidi is working for Soledad. Good morning.

And good morning to you, as well.

HEIDI COLLINS, CNN ANCHOR: Good morning to you.

HEMMER: The market is going to open up about 30 minutes from now. Opening back up later this hour. Everyone watching to see what happens with the price of oil today.

Record highs yesterday. Over $42 a barrel, right?

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: That's right.

HEMMER: Andy Serwer is here in a few moments at a look at why investors are so rattled and what consumers should expect to pay at the pump. A big issue, yet again.

COLLINS: Yes. Also, Baghdad hit by another car bombing today. And while insurgents don't speak for the entire population, what difficulties will Iraq's new leaders face if terrorist attacks continue? We are going to get some answers from a man with a lot of insight on what's needed for success. And that is Ken Pollack.

HEMMER: Also, something we talked about yesterday, one of the most unfair headaches of all, the ice cream headache. The dreaded ice-cream headache. Take a bite, freeze your brain.

COLLINS: You know what they say you're supposed to do?

HEMMER: What's that? COLLINS: Suck really hard on the roof of your mouth.

HEMMER: That's right. Put your tongue on the roof of your mouth and warm up that nerve. Is that founded in science? Because I've heard the same thing.

COLLINS: OK, let's just move on.

HEMMER: What's up, Jack?

JACK CAFFERTY, CNN ANCHOR: Well, I've got those tapes over there. CBS News got these tapes of these Enron traders and it's pretty disgusting, actually. You can hear these Enron traders gloating about skyrocketing energy prices and power shortages during the big crisis in California about three or four years ago. We'll play some of them for you, and we're reading e-mails about how damaging these might be.

HEMMER: Down right tick you off, too, when you hear a lot of it, too.

COLLINS: Yes.

CAFFERTY: What are you supposed to do here?

(CROSSTALK)

HEMMER: Let's get to the oil prices. They hit an all-time record high, $42 a barrel yesterday in New York. Gasoline, the single largest energy product consumed in the U.S. Consumption has been rising since the 1950s. And today, the U.S. imports 60 percent of its oil.

Meanwhile, consumer spending and all kinds of energy soar. The average U.S. household spending five percent of its budget on energy, three percent of that on gas. Is there relief in sight? Andy Serwer checks back in with us top of the hour here.

How about it?

SERWER: Well, there may be a little relief in sight. This just crossing the newswires.

Early this morning, the United Arab Emirates announcing it was going to be releasing 400,000 barrels of oil a day just now coming on the stream. That's about two percent of U.S. daily production. We use 20 million barrels. So that should help, and that's probably why the price of oil has been slipping a little bit this morning, which is a nice thing to see.

What's going on here is we have a couple factors making the price of oil going up -- the improving U.S. economy, economies in China coming on stream and sucking up a lot of oil. We have low production. And the real big wildcard, Bill, terrorism, the threat of terrorism in the future. Experts saying that's adding about $5 to $12 per barrel, which is what's getting you up towards $42 a barrel. How does that translate to gasoline prices? Some say as much as 36 cents of our $2-plus per gallon has to do with terrorism and the fear of terrorism. That's not going to go away until those fears abide. And, of course, that is a tremendous wildcard.

HEMMER: The fears you talk about, that's psychological.

SERWER: It is psychological. And, you know, what is going to stop that and what's going to make that go away? Your guess is as good as mine. Clearly, Saudi Arabia is in a vulnerable situation. And that's what traders are responding to right now. We're in the summer peak driving season; the price of gas is high.

HEMMER: Yes, but the thing we always talk about, even if Saudi Arabia increases production, even if the United Arab Emirates throws 400,000 barrels out there a day, in addition to what they're already doing, you still have the issue of refineries. Are they at capacity right now? And if they are, how are you going to get more gasoline in the system here in this country unless you're able to get that oil to the refineries?

SERWER: Well, Lee Raymond, the CEO of Exxon Mobile, said that there is excess capacity with refineries. And he seemed to be indicating a lot of the problem is the psychological factor and traders bidding the price of oil up. But again, it's a fluid situation. OPEC ministers meeting in Beirut tomorrow. Obviously, that's going to be big news there.

HEMMER: OK. Thank you, Andy.

SERWER: You're welcome.

HEMMER: Also, the FBI has put out a nationwide alert for two propane tanker trucks stolen in Texas. Those tankers, loaded with volatile propane, vanished from the San Antonio Gas Company some time over the weekend. The FBI says propane is one of the elements that terrorists have trained on. The police in San Antonio do not suspect terrorism, though. They say propane thefts often happen in southern Texas because it's close with the northern Mexican border, where residents commonly use that kind of fuel.

Heidi across the room now for more.

COLLINS: The prosecutor has made his opening statement in the trial of Scott Peterson trial on charges that he killed his wife, Laci, and their unborn child. Today, the defense gets its turn. Ted Rowlands is in Redwood City, California, now.

Ted, tell us a little bit about what we might expect from Mark Geragos today.

TED ROWLANDS, CNN CORRESPONDENT: Well, the jury is going to hear a much different story today from Mark Geragos and a much different style. Rick Distaso, the prosecutor in this case, is very methodical. And yesterday, he went through the state's case in a methodical fashion, just poining out facts that point Scott Peterson to the jury. It took him all day. He played some audio tapes, he showed some autopsy photos. But he was very consistent throughout.

Geragos is a story teller, and he's a very engaging lawyer with a great command of the law. And he is going to take this jury on a much different path, show them a different story. And that would be that Scott Peterson may have acted inappropriately, may have had an affair, and may be despicable in the eyes of these jurors, but he's going to say that someone else is responsible for these murders, and he'll lay out a map of different people around the city of Modesto that say they saw Laci Peterson the day that she was reported missing.

He'll add more about a van that was in the area and talk about eyewitness testimony that he'll later bring in that would lend people to believe that she may have been abducted. He will also show autopsy photos, as they did yesterday in court, but with a different spin, saying that a picture specifically of the baby shows that the baby was handled outside of Laci Peterson's body.

So this jury will have a much different presentation today, coming from a much different side of thing. Geragos will try to combat this circumstantial evidence that was laid on his client yesterday, and he'll try to spin it around and show the jury that this investigation was flawed from the beginning, and Scott Peterson, as inappropriate as he is, was not responsible for his wife's murder.

COLLINS: And Ted, you know, you mentioned those pictures that were shown yesterday. They're going to show them again today. What was the reaction in court when those pictures were up on that brig screen?

ROWLANDS: Well, the family, as you might imagine, had a tough time with them. Sharon Rocha, Laci's mother, broke down at one point. All the Rocha family, as you might imagine, had a difficult time with it.

And the Peterson family. JD Peterson (ph), Scott Peterson's sister-in-law, got up and left the court. But the jury was focused, and they seemed to really be able to take -- you know, understand their task. And they focused on what Distaso was saying and they looked at the images, as bad as they were, and they absorbed them. Peterson, himself, would not look at any of the images.

COLLINS: All right. Ted Rowlands, thanks so much. Appreciate it.

The woman accusing Kobe Bryant of rape will not be referred to as a "victim" when Bryant goes on trial. Defense lawyers won that ruling from a Colorado judge who agreed with them that the term "victim" implies that Bryant is guilty. The NBA star has said the two had consensual sex.

HEMMER: From overseas in Iraq today, more bloodshed in the streets of the Iraqi capital of Baghdad. A car bomb explosion on a busy street in the northern part of the town wounded at least 22. There have been some reports of at least two deaths from the blast, which came a day after the naming of the interim government.

Earlier on AMERICAN MORNING, I talked with the coalition spokesperson, Dan Senor, in Baghdad, telling me that that government has work to be done before taking power at the end of the month. Senor also saying it is a step in the right direction in Iraq.

(BEGIN VIDEO CLIP)

DAN SENOR, COALITION SPOKESMAN: When you have a government formed as diverse as the government that was stood up yesterday with, for instance, six women, a higher percentage of women in the cabinet than probably most governments in the world, and a government that is committed to the ideals and principles enshrined in Iraq's interim constitution, individual liberties, certain protections for minority rights, principles like federalism, civilian control of the military, when you stand up a government that's committed to those things and is committed to winning the war on terrorism here in Iraq, it's a really good day.

(END VIDEO CLIP)

HEMMER: Now, what does the government have to do in order to be viewed as legitimate by the Iraqi people? Good question for our analyst, Ken Pollack.

Ken, welcome back.

KEN POLLACK, CNN ANALYST: Good morning to you.

HEMMER: Is the handover officially done?

POLLACK: No.

HEMMER: I mean, if the Iraqi Council dissolves itself, and the government puts forward (ph) the people yesterday, what else is left?

POLLACK: Well, the big thing that's lying out there, Bill, is on June 30th, the United States is supposed to turn over full sovereignty to this new interim Iraqi government. And beyond that, some degree of operational control over day-to-day administrative matters.

There are two issues out there, though, which is, one, nobody really knows exactly what full sovereignty means. And, two, no one has yet defined exactly what those administrative responsibilities are going to be. Those are big issues, huge issues, which still need to be resolved.

HEMMER: Is there any way to gauge at this point how the Iraqi people are responding to these men and women who were put forward yesterday?

POLLACK: So far, no. And yet, Bill, that is really the key issue. It's very important to focus on this.

You know, it's one thing for the administration to come out and say these are not Iraqi puppets. And you can look at that list of people. It's a pretty good list in many ways. There are also some question marks out there, but in many ways I think a lot of people would look at it and say a pretty good list, all things considered.

But it really is irrelevant what we think. All that matters is how the Iraqi people respond. And I think that's going to take several weeks before we get a sense of whether or not the Iraqis actually accept this group as legitimate and representative.

HEMMER: You know who was not in that room yesterday was Ahmad Chalabi. Listen to President Bush yesterday in the Rose Garden talking about him and his involvement.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My meetings with him were very brief. I mean, I think I met him at the state of the union and just kind of working through the rope line. And he might have come with a group of leaders. But I haven't had any extensive conversations with him.

(END VIDEO CLIP)

HEMMER: In the political world, I think that's a stiff arm.

POLLACK: Yes, absolutely.

(CROSSTALK)

HEMMER: Explain that to us, and also the reports today that say Chalabi was actually telling the Iranians that the U.S. had cracked the Iranian code.

POLLACK: Yes. I'll be honest with you, Bill, this is something that I have heard about several monthses ago, also, when -- or, sorry, several weeks ago. When this first came out, there were a lot of people in the intelligence world who were absolutely beside themselves about what Chalabi had done, this claim that he had given away the fact that we had cracked one of Iran's most important secret codes and had been reading their message traffic, had told the Iranians that, had shut everything down, and was making it very difficult for the U.S. to know what was going on inside Iran.

I think that and some of the other problems with Chalabi have pretty much forced the White House to say, you know what, we have to keep this guy at arm's distance because he's not helping up in Iraq.

HEMMER: So you heard about this months ago, huh, this Iranian deal?

POLLACK: Weeks ago. I apologize. Time's getting a little bit...

HEMMER: That's OK. I'm patient. One thing we need to watch here. Where does Sistani come down in this interim government, and when does he speak out and tell the Iraqi people, these are our men and women, they are our future, at least in the near term? POLLACK: Well, that's the big hope, Bill, that Sistani will make some kind of a statement like that. Because if he says this is a good group, it's representative, you should work with him, that will go an enormous way toward helping build real popular support for this group.

On the other hand, if he makes some kind of a negative statement or if he says nothing at all, that may also be interpreted by many Iraqis as Sistani not wanting to embrace them, and, therefore, him wanting to keep them at arm's distance. And he's already said that he doesn't believe this interim government represents very much. Wherever it's going to be, that really Iraqis ought to focus on the elections that will come up hopefully in December of this year. That that's when Iraq will get its real government.

HEMMER: Thanks, Ken. Insight is always helpful. Appreciate it. See you in days and not months, OK? Come on back. See you later.

Here's Heidi.

COLLINS: Twelve minutes past the hour now, and here's what's happening in other news. Two members of the U.S. military coming under fire in the Saudi capital of Riyadh today. According to Pentagon and U.S. embassy officials, one U.S. Army officer suffered minor injuries. In a separate incident, Saudi security forces killed two militants in the western part of the country, but there are conflicting reports on whether the militants were connected in any way to the attacks in Khobar over the weekend.

In U.S. politics, Democrats have picked up another seat in the House after a special election victory in South Dakota. Stephanie Herseth is now the state's first congresswoman. She defeated Republican Larry Diedrich. Herseth fills the seat left vacant by Republican Bill Janklow following his manslaughter conviction.

And in basketball, Detroit Pistons fans are on cloud nine this morning. For the first time in 14 years, their team heading to the NBA finals, where they'll face the LA Lakers. Last night, the Pistons closed out the Eastern Conference Finals with a game six win over the Indiana Pacers. Final score there, 69 to 65. And game one of the NBA finals starts on Sunday.

HEMMER: Who stayed up to watch that thing last night?

CAFFERTY: I didn't. How come they don't score anymore -- 69 to 65, that's not very many points for an NBA game, is it?

COLLINS: They were really playing.

HEMMER: Wait till the Lakers get a hold of those guys. Come on.

CAFFERTY: What are you suggesting, Bill?

HEMMER: I'm suggesting a four-game sweep by the LA Lakers.

COLLINS: Really? Wow.

CAFFERTY: I might have a little something in my pocket here.

HEMMER: Detroit rock city.

CAFFERTY: We'll talk right after the show.

Question of the Day is not about the Lakers. It's about these tapes that the CBS Evening News released yesterday.

Bad news for Enron. The traders on these tapes are heard gloating about their role in the western power crisis of about three or four years ago, apparently confirming that they deliberately drove up prices. Here's a trader rejoicing about a forest fire that shut down a major transmission line into California.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Burn, baby, burn. That's a beautiful thing.

(END AUDIO CLIP)

CAFFERTY: Others congratulate each other on cashing in on the energy crisis.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: (UNINTELLIGIBLE) taking all the money back from you guys? All the money you guys stole from all those poor grandmothers in California?

UNIDENTIFIED MALE: Yeah, Grandma Milly, man.

UNIDENTIFIED MALE: Yes, now she wants her (EXPLETIVE DELETED) money back for all the power you jammed right up her (EXPLETIVE DELETED), $250 a megawatt hour.

(END AUDIO CLIP)

CAFFERTY: Aren't they cute? The tapes also appear to link top Enron officials Ken Lay and Jeff Skilling to schemes that started that crisis.

The question is, how damaging are these tapes? Pretty damaging, I would guess. It would seem to me. Here's some of what you've written.

Pat writes, "As I listen to the CBS News audiotapes of Enron officials gloating over ripping off helpless people, I could hear similar conversations going on right now in the oil industry. I wish someone could get a tape of that."

Chris writes, "Are the Enron tapes damaging? To Lay and Skilling you bet they are. But they may be a godsend for Grandma Milly in California. Enron may be flat broke, but with the right lawyer and those tapes in front of a jury, the state of California might wind up owning the power plants that conspired with Enron's scheme to defraud and manipulate energy prices" And David in Massachusetts writes, "Those Enron tapes are no more damaging than the blood trail from OJ's driveway into his bedroom."

Fairly clear there how David feels.

HEMMER: I would say.

Thank you, jack.

CAFFERTY: Yes.

(WEATHER REPORT)

COLLINS: Palestinian sources say Israeli troops are back in the Rafah refugee camp demolishing homes today. Last week, Israel withdrew its forces after an operation to find and destroy tunnels supposedly used to smuggle weapons.

Our next guest, Richard Ben Cramer, won the Pulitzer Prize in 1979 for his coverage in the Middle East. For his latest work, "How Israel Lost: The Four Questions," he returned to look at how the country has changed. Richard Ben Cramer is joining us now this morning to tell us more about the book.

Thanks for being with us today. Appreciate you being here.

You know, Prime Minister Ariel Sharon has offered this plan to pull out of Gaza and parts of the West Bank, as well. Is this plan going to work?

RICHARD BEN CRAMER, AUTHOR, "HOW ISRAEL LOST": Well, I don't think so. You know, the other shoe that drops on this plan is the parts of the West Bank he doesn't pull out of.

So the price of pulling out of Gaza, in effect, is to keep the big settlements on the West Bank. And I don't think the Palestinians can make a peace on that basis because what it means is their punitive new country would actually be about three or four little small parcels between which they could not go without the say-so of the Israeli army.

COLLINS: So they don't even see it as one step closer to a concession or to getting their way at all?

CRAMER: I think they see it as very dangerous because Sharon is able to offer it as a supposed peace deal. But what it really means is he keeps the West Bank.

COLLINS: All right. Let's turn to your book now, if we could, once again, called "How Israel Lost."

You say that it's not so much history about the story of the Israelis and the Palestinians and how they're locked in this seemingly eternal struggle. It's more about the complicated scenario that surrounds that. Can you share a couple stories with us that really pinpoints that? CRAMER: Well, Heidi, you know, it's not a situation that's as hopeless as Americans tend to think. You know, in my little town in Maryland, when I tell people I'm writing about the Israelis and Palestinians, they say, oh, they've been fighting for centuries.

COLLINS: They roll their eyes, yes.

CRAMER: It's not true. They lived together for centuries in relative calm. I mean, there were incidents, but not any war.

And what really happened is that, after the '67 war, Israel took over the last parts of what had been Palestine. And for 35 years, they've held it. And every peace proposal has been about continuing to hold on to that land.

So the Palestinians have never made their story much known here. I try to make both sides known. And what has happened in the years since I left the Middle East, and in the years since the occupation began, is that Israel, herself, is changing because of being an occupying power. It's a very corrosive, corrupting, undermining experience, not only for the Palestinians, but for the Israelis who do the occupying.

COLLINS: Well, in the book, you pose four questions, four big questions. Let's just focus on one of them. And it's one that everyone asks. As you say, why is there no peace in the Middle East? Your answer is interesting.

CRAMER: Well, the answer is, to give it the shortest answer, is who wants one? You know?

COLLINS: Right.

CRAMER: If you look at the leaderships of both the Israelis and the Palestinians, there's no way that they get anywhere near leadership without the conflict. The conflict has its own momentum because it has made the career of everybody in power. Not to mention, there are a lot of people getting rich off the status quo.

There's a powerful interest in keeping it the way it is. And the inertia of the occupation has now taken over Israeli society altogether. It is the central fact, the center drama of Israel, the conflict.

COLLINS: Every day for everyone.

CRAMER: Every day. And if you and I end up on opposite sides of that questions, if you're a hawk and I'm a dove, or vice versa, then we don't listen to each other at all, because everything is about where you stand on this conflict.

COLLINS: Right. And it is incredibly complicated, as you well point out. Richard Ben Cramer, the name of the book is "How Israel Lost." Thanks for your time.

CRAMER: Thanks. COLLINS: Bill?

HEMMER: Twenty-two past the hour now. In a moment, the connection between the migraine headache and the dreaded brain freeze. Sanjay explains in a moment here.

Heidi?

COLLINS: Plus, a new Miss Universe. We'll tell you who won coming up in a little later.

HEMMER: Also, the oil prices skyrocketing. There might be a silver lining, though. Andy's checking that out. Back in a moment here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: At one time or another, a lot of us have attacked that bowl of ice cream and found that it can bite you right back, that sure and painful headache, the brain freeze. Sanjay is back in Atlanta with more on this.

Good morning. Like this topic, Sanjay, by the way. I'm a victim time and time again.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: It's an important topic for those of us who love ice-cream, for sure. Brain freeze may be a little bit of a misnomer. Certainly, your brain doesn't really freeze. We'll talk about that in a moment.

What had researchers sort of interested for some time was who is more likely to develop these ice-cream headaches or these brain freezes. That was the subject of some research coming out of Turkey, actually. And what they found, in fact, is that if you already have a history of migraine headaches, you're more likely to suffer from these brain freezes as well.

They looked at 76 migraine sufferers and 38 people who just had occasional headaches, and they asked them to put an ice cube against their pallet -- that's the roof of your mouth -- for about 90 seconds. What they found was that almost three-quarters of migraine sufferers went on to also develop one of these ice-cream headaches. Less than a third of the non-migraine sufferers also developed these migraine headaches.

Now, the headaches and the migraine sufferers tended to be more located in the temples or side of the head, and they tended to be more of a throbbing quality. Bill, you're exactly right. These headaches typically only last a few seconds. They can last up to five minutes. But they can really give you a problem in terms of your ice-cream -- Bill.

HEMMER: There is a nerve connection here in all of this. What causes them, Sanjay?

GUPTA: Yes. You know, that's the thing. People say the term "brain freeze" because they figure you're eating something cold and it must actually be causing a cold sensation to the brain. Not so.

In fact, there is a nerve connection. It's called the trigeminal nerve, and that's the fifth nerve. And actually, if you put some ice against the palate of your mouth, what happens -- you can see the images there -- that nerve actually gets stimulated. That nerve goes all over the place.

You can see into your face, behind your ear, and certainly up into your head as well. You can get pain in any of those locations if you have a sudden ice or ice-cream or a slushy or a snow cone or something like that. Again, migraine sufferers are going to be more likely to get one of these.

Now, there are ways to sort of avoid it. Eat your ice-cream more slowly. That's sort of the scoop on that. Also, lukewarm water sometimes with really cold foods may help as well -- Bill.

HEMMER: And can you take your tongue and force it up against the roof of your mouth and cure it, or not?

COLLINS: That's the answer.

GUPTA: That doesn't seem to work.

HEMMER: See, Heidi, we were wrong. Thank you, Sanjay. Talk to you later.

In a moment here, Beijing is telling Britney to behave. Coming up in "90-Second Pop," more on this pop star's stop in China.

Also in a moment, "Harry Potter" tries to work its magic yet a third time. And can Siegfried and Roy make some bad buzz disappear? We'll get to it all in a moment on AMERICAN MORNING.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

HEMMER: Good morning to you.

COLLINS: Good morning to you.

HEMMER: Heidi Collins working for Soledad O'Brien today. Soledad is back tomorrow.

In a moment here on AMERICAN MORNING, we're learning a bit more about what Iraqi politician Ahmad Chalabi is accused of doing to try to betray the U.S. What did he tell Iran? How much damage did he possibly cause to the U.S. in that effort? We'll get to that in a moment here.

COLLINS: Also, the woman who was instrumental in Al Gore's run for the presidency now offering her advice to Democrats in 2004. Donna Brazile calls it "Cooking With Greace," and she'll be with us in just a few minutes. HEMMER: Also this hour, stay tuned for "90-Second Pop." Britney Spears is in China. Britney Spears day today. China wants a Britney show, but it does not want Britney to show too much.

COLLINS: That's going to be hard.

HEMMER: Compromise in the works?

COLLINS: We'll have to see.

HEMMER: Stay tuned.

COLLINS: There is new information this morning about a former Iraqi friend of the U.S. and his ties to the government of Iran. National security correspondent David Ensor joins us now from Washington with what he has learned this morning.

David, good morning.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: ... it is true, unfortunately, that, according to U.S. officials, that Ahmad Chalabi, the information that he gave to the Iranians, was of great value, indeed. He informed them, according to these sources, that the U.S. was monitoring the communications of Iranian intelligence, that it had cracked the code of communications used by Iranian intelligence officials.

Now, this, of course, is a very serious national security breach. And there is a full-blown investigation now into who told Ahmad Chalabi, the Iraqi who has been a politician, who has been a member of the Iraqi Governing Council, who gave him that information about the compromise of Iranian intelligence codes. But according to these sources, it was Ahmad Chalabi himself who informed Iranian intelligence that their communications had been compromised.

Now, my understanding this morning is that, at least until the last few hours, the Iranians apparently did not believe Chalabi. They had not yet started to change the codes they were using. So, until recent days, at least, Iranian intelligence communications were still able to be monitored by U.S. intelligence. That may now change, however -- Heidi.

COLLINS: David, so what does all this mean? Will he face some sort of punishment now?

ENSOR: Well, it's a very serious problem for U.S. intelligence. Whether he will be prosecuted in some way is really not clear at this point. His role, vis-a-vis the United States, has obviously been shifting dramatically in the last few weeks. My colleague asked Condoleezza Rice, the national security adviser, at the White House about how he's viewed now, and this is the answer she got this morning.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: It's no secret that the relationship with Ahmad Chalabi has been somewhat strained of late. But it doesn't matter what his relationship is to us. What matters what is his relationship to the Iraqi people.

And we've always said we had no candidate, no horse, so to speak, in this race. The president said it on the day shortly after liberation. And whatever Ahmad Chalabi is going to do in Iraq will be because he's convinced the Iraqi people that he should be a part of their future.

(END VIDEO CLIP)

ENSOR: He certainly hasn't convinced the United States or the Lakhdar Brahimi, the U.N. special ambassador. You will notice that neither Chalabi nor any of the representatives of the INC, the Iraqi National Congress, the group that Chalabi was the head of, have been included in the new government in Baghdad -- Heidi.

COLLINS: All right. We'll continue to monitor that one, that's for sure. National correspondent security David Ensor. Thanks so much, David.

Bill?

HEMMER: To politics now. Donna Brazile has proven she can stand the heat without leaving the kitchen. Al Gore's campaign manager back in 2000, Brazile, the first African-American woman to head up a presidential campaign. She has a new book to talk about it, and a number of things, too.

We're learning so much about our friend, Donna Brazile. It's called "Cooking With Grease," and as she puts it, it's about stirring the pots in American politics. Donna Brazile, Democratic strategist, political contributor here on CNN, and now an author, as well.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Thank you.

HEMMER: Good morning to you.

BRAZILE: Good morning.

HEMMER: Nice to see you in person.

BRAZILE: It's good to be here.

HEMMER: You like the digs around here?

BRAZILE: Oh, I love the digs.

HEMMER: On the bayou, cooking is king.

BRAZILE: That's right.

HEMMER: What's got it got to do with politics?

BRAZILE: It has everything to do with politics. You know, if you put something on a stove too hot, and you don't tend to it, you can ruin a good meal. The same is true in politics. If you put a candidate out there without a message, well, you know what? Nothing sticks.

HEMMER: As you look at your party, as you look at your man, your candidate, John Kerry...

BRAZILE: Yes, he is my man.

HEMMER: ... he is your man. Is Tabasco needed in this campaign?

BRAZILE: Oh, you always keep a little bottle of Tabasco just to spice things up, to get it right. I think John Kerry has really found his mark. He's found his voice. He's doing very well out there in the polls. But you know what? If he can spice it up just a little bit, just a little bit of cayenne pepper...

HEMMER: You say he's found his mark. There's a poll that came out in New Jersey, a Democratic stronghold, that Al Gore won, your former man, your former guy, he beat George Bush by 16 points in 2000. Kerry is only up by three. What explains that?

BRAZILE: Well, two things. One, its early in the season. Also, I believe that the governor has not really released people to go out there and shake things up or stir things up for Kerry in New Jersey.

Kerry is going to carry New Jersey, he's going to carry New York. And you know what? He's going to carry my home state of Louisiana, and possibly Heidi's home state of Georgia.

There you go, Heidi.

HEMMER: Minnesota.

Back to 2000, you were the campaign manager for Al Gore. You lose the recount. You admit in the book you made mistakes. Mistakes like what?

BRAZILE: Right. We didn't educate people. You know, tens of thousands of people went to the polls for the first time in 2000. They didn't have all the tools that they needed to navigate the political process.

Many of them went in there, made errors on their ballots. Some were purged. My own sister had to produce three forms of I.D. in order to vote. We're going to make some corrections. But I would hope that Congress would fully fund election reform and...

HEMMER: But even then, Al Gore lost to his home state of Tennessee.

BRAZILE: Well, that was a mistake. That really was a mistake on our part.

I mention the book, and I refer to the period where we took certain states for granted, like Tennessee, like Arkansas and West Virginia. And look at the results. We also had problems getting our message out at the time when the Bush campaign was attacking Al Gore day in and day out. And I talked about the heat of just going through a presidential campaign really took our candidate off the message.

HEMMER: Want to get the two more points here. In 1998, you were fired, you lost your job.

BRAZILE: Yes, I did.

HEMMER: You contributed to this rumor that the former President Bush, number 41, had an affair.

BRAZILE: Right.

HEMMER: It was a mistake, and you say that. Did that hurt your credibility?

BRAZILE: It did. It was a big mistake on my part. It was a boo-boo of massive proportions.

And I'll tell you why. It was a rumor, I had no reason to spread it, and I had no reason to talk about it. I apologized.

I was fired. I didn't resign. And I later told, you know, former President Bush that I was sorry that I said it. It was also a very personal time because my mom was sick. I went home and she passed away a couple weeks later.

HEMMER: Would you admit Washington is a small town?

BRAZILE: It is.

HEMMER: I did not know you and Karl Rove are friends.

BRAZILE: He is a buddy of mine. I like Karl Rove. I respect him a lot.

Many of my Democratic friends and operatives say, how can you like someone like Karl Rove? And I say, because, you know what, this guy has spent his entire life working on campaigns, on the opposite side, by the way. And he's a good, tenacious fighter. And I like fighters.

HEMMER: Good to see you. We're good to you, aren't we?

BRAZILE: You're always good to me.

HEMMER: Sell your book, "Cooking With Grease."

BRAZILE: And since I messed up her home town, let me just say, go Tigers. She'll like that.

HEMMER: Thanks, Donna. Good to see you. See you later in the week.

Heidi?

COLLINS: Thanks, Donna.

And just what primetime needed, a cartoon about Siegfried and Roy's tigers. "90-Second Pop" coming your way next.

Plus, drivers are feeling the pinch at the pump now, but could the rising price of oil actually be good news for your wallet?

(COMMERCIAL BREAK)

COLLINS: Time now for our fast-moving "90-Second Pop" segment. On tap today, that woman, Britney Spears. Can she perform in China with clothing or without? We're not so sure.

The softer side of Siegfried and Roy, as well. Talking about their jungle cats. And everybody's favorite wizard casting a whole new batch of spells starting on Friday.

Our panel of all-stars today: Andy Borowitz, of Borowtizreport.com; New York Magazine contributing editor, Sarah Bernard; and Sam Rubin, entertainment reporter from KTLA.

Thanks for coming all the way in from California today to talk about Britney, to start off with. We talked about this a little bit yesterday with Jack. You know, she's going to China, some issues about her wardrobe or lack thereof. What's going to happen here?

SARAH BERNARD, CONTRIBUTING EDITOR, NEW YORK MAGAZINE: Well, I think they're a little worried that she might pull a Janet Jackson- type stunt. I know. Can you believe it?

But the thing is, I mean, asking Britney to perform without her revealing clothing is like asking the Rolling Stones to perform without their guitars. I mean, her...

COLLINS: I don't know. Really?

BERNARD: It's so instrument. It's what she does. It would be so silly.

SAM RUBIN, KTLA: It would be like asking Britney to actually sing live.

COLLINS: Sing, yes. Thank you, Sam.

BERNARD: Have they heard her sing? Because that's not why people go to see Britney.

COLLINS: All right. Let's talk Siegfried and Roy a little bit now. And Andy, "Father of the Pride" is an animated cartoon show about Siegfried and Roy's tigers. Some people looking forward to this, but others who are saying, there is no way this thing is going to last. It's going to be NBC, yes?

ANDY BOROWITZ, HUMORIST: Right. Well, some people are saying it's kind of creepy to do a show about Siegfried and Roy's tigers knowing what we know. There's never been a successful animated series based on an unfortunate mauling incident. So I think this is really...

(CROSSTALK)

COLLINS: Your research is good.

BOROWITZ: Yes. Well, I Googled it. It's a huge gamble they're playing.

BERNARD: You know what I don't understand about this? I thought the whole point was to make things that were less expensive. I mean, reality TV is so much cheaper than a sitcom.

This costs $2.5 million an episode to make. And it just seems unbelievable. I said that "The Swan" was my least favorite show, but I can tell that this is going to be it. This just seems like the worst idea. I can't even imagine.

BOROWITZ: The one thing they have going for it, the tigers are approximately the same color as Donald Trump. So that might be a good thing.

BERNARD: Do they have the bouffant? Do they have the hair?

COLLINS: Yes, maybe more of the hair, that would be a better comparison.

All right. Sam, let's talk "Harry Potter" now.

(CROSSTALK)

RUBIN: You're an aficionado. If you like one and two, you'll certainly like three. And the fact is, there is a new director on board.

The kids have grown up to a degree. And there's an excellent -- and Andy will appreciate -- a great hair joke in the movie. But other than that, I didn't think it was anything -- a particular departure. Again, it will be extraordinarily successful. It is relatively faithful to the book.

BOROWITZ: There's a lot of concerns about piracy actually of this film. As a matter of fact, Warner Brothers is actually shipping the film in cans labeled "New York Minute."

COLLINS: Thanks so much this morning, Andy, Sarah and Sam. Thanks, once again, you guys.

Bill?

HEMMER: Heidi, thanks for that. Fifteen minutes before the hour.

In a moment here, the judge in the Kobe Bryant case makes a ruling on one little word. We'll explain when we continue right after this.

(COMMERCIAL BREAK)

COLLINS: Forty-seven minutes past the hour now. And here's what's happening in other news today.

In Iraq, nearly two dozen people were wounded in a car bombing in northern Baghdad. Iraqi police say the car exploded twice, but no one was killed. The target of the bomb was not clear.

The attorney for dirty bomb suspect Jose Padilla is, once again, calling on the government to bring the case to court. This as the Justice Department is revealing new claims about Padilla previously classified. They say he also plotted to blow up high-rise apartment buildings in the U.S. Padilla, considered an enemy combatant by the U.S. government, has been in military custody for two years.

To Colorado now. Kobe Bryant's accuser will now be referred to by name or as "person." A judge in the sexual assault case sided with Bryant's lawyers, who argued that the term "victim" implies guilt. Bryant has pleaded not guilty to one count of sexual assault.

And> severe storms packing winds of more than 80 miles per hour swept through parts of Texas. A tornado was also reportedly spotted last night in Arlington. The wild weather knocking out power for more than a half-million residents at the height of the storm.

And finally, an Aussie beauty beating out Miss USA for the Miss Universe title. Miss Australia, Jennifer Hawkins, was crowned Miss Universe 2004 in Ecuador last night. Hawkins, who is 5'11", beat out women from 80 countries. So that's pretty good.

HEMMER: Very good. And congratulations.

COLLINS: Very pretty. Beautiful.

Still to come this morning, find out how Enron is ticking people off now. You're gong to want to hear this right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: Pandemonium in here, people. All right. Let's make it to the end -- Jack.

CAFFERTY: All right. The Enron tapes that CBS News aired last night on Dan Rather's program, really disgusting stuff. You've got these energy traders gloating about the skyrocketing price of energy and the fact that there were energy shortages out in California three, four years ago.

It really does not reflect too well on Enron. How damaging are the tapes? Carol in Connecticut writes, "So Martha Stewart is going to the slammer while the arrogant and greedy Ken Lay, with his many connections in the Bush administration, thumbs his nose and breezes off. And the media meekly drops the whole story on queue. No wonder lady justice covers her eyes, it's from pure shame." Paul in North Carolina, "These tapes should not be a surprise to anyone. What makes this difficult is what do you say to your kids when you're trying to raise honest, moral citizens? The message, it's OK to steal, lie and cheat when it's done in the workplace."

And Dave in Pennsylvania says, "There were so many bleeps in the tapes I couldn't make out what was being said. These guys ought to be writing for "The Sopranos."

HEMMER: Some of those bleeps were a little more accurate than others.

COLLINS: Hey, that was good.

CAFFERTY: Yes. Well, it was full of profanity.

HEMMER: That it was. Thank you, Jack.

(WEATHER REPORT)

HEMMER: See you tomorrow. Next hour here on CNN, countdown to the handover. The violence yet again today in Baghdad, is it ready for self-rule? How long will that take? Daryn Kagan looks at that next hour.

We are back in a moment on AMERICAN MORNING right after this.

(COMMERCIAL BREAK)

HEMMER: Thanks for being with us, everybody. We're out of time. Clearly out of time.

SERWER: Yes.

CAFFERTY: Gee, what a shame.

COLLINS: It's probably best that way today.

HEMMER: I'm telling you. Just in the nick of time.

CAFFERTY: It goes by so quickly.

HEMMER: That it does.

Here's Daryn Kagan at the CNN Center after a sick day yesterday. Hope you're feeling OK, Daryn.

DARYN KAGAN, CNN ANCHOR: I'm feeling much better.

HEMMER: And good morning to you.

KAGAN: Thank you, Billy. You guys have a great day there in New York City. We'll get started here.

Good morning from CNN headquarters in Atlanta. I'm Daryn Kagan. In the headlines right now, a spotlight on Saudi Arabia. A U.S. Army officer was slightly wounded by gunmen today while driving on a highway. An officer in a second vehicle was not hurt.

Near Mecca, a daylong standoff ended with Saudi security forces killing two militants. One of those killed was the Saudi -- on the Saudi list of most wanted terrorists.

The man once considered the next possible leader of Iraq may have been spying for Iran. Sources confirm to CNN that...


Aired June 2, 2004 - 9:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good morning. Markets driven by fear; no easy answers out there. Will this be another day of skyrocketing oil prices? We'll find out.
The Scott Peterson trial: the defense gets its turn today. How to explain away the circumstantial evidence against him.

And those wildfires, all it takes is one look and you know the Everglades in Florida need an awful lot of help on this AMERICAN MORNING.

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

HEMMER: Welcome, everybody. Heidi is working for Soledad. Good morning.

And good morning to you, as well.

HEIDI COLLINS, CNN ANCHOR: Good morning to you.

HEMMER: The market is going to open up about 30 minutes from now. Opening back up later this hour. Everyone watching to see what happens with the price of oil today.

Record highs yesterday. Over $42 a barrel, right?

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: That's right.

HEMMER: Andy Serwer is here in a few moments at a look at why investors are so rattled and what consumers should expect to pay at the pump. A big issue, yet again.

COLLINS: Yes. Also, Baghdad hit by another car bombing today. And while insurgents don't speak for the entire population, what difficulties will Iraq's new leaders face if terrorist attacks continue? We are going to get some answers from a man with a lot of insight on what's needed for success. And that is Ken Pollack.

HEMMER: Also, something we talked about yesterday, one of the most unfair headaches of all, the ice cream headache. The dreaded ice-cream headache. Take a bite, freeze your brain.

COLLINS: You know what they say you're supposed to do?

HEMMER: What's that? COLLINS: Suck really hard on the roof of your mouth.

HEMMER: That's right. Put your tongue on the roof of your mouth and warm up that nerve. Is that founded in science? Because I've heard the same thing.

COLLINS: OK, let's just move on.

HEMMER: What's up, Jack?

JACK CAFFERTY, CNN ANCHOR: Well, I've got those tapes over there. CBS News got these tapes of these Enron traders and it's pretty disgusting, actually. You can hear these Enron traders gloating about skyrocketing energy prices and power shortages during the big crisis in California about three or four years ago. We'll play some of them for you, and we're reading e-mails about how damaging these might be.

HEMMER: Down right tick you off, too, when you hear a lot of it, too.

COLLINS: Yes.

CAFFERTY: What are you supposed to do here?

(CROSSTALK)

HEMMER: Let's get to the oil prices. They hit an all-time record high, $42 a barrel yesterday in New York. Gasoline, the single largest energy product consumed in the U.S. Consumption has been rising since the 1950s. And today, the U.S. imports 60 percent of its oil.

Meanwhile, consumer spending and all kinds of energy soar. The average U.S. household spending five percent of its budget on energy, three percent of that on gas. Is there relief in sight? Andy Serwer checks back in with us top of the hour here.

How about it?

SERWER: Well, there may be a little relief in sight. This just crossing the newswires.

Early this morning, the United Arab Emirates announcing it was going to be releasing 400,000 barrels of oil a day just now coming on the stream. That's about two percent of U.S. daily production. We use 20 million barrels. So that should help, and that's probably why the price of oil has been slipping a little bit this morning, which is a nice thing to see.

What's going on here is we have a couple factors making the price of oil going up -- the improving U.S. economy, economies in China coming on stream and sucking up a lot of oil. We have low production. And the real big wildcard, Bill, terrorism, the threat of terrorism in the future. Experts saying that's adding about $5 to $12 per barrel, which is what's getting you up towards $42 a barrel. How does that translate to gasoline prices? Some say as much as 36 cents of our $2-plus per gallon has to do with terrorism and the fear of terrorism. That's not going to go away until those fears abide. And, of course, that is a tremendous wildcard.

HEMMER: The fears you talk about, that's psychological.

SERWER: It is psychological. And, you know, what is going to stop that and what's going to make that go away? Your guess is as good as mine. Clearly, Saudi Arabia is in a vulnerable situation. And that's what traders are responding to right now. We're in the summer peak driving season; the price of gas is high.

HEMMER: Yes, but the thing we always talk about, even if Saudi Arabia increases production, even if the United Arab Emirates throws 400,000 barrels out there a day, in addition to what they're already doing, you still have the issue of refineries. Are they at capacity right now? And if they are, how are you going to get more gasoline in the system here in this country unless you're able to get that oil to the refineries?

SERWER: Well, Lee Raymond, the CEO of Exxon Mobile, said that there is excess capacity with refineries. And he seemed to be indicating a lot of the problem is the psychological factor and traders bidding the price of oil up. But again, it's a fluid situation. OPEC ministers meeting in Beirut tomorrow. Obviously, that's going to be big news there.

HEMMER: OK. Thank you, Andy.

SERWER: You're welcome.

HEMMER: Also, the FBI has put out a nationwide alert for two propane tanker trucks stolen in Texas. Those tankers, loaded with volatile propane, vanished from the San Antonio Gas Company some time over the weekend. The FBI says propane is one of the elements that terrorists have trained on. The police in San Antonio do not suspect terrorism, though. They say propane thefts often happen in southern Texas because it's close with the northern Mexican border, where residents commonly use that kind of fuel.

Heidi across the room now for more.

COLLINS: The prosecutor has made his opening statement in the trial of Scott Peterson trial on charges that he killed his wife, Laci, and their unborn child. Today, the defense gets its turn. Ted Rowlands is in Redwood City, California, now.

Ted, tell us a little bit about what we might expect from Mark Geragos today.

TED ROWLANDS, CNN CORRESPONDENT: Well, the jury is going to hear a much different story today from Mark Geragos and a much different style. Rick Distaso, the prosecutor in this case, is very methodical. And yesterday, he went through the state's case in a methodical fashion, just poining out facts that point Scott Peterson to the jury. It took him all day. He played some audio tapes, he showed some autopsy photos. But he was very consistent throughout.

Geragos is a story teller, and he's a very engaging lawyer with a great command of the law. And he is going to take this jury on a much different path, show them a different story. And that would be that Scott Peterson may have acted inappropriately, may have had an affair, and may be despicable in the eyes of these jurors, but he's going to say that someone else is responsible for these murders, and he'll lay out a map of different people around the city of Modesto that say they saw Laci Peterson the day that she was reported missing.

He'll add more about a van that was in the area and talk about eyewitness testimony that he'll later bring in that would lend people to believe that she may have been abducted. He will also show autopsy photos, as they did yesterday in court, but with a different spin, saying that a picture specifically of the baby shows that the baby was handled outside of Laci Peterson's body.

So this jury will have a much different presentation today, coming from a much different side of thing. Geragos will try to combat this circumstantial evidence that was laid on his client yesterday, and he'll try to spin it around and show the jury that this investigation was flawed from the beginning, and Scott Peterson, as inappropriate as he is, was not responsible for his wife's murder.

COLLINS: And Ted, you know, you mentioned those pictures that were shown yesterday. They're going to show them again today. What was the reaction in court when those pictures were up on that brig screen?

ROWLANDS: Well, the family, as you might imagine, had a tough time with them. Sharon Rocha, Laci's mother, broke down at one point. All the Rocha family, as you might imagine, had a difficult time with it.

And the Peterson family. JD Peterson (ph), Scott Peterson's sister-in-law, got up and left the court. But the jury was focused, and they seemed to really be able to take -- you know, understand their task. And they focused on what Distaso was saying and they looked at the images, as bad as they were, and they absorbed them. Peterson, himself, would not look at any of the images.

COLLINS: All right. Ted Rowlands, thanks so much. Appreciate it.

The woman accusing Kobe Bryant of rape will not be referred to as a "victim" when Bryant goes on trial. Defense lawyers won that ruling from a Colorado judge who agreed with them that the term "victim" implies that Bryant is guilty. The NBA star has said the two had consensual sex.

HEMMER: From overseas in Iraq today, more bloodshed in the streets of the Iraqi capital of Baghdad. A car bomb explosion on a busy street in the northern part of the town wounded at least 22. There have been some reports of at least two deaths from the blast, which came a day after the naming of the interim government.

Earlier on AMERICAN MORNING, I talked with the coalition spokesperson, Dan Senor, in Baghdad, telling me that that government has work to be done before taking power at the end of the month. Senor also saying it is a step in the right direction in Iraq.

(BEGIN VIDEO CLIP)

DAN SENOR, COALITION SPOKESMAN: When you have a government formed as diverse as the government that was stood up yesterday with, for instance, six women, a higher percentage of women in the cabinet than probably most governments in the world, and a government that is committed to the ideals and principles enshrined in Iraq's interim constitution, individual liberties, certain protections for minority rights, principles like federalism, civilian control of the military, when you stand up a government that's committed to those things and is committed to winning the war on terrorism here in Iraq, it's a really good day.

(END VIDEO CLIP)

HEMMER: Now, what does the government have to do in order to be viewed as legitimate by the Iraqi people? Good question for our analyst, Ken Pollack.

Ken, welcome back.

KEN POLLACK, CNN ANALYST: Good morning to you.

HEMMER: Is the handover officially done?

POLLACK: No.

HEMMER: I mean, if the Iraqi Council dissolves itself, and the government puts forward (ph) the people yesterday, what else is left?

POLLACK: Well, the big thing that's lying out there, Bill, is on June 30th, the United States is supposed to turn over full sovereignty to this new interim Iraqi government. And beyond that, some degree of operational control over day-to-day administrative matters.

There are two issues out there, though, which is, one, nobody really knows exactly what full sovereignty means. And, two, no one has yet defined exactly what those administrative responsibilities are going to be. Those are big issues, huge issues, which still need to be resolved.

HEMMER: Is there any way to gauge at this point how the Iraqi people are responding to these men and women who were put forward yesterday?

POLLACK: So far, no. And yet, Bill, that is really the key issue. It's very important to focus on this.

You know, it's one thing for the administration to come out and say these are not Iraqi puppets. And you can look at that list of people. It's a pretty good list in many ways. There are also some question marks out there, but in many ways I think a lot of people would look at it and say a pretty good list, all things considered.

But it really is irrelevant what we think. All that matters is how the Iraqi people respond. And I think that's going to take several weeks before we get a sense of whether or not the Iraqis actually accept this group as legitimate and representative.

HEMMER: You know who was not in that room yesterday was Ahmad Chalabi. Listen to President Bush yesterday in the Rose Garden talking about him and his involvement.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My meetings with him were very brief. I mean, I think I met him at the state of the union and just kind of working through the rope line. And he might have come with a group of leaders. But I haven't had any extensive conversations with him.

(END VIDEO CLIP)

HEMMER: In the political world, I think that's a stiff arm.

POLLACK: Yes, absolutely.

(CROSSTALK)

HEMMER: Explain that to us, and also the reports today that say Chalabi was actually telling the Iranians that the U.S. had cracked the Iranian code.

POLLACK: Yes. I'll be honest with you, Bill, this is something that I have heard about several monthses ago, also, when -- or, sorry, several weeks ago. When this first came out, there were a lot of people in the intelligence world who were absolutely beside themselves about what Chalabi had done, this claim that he had given away the fact that we had cracked one of Iran's most important secret codes and had been reading their message traffic, had told the Iranians that, had shut everything down, and was making it very difficult for the U.S. to know what was going on inside Iran.

I think that and some of the other problems with Chalabi have pretty much forced the White House to say, you know what, we have to keep this guy at arm's distance because he's not helping up in Iraq.

HEMMER: So you heard about this months ago, huh, this Iranian deal?

POLLACK: Weeks ago. I apologize. Time's getting a little bit...

HEMMER: That's OK. I'm patient. One thing we need to watch here. Where does Sistani come down in this interim government, and when does he speak out and tell the Iraqi people, these are our men and women, they are our future, at least in the near term? POLLACK: Well, that's the big hope, Bill, that Sistani will make some kind of a statement like that. Because if he says this is a good group, it's representative, you should work with him, that will go an enormous way toward helping build real popular support for this group.

On the other hand, if he makes some kind of a negative statement or if he says nothing at all, that may also be interpreted by many Iraqis as Sistani not wanting to embrace them, and, therefore, him wanting to keep them at arm's distance. And he's already said that he doesn't believe this interim government represents very much. Wherever it's going to be, that really Iraqis ought to focus on the elections that will come up hopefully in December of this year. That that's when Iraq will get its real government.

HEMMER: Thanks, Ken. Insight is always helpful. Appreciate it. See you in days and not months, OK? Come on back. See you later.

Here's Heidi.

COLLINS: Twelve minutes past the hour now, and here's what's happening in other news. Two members of the U.S. military coming under fire in the Saudi capital of Riyadh today. According to Pentagon and U.S. embassy officials, one U.S. Army officer suffered minor injuries. In a separate incident, Saudi security forces killed two militants in the western part of the country, but there are conflicting reports on whether the militants were connected in any way to the attacks in Khobar over the weekend.

In U.S. politics, Democrats have picked up another seat in the House after a special election victory in South Dakota. Stephanie Herseth is now the state's first congresswoman. She defeated Republican Larry Diedrich. Herseth fills the seat left vacant by Republican Bill Janklow following his manslaughter conviction.

And in basketball, Detroit Pistons fans are on cloud nine this morning. For the first time in 14 years, their team heading to the NBA finals, where they'll face the LA Lakers. Last night, the Pistons closed out the Eastern Conference Finals with a game six win over the Indiana Pacers. Final score there, 69 to 65. And game one of the NBA finals starts on Sunday.

HEMMER: Who stayed up to watch that thing last night?

CAFFERTY: I didn't. How come they don't score anymore -- 69 to 65, that's not very many points for an NBA game, is it?

COLLINS: They were really playing.

HEMMER: Wait till the Lakers get a hold of those guys. Come on.

CAFFERTY: What are you suggesting, Bill?

HEMMER: I'm suggesting a four-game sweep by the LA Lakers.

COLLINS: Really? Wow.

CAFFERTY: I might have a little something in my pocket here.

HEMMER: Detroit rock city.

CAFFERTY: We'll talk right after the show.

Question of the Day is not about the Lakers. It's about these tapes that the CBS Evening News released yesterday.

Bad news for Enron. The traders on these tapes are heard gloating about their role in the western power crisis of about three or four years ago, apparently confirming that they deliberately drove up prices. Here's a trader rejoicing about a forest fire that shut down a major transmission line into California.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: Burn, baby, burn. That's a beautiful thing.

(END AUDIO CLIP)

CAFFERTY: Others congratulate each other on cashing in on the energy crisis.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: (UNINTELLIGIBLE) taking all the money back from you guys? All the money you guys stole from all those poor grandmothers in California?

UNIDENTIFIED MALE: Yeah, Grandma Milly, man.

UNIDENTIFIED MALE: Yes, now she wants her (EXPLETIVE DELETED) money back for all the power you jammed right up her (EXPLETIVE DELETED), $250 a megawatt hour.

(END AUDIO CLIP)

CAFFERTY: Aren't they cute? The tapes also appear to link top Enron officials Ken Lay and Jeff Skilling to schemes that started that crisis.

The question is, how damaging are these tapes? Pretty damaging, I would guess. It would seem to me. Here's some of what you've written.

Pat writes, "As I listen to the CBS News audiotapes of Enron officials gloating over ripping off helpless people, I could hear similar conversations going on right now in the oil industry. I wish someone could get a tape of that."

Chris writes, "Are the Enron tapes damaging? To Lay and Skilling you bet they are. But they may be a godsend for Grandma Milly in California. Enron may be flat broke, but with the right lawyer and those tapes in front of a jury, the state of California might wind up owning the power plants that conspired with Enron's scheme to defraud and manipulate energy prices" And David in Massachusetts writes, "Those Enron tapes are no more damaging than the blood trail from OJ's driveway into his bedroom."

Fairly clear there how David feels.

HEMMER: I would say.

Thank you, jack.

CAFFERTY: Yes.

(WEATHER REPORT)

COLLINS: Palestinian sources say Israeli troops are back in the Rafah refugee camp demolishing homes today. Last week, Israel withdrew its forces after an operation to find and destroy tunnels supposedly used to smuggle weapons.

Our next guest, Richard Ben Cramer, won the Pulitzer Prize in 1979 for his coverage in the Middle East. For his latest work, "How Israel Lost: The Four Questions," he returned to look at how the country has changed. Richard Ben Cramer is joining us now this morning to tell us more about the book.

Thanks for being with us today. Appreciate you being here.

You know, Prime Minister Ariel Sharon has offered this plan to pull out of Gaza and parts of the West Bank, as well. Is this plan going to work?

RICHARD BEN CRAMER, AUTHOR, "HOW ISRAEL LOST": Well, I don't think so. You know, the other shoe that drops on this plan is the parts of the West Bank he doesn't pull out of.

So the price of pulling out of Gaza, in effect, is to keep the big settlements on the West Bank. And I don't think the Palestinians can make a peace on that basis because what it means is their punitive new country would actually be about three or four little small parcels between which they could not go without the say-so of the Israeli army.

COLLINS: So they don't even see it as one step closer to a concession or to getting their way at all?

CRAMER: I think they see it as very dangerous because Sharon is able to offer it as a supposed peace deal. But what it really means is he keeps the West Bank.

COLLINS: All right. Let's turn to your book now, if we could, once again, called "How Israel Lost."

You say that it's not so much history about the story of the Israelis and the Palestinians and how they're locked in this seemingly eternal struggle. It's more about the complicated scenario that surrounds that. Can you share a couple stories with us that really pinpoints that? CRAMER: Well, Heidi, you know, it's not a situation that's as hopeless as Americans tend to think. You know, in my little town in Maryland, when I tell people I'm writing about the Israelis and Palestinians, they say, oh, they've been fighting for centuries.

COLLINS: They roll their eyes, yes.

CRAMER: It's not true. They lived together for centuries in relative calm. I mean, there were incidents, but not any war.

And what really happened is that, after the '67 war, Israel took over the last parts of what had been Palestine. And for 35 years, they've held it. And every peace proposal has been about continuing to hold on to that land.

So the Palestinians have never made their story much known here. I try to make both sides known. And what has happened in the years since I left the Middle East, and in the years since the occupation began, is that Israel, herself, is changing because of being an occupying power. It's a very corrosive, corrupting, undermining experience, not only for the Palestinians, but for the Israelis who do the occupying.

COLLINS: Well, in the book, you pose four questions, four big questions. Let's just focus on one of them. And it's one that everyone asks. As you say, why is there no peace in the Middle East? Your answer is interesting.

CRAMER: Well, the answer is, to give it the shortest answer, is who wants one? You know?

COLLINS: Right.

CRAMER: If you look at the leaderships of both the Israelis and the Palestinians, there's no way that they get anywhere near leadership without the conflict. The conflict has its own momentum because it has made the career of everybody in power. Not to mention, there are a lot of people getting rich off the status quo.

There's a powerful interest in keeping it the way it is. And the inertia of the occupation has now taken over Israeli society altogether. It is the central fact, the center drama of Israel, the conflict.

COLLINS: Every day for everyone.

CRAMER: Every day. And if you and I end up on opposite sides of that questions, if you're a hawk and I'm a dove, or vice versa, then we don't listen to each other at all, because everything is about where you stand on this conflict.

COLLINS: Right. And it is incredibly complicated, as you well point out. Richard Ben Cramer, the name of the book is "How Israel Lost." Thanks for your time.

CRAMER: Thanks. COLLINS: Bill?

HEMMER: Twenty-two past the hour now. In a moment, the connection between the migraine headache and the dreaded brain freeze. Sanjay explains in a moment here.

Heidi?

COLLINS: Plus, a new Miss Universe. We'll tell you who won coming up in a little later.

HEMMER: Also, the oil prices skyrocketing. There might be a silver lining, though. Andy's checking that out. Back in a moment here on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: At one time or another, a lot of us have attacked that bowl of ice cream and found that it can bite you right back, that sure and painful headache, the brain freeze. Sanjay is back in Atlanta with more on this.

Good morning. Like this topic, Sanjay, by the way. I'm a victim time and time again.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: It's an important topic for those of us who love ice-cream, for sure. Brain freeze may be a little bit of a misnomer. Certainly, your brain doesn't really freeze. We'll talk about that in a moment.

What had researchers sort of interested for some time was who is more likely to develop these ice-cream headaches or these brain freezes. That was the subject of some research coming out of Turkey, actually. And what they found, in fact, is that if you already have a history of migraine headaches, you're more likely to suffer from these brain freezes as well.

They looked at 76 migraine sufferers and 38 people who just had occasional headaches, and they asked them to put an ice cube against their pallet -- that's the roof of your mouth -- for about 90 seconds. What they found was that almost three-quarters of migraine sufferers went on to also develop one of these ice-cream headaches. Less than a third of the non-migraine sufferers also developed these migraine headaches.

Now, the headaches and the migraine sufferers tended to be more located in the temples or side of the head, and they tended to be more of a throbbing quality. Bill, you're exactly right. These headaches typically only last a few seconds. They can last up to five minutes. But they can really give you a problem in terms of your ice-cream -- Bill.

HEMMER: There is a nerve connection here in all of this. What causes them, Sanjay?

GUPTA: Yes. You know, that's the thing. People say the term "brain freeze" because they figure you're eating something cold and it must actually be causing a cold sensation to the brain. Not so.

In fact, there is a nerve connection. It's called the trigeminal nerve, and that's the fifth nerve. And actually, if you put some ice against the palate of your mouth, what happens -- you can see the images there -- that nerve actually gets stimulated. That nerve goes all over the place.

You can see into your face, behind your ear, and certainly up into your head as well. You can get pain in any of those locations if you have a sudden ice or ice-cream or a slushy or a snow cone or something like that. Again, migraine sufferers are going to be more likely to get one of these.

Now, there are ways to sort of avoid it. Eat your ice-cream more slowly. That's sort of the scoop on that. Also, lukewarm water sometimes with really cold foods may help as well -- Bill.

HEMMER: And can you take your tongue and force it up against the roof of your mouth and cure it, or not?

COLLINS: That's the answer.

GUPTA: That doesn't seem to work.

HEMMER: See, Heidi, we were wrong. Thank you, Sanjay. Talk to you later.

In a moment here, Beijing is telling Britney to behave. Coming up in "90-Second Pop," more on this pop star's stop in China.

Also in a moment, "Harry Potter" tries to work its magic yet a third time. And can Siegfried and Roy make some bad buzz disappear? We'll get to it all in a moment on AMERICAN MORNING.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

HEMMER: Good morning to you.

COLLINS: Good morning to you.

HEMMER: Heidi Collins working for Soledad O'Brien today. Soledad is back tomorrow.

In a moment here on AMERICAN MORNING, we're learning a bit more about what Iraqi politician Ahmad Chalabi is accused of doing to try to betray the U.S. What did he tell Iran? How much damage did he possibly cause to the U.S. in that effort? We'll get to that in a moment here.

COLLINS: Also, the woman who was instrumental in Al Gore's run for the presidency now offering her advice to Democrats in 2004. Donna Brazile calls it "Cooking With Greace," and she'll be with us in just a few minutes. HEMMER: Also this hour, stay tuned for "90-Second Pop." Britney Spears is in China. Britney Spears day today. China wants a Britney show, but it does not want Britney to show too much.

COLLINS: That's going to be hard.

HEMMER: Compromise in the works?

COLLINS: We'll have to see.

HEMMER: Stay tuned.

COLLINS: There is new information this morning about a former Iraqi friend of the U.S. and his ties to the government of Iran. National security correspondent David Ensor joins us now from Washington with what he has learned this morning.

David, good morning.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: ... it is true, unfortunately, that, according to U.S. officials, that Ahmad Chalabi, the information that he gave to the Iranians, was of great value, indeed. He informed them, according to these sources, that the U.S. was monitoring the communications of Iranian intelligence, that it had cracked the code of communications used by Iranian intelligence officials.

Now, this, of course, is a very serious national security breach. And there is a full-blown investigation now into who told Ahmad Chalabi, the Iraqi who has been a politician, who has been a member of the Iraqi Governing Council, who gave him that information about the compromise of Iranian intelligence codes. But according to these sources, it was Ahmad Chalabi himself who informed Iranian intelligence that their communications had been compromised.

Now, my understanding this morning is that, at least until the last few hours, the Iranians apparently did not believe Chalabi. They had not yet started to change the codes they were using. So, until recent days, at least, Iranian intelligence communications were still able to be monitored by U.S. intelligence. That may now change, however -- Heidi.

COLLINS: David, so what does all this mean? Will he face some sort of punishment now?

ENSOR: Well, it's a very serious problem for U.S. intelligence. Whether he will be prosecuted in some way is really not clear at this point. His role, vis-a-vis the United States, has obviously been shifting dramatically in the last few weeks. My colleague asked Condoleezza Rice, the national security adviser, at the White House about how he's viewed now, and this is the answer she got this morning.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: It's no secret that the relationship with Ahmad Chalabi has been somewhat strained of late. But it doesn't matter what his relationship is to us. What matters what is his relationship to the Iraqi people.

And we've always said we had no candidate, no horse, so to speak, in this race. The president said it on the day shortly after liberation. And whatever Ahmad Chalabi is going to do in Iraq will be because he's convinced the Iraqi people that he should be a part of their future.

(END VIDEO CLIP)

ENSOR: He certainly hasn't convinced the United States or the Lakhdar Brahimi, the U.N. special ambassador. You will notice that neither Chalabi nor any of the representatives of the INC, the Iraqi National Congress, the group that Chalabi was the head of, have been included in the new government in Baghdad -- Heidi.

COLLINS: All right. We'll continue to monitor that one, that's for sure. National correspondent security David Ensor. Thanks so much, David.

Bill?

HEMMER: To politics now. Donna Brazile has proven she can stand the heat without leaving the kitchen. Al Gore's campaign manager back in 2000, Brazile, the first African-American woman to head up a presidential campaign. She has a new book to talk about it, and a number of things, too.

We're learning so much about our friend, Donna Brazile. It's called "Cooking With Grease," and as she puts it, it's about stirring the pots in American politics. Donna Brazile, Democratic strategist, political contributor here on CNN, and now an author, as well.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Thank you.

HEMMER: Good morning to you.

BRAZILE: Good morning.

HEMMER: Nice to see you in person.

BRAZILE: It's good to be here.

HEMMER: You like the digs around here?

BRAZILE: Oh, I love the digs.

HEMMER: On the bayou, cooking is king.

BRAZILE: That's right.

HEMMER: What's got it got to do with politics?

BRAZILE: It has everything to do with politics. You know, if you put something on a stove too hot, and you don't tend to it, you can ruin a good meal. The same is true in politics. If you put a candidate out there without a message, well, you know what? Nothing sticks.

HEMMER: As you look at your party, as you look at your man, your candidate, John Kerry...

BRAZILE: Yes, he is my man.

HEMMER: ... he is your man. Is Tabasco needed in this campaign?

BRAZILE: Oh, you always keep a little bottle of Tabasco just to spice things up, to get it right. I think John Kerry has really found his mark. He's found his voice. He's doing very well out there in the polls. But you know what? If he can spice it up just a little bit, just a little bit of cayenne pepper...

HEMMER: You say he's found his mark. There's a poll that came out in New Jersey, a Democratic stronghold, that Al Gore won, your former man, your former guy, he beat George Bush by 16 points in 2000. Kerry is only up by three. What explains that?

BRAZILE: Well, two things. One, its early in the season. Also, I believe that the governor has not really released people to go out there and shake things up or stir things up for Kerry in New Jersey.

Kerry is going to carry New Jersey, he's going to carry New York. And you know what? He's going to carry my home state of Louisiana, and possibly Heidi's home state of Georgia.

There you go, Heidi.

HEMMER: Minnesota.

Back to 2000, you were the campaign manager for Al Gore. You lose the recount. You admit in the book you made mistakes. Mistakes like what?

BRAZILE: Right. We didn't educate people. You know, tens of thousands of people went to the polls for the first time in 2000. They didn't have all the tools that they needed to navigate the political process.

Many of them went in there, made errors on their ballots. Some were purged. My own sister had to produce three forms of I.D. in order to vote. We're going to make some corrections. But I would hope that Congress would fully fund election reform and...

HEMMER: But even then, Al Gore lost to his home state of Tennessee.

BRAZILE: Well, that was a mistake. That really was a mistake on our part.

I mention the book, and I refer to the period where we took certain states for granted, like Tennessee, like Arkansas and West Virginia. And look at the results. We also had problems getting our message out at the time when the Bush campaign was attacking Al Gore day in and day out. And I talked about the heat of just going through a presidential campaign really took our candidate off the message.

HEMMER: Want to get the two more points here. In 1998, you were fired, you lost your job.

BRAZILE: Yes, I did.

HEMMER: You contributed to this rumor that the former President Bush, number 41, had an affair.

BRAZILE: Right.

HEMMER: It was a mistake, and you say that. Did that hurt your credibility?

BRAZILE: It did. It was a big mistake on my part. It was a boo-boo of massive proportions.

And I'll tell you why. It was a rumor, I had no reason to spread it, and I had no reason to talk about it. I apologized.

I was fired. I didn't resign. And I later told, you know, former President Bush that I was sorry that I said it. It was also a very personal time because my mom was sick. I went home and she passed away a couple weeks later.

HEMMER: Would you admit Washington is a small town?

BRAZILE: It is.

HEMMER: I did not know you and Karl Rove are friends.

BRAZILE: He is a buddy of mine. I like Karl Rove. I respect him a lot.

Many of my Democratic friends and operatives say, how can you like someone like Karl Rove? And I say, because, you know what, this guy has spent his entire life working on campaigns, on the opposite side, by the way. And he's a good, tenacious fighter. And I like fighters.

HEMMER: Good to see you. We're good to you, aren't we?

BRAZILE: You're always good to me.

HEMMER: Sell your book, "Cooking With Grease."

BRAZILE: And since I messed up her home town, let me just say, go Tigers. She'll like that.

HEMMER: Thanks, Donna. Good to see you. See you later in the week.

Heidi?

COLLINS: Thanks, Donna.

And just what primetime needed, a cartoon about Siegfried and Roy's tigers. "90-Second Pop" coming your way next.

Plus, drivers are feeling the pinch at the pump now, but could the rising price of oil actually be good news for your wallet?

(COMMERCIAL BREAK)

COLLINS: Time now for our fast-moving "90-Second Pop" segment. On tap today, that woman, Britney Spears. Can she perform in China with clothing or without? We're not so sure.

The softer side of Siegfried and Roy, as well. Talking about their jungle cats. And everybody's favorite wizard casting a whole new batch of spells starting on Friday.

Our panel of all-stars today: Andy Borowitz, of Borowtizreport.com; New York Magazine contributing editor, Sarah Bernard; and Sam Rubin, entertainment reporter from KTLA.

Thanks for coming all the way in from California today to talk about Britney, to start off with. We talked about this a little bit yesterday with Jack. You know, she's going to China, some issues about her wardrobe or lack thereof. What's going to happen here?

SARAH BERNARD, CONTRIBUTING EDITOR, NEW YORK MAGAZINE: Well, I think they're a little worried that she might pull a Janet Jackson- type stunt. I know. Can you believe it?

But the thing is, I mean, asking Britney to perform without her revealing clothing is like asking the Rolling Stones to perform without their guitars. I mean, her...

COLLINS: I don't know. Really?

BERNARD: It's so instrument. It's what she does. It would be so silly.

SAM RUBIN, KTLA: It would be like asking Britney to actually sing live.

COLLINS: Sing, yes. Thank you, Sam.

BERNARD: Have they heard her sing? Because that's not why people go to see Britney.

COLLINS: All right. Let's talk Siegfried and Roy a little bit now. And Andy, "Father of the Pride" is an animated cartoon show about Siegfried and Roy's tigers. Some people looking forward to this, but others who are saying, there is no way this thing is going to last. It's going to be NBC, yes?

ANDY BOROWITZ, HUMORIST: Right. Well, some people are saying it's kind of creepy to do a show about Siegfried and Roy's tigers knowing what we know. There's never been a successful animated series based on an unfortunate mauling incident. So I think this is really...

(CROSSTALK)

COLLINS: Your research is good.

BOROWITZ: Yes. Well, I Googled it. It's a huge gamble they're playing.

BERNARD: You know what I don't understand about this? I thought the whole point was to make things that were less expensive. I mean, reality TV is so much cheaper than a sitcom.

This costs $2.5 million an episode to make. And it just seems unbelievable. I said that "The Swan" was my least favorite show, but I can tell that this is going to be it. This just seems like the worst idea. I can't even imagine.

BOROWITZ: The one thing they have going for it, the tigers are approximately the same color as Donald Trump. So that might be a good thing.

BERNARD: Do they have the bouffant? Do they have the hair?

COLLINS: Yes, maybe more of the hair, that would be a better comparison.

All right. Sam, let's talk "Harry Potter" now.

(CROSSTALK)

RUBIN: You're an aficionado. If you like one and two, you'll certainly like three. And the fact is, there is a new director on board.

The kids have grown up to a degree. And there's an excellent -- and Andy will appreciate -- a great hair joke in the movie. But other than that, I didn't think it was anything -- a particular departure. Again, it will be extraordinarily successful. It is relatively faithful to the book.

BOROWITZ: There's a lot of concerns about piracy actually of this film. As a matter of fact, Warner Brothers is actually shipping the film in cans labeled "New York Minute."

COLLINS: Thanks so much this morning, Andy, Sarah and Sam. Thanks, once again, you guys.

Bill?

HEMMER: Heidi, thanks for that. Fifteen minutes before the hour.

In a moment here, the judge in the Kobe Bryant case makes a ruling on one little word. We'll explain when we continue right after this.

(COMMERCIAL BREAK)

COLLINS: Forty-seven minutes past the hour now. And here's what's happening in other news today.

In Iraq, nearly two dozen people were wounded in a car bombing in northern Baghdad. Iraqi police say the car exploded twice, but no one was killed. The target of the bomb was not clear.

The attorney for dirty bomb suspect Jose Padilla is, once again, calling on the government to bring the case to court. This as the Justice Department is revealing new claims about Padilla previously classified. They say he also plotted to blow up high-rise apartment buildings in the U.S. Padilla, considered an enemy combatant by the U.S. government, has been in military custody for two years.

To Colorado now. Kobe Bryant's accuser will now be referred to by name or as "person." A judge in the sexual assault case sided with Bryant's lawyers, who argued that the term "victim" implies guilt. Bryant has pleaded not guilty to one count of sexual assault.

And> severe storms packing winds of more than 80 miles per hour swept through parts of Texas. A tornado was also reportedly spotted last night in Arlington. The wild weather knocking out power for more than a half-million residents at the height of the storm.

And finally, an Aussie beauty beating out Miss USA for the Miss Universe title. Miss Australia, Jennifer Hawkins, was crowned Miss Universe 2004 in Ecuador last night. Hawkins, who is 5'11", beat out women from 80 countries. So that's pretty good.

HEMMER: Very good. And congratulations.

COLLINS: Very pretty. Beautiful.

Still to come this morning, find out how Enron is ticking people off now. You're gong to want to hear this right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: Pandemonium in here, people. All right. Let's make it to the end -- Jack.

CAFFERTY: All right. The Enron tapes that CBS News aired last night on Dan Rather's program, really disgusting stuff. You've got these energy traders gloating about the skyrocketing price of energy and the fact that there were energy shortages out in California three, four years ago.

It really does not reflect too well on Enron. How damaging are the tapes? Carol in Connecticut writes, "So Martha Stewart is going to the slammer while the arrogant and greedy Ken Lay, with his many connections in the Bush administration, thumbs his nose and breezes off. And the media meekly drops the whole story on queue. No wonder lady justice covers her eyes, it's from pure shame." Paul in North Carolina, "These tapes should not be a surprise to anyone. What makes this difficult is what do you say to your kids when you're trying to raise honest, moral citizens? The message, it's OK to steal, lie and cheat when it's done in the workplace."

And Dave in Pennsylvania says, "There were so many bleeps in the tapes I couldn't make out what was being said. These guys ought to be writing for "The Sopranos."

HEMMER: Some of those bleeps were a little more accurate than others.

COLLINS: Hey, that was good.

CAFFERTY: Yes. Well, it was full of profanity.

HEMMER: That it was. Thank you, Jack.

(WEATHER REPORT)

HEMMER: See you tomorrow. Next hour here on CNN, countdown to the handover. The violence yet again today in Baghdad, is it ready for self-rule? How long will that take? Daryn Kagan looks at that next hour.

We are back in a moment on AMERICAN MORNING right after this.

(COMMERCIAL BREAK)

HEMMER: Thanks for being with us, everybody. We're out of time. Clearly out of time.

SERWER: Yes.

CAFFERTY: Gee, what a shame.

COLLINS: It's probably best that way today.

HEMMER: I'm telling you. Just in the nick of time.

CAFFERTY: It goes by so quickly.

HEMMER: That it does.

Here's Daryn Kagan at the CNN Center after a sick day yesterday. Hope you're feeling OK, Daryn.

DARYN KAGAN, CNN ANCHOR: I'm feeling much better.

HEMMER: And good morning to you.

KAGAN: Thank you, Billy. You guys have a great day there in New York City. We'll get started here.

Good morning from CNN headquarters in Atlanta. I'm Daryn Kagan. In the headlines right now, a spotlight on Saudi Arabia. A U.S. Army officer was slightly wounded by gunmen today while driving on a highway. An officer in a second vehicle was not hurt.

Near Mecca, a daylong standoff ended with Saudi security forces killing two militants. One of those killed was the Saudi -- on the Saudi list of most wanted terrorists.

The man once considered the next possible leader of Iraq may have been spying for Iran. Sources confirm to CNN that...