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CNN Live At Daybreak

Latest Violence in Iraq as Countdown to Handover of Power Begins; In OPEC Meeting, It's Expected Cartel Will Develop Plans to Lower Prices

Aired June 03, 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: Accused of leaking classified information, now this Iraqi says he is willing and ready to come to Washington to respond to the allegations.
This is DAYBREAK for Thursday, June 3.

And good morning to you.

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

Let me bring you up to date.

Military action this morning in the Iraqi city of Kufa. U.S. troops backed by tanks killed 30 insurgents who were firing mortars at a forward operating base. Four Americans are wounded.

In northern California, no immediate reports of damage from an earthquake in Placer County, near the Nevada border. The magnitude 4.5 quake struck early this morning along the northern shore of Lake Tahoe.

"Stone cold innocent," that's how Scott Peterson's attorney describes his client. Opening statements in the murder trial are over and the prosecution has called its first witness.

In money news, as the OPEC meeting gets under way in Beirut, crude oil prices are on a roller coaster ride. The price is $40.49 a barrel. That's down about a dollar from Tuesday's record high. Just the day before, the price zoomed up more than $2.

In sports, Marty Jones is the odds on favorite to win Saturday's Belmont stakes and the first Triple Crown in 26 years. Odds makers make the undefeated horse the 2-5 favorite in the race.

In culture, former President Bill Clinton is the featured speaker tonight at the publishing industry's annual convention in Chicago. His memoir, "My Life," will be published June 22 -- Chad.

(WEATHER REPORT)

COSTELLO: In Baghdad, Iraq's new interim government is holding meetings today, counting the 27 days until sovereignty in Baghdad. In Washington, the Bush administration says it has turned the corner in Iraq. But some critics say it's unclear what's around that corner.

Bill Prasad live in Washington for us with more -- good morning, Bill.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

The president leaves for Europe today, hoping to garner support for his policies in Iraq. But he may be in for a rough ride. Resistance to those policies, like the violence in Iraq, is not going away.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): A bomb explodes in Baghdad. Five dead, 37 wounded. In Kirkuk, an explosion rocked a major U.S. base. In Kufa, more clashes overnight. Officials say U.S. troops killed about 30 insurgents responsible for firing mortar rounds at a U.S. base yesterday.

The president says expect more violence. At a commencement speech before the U.S. Air Force Academy, Mr. Bush previewed a message he'll deliver at the 60th D-Day anniversary in Normandy later this week. Mr. Bush was trying to convince world leaders, some of whom he'll see this week, that his preemptive policy is justified.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If America were not fighting terrorists in Iraq and Afghanistan and elsewhere, what would these thousands of killers do, suddenly begin leading productive lives of service and charity?

PRASAD: Iraq's new interim government met for the first time Wednesday and will meet again today. It will rely on a multinational force to try to establish stability. The White House says the troops will change from an occupying force to partners with the new government.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The Iraqis don't like occupation any more than we would like occupation. And it is time for that occupation to end.

(END VIDEOTAPE)

PRASAD: The president hopes to establish a new beginning with trips to Italy and France. France is one of the countries that is reluctant to endorse a U.S.-backed resolution in the U.N. which would call on more countries to send more troops to Iraq. And, Carol, right after the trip to Europe, he moves on to Georgia for the World Economic Summit. So he'll have a tremendous opportunity to talk to a number of world leaders in the next seven days.

COSTELLO: Thank you.

Bill Prasad reporting live from Washington.

Ahmad Chalabi sent us a letter overnight from his attorneys. The letter says he's a scapegoat. As you may know, Chalabi is now accused of leaking classified U.S. information to Iran. Because of that, the "New York Times" reports polygraph testing is going on at the Pentagon, investigators trying to find out who leaked that information to Chalabi, specifically, that the U.S. had cracked Iranian intelligence codes.

Back to the letter now. Chalabi calls the charge "stupid and false." The letter goes on to say, "Dr. Chalabi denies all charges which have been anonymously leaked to the press. Dr. Chalabi would never endanger the national security of the United States." And the letter continues, "Dr. Chalabi is willing and ready to come to Washington to be interviewed fully by law enforcement agents on this subject and to answer all questions on this subject fully and without reservation."

One possible hitch, though. Legal experts say Chalabi could be prosecuted under U.S. law and could be arrested if he returns to the United States from Iraq.

President Bush meets at the White House this morning with Australia's prime minister, John Howard. And then, as you heard Bill say, he heads to Europe for the weekend. The first stop will be Italy, where Mr. Bush meets with Pope John Paul II and with the Italian prime minister. And then the president heads for Paris and a meeting with French President Jacques Chirac. By Sunday, he'll be in Normandy for the 60th anniversary of D-Day, in a ceremony for nearly 9,400 Americans overlooking Omaha Beach.

In Rome, President Bush is expected to get an enthusiastic official reception from his stalwart ally, Prime Minister Berlusconi. Unofficially, the welcome may not be so warm, as our bureau chief Alessio Vinci reports.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN CORRESPONDENT (voice-over): Italians welcome President Bush with mixed feelings. There is gratitude for allied help liberating Italy 60 years ago, but also growing discontent towards today's unwanted war in Iraq, a conflict that so far has claimed the lives of 20 Italian soldiers and four civilians, a body count people here are still trying to absorb.

MARTA DASSU, ASPEN INSTITUTE ITALIA: We know from recent polls that six out of 10 of the Italian public opinion thinks that we would have to withdraw by the end of June. So certainly there is the sense of a new vulnerability.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Like my friend Silvio.

VINCI: In Rome, Bush will meet two leaders with opposing views on that conflict -- Prime Minister Silvio Berlusconi, who stands shoulder to shoulder with the U.S. president. "The West isn't the aggressor," the prime minister said in a recent interview. "We are defending ourselves and trying to root out terrorists from their hideouts. That's what happened in Afghanistan and that is what Bush says is the case in Iraq."

A less enthusiastic welcome is expected at the Vatican. Pope John Paul II was a fierce opponent of military action and predicted war would bring chaos. JOHN FOLEY, VATICAN OFFICIAL: I think all of those warnings are now being shown to have been correct. The analysis was correct on the part of the Holy Father.

UNIDENTIFIED PROTESTERS: Stop, stop, stop the war!

VINCI: Tens of thousands plan to attend a large anti-war protest on Friday and security officials, who will deploy 10,000 policemen to patrol the city, are bracing for possible violence.

(on camera): President Bush will come nowhere near those demonstrators, who plan to gather here, in the historical Piazza Venezia, also home here behind me to the Tomb of the Unknown Soldier. An initial plan for the president to lay a wreath here was also scrapped because of security reasons.

(voice-over): The president will be in Italy for 36 hours, enough time to hear both praise and some criticism in a country still debating whether it was a good idea to invite him.

Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

COSTELLO: And back here at home, President Bush could face questions in the investigation into who leaked a covert CIA operative's identity. The White House says President Bush has had discussions with a private attorney in connection with a federal grand jury probe. Administration officials had previously said President Bush doesn't know who leaked the operative's identity to columnist Robert Novak.

In stories across America this Thursday, Nicholas Wiley, a sex offender released from prison in January, has now been charged with murdering two women in Syracuse, New York. One victim was found in the building where Wiley lives, the other in a dumpster outside of his building. Syracuse police say Wiley has indicated there are other victims.

In Florida, the Sarasota "Herald Tribune" is sharing some information on the last hours of Carlie Brucia. Carlie's abduction on February 1, captured by a surveillance camera, drew worldwide attention. Citing sealed court documents, the newspaper says suspect Joseph Smith told his brother where to find the 11-year-old's body.

In Tampa, Florida, arraignment for a woman facing a felony charge of leaving the scene of an accident. Two brothers, 13 and three, were killed. Jennifer Porter, who acknowledged being involved in the March 31 accident, has pleaded not guilty. Her lawyers say Porter was too scared to stop.

Still to come on DAYBREAK, emotional words from Scott Peterson's attorney and smiles from his family after opening statements. They say the truth is finally coming out.

And big plans in the works at the OPEC meetings. We'll take you live to Beirut to find out how it could affect the rest of us.

And a popular drug at the center of a lawsuit -- does Paxil help or harm patients?

This is DAYBREAK for June 3.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz.

One of the world's biggest drug companies being sued over claims it hid evidence that its leading anti-depressant may not work for children and teenagers and could actually make them suicidal.

Carrie Lee has more for us live from the NASDAQ market site -- good morning.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

The debate on this subject continues. New York Attorney General Eliot Spitzer is now suing GlaxoSmithKline, saying that the British drug maker withheld negative information about its anti-depressant Paxil in treating children and teens. The lawsuit claims Glaxo misrepresented data about Paxil's safety and effectiveness in patients under 18 and suppressed data that failed to show the drug worked and may have even suggested an increased risk of suicide.

Spitzer is seeking that Glaxo give up all profits from the sale of Paxil in New York for treating depression in children and teens. Also, he's seeking unspecified damages for affected consumers.

For its part, Glaxo is denying the allegations, saying they acted responsibly in conducting studies and disseminating that information.

Interesting to note, though, that U.S. and U.K. regulators last summer issued warnings that Paxil should not be taken by patients under the age of 18. It's approved in the United States only for adults. Doctors can choose to prescribe it for younger people if they want to. However, Eli Lily's Prozac is the only anti-depressant approved here for treating children.

So we'll see what happens with this lawsuit. But a pretty big deal, Carol.

COSTELLO: Definitely so.

Mr. Spitzer is always busy, isn't he?

LEE: He is very busy. He's gone after the mutual funds, a lot of the financial companies and now moving on to the drug sector.

COSTELLO: Carrie Lee live from the NASDAQ market site.

Your news, money, weather and sports.

It's 6:14 Eastern. Here's what's all new this morning.

Military action this morning in the Iraqi city of Kufa. U.S. troops backed by tanks killed 30 insurgents who were firing mortars at a forward operating base. Four Americans are wounded.

This morning, malfunctioning air traffic control computers grounded all flights from Britain for about 45 minutes. They're up and running again, but long delays persist.

In money news, several U.S. airlines are in financial trouble again and a House committee holds hearings today on airline finances. Among the witnesses, CEOs of Continental, Northwest, AirTran, America West, Frontier and United.

In sports, Kurt Warner's agent has been talking to the New York Giants, but there's no announcement yet. Warner is the quarterback who led the Rams to the Super Bowl twice. But St. Louis released him on Tuesday.

In culture, it may be the first of its kind, an ad by the Philadelphia Tourism Agency encouraging gay people to visit the city. The closing line? "Get your history straight and your night life gay" -- Chad.

CHAD MYERS, CNN CORRESPONDENT: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

OPEC oil ministers are meeting in Lebanon at this hour and they are expected to increase production to bring down the price of oil. But analysts say you might not see any changes at the pump any time soon.

Our Beirut bureau chief, Brent Sadler, is on the story.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT (voice-over): In Beirut, all eyes are on Saudi Arabia's oil minister, Ali Al-Naimi, signaling support for an OPEC increase in oil production. But he warns that surging prices are being driven higher not just by supply shortages, but what he calls an exaggerated perception that Saudi supplies could be seriously disrupted by terrorist action.

ALI AL-NAIMI, SAUDI OIL MINISTER: You may call it terrorism. You may call it expectation of destruction of oil and gas facilities in producing areas and so forth. But increasing production does not help this perception.

SADLER: Saudi Arabia is like the world's central bank of oil, sitting on reserves of 260 billion barrels, heavily protected and so far untouched by terrorism. But terrorist threats to those supplies intensified after Saturday's attacks on foreign workers that left 22 people dead in the Saudi oil hub of Khobar.

Oil ministers remain jittery and the so-called fear factor premium, say oil experts, has added as much as $10 to the price of a barrel of oil.

(voice-over): Gasoline costs about a dollar more a gallon here in Beirut than it does in the United States, and about half what motorists pay in Britain. Yet rising pump prices were enough to spark violent protests here only last week.

(voice-over): They turned deadly when soldiers opened fire as anti-government protesters threw stones and blocked streets. Now, oil ministers are trying to cool an over heated market by promising to pump more oil and trying to persuade customers that Saudi Arabia can block terrorist attacks.

UNIDENTIFIED MALE: So the government is strong enough to handle this problem, but Saudi Arabia is suffering from the same disease the world is suffering now, and they are fighting it.

SADLER: With a head on battle to combat terror, protect Saudi oil wealth and keep Middle East crude flowing at stable prices.

(END VIDEOTAPE)

SADLER: And that's precisely what's happening here I the Lebanese capital, Beirut, with OPEC's oil ministers expected to put in real terms, Carol, about one million to 1.5 million barrels of oil into the market a day to cool those raging prices. But really there's no quick fix to the problem of how much you're paying for gas at gas stations. That is unlikely to tumble any time soon and in real terms, again, it's going to take at least six, perhaps eight, weeks for any extra oil in the market to register in terms of pump prices.

So don't expect relief any time soon -- Carol.

COSTELLO: Not what consumers want to hear.

Brent Sadler live from Beirut this morning.

So OPEC meets and we throw stuff at the television, hoping it will do something to make gas prices drop. But are we misplacing the blame?

You just heard what Brent said.

Joining us this morning, Jeff Rosensweig, who's the associate dean of business -- associate dean at the business school at Emory University.

He's also a finance professor.

Thanks for joining us this morning.

So, OPEC is meeting. OPEC often says it's the scapegoat for the high price of oil. Is that true? Is there anything OPEC can do in these meetings to bring down the price of gas in the short run?

JEFF ROSENSWEIG, EMORY UNIVERSITY: In this case, they are the scapegoat, and they're already doing what they can. We saw the price of oil come down a lot yesterday, about six percent over $2, because they started pumping oil yesterday, which was a nice sign, because sometimes they get to these meetings and they talk...

COSTELLO: Well, that's a sign that OPEC can do something to bring the price of gas down.

ROSENSWEIG: Except that it went up a little bit the day before. You know, it's really fluctuating a lot. So I think what they can do is they can do everything they can, which they're doing, or they will do, I think, at the end of this meeting. The only thing is they can only do so much because we're in a very strange situation in the world right now where it's really demand that's driving the equation. It's not supply.

They can control supply, but the U.S. is the world's biggest consumer of demand and we have a new number two and rising fast, and that's China.

COSTELLO: Oh.

ROSENSWEIG: And with 1.3 billion Chinese people -- and they don't all have a car yet. Most of them still have a bicycle. But there's a tremendous increase, about 40 percent a year, of moving into a car and a tremendous increase in their use of steel and then steel for construction.

They've recently passed number -- Japan to be number two in the world and they're catching up on the U.S. in terms of oil consumption.

COSTELLO: So...

ROSENSWEIG: And I don't see them stopping.

COSTELLO: So if the demand continues to rise, could we see gas prices go even higher, despite what OPEC does?

ROSENSWEIG: We could because they have limited capacity at this point. One great thing, from our standpoint, about OPEC, is they always cheat on their agreements. They've been producing more than their agreement anyway. Now, they're adding a little bit. Like I said, yesterday, the ones who can throw in a little bit more. Saudi Arabia usually has a little bit excess capacity. So they're helping out. They're our ally and they want to remain our ally. They know we don't want to get mad at them. But at some point, they run out of their own supply -- they've got limited amounts -- whereas it's not just China at this point, although they're number one in terms of growth. India, as you've heard about, is growing so much. And they've got a billion people.

COSTELLO: Oh, I understand. The demand is going up and up. I just wanted to say this, because I was looking at the list of Fortune 500 companies.

ROSENSWEIG: Yes?

COSTELLO: Exxon comes in at number two.

ROSENSWEIG: That's right.

COSTELLO: I want to get this right. Chevron Texaco comes in at number six, Conoco-Phillips jumped five spots to number seven. Oil companies are making out.

ROSENSWEIG: Yes.

COSTELLO: Why aren't they giving us a break?

ROSENSWEIG: Well, that is one thing that bothers me. I decided to do some easy calculations yesterday. Even when the price of oil is $42 a barrel, there's 42 gallons in a barrel of oil. So that's about a dollar a gallon. And I'm paying over $2.

Now, I know there's some taxes.

COSTELLO: True.

ROSENSWEIG: But it also means that the refinery margins have been going up. You know, it's -- we don't have enough capacity and an oil -- some oil companies have been closing refineries instead of trying to open more. And that is bothering me, too.

COSTELLO: Well, they're clearly making money. So why aren't they getting out there and building more refineries?

ROSENSWEIG: Yes. And I...

COSTELLO: Or bringing the costs down just temporarily to give us consumers a break while they reap all those profits?

ROSENSWEIG: Well, one thing is if they bring it down too much and bring us a break, we're going to go out and keep buying hummers. I mean we've got to look at ourselves, too. And that's the other side of the equation.

Have we seen any leadership on this? Have we seen the president talk to oil companies and say what's going on with the refineries? Have we seen ourselves challenged to conserve at all? You know, we're all complaining about the price, but there's no challenge to car pool or take the bus or something, or stay home once in a while.

COSTELLO: We love our cars.

ROSENSWEIG: We do. And if it was just a car, it'd be nice. It's the hummer now.

COSTELLO: By the way, there are many car companies in the Fortune 500 top list, as well.

ROSENSWEIG: Yes. But you are right, Citigroup used to be the most profitable company in the world, the bank? Now it is ExxonMobil, and it's over $20 billion a year after tax profit. That's a lot of money after tax profit, $20 billion.

COSTELLO: There's something just not quite right there.

Thank you very much, Dr. Rosensweig, for coming in this morning.

ROSENSWEIG: You're welcome.

COSTELLO: We appreciate it.

ROSENSWEIG: My pleasure.

COSTELLO: Still to come on DAYBREAK, kicked out of class for wearing his beliefs -- is it a double standard of one school's enforcement of free speech?

And our DAYBREAK Photo of the Day -- it's me! There it is. What is it? We'll tell you after a break.

(COMMERCIAL BREAK)

COSTELLO: Time for our DAYBREAK Eye-Openers now.

School dress code or religious expression? That's now up to a California federal court. A 16-year-old's family is suing after he was suspended from school for wearing a T-shirt that said, "Homosexuality Is Shameful." The high school sophomore says he was expressing his sincerely held religious beliefs.

A hot dog vendor in Michigan has apparently struck a bad chord. His operatic rendition of the words "hot dog" have become synonymous with the Detroit Tigers' home games. But no more. He's been told to pipe down. And he can't even say who told him. He's suffering in silence. He's not allowed to comment. And I've heard him and we'll miss him.

Uh-oh, the weekend barbecue is now canceled. A 180-foot crane called in to remove some trees from this house fell over, slicing through the home. The home literally sliced in half. This happened in Georgia. The homeowner was eating dinner when the crane fell. She wasn't hurt, but of course her house has now been condemned.

Now instead of a barbecue, ummm, I smell a lawsuit.

So did you figure it out, the DAYBREAK Photo of the Day? It was not me. It is a shot from the panoramic camera on NASA's Mars rover Spirit. You were wondering if that was still up there, weren't you? Well, it is. And as you can see, it's showing some more rocks on the red planet.

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

Caught on tape, some troubling talk among traders. Is it evidence now in the case against Enron?

Plus, is it right or wrong to clone? The U.N. taking up that debate. We'll hear from someone who's argued the case himself.

And Scott Peterson on trial -- day three gets under way. We'll share some of the revelations from the defense's opening statements.

(COMMERCIAL BREAK)

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Aired June 3, 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: Accused of leaking classified information, now this Iraqi says he is willing and ready to come to Washington to respond to the allegations.
This is DAYBREAK for Thursday, June 3.

And good morning to you.

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

Let me bring you up to date.

Military action this morning in the Iraqi city of Kufa. U.S. troops backed by tanks killed 30 insurgents who were firing mortars at a forward operating base. Four Americans are wounded.

In northern California, no immediate reports of damage from an earthquake in Placer County, near the Nevada border. The magnitude 4.5 quake struck early this morning along the northern shore of Lake Tahoe.

"Stone cold innocent," that's how Scott Peterson's attorney describes his client. Opening statements in the murder trial are over and the prosecution has called its first witness.

In money news, as the OPEC meeting gets under way in Beirut, crude oil prices are on a roller coaster ride. The price is $40.49 a barrel. That's down about a dollar from Tuesday's record high. Just the day before, the price zoomed up more than $2.

In sports, Marty Jones is the odds on favorite to win Saturday's Belmont stakes and the first Triple Crown in 26 years. Odds makers make the undefeated horse the 2-5 favorite in the race.

In culture, former President Bill Clinton is the featured speaker tonight at the publishing industry's annual convention in Chicago. His memoir, "My Life," will be published June 22 -- Chad.

(WEATHER REPORT)

COSTELLO: In Baghdad, Iraq's new interim government is holding meetings today, counting the 27 days until sovereignty in Baghdad. In Washington, the Bush administration says it has turned the corner in Iraq. But some critics say it's unclear what's around that corner.

Bill Prasad live in Washington for us with more -- good morning, Bill.

BILL PRASAD, CNN CORRESPONDENT: Good morning, Carol.

The president leaves for Europe today, hoping to garner support for his policies in Iraq. But he may be in for a rough ride. Resistance to those policies, like the violence in Iraq, is not going away.

(BEGIN VIDEOTAPE)

PRASAD (voice-over): A bomb explodes in Baghdad. Five dead, 37 wounded. In Kirkuk, an explosion rocked a major U.S. base. In Kufa, more clashes overnight. Officials say U.S. troops killed about 30 insurgents responsible for firing mortar rounds at a U.S. base yesterday.

The president says expect more violence. At a commencement speech before the U.S. Air Force Academy, Mr. Bush previewed a message he'll deliver at the 60th D-Day anniversary in Normandy later this week. Mr. Bush was trying to convince world leaders, some of whom he'll see this week, that his preemptive policy is justified.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If America were not fighting terrorists in Iraq and Afghanistan and elsewhere, what would these thousands of killers do, suddenly begin leading productive lives of service and charity?

PRASAD: Iraq's new interim government met for the first time Wednesday and will meet again today. It will rely on a multinational force to try to establish stability. The White House says the troops will change from an occupying force to partners with the new government.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: The Iraqis don't like occupation any more than we would like occupation. And it is time for that occupation to end.

(END VIDEOTAPE)

PRASAD: The president hopes to establish a new beginning with trips to Italy and France. France is one of the countries that is reluctant to endorse a U.S.-backed resolution in the U.N. which would call on more countries to send more troops to Iraq. And, Carol, right after the trip to Europe, he moves on to Georgia for the World Economic Summit. So he'll have a tremendous opportunity to talk to a number of world leaders in the next seven days.

COSTELLO: Thank you.

Bill Prasad reporting live from Washington.

Ahmad Chalabi sent us a letter overnight from his attorneys. The letter says he's a scapegoat. As you may know, Chalabi is now accused of leaking classified U.S. information to Iran. Because of that, the "New York Times" reports polygraph testing is going on at the Pentagon, investigators trying to find out who leaked that information to Chalabi, specifically, that the U.S. had cracked Iranian intelligence codes.

Back to the letter now. Chalabi calls the charge "stupid and false." The letter goes on to say, "Dr. Chalabi denies all charges which have been anonymously leaked to the press. Dr. Chalabi would never endanger the national security of the United States." And the letter continues, "Dr. Chalabi is willing and ready to come to Washington to be interviewed fully by law enforcement agents on this subject and to answer all questions on this subject fully and without reservation."

One possible hitch, though. Legal experts say Chalabi could be prosecuted under U.S. law and could be arrested if he returns to the United States from Iraq.

President Bush meets at the White House this morning with Australia's prime minister, John Howard. And then, as you heard Bill say, he heads to Europe for the weekend. The first stop will be Italy, where Mr. Bush meets with Pope John Paul II and with the Italian prime minister. And then the president heads for Paris and a meeting with French President Jacques Chirac. By Sunday, he'll be in Normandy for the 60th anniversary of D-Day, in a ceremony for nearly 9,400 Americans overlooking Omaha Beach.

In Rome, President Bush is expected to get an enthusiastic official reception from his stalwart ally, Prime Minister Berlusconi. Unofficially, the welcome may not be so warm, as our bureau chief Alessio Vinci reports.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN CORRESPONDENT (voice-over): Italians welcome President Bush with mixed feelings. There is gratitude for allied help liberating Italy 60 years ago, but also growing discontent towards today's unwanted war in Iraq, a conflict that so far has claimed the lives of 20 Italian soldiers and four civilians, a body count people here are still trying to absorb.

MARTA DASSU, ASPEN INSTITUTE ITALIA: We know from recent polls that six out of 10 of the Italian public opinion thinks that we would have to withdraw by the end of June. So certainly there is the sense of a new vulnerability.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Like my friend Silvio.

VINCI: In Rome, Bush will meet two leaders with opposing views on that conflict -- Prime Minister Silvio Berlusconi, who stands shoulder to shoulder with the U.S. president. "The West isn't the aggressor," the prime minister said in a recent interview. "We are defending ourselves and trying to root out terrorists from their hideouts. That's what happened in Afghanistan and that is what Bush says is the case in Iraq."

A less enthusiastic welcome is expected at the Vatican. Pope John Paul II was a fierce opponent of military action and predicted war would bring chaos. JOHN FOLEY, VATICAN OFFICIAL: I think all of those warnings are now being shown to have been correct. The analysis was correct on the part of the Holy Father.

UNIDENTIFIED PROTESTERS: Stop, stop, stop the war!

VINCI: Tens of thousands plan to attend a large anti-war protest on Friday and security officials, who will deploy 10,000 policemen to patrol the city, are bracing for possible violence.

(on camera): President Bush will come nowhere near those demonstrators, who plan to gather here, in the historical Piazza Venezia, also home here behind me to the Tomb of the Unknown Soldier. An initial plan for the president to lay a wreath here was also scrapped because of security reasons.

(voice-over): The president will be in Italy for 36 hours, enough time to hear both praise and some criticism in a country still debating whether it was a good idea to invite him.

Alessio Vinci, CNN, Rome.

(END VIDEOTAPE)

COSTELLO: And back here at home, President Bush could face questions in the investigation into who leaked a covert CIA operative's identity. The White House says President Bush has had discussions with a private attorney in connection with a federal grand jury probe. Administration officials had previously said President Bush doesn't know who leaked the operative's identity to columnist Robert Novak.

In stories across America this Thursday, Nicholas Wiley, a sex offender released from prison in January, has now been charged with murdering two women in Syracuse, New York. One victim was found in the building where Wiley lives, the other in a dumpster outside of his building. Syracuse police say Wiley has indicated there are other victims.

In Florida, the Sarasota "Herald Tribune" is sharing some information on the last hours of Carlie Brucia. Carlie's abduction on February 1, captured by a surveillance camera, drew worldwide attention. Citing sealed court documents, the newspaper says suspect Joseph Smith told his brother where to find the 11-year-old's body.

In Tampa, Florida, arraignment for a woman facing a felony charge of leaving the scene of an accident. Two brothers, 13 and three, were killed. Jennifer Porter, who acknowledged being involved in the March 31 accident, has pleaded not guilty. Her lawyers say Porter was too scared to stop.

Still to come on DAYBREAK, emotional words from Scott Peterson's attorney and smiles from his family after opening statements. They say the truth is finally coming out.

And big plans in the works at the OPEC meetings. We'll take you live to Beirut to find out how it could affect the rest of us.

And a popular drug at the center of a lawsuit -- does Paxil help or harm patients?

This is DAYBREAK for June 3.

(COMMERCIAL BREAK)

COSTELLO: Time for a little business buzz.

One of the world's biggest drug companies being sued over claims it hid evidence that its leading anti-depressant may not work for children and teenagers and could actually make them suicidal.

Carrie Lee has more for us live from the NASDAQ market site -- good morning.

CARRIE LEE, CNN CORRESPONDENT: Hi, Carol.

The debate on this subject continues. New York Attorney General Eliot Spitzer is now suing GlaxoSmithKline, saying that the British drug maker withheld negative information about its anti-depressant Paxil in treating children and teens. The lawsuit claims Glaxo misrepresented data about Paxil's safety and effectiveness in patients under 18 and suppressed data that failed to show the drug worked and may have even suggested an increased risk of suicide.

Spitzer is seeking that Glaxo give up all profits from the sale of Paxil in New York for treating depression in children and teens. Also, he's seeking unspecified damages for affected consumers.

For its part, Glaxo is denying the allegations, saying they acted responsibly in conducting studies and disseminating that information.

Interesting to note, though, that U.S. and U.K. regulators last summer issued warnings that Paxil should not be taken by patients under the age of 18. It's approved in the United States only for adults. Doctors can choose to prescribe it for younger people if they want to. However, Eli Lily's Prozac is the only anti-depressant approved here for treating children.

So we'll see what happens with this lawsuit. But a pretty big deal, Carol.

COSTELLO: Definitely so.

Mr. Spitzer is always busy, isn't he?

LEE: He is very busy. He's gone after the mutual funds, a lot of the financial companies and now moving on to the drug sector.

COSTELLO: Carrie Lee live from the NASDAQ market site.

Your news, money, weather and sports.

It's 6:14 Eastern. Here's what's all new this morning.

Military action this morning in the Iraqi city of Kufa. U.S. troops backed by tanks killed 30 insurgents who were firing mortars at a forward operating base. Four Americans are wounded.

This morning, malfunctioning air traffic control computers grounded all flights from Britain for about 45 minutes. They're up and running again, but long delays persist.

In money news, several U.S. airlines are in financial trouble again and a House committee holds hearings today on airline finances. Among the witnesses, CEOs of Continental, Northwest, AirTran, America West, Frontier and United.

In sports, Kurt Warner's agent has been talking to the New York Giants, but there's no announcement yet. Warner is the quarterback who led the Rams to the Super Bowl twice. But St. Louis released him on Tuesday.

In culture, it may be the first of its kind, an ad by the Philadelphia Tourism Agency encouraging gay people to visit the city. The closing line? "Get your history straight and your night life gay" -- Chad.

CHAD MYERS, CNN CORRESPONDENT: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

OPEC oil ministers are meeting in Lebanon at this hour and they are expected to increase production to bring down the price of oil. But analysts say you might not see any changes at the pump any time soon.

Our Beirut bureau chief, Brent Sadler, is on the story.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT (voice-over): In Beirut, all eyes are on Saudi Arabia's oil minister, Ali Al-Naimi, signaling support for an OPEC increase in oil production. But he warns that surging prices are being driven higher not just by supply shortages, but what he calls an exaggerated perception that Saudi supplies could be seriously disrupted by terrorist action.

ALI AL-NAIMI, SAUDI OIL MINISTER: You may call it terrorism. You may call it expectation of destruction of oil and gas facilities in producing areas and so forth. But increasing production does not help this perception.

SADLER: Saudi Arabia is like the world's central bank of oil, sitting on reserves of 260 billion barrels, heavily protected and so far untouched by terrorism. But terrorist threats to those supplies intensified after Saturday's attacks on foreign workers that left 22 people dead in the Saudi oil hub of Khobar.

Oil ministers remain jittery and the so-called fear factor premium, say oil experts, has added as much as $10 to the price of a barrel of oil.

(voice-over): Gasoline costs about a dollar more a gallon here in Beirut than it does in the United States, and about half what motorists pay in Britain. Yet rising pump prices were enough to spark violent protests here only last week.

(voice-over): They turned deadly when soldiers opened fire as anti-government protesters threw stones and blocked streets. Now, oil ministers are trying to cool an over heated market by promising to pump more oil and trying to persuade customers that Saudi Arabia can block terrorist attacks.

UNIDENTIFIED MALE: So the government is strong enough to handle this problem, but Saudi Arabia is suffering from the same disease the world is suffering now, and they are fighting it.

SADLER: With a head on battle to combat terror, protect Saudi oil wealth and keep Middle East crude flowing at stable prices.

(END VIDEOTAPE)

SADLER: And that's precisely what's happening here I the Lebanese capital, Beirut, with OPEC's oil ministers expected to put in real terms, Carol, about one million to 1.5 million barrels of oil into the market a day to cool those raging prices. But really there's no quick fix to the problem of how much you're paying for gas at gas stations. That is unlikely to tumble any time soon and in real terms, again, it's going to take at least six, perhaps eight, weeks for any extra oil in the market to register in terms of pump prices.

So don't expect relief any time soon -- Carol.

COSTELLO: Not what consumers want to hear.

Brent Sadler live from Beirut this morning.

So OPEC meets and we throw stuff at the television, hoping it will do something to make gas prices drop. But are we misplacing the blame?

You just heard what Brent said.

Joining us this morning, Jeff Rosensweig, who's the associate dean of business -- associate dean at the business school at Emory University.

He's also a finance professor.

Thanks for joining us this morning.

So, OPEC is meeting. OPEC often says it's the scapegoat for the high price of oil. Is that true? Is there anything OPEC can do in these meetings to bring down the price of gas in the short run?

JEFF ROSENSWEIG, EMORY UNIVERSITY: In this case, they are the scapegoat, and they're already doing what they can. We saw the price of oil come down a lot yesterday, about six percent over $2, because they started pumping oil yesterday, which was a nice sign, because sometimes they get to these meetings and they talk...

COSTELLO: Well, that's a sign that OPEC can do something to bring the price of gas down.

ROSENSWEIG: Except that it went up a little bit the day before. You know, it's really fluctuating a lot. So I think what they can do is they can do everything they can, which they're doing, or they will do, I think, at the end of this meeting. The only thing is they can only do so much because we're in a very strange situation in the world right now where it's really demand that's driving the equation. It's not supply.

They can control supply, but the U.S. is the world's biggest consumer of demand and we have a new number two and rising fast, and that's China.

COSTELLO: Oh.

ROSENSWEIG: And with 1.3 billion Chinese people -- and they don't all have a car yet. Most of them still have a bicycle. But there's a tremendous increase, about 40 percent a year, of moving into a car and a tremendous increase in their use of steel and then steel for construction.

They've recently passed number -- Japan to be number two in the world and they're catching up on the U.S. in terms of oil consumption.

COSTELLO: So...

ROSENSWEIG: And I don't see them stopping.

COSTELLO: So if the demand continues to rise, could we see gas prices go even higher, despite what OPEC does?

ROSENSWEIG: We could because they have limited capacity at this point. One great thing, from our standpoint, about OPEC, is they always cheat on their agreements. They've been producing more than their agreement anyway. Now, they're adding a little bit. Like I said, yesterday, the ones who can throw in a little bit more. Saudi Arabia usually has a little bit excess capacity. So they're helping out. They're our ally and they want to remain our ally. They know we don't want to get mad at them. But at some point, they run out of their own supply -- they've got limited amounts -- whereas it's not just China at this point, although they're number one in terms of growth. India, as you've heard about, is growing so much. And they've got a billion people.

COSTELLO: Oh, I understand. The demand is going up and up. I just wanted to say this, because I was looking at the list of Fortune 500 companies.

ROSENSWEIG: Yes?

COSTELLO: Exxon comes in at number two.

ROSENSWEIG: That's right.

COSTELLO: I want to get this right. Chevron Texaco comes in at number six, Conoco-Phillips jumped five spots to number seven. Oil companies are making out.

ROSENSWEIG: Yes.

COSTELLO: Why aren't they giving us a break?

ROSENSWEIG: Well, that is one thing that bothers me. I decided to do some easy calculations yesterday. Even when the price of oil is $42 a barrel, there's 42 gallons in a barrel of oil. So that's about a dollar a gallon. And I'm paying over $2.

Now, I know there's some taxes.

COSTELLO: True.

ROSENSWEIG: But it also means that the refinery margins have been going up. You know, it's -- we don't have enough capacity and an oil -- some oil companies have been closing refineries instead of trying to open more. And that is bothering me, too.

COSTELLO: Well, they're clearly making money. So why aren't they getting out there and building more refineries?

ROSENSWEIG: Yes. And I...

COSTELLO: Or bringing the costs down just temporarily to give us consumers a break while they reap all those profits?

ROSENSWEIG: Well, one thing is if they bring it down too much and bring us a break, we're going to go out and keep buying hummers. I mean we've got to look at ourselves, too. And that's the other side of the equation.

Have we seen any leadership on this? Have we seen the president talk to oil companies and say what's going on with the refineries? Have we seen ourselves challenged to conserve at all? You know, we're all complaining about the price, but there's no challenge to car pool or take the bus or something, or stay home once in a while.

COSTELLO: We love our cars.

ROSENSWEIG: We do. And if it was just a car, it'd be nice. It's the hummer now.

COSTELLO: By the way, there are many car companies in the Fortune 500 top list, as well.

ROSENSWEIG: Yes. But you are right, Citigroup used to be the most profitable company in the world, the bank? Now it is ExxonMobil, and it's over $20 billion a year after tax profit. That's a lot of money after tax profit, $20 billion.

COSTELLO: There's something just not quite right there.

Thank you very much, Dr. Rosensweig, for coming in this morning.

ROSENSWEIG: You're welcome.

COSTELLO: We appreciate it.

ROSENSWEIG: My pleasure.

COSTELLO: Still to come on DAYBREAK, kicked out of class for wearing his beliefs -- is it a double standard of one school's enforcement of free speech?

And our DAYBREAK Photo of the Day -- it's me! There it is. What is it? We'll tell you after a break.

(COMMERCIAL BREAK)

COSTELLO: Time for our DAYBREAK Eye-Openers now.

School dress code or religious expression? That's now up to a California federal court. A 16-year-old's family is suing after he was suspended from school for wearing a T-shirt that said, "Homosexuality Is Shameful." The high school sophomore says he was expressing his sincerely held religious beliefs.

A hot dog vendor in Michigan has apparently struck a bad chord. His operatic rendition of the words "hot dog" have become synonymous with the Detroit Tigers' home games. But no more. He's been told to pipe down. And he can't even say who told him. He's suffering in silence. He's not allowed to comment. And I've heard him and we'll miss him.

Uh-oh, the weekend barbecue is now canceled. A 180-foot crane called in to remove some trees from this house fell over, slicing through the home. The home literally sliced in half. This happened in Georgia. The homeowner was eating dinner when the crane fell. She wasn't hurt, but of course her house has now been condemned.

Now instead of a barbecue, ummm, I smell a lawsuit.

So did you figure it out, the DAYBREAK Photo of the Day? It was not me. It is a shot from the panoramic camera on NASA's Mars rover Spirit. You were wondering if that was still up there, weren't you? Well, it is. And as you can see, it's showing some more rocks on the red planet.

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

Caught on tape, some troubling talk among traders. Is it evidence now in the case against Enron?

Plus, is it right or wrong to clone? The U.N. taking up that debate. We'll hear from someone who's argued the case himself.

And Scott Peterson on trial -- day three gets under way. We'll share some of the revelations from the defense's opening statements.

(COMMERCIAL BREAK)

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