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CNN Live At Daybreak

In Nevada, Wildfire Has Burned 7,100 Acres, Threatening More Than 500 Homes and Businesses; Martha Stewart Faces Sentencing

Aired July 16, 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.


FREDRICKA WHITFIELD, CNN ANCHOR: Hundreds of firefighters battling thousands of burning acres.
It's Friday, July 16, and this is DAYBREAK.

Good morning.

From the CNN Global Headquarters in Atlanta, I'm Fredricka Whitfield in for Carol Costello this morning.

Now in the news, the question this morning -- will home fashion queen Martha Stewart go to jail? Four hours from now, Stewart appears before a federal judge in Manhattan. She's being sentenced for lying about a stock sale. Stewart was convicted last March.

In the latest move to try to keep a Filipino truck driver from being beheaded, the Philippine government is recalling the leader of its humanitarian contingent in Iraq and 10 more of its members today.

A tragic story at a girls' school in southern India at this hour. A fast moving fire has killed at least 75 children. Another 28 have been hospitalized. We'll have a live report from India in just a few minutes.

The 15th International AIDS Conference has just wrapped up in Thailand with much fanfare and calls to action. Delegates focused on how to keep, rather, get cheaper generic medications to millions of AIDS victims. Researchers say an AIDS vaccine is still years away.

Keeping you informed, CNN, the most trusted name in news.

And flood waters are receding in the Northeast. The National Weather Service called this a 1,000 year storm. Heavy rain triggered flooding in New Jersey, Pennsylvania, Delaware and Maryland. The vast majority of residents who sustained damage don't have flood insurance.

In eastern Pennsylvania, residents of a Campbelltown subdivision are returning to their homes to find not all -- not very much being left. Powerful storms and a tornado damaged at least 100 homes, leveling some of them. The tornado was on the ground for 10 to 15 minutes, tearing a path more than seven miles long.

And then out West, in Nevada, a wildfire that's burned about 7,100 acres near Carson City is threatening more than 500 homes and businesses. Thirty mile an hour winds fanned the flames toward the city of 50,000. The Carson City fire has burned more than a dozen homes so far. But firefighters may be making some progress.

For the latest fire information, Officer Paddy Hardy joins us now on the telephone.

And what kind of progress is being made, Officer?

PADDY HARDY, SIERRA FRONT DISPATCH CENTER: Well, not very much progress. But we are starting to see some improvements in being able to get some line around. I have no measurements as to the percentage of line being completed, but there is some line being completed. We still have evacuations under order for Timberline, Lake View, Silver Oaks and Franktown, which are areas to the north and west of Carson City.

WHITFIELD: How difficult is it to get the evacuation going? Are people cooperating, for the most part?

HARDY: From what I understand, people are cooperating. The evacuations are being handled by the Carson City Sheriff's office and the Washoe County Sheriff's office.

WHITFIELD: And this is a fire that's still believed to have been sparked by, perhaps, some kids who were playing in the area and may have set this accidentally.

Is that where the investigation is going?

HARDY: My understanding is that the investigation is leading in the directions of possibly teenagers outside partying, yes.

WHITFIELD: And give me a sense as to how the forecast might be impeding or perhaps helping in the firefighting efforts.

HARDY: Unfortunately, the forecast for the weather today looks about the same as yesterday, with extreme low humidity and erratic winds driving the fire. So it'll be very hard to predict the fire's behavior.

WHITFIELD: All right, Officer Paddy Hardy, thanks very much for joining us and best wishes and best of luck on the continuing efforts to get this fire under control outside of Carson City.

CHAD MYERS, CNN METEOROLOGIST: Right.

WHITFIELD: All right, let's check in with Chad Myers.

It's very dry, as you heard the officer say.

MYERS: It is. It is, yes.

WHITFIELD: And it just doesn't seem to be getting any better.

MYERS: Yes, really. It's called the Waterfall Fire, officially, is the name of it from the Forest Service. We'll probably know it as the Carson City Fire at some point in time.

Zero percent contained, 2,000 acres so far, and still burning completely out of control here. And here's some of the pictures from yesterday. A lot of wind with the system, as well, part of the problem, and absolutely no rain and no rain in the forecast whatsoever.

There was some rain east of there into parts of Utah and Colorado, but that moisture is just not headed back to Reno, which is way back there in Carson City, right there on the map.

Here's what was going on yesterday. We had all of the fire running up the hillsides. And now this is right around Lake Tahoe. You've got a lot of mountains going on and you've got a lot of hillsides going on there. You had the fire coming up the hillside with all of this erratic wind, blowing it up and the firefighters thought they had a good handle on it at the top of the ridge. The problem was the sparks from this storm actually blew off the top of the trees and then back into some of the subdivisions here, not that far from Carson City. And that's when they actually lost a couple of homes, from the blowing sparks.

We had winds over 30 miles per hour yesterday and these sparks were just advancing the fire line closer and closer to the subdivisions, closer and closer to the homes here. And very -- we had a couple of roads that actually acted as fire barriers for a while but, you know, and the road is, what, maybe 30, 40 feet wide? As soon as that wind blew more sparks over the road, it was just all over. The firefighters lost the containment there again.

(WEATHER REPORT)

WHITFIELD: Well, just about four hours from now, Martha Stewart will find out how much time, if any, she has to spend in prison.

CNN's Ali Velshi joins us from New York to tell us about today's court proceedings -- and, Ali, I understand that Martha and her team tried to make a plea to the court that if she were to go to jail, her company would fail and hundreds, if not thousands, of people would be put out of work.

ALI VELSHI, CNN CORRESPONDENT: Yes, Fred, that's exactly what's happened. There are two major arguments that the lawyers for Martha Stewart are making today. One is exactly that, that she is critical to her company, it's a publicly listed company, and it employs many, many people, and that if she goes to jail, her brand is tarnished and it is going to cost the company. We've obviously already seen that, with ad sales suffering and things like that.

The other case that they're making is that this case is extraordinary in that the things that got Martha Stewart into trouble were not habitual behavior. Instead, they were a one time event.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): It was no ordinary trial. She's no ordinary convict. So why should Martha Stewart's sentencing be ordinary? Federal sentencing guidelines suggest a jail term of 10 to 16 months. But Stewart's lawyers say they've got a better idea -- keep her out of jail and have her teach disadvantaged women how to run their own businesses.

Herb Holter (ph) was hired to be Stewart's stay out of jail expert.

HERB HOLTER: The alternative that we developed for Martha was to work at the Women's Venture Fund, which is a non-profit organization in New York, in assisting low income and minority women in developing their own businesses.

VELSHI: Attorney Joseph Bondy has spent a lot of time trying to keep clients out of jail.

He likes Stewart's chances with this one.

JOSEPH BONDY, ATTORNEY: That would be considered as a charitable activity and you would make the argument that those charitable activities should warrant the downward reduction.

VELSHI: And if that doesn't work, this prison in Danbury, Connecticut, or another low security prison nearby, could soon be Martha's home.

JOYCE ELLWANGER, FORMER DANBURY INMATE: Danbury is a low security institution. So most of the people that are there are there for non-violent offenses. And many of them are drug related.

VELSHI: Joyce Ellwanger, a peace activist who served six months at Danbury, says if Martha ends up at a place like this, it won't be easy.

ELLWANGER: I think she's going to feel like I did -- diminished. A lot of choices that she might like to make for herself are gone.

(END VIDEOTAPE)

VELSHI: Fred, even if the judge doesn't buy the defense's argument that there shouldn't be any prison time imposed, it's not likely that even though this dramatic trial has offered lots of available shots for the dozens of cameras here, we're not likely to see Martha Stewart carted out of jail, out of the court in handcuffs and on her way to jail.

Two things will happen. One is if the judge sentences her, it may not take effect immediately. And the second thing is the -- Martha Stewart's lawyers are going to ask that the sentence be stayed until the appeal of this case is heard -- Fred.

WHITFIELD: Yes, and we heard Kendall say earlier it could be months or years because the appellate process takes that long. VELSHI: Exactly.

WHITFIELD: Well, here's another thing, another caveat in that while argument that her team is trying to make about her company going down. Well, right now the CEO, Sharon Patrick, apparently had already told the team that this company is going to be fine even without Martha Stewart. She would have to backpedal on those remarks and she would really be in trouble with the shareholders, wouldn't she, if she did that?

VELSHI: Yes. Fredricka, that's -- I mean obviously, being a public company, they needed to assure investors the company doesn't go down the tubes if Martha Stewart's not at the helm. The judge is a different story. That story changes entirely, to say hey, this company completely defends -- depends on Martha Stewart's good name, like no other company really that's out there.

WHITFIELD: All right, Ali Velshi, thanks very much.

VELSHI: Sure.

WHITFIELD: And we'll be checking with you throughout the morning as we learn of the fate of Martha Stewart, with her sentencing scheduled at 10:00 Eastern time.

Well, at least 75 little girls are dead this morning in India and dozens more injured. And those casualty figures are expected to rise. Their school became a death trap when fire raced through.

Let's go to our New Delhi bureau chief, Satinder Bindra, for more on this tragedy -- Satinder.

SATINDER BINDRA, CNN CORRESPONDENT: Fredricka, this fire started in a school in south India about five hours ago. And officials say it was a horrific scene. They are telling us that the fire started in the school's kitchen and then quickly spread to the roof of the school. The roof was made up mainly of bamboo shafts and it was very (AUDIO GAP) the entire roof then collapsed on dozens and dozens of screaming children. And it was very difficult to get out.

Officials are saying that 75 children are dead. Another (AUDIO GAP) have been taken to the local hospital and they are in a very critical (AUDIO GAP).

When the fire first began, it was -- the flames were fanned by a very heavy wind and there was also a lot of dried up vegetarian around the school that helped this fire to grow. When fire officials first reached the scene, they also found it very difficult to gain access to the school. The conditions were very congested and very crowded.

At the moment, officials are now promising a full inquiry and say they'll take the strictest possible action against anyone found negligent -- Fredricka, back to you.

WHITFIELD: And, Satinder, what are the ages that we're talking about this girls' school? BINDRA: Well, most of the children, officials tell us, were in grade three, four and five. So most of the children who died were under 10 years old. And this in -- this tragedy has now gripped this country of one billion people. Television news reports have been running this story, Fredricka, nonstop now for about four hours.

WHITFIELD: So tragic and so sad.

Thanks very much, Satinder Bindra, for that report.

The Front Porch Tour continues for the Democrats. In politics now, straight ahead, we'll hear from veep hopeful John Edwards as he campaigns solo. The presidential candidates aren't the only ones who have a spotlight shining on them, however. It can also be focused on their relatives. We'll look at some notorious presidential siblings.

And we'll meet an American Marine who fought in Iraq. Now he's fighting to heal his wounds back home.

This is DAYBREAK for July 16.

(COMMERCIAL BREAK)

WHITFIELD: Your news, money, weather and sports.

It's now 14 minutes after the hour.

And here's what's all new this morning.

Medicare now recognizes obesity as an illness. That means medical science will now determine if treatments for obesity are covered under Medicare. Until now, Medicare policies did not classify obesity as an illness.

A former U.S. soldier who allegedly deserted to North Korea 40 years ago plans to go to Japan on Sunday for medical treatment. Once there, he could be handed over to the U.S. for court martial.

In money, the House has approved a $19.5 billion foreign aid bill. It provides money for the world's poor and military assistance for U.S. allies in Iraq and the war on terror. The bill now goes to the Senate.

In culture, the American Red Cross is issuing an urgent call for blood donations. Officials say parts of the country have less than one day's supply.

In sports, the Lakers are shelling out big bucks to keep Kobe Bryant. Bryant resigned with the Lakers for a little more than $136 million over the next seven years.

(WEATHER REPORT)

WHITFIELD: And those are the headlines.

President Bush leaves the White House in about two hours for a day of campaigning. Florida and West Virginia are on today's itinerary. He's attending a Tampa conference on the crime of human trafficking.

Later today, the president will rally the faithful in West Virginia, as he did earlier this week in the Midwest. Vice President Dick Cheney is spending the day stumping in Michigan and Iowa.

Senator John Kerry is polishing some apples today. He's speaking to thousands of teachers at an educators' conference in D.C. He'll outline his plans for education reform.

At his own stop in West Virginia earlier, Kerry focused on family values. He also spoke at the NAACP convention in Philadelphia, where he accused President Bush of dividing America by race and riches.

John Edwards went deep in the heart of Bush country, with a stop in Texas. It's part of what the campaign calls its Front Porch Tour. Porches in California are on Edwards' schedule today.

Earlier, the Democratic vice presidential candidate heaped praise on his running mate in an interview with CNN's Kelly Wallace.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: I can talk about things that he can't naturally talk about. He can say that he served in Vietnam, but he can't talk in the sort of passionate way I can about what it means about his values and his beliefs that the men who served with him adore him and respect him and look up to him, even now, 30 years later. And that means a lot in America. It means something about your patriotism and it means something about how much you love your country, what your values are. And I can talk about those things in a way that's hard for John to talk about.

(END VIDEO CLIP)

WHITFIELD: Well, the candidates may pick their running mates, but they can't pick their relatives.

Our David Mattingly looks at how bad brothers seem to run in White House families.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): If your name is John Edwards and you're running for vice president, you probably shouldn't be too worried when you're younger brother makes headlines for allegedly being a very, very bad driver. Presidential politics are full of bad boy brothers.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: It seems to be that if you're high achieving enough and hard-driving enough to become a president, there's got to be some brother that you drive to drink or to petty crime. Troublesome presidential brothers are as old as the republic and seem as common as five cent coins. MATTINGLY: For every Jimmy, there is a Billy. For every Phil, there is a Roger. For every W, there is a Neil. Papers from a nasty divorce reveal Neil Bush was doing the nasty with women who mysteriously showed up at his hotel room. Brother Neil also agreed to pay part of the settlement without admitting guilt after being implicated in the savings and loan scandal when his dad was president. It made for political cartooning gold.

MIKE LUKOVICH, EDITORIAL CARTOONIST: You actually sort of feel for these politicians knowing, you know, there's not a damn thing you can do about relatives that are going to do what they are going to do.

MATTINGLY: Billy Carter seemed to love to keep them laughing as the abashed beer drinking self-proclaimed red neck. He tried to cash with books and merchandising, and once wisely pointed out beer is not a good cocktail party drink, especially in a home where you don't know where the bathroom is. In public, the brothers were all smiles. But no one was laughing when Billy was investigated by the Justice Department for a $200,000 loan and deals he made with Libyan businessmen.

Clinton opponents didn't think it was very funny either when half brother Roger Clinton got a presidential pardon wiping the slate clean of his cocaine incarcerated past. Roger was investigated for allegedly taking money to lobby the president to pardon others, claims that he deny. There wasn't any real political damage here. The Clinton presidency was over. Besides, investigations ran in the family.

LUKOVICH: That relationship sometimes you don't know who was embarrassing who the worse.

MATTINGLY (on camera): In the public eye, it's always good for brothers to be close, after all, everyone likes to think that the commander in chief has the love and respect of his siblings. But historically, the problem always begins when it's believed that that closeness is being used for political influence or profit.

UNIDENTIFIED MALE: What the public wants when it comes to presidential siblings is that they be neither seen nor heard.

MATTINGLY: So maybe LBJ had the right idea when he assigned secret service agents to his binge drinking brother Sam as a way to keep him out of trouble and out of the headlines. A pattern of behavior that might of dated back to childhood. Big brother Lyndon keeping an eye on the rebellious little brother.

Some speculate it might be some of these early male relationships that lead to adult rivalries and competition, even in the White House. That might explain why presidential sisters rarely make the news!

LUKOVICH: Every day in politics, men seem to be the ones that are goofing up and maybe that would be one reason why it would be nice to have a woman president one day.

(END VIDEOTAPE) WHITFIELD: Well, coming up, just when you thought you had had enough of her, now you can feel like the pop princess herself in the privacy of your very own Onyx Hotel.

And later, the domestic diva's day in court. Will she be treated any differently than the common man or woman?

(COMMERCIAL BREAK)

CARRIE LEE, CNN CORRESPONDENT: Good morning, everyone.

I'm Carrie Lee at the Nasdaq market site.

EBay is setting up a six month long digital music test. The online auction powerhouse starting a new music downloading pilot program today. A handful of record labels are going to sell music they own directly to consumers and the test is going to see how the eBay community welcomes music. So eBay joining the ranks of Sony, Wal-Mart, and, of course, Apple, with its iPods.

EBay says an unspecified number of pre-approved users will be able to conduct digital music transactions in eBay's new digital downloads category. Then they'll monitor how well the system fares.

So eBay rolling this out today.

Turning to market futures, things looking pretty flat for today's session after a bit of selling yesterday. The Dow Jones Industrials down 45 points at the close. The Nasdaq down 2. Today we're expecting a flat open on the heels of IBM's profit report, out last night. Big Blue did beat the Wall Street estimate. Profits of 17 percent over the year ago period. Sales a little bit disappointing, rising to $23.2 billion. We will see how IBM and the markets overall fare in today's session.

And that's the latest business news.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

WHITFIELD: Well, time for our DAYBREAK "Eye Opener."

Do you want to feel like Britney Spears? Well, the closest you'll probably get is to stay in the Britney Room at Boston's Onyx Hotel. The room was designed by Britney's mom based on the singer's real life bedroom. The room costs about $259 a night, with 10 percent going to the Britney Spears' Foundation. And it's perfect for, say, honeymoons, divorce parties, and, say, honeymoons again. I'm not responsible for that thought.

Now, there's a new way to get to your Las Vegas wedding. The Las Vegas Monorail is finally running. The train runs the length of the strip with stops at the casinos along the way. Software problems had kept the driverless trains on hold for the past six months. And Sassie (ph) is safe. The one month old puppy was successfully fished out of a 33-foot well after being down there for nearly three days. It took a pair of firefighters several hours to finally reunite little Sassie with her brother Blackie. And now together everyone, a collective ah.

Well, still to come in the next half hour of DAYBREAK, a Marine and his family and the emotional cost of war.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You can't describe the feeling from your son laying on a bed lifeless to opening his eyes and saying, "Hey, mom."

(END VIDEO CLIP)

WHITFIELD: We'll see what a new rehab center is doing for the young heroes forever changed by war in Iraq.

Then, another message about war will soon go up in a prime advertising location. But not without some controversy.

And will Martha Stewart have it easy in court today? We'll examine justice celebrity style.

(COMMERCIAL BREAK)

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


Aired July 16, 2004 - 06:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Hundreds of firefighters battling thousands of burning acres.
It's Friday, July 16, and this is DAYBREAK.

Good morning.

From the CNN Global Headquarters in Atlanta, I'm Fredricka Whitfield in for Carol Costello this morning.

Now in the news, the question this morning -- will home fashion queen Martha Stewart go to jail? Four hours from now, Stewart appears before a federal judge in Manhattan. She's being sentenced for lying about a stock sale. Stewart was convicted last March.

In the latest move to try to keep a Filipino truck driver from being beheaded, the Philippine government is recalling the leader of its humanitarian contingent in Iraq and 10 more of its members today.

A tragic story at a girls' school in southern India at this hour. A fast moving fire has killed at least 75 children. Another 28 have been hospitalized. We'll have a live report from India in just a few minutes.

The 15th International AIDS Conference has just wrapped up in Thailand with much fanfare and calls to action. Delegates focused on how to keep, rather, get cheaper generic medications to millions of AIDS victims. Researchers say an AIDS vaccine is still years away.

Keeping you informed, CNN, the most trusted name in news.

And flood waters are receding in the Northeast. The National Weather Service called this a 1,000 year storm. Heavy rain triggered flooding in New Jersey, Pennsylvania, Delaware and Maryland. The vast majority of residents who sustained damage don't have flood insurance.

In eastern Pennsylvania, residents of a Campbelltown subdivision are returning to their homes to find not all -- not very much being left. Powerful storms and a tornado damaged at least 100 homes, leveling some of them. The tornado was on the ground for 10 to 15 minutes, tearing a path more than seven miles long.

And then out West, in Nevada, a wildfire that's burned about 7,100 acres near Carson City is threatening more than 500 homes and businesses. Thirty mile an hour winds fanned the flames toward the city of 50,000. The Carson City fire has burned more than a dozen homes so far. But firefighters may be making some progress.

For the latest fire information, Officer Paddy Hardy joins us now on the telephone.

And what kind of progress is being made, Officer?

PADDY HARDY, SIERRA FRONT DISPATCH CENTER: Well, not very much progress. But we are starting to see some improvements in being able to get some line around. I have no measurements as to the percentage of line being completed, but there is some line being completed. We still have evacuations under order for Timberline, Lake View, Silver Oaks and Franktown, which are areas to the north and west of Carson City.

WHITFIELD: How difficult is it to get the evacuation going? Are people cooperating, for the most part?

HARDY: From what I understand, people are cooperating. The evacuations are being handled by the Carson City Sheriff's office and the Washoe County Sheriff's office.

WHITFIELD: And this is a fire that's still believed to have been sparked by, perhaps, some kids who were playing in the area and may have set this accidentally.

Is that where the investigation is going?

HARDY: My understanding is that the investigation is leading in the directions of possibly teenagers outside partying, yes.

WHITFIELD: And give me a sense as to how the forecast might be impeding or perhaps helping in the firefighting efforts.

HARDY: Unfortunately, the forecast for the weather today looks about the same as yesterday, with extreme low humidity and erratic winds driving the fire. So it'll be very hard to predict the fire's behavior.

WHITFIELD: All right, Officer Paddy Hardy, thanks very much for joining us and best wishes and best of luck on the continuing efforts to get this fire under control outside of Carson City.

CHAD MYERS, CNN METEOROLOGIST: Right.

WHITFIELD: All right, let's check in with Chad Myers.

It's very dry, as you heard the officer say.

MYERS: It is. It is, yes.

WHITFIELD: And it just doesn't seem to be getting any better.

MYERS: Yes, really. It's called the Waterfall Fire, officially, is the name of it from the Forest Service. We'll probably know it as the Carson City Fire at some point in time.

Zero percent contained, 2,000 acres so far, and still burning completely out of control here. And here's some of the pictures from yesterday. A lot of wind with the system, as well, part of the problem, and absolutely no rain and no rain in the forecast whatsoever.

There was some rain east of there into parts of Utah and Colorado, but that moisture is just not headed back to Reno, which is way back there in Carson City, right there on the map.

Here's what was going on yesterday. We had all of the fire running up the hillsides. And now this is right around Lake Tahoe. You've got a lot of mountains going on and you've got a lot of hillsides going on there. You had the fire coming up the hillside with all of this erratic wind, blowing it up and the firefighters thought they had a good handle on it at the top of the ridge. The problem was the sparks from this storm actually blew off the top of the trees and then back into some of the subdivisions here, not that far from Carson City. And that's when they actually lost a couple of homes, from the blowing sparks.

We had winds over 30 miles per hour yesterday and these sparks were just advancing the fire line closer and closer to the subdivisions, closer and closer to the homes here. And very -- we had a couple of roads that actually acted as fire barriers for a while but, you know, and the road is, what, maybe 30, 40 feet wide? As soon as that wind blew more sparks over the road, it was just all over. The firefighters lost the containment there again.

(WEATHER REPORT)

WHITFIELD: Well, just about four hours from now, Martha Stewart will find out how much time, if any, she has to spend in prison.

CNN's Ali Velshi joins us from New York to tell us about today's court proceedings -- and, Ali, I understand that Martha and her team tried to make a plea to the court that if she were to go to jail, her company would fail and hundreds, if not thousands, of people would be put out of work.

ALI VELSHI, CNN CORRESPONDENT: Yes, Fred, that's exactly what's happened. There are two major arguments that the lawyers for Martha Stewart are making today. One is exactly that, that she is critical to her company, it's a publicly listed company, and it employs many, many people, and that if she goes to jail, her brand is tarnished and it is going to cost the company. We've obviously already seen that, with ad sales suffering and things like that.

The other case that they're making is that this case is extraordinary in that the things that got Martha Stewart into trouble were not habitual behavior. Instead, they were a one time event.

(BEGIN VIDEOTAPE)

VELSHI (voice-over): It was no ordinary trial. She's no ordinary convict. So why should Martha Stewart's sentencing be ordinary? Federal sentencing guidelines suggest a jail term of 10 to 16 months. But Stewart's lawyers say they've got a better idea -- keep her out of jail and have her teach disadvantaged women how to run their own businesses.

Herb Holter (ph) was hired to be Stewart's stay out of jail expert.

HERB HOLTER: The alternative that we developed for Martha was to work at the Women's Venture Fund, which is a non-profit organization in New York, in assisting low income and minority women in developing their own businesses.

VELSHI: Attorney Joseph Bondy has spent a lot of time trying to keep clients out of jail.

He likes Stewart's chances with this one.

JOSEPH BONDY, ATTORNEY: That would be considered as a charitable activity and you would make the argument that those charitable activities should warrant the downward reduction.

VELSHI: And if that doesn't work, this prison in Danbury, Connecticut, or another low security prison nearby, could soon be Martha's home.

JOYCE ELLWANGER, FORMER DANBURY INMATE: Danbury is a low security institution. So most of the people that are there are there for non-violent offenses. And many of them are drug related.

VELSHI: Joyce Ellwanger, a peace activist who served six months at Danbury, says if Martha ends up at a place like this, it won't be easy.

ELLWANGER: I think she's going to feel like I did -- diminished. A lot of choices that she might like to make for herself are gone.

(END VIDEOTAPE)

VELSHI: Fred, even if the judge doesn't buy the defense's argument that there shouldn't be any prison time imposed, it's not likely that even though this dramatic trial has offered lots of available shots for the dozens of cameras here, we're not likely to see Martha Stewart carted out of jail, out of the court in handcuffs and on her way to jail.

Two things will happen. One is if the judge sentences her, it may not take effect immediately. And the second thing is the -- Martha Stewart's lawyers are going to ask that the sentence be stayed until the appeal of this case is heard -- Fred.

WHITFIELD: Yes, and we heard Kendall say earlier it could be months or years because the appellate process takes that long. VELSHI: Exactly.

WHITFIELD: Well, here's another thing, another caveat in that while argument that her team is trying to make about her company going down. Well, right now the CEO, Sharon Patrick, apparently had already told the team that this company is going to be fine even without Martha Stewart. She would have to backpedal on those remarks and she would really be in trouble with the shareholders, wouldn't she, if she did that?

VELSHI: Yes. Fredricka, that's -- I mean obviously, being a public company, they needed to assure investors the company doesn't go down the tubes if Martha Stewart's not at the helm. The judge is a different story. That story changes entirely, to say hey, this company completely defends -- depends on Martha Stewart's good name, like no other company really that's out there.

WHITFIELD: All right, Ali Velshi, thanks very much.

VELSHI: Sure.

WHITFIELD: And we'll be checking with you throughout the morning as we learn of the fate of Martha Stewart, with her sentencing scheduled at 10:00 Eastern time.

Well, at least 75 little girls are dead this morning in India and dozens more injured. And those casualty figures are expected to rise. Their school became a death trap when fire raced through.

Let's go to our New Delhi bureau chief, Satinder Bindra, for more on this tragedy -- Satinder.

SATINDER BINDRA, CNN CORRESPONDENT: Fredricka, this fire started in a school in south India about five hours ago. And officials say it was a horrific scene. They are telling us that the fire started in the school's kitchen and then quickly spread to the roof of the school. The roof was made up mainly of bamboo shafts and it was very (AUDIO GAP) the entire roof then collapsed on dozens and dozens of screaming children. And it was very difficult to get out.

Officials are saying that 75 children are dead. Another (AUDIO GAP) have been taken to the local hospital and they are in a very critical (AUDIO GAP).

When the fire first began, it was -- the flames were fanned by a very heavy wind and there was also a lot of dried up vegetarian around the school that helped this fire to grow. When fire officials first reached the scene, they also found it very difficult to gain access to the school. The conditions were very congested and very crowded.

At the moment, officials are now promising a full inquiry and say they'll take the strictest possible action against anyone found negligent -- Fredricka, back to you.

WHITFIELD: And, Satinder, what are the ages that we're talking about this girls' school? BINDRA: Well, most of the children, officials tell us, were in grade three, four and five. So most of the children who died were under 10 years old. And this in -- this tragedy has now gripped this country of one billion people. Television news reports have been running this story, Fredricka, nonstop now for about four hours.

WHITFIELD: So tragic and so sad.

Thanks very much, Satinder Bindra, for that report.

The Front Porch Tour continues for the Democrats. In politics now, straight ahead, we'll hear from veep hopeful John Edwards as he campaigns solo. The presidential candidates aren't the only ones who have a spotlight shining on them, however. It can also be focused on their relatives. We'll look at some notorious presidential siblings.

And we'll meet an American Marine who fought in Iraq. Now he's fighting to heal his wounds back home.

This is DAYBREAK for July 16.

(COMMERCIAL BREAK)

WHITFIELD: Your news, money, weather and sports.

It's now 14 minutes after the hour.

And here's what's all new this morning.

Medicare now recognizes obesity as an illness. That means medical science will now determine if treatments for obesity are covered under Medicare. Until now, Medicare policies did not classify obesity as an illness.

A former U.S. soldier who allegedly deserted to North Korea 40 years ago plans to go to Japan on Sunday for medical treatment. Once there, he could be handed over to the U.S. for court martial.

In money, the House has approved a $19.5 billion foreign aid bill. It provides money for the world's poor and military assistance for U.S. allies in Iraq and the war on terror. The bill now goes to the Senate.

In culture, the American Red Cross is issuing an urgent call for blood donations. Officials say parts of the country have less than one day's supply.

In sports, the Lakers are shelling out big bucks to keep Kobe Bryant. Bryant resigned with the Lakers for a little more than $136 million over the next seven years.

(WEATHER REPORT)

WHITFIELD: And those are the headlines.

President Bush leaves the White House in about two hours for a day of campaigning. Florida and West Virginia are on today's itinerary. He's attending a Tampa conference on the crime of human trafficking.

Later today, the president will rally the faithful in West Virginia, as he did earlier this week in the Midwest. Vice President Dick Cheney is spending the day stumping in Michigan and Iowa.

Senator John Kerry is polishing some apples today. He's speaking to thousands of teachers at an educators' conference in D.C. He'll outline his plans for education reform.

At his own stop in West Virginia earlier, Kerry focused on family values. He also spoke at the NAACP convention in Philadelphia, where he accused President Bush of dividing America by race and riches.

John Edwards went deep in the heart of Bush country, with a stop in Texas. It's part of what the campaign calls its Front Porch Tour. Porches in California are on Edwards' schedule today.

Earlier, the Democratic vice presidential candidate heaped praise on his running mate in an interview with CNN's Kelly Wallace.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: I can talk about things that he can't naturally talk about. He can say that he served in Vietnam, but he can't talk in the sort of passionate way I can about what it means about his values and his beliefs that the men who served with him adore him and respect him and look up to him, even now, 30 years later. And that means a lot in America. It means something about your patriotism and it means something about how much you love your country, what your values are. And I can talk about those things in a way that's hard for John to talk about.

(END VIDEO CLIP)

WHITFIELD: Well, the candidates may pick their running mates, but they can't pick their relatives.

Our David Mattingly looks at how bad brothers seem to run in White House families.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): If your name is John Edwards and you're running for vice president, you probably shouldn't be too worried when you're younger brother makes headlines for allegedly being a very, very bad driver. Presidential politics are full of bad boy brothers.

ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: It seems to be that if you're high achieving enough and hard-driving enough to become a president, there's got to be some brother that you drive to drink or to petty crime. Troublesome presidential brothers are as old as the republic and seem as common as five cent coins. MATTINGLY: For every Jimmy, there is a Billy. For every Phil, there is a Roger. For every W, there is a Neil. Papers from a nasty divorce reveal Neil Bush was doing the nasty with women who mysteriously showed up at his hotel room. Brother Neil also agreed to pay part of the settlement without admitting guilt after being implicated in the savings and loan scandal when his dad was president. It made for political cartooning gold.

MIKE LUKOVICH, EDITORIAL CARTOONIST: You actually sort of feel for these politicians knowing, you know, there's not a damn thing you can do about relatives that are going to do what they are going to do.

MATTINGLY: Billy Carter seemed to love to keep them laughing as the abashed beer drinking self-proclaimed red neck. He tried to cash with books and merchandising, and once wisely pointed out beer is not a good cocktail party drink, especially in a home where you don't know where the bathroom is. In public, the brothers were all smiles. But no one was laughing when Billy was investigated by the Justice Department for a $200,000 loan and deals he made with Libyan businessmen.

Clinton opponents didn't think it was very funny either when half brother Roger Clinton got a presidential pardon wiping the slate clean of his cocaine incarcerated past. Roger was investigated for allegedly taking money to lobby the president to pardon others, claims that he deny. There wasn't any real political damage here. The Clinton presidency was over. Besides, investigations ran in the family.

LUKOVICH: That relationship sometimes you don't know who was embarrassing who the worse.

MATTINGLY (on camera): In the public eye, it's always good for brothers to be close, after all, everyone likes to think that the commander in chief has the love and respect of his siblings. But historically, the problem always begins when it's believed that that closeness is being used for political influence or profit.

UNIDENTIFIED MALE: What the public wants when it comes to presidential siblings is that they be neither seen nor heard.

MATTINGLY: So maybe LBJ had the right idea when he assigned secret service agents to his binge drinking brother Sam as a way to keep him out of trouble and out of the headlines. A pattern of behavior that might of dated back to childhood. Big brother Lyndon keeping an eye on the rebellious little brother.

Some speculate it might be some of these early male relationships that lead to adult rivalries and competition, even in the White House. That might explain why presidential sisters rarely make the news!

LUKOVICH: Every day in politics, men seem to be the ones that are goofing up and maybe that would be one reason why it would be nice to have a woman president one day.

(END VIDEOTAPE) WHITFIELD: Well, coming up, just when you thought you had had enough of her, now you can feel like the pop princess herself in the privacy of your very own Onyx Hotel.

And later, the domestic diva's day in court. Will she be treated any differently than the common man or woman?

(COMMERCIAL BREAK)

CARRIE LEE, CNN CORRESPONDENT: Good morning, everyone.

I'm Carrie Lee at the Nasdaq market site.

EBay is setting up a six month long digital music test. The online auction powerhouse starting a new music downloading pilot program today. A handful of record labels are going to sell music they own directly to consumers and the test is going to see how the eBay community welcomes music. So eBay joining the ranks of Sony, Wal-Mart, and, of course, Apple, with its iPods.

EBay says an unspecified number of pre-approved users will be able to conduct digital music transactions in eBay's new digital downloads category. Then they'll monitor how well the system fares.

So eBay rolling this out today.

Turning to market futures, things looking pretty flat for today's session after a bit of selling yesterday. The Dow Jones Industrials down 45 points at the close. The Nasdaq down 2. Today we're expecting a flat open on the heels of IBM's profit report, out last night. Big Blue did beat the Wall Street estimate. Profits of 17 percent over the year ago period. Sales a little bit disappointing, rising to $23.2 billion. We will see how IBM and the markets overall fare in today's session.

And that's the latest business news.

DAYBREAK will be right back.

(COMMERCIAL BREAK)

WHITFIELD: Well, time for our DAYBREAK "Eye Opener."

Do you want to feel like Britney Spears? Well, the closest you'll probably get is to stay in the Britney Room at Boston's Onyx Hotel. The room was designed by Britney's mom based on the singer's real life bedroom. The room costs about $259 a night, with 10 percent going to the Britney Spears' Foundation. And it's perfect for, say, honeymoons, divorce parties, and, say, honeymoons again. I'm not responsible for that thought.

Now, there's a new way to get to your Las Vegas wedding. The Las Vegas Monorail is finally running. The train runs the length of the strip with stops at the casinos along the way. Software problems had kept the driverless trains on hold for the past six months. And Sassie (ph) is safe. The one month old puppy was successfully fished out of a 33-foot well after being down there for nearly three days. It took a pair of firefighters several hours to finally reunite little Sassie with her brother Blackie. And now together everyone, a collective ah.

Well, still to come in the next half hour of DAYBREAK, a Marine and his family and the emotional cost of war.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: You can't describe the feeling from your son laying on a bed lifeless to opening his eyes and saying, "Hey, mom."

(END VIDEO CLIP)

WHITFIELD: We'll see what a new rehab center is doing for the young heroes forever changed by war in Iraq.

Then, another message about war will soon go up in a prime advertising location. But not without some controversy.

And will Martha Stewart have it easy in court today? We'll examine justice celebrity style.

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