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CNN Live At Daybreak

Two More U.S. Troops Killed; 9/11 Commission's Final Report Recommends a Number of Dramatic Changes

Aired July 23, 2004 - 05:00   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.


BETTY NGUYEN, CNN ANCHOR: U.S. forces in Iraq strike a blow against insurgents.
It's Friday, July 23, and this is DAYBREAK.

Well, good morning.

From the CNN Headquarters here in Atlanta, I'm Betty Nguyen in for Carol Costello.

Now in the news, suspected Iraqi insurgents have been targeted in Fallujah. A coalition spokesman says today's air strike was against a dozen insurgents with ties to terror suspect Abu Musab al-Zarqawi. The strike was conducted in coordination with the Iraqi government.

An investigation is going on right now into a deadly high speed train wreck in Turkey that killed 36 people and injured 79 more. The new high speed train began operating just last month.

President Bush is traveling to Detroit this morning. He's speaking at the National Urban League conference in an effort to connect with African-American voters. CNN will carry the president's talk live at 10:00 Eastern today.

The aircraft carrier Ronald Reagan is making its first home port docking in San Diego this morning. Former First Lady Nancy Reagan will be there and CNN's Miguel Marquez is aboard with live reports throughout the day.

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

Chad -- good morning to you.

It's Friday.

CHAD MYERS, CNN METEOROLOGIST: It is for me.

NGUYEN: Yes, for you, of course. Not me.

MYERS: Not for you, because you have to work the weekend, as well.

NGUYEN: Oh, yes.

MYERS: It's only Wednesday for you.

Good morning, everybody.

NGUYEN: It's only Monday.

MYERS: It's only Monday for you.

NGUYEN: Yes.

MYERS: Oh, all right. Sorry about that.

NGUYEN: Yes, exactly. Let's not talk about that.

(WEATHER REPORT)

NGUYEN: Well, on the attack in Iraq, U.S. forces strike at targets in Fallujah. Plus, a deadly roadside bombing in Baghdad. And north of the city, two more U.S. troops are killed.

We want to go live now to our Michael Holmes in Baghdad for details on these developments.

Good morning to you.

It's been a busy and a rough night -- Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, Betty, that's right. It's, in fact, been a busy month in Fallujah in particular. This is, by our count, the seventh strike by U.S. forces against what they describe as targets linked to the wanted Jordanian, Abu Musab al- Zarqawi, the man they say is responsible for numerous large scale attacks in Iraq.

Now, this attack happened overnight. Multinational forcers -- in fact, they were U.S. forces -- conducting what they said was a precision attack on the courtyard of a house in Fallujah. They said that they had heard of 10 to 12 -- had had intelligence that 10 to 12 what they called terrorists with known ties to al-Zarqawi were in that courtyard. And the forces were struck, the house left intact, they say.

The military not saying specifically whether the attack caused any casualties. We've been talking to the ministry of health. They say they've heard of one wounded, but other news agencies are saying, hospital officials are telling them that they received five civilian wounded, two adults and three children. Still checking into that.

That IED or roadside bomb in Baghdad, an extraordinary story. One of our people on the scene there tells us that locals said they saw this roadside bomb being planted at about 1:00 in the morning, overnight our time, and called the police. Now, the police blocked off the road and this bus driver, the driver of the bus you see in the pictures there, apparently drove around the roadblock and headed down into the kill zone. The explosive was detonated and the results you can see there.

We're told that two people were killed, the driver of that bus and also a 5-year-old girl who was a passenger. Now, two U.S. soldiers have been killed, as well, one wounded, in another roadside bomb attack. This happened in Samarra. Now, that's according to the U.S. military spokesman. The attack happened as a convoy was passing by on Thursday. The wounded soldier said to be in a stable condition.

So, as you can see, the violence still continuing around Iraq -- Betty.

NGUYEN: Samarra has been a real difficult area for U.S. troops in the region. A lot of violence in that area.

HOLMES: Yes, there has. In fact, we had a briefing with a multinational force representative a few days ago and he said that Samarra does have the potential, in his words, to become another Fallujah. U.S. troops don't go very far into the city. They're mainly on the outside. When they do, they invariably encounter things like this. There's been numerous instances of clashes there over the last few weeks. And Fallujah, as we know, still remains a hotbed of the insurgency and a place where U.S. forces strike pretty much only from the air.

And this view that Samarra could become "another Fallujah" certainly very disturbing -- Betty.

NGUYEN: Disturbing and a lot of folks do not want that to happen.

All right, Michael Holmes in Baghdad, thank you.

The 9/11 Commission's final report recommends a number of dramatic changes across many levels of government.

CNN justice correspondent Kelli Arena looks at what the panel says the intelligence community can do to better protect us.

(BEGIN VIDEOTAPE)

THOMAS KEAN, 9/11 COMMISSION CHAIRMAN: This report represents the unanimous conclusion.

KELLI ARENA, CNN CORRESPONDENT (voice-over): The message from the Commission is clear -- the U.S. cannot afford to wait to make changes.

KEAN: Every expert with whom we spoke told us an attack of even greater magnitude is now possible and even probable. We do not have the luxury of time.

ARENA: The 9/11 report calls for significant reform, covering everything from the way the U.S. deals with Muslim nations to putting together response plans in the case of another attack.

LEE HAMILTON, 9/11 COMMISSION CO-CHAIRMAN: There is no silver bullet or decisive blow that can defeat Islamist terrorism. It will take unity of effort. ARENA: The Commission recommends creating a new counter- terrorism center to coordinate more than a dozen intelligence agencies. In charge would be a new national intelligence director, reporting to the president, confirmed by the Senate. The director would have control over intelligence budgets and the ability to hire and fire deputies, including the CIA director and top intelligence officials at the FBI, Homeland Security and Defense Departments.

The Commission did not endorse the creation of a new domestic intelligence agency. But it did back the FBI's move toward a new intelligence service within the Bureau. The report also called for a reworking of congressional committees to provide stronger oversight.

HAMILTON: The intelligence community needs a shift in mind set and organization.

ARENA: The FBI embraced many of the recommendations and says it will look closely at others. Senior CIA officials say they want to proceed carefully. "We are in the middle of a war," one said, "and do not want to disrupt that activity."

The president called the report "constructive," but made no commitments.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I look forward to studying their recommendations and look forward to working with responsible parties within my administration to move forward on those recommendations.

ARENA: Commission member and former Senator Bob Kerrey says he's hopeful changes will be implemented, but not optimistic.

BOB KERREY, 9/11 COMMISSION MEMBER: In my experience in politics, when somebody is asked to give up something, they will come up with all kinds of reasons other than the most important one, which is they don't want to surrender authority.

ARENA (on camera): Commission members say even though their charter expires, they won't be going out of business. They promise to return in a year with a report card judging what, if any, progress has been made.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

NGUYEN: New York Mayor Michael Bloomberg says he hasn't read the 9/11 Commission report just yet, but he's pleased the panel agrees that New York needs more federal funding to fight the threat of terrorism.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK: The important thing for the city is it's a big victory and that this Commission agrees with us that we've got to get homeland security in this country funds allocated based on where the risks are. This should not be a pork barrel bill. There are plenty of other ways to get monies for other purposes to other locations. But the monies that you spend to defend this country have to be used where the problems and the risks are.

(END VIDEO CLIP)

NGUYEN: Homeland security funding for New York has dropped from $187 million to $96 million, even though New York is considered the city most likely to be attacked by terrorists.

So much has changed in our world since the September 11 attacks.

Our Keith Oppenheim looks at some of the new security measures already in place.

(BEGIN VIDEOTAPE)

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): In Chicago, you can't just walk into one of America's oldest ballparks anymore. Backpacks are now checked for hazards.

In New York, you can't just park at one of the city's largest hotels. Cars are checked for explosives and crisis plans are ready.

MIKE STENGEL, MARRIOTT MARQUIS TIMES SQUARE: If we had to house people in our ballroom, we're prepared to do that within minutes.

OPPENHEIM: In post-9/11 America, technology as a form of security has taken flight. In Arizona, unmanned planes patrol the Mexican border. In Minneapolis, a pilot program was launched to screen airline passengers faster by scanning retinas and fingerprints.

UNIDENTIFIED FEMALE: I'm just going to take three scans of each index finger.

OPPENHEIM: Surveillance is getting higher tech, too. Consider this crisis center in Chicago.

(on camera): It's a state-of-the-art facility that can integrate live video feeds with a computerized layout of all the floor plans in the city's major high rises, enabling emergency managers to see and evaluate a crisis in ways they never could before.

RON HUBERMAN, CHICAGO EMERGENCY MANAGEMENT & COMMITTEE: The city has invested heavily in cameras around key infrastructure and other locations, giving us the capacity in real time to monitor what's going on.

UNIDENTIFIED MALE: Everybody has a different attitude about terrorism and terrorists and just, you know, everybody's more paranoid.

OPPENHEIM: Perhaps. But some believe paranoia is one change that's fading. At this Illinois supply store, sales of gas masks and water jugs spiked after September 11. PHILIP CABLE, AMERICAN SCIENCE AND SURPLUS: And we haven't seen any significant increase in sales on any of these types of products since then. It's been as if 9/11 never happened.

OPPENHEIM: But in some places, the changes are simple. This paralegal service near ground zero now has an emergency plan.

SALVADOR UV, AMERICAN CLERICAL SERVICE: I wish I had told people to evacuate a little earlier that day. I'm much more prepared to make that decision.

OPPENHEIM: Feelings of regret or loss come with memories of that day, something no level of higher security and technology can easily diminish.

Keith Oppenheim, CNN, Chicago.

(END VIDEOTAPE)

NGUYEN: And you can log onto our Web site for more on the 9/11 report. You can read the entire document, all 500 plus pages, and find out what victims' families are saying, plus much more. You know the address. It is cnn.com.

Here are some of the stories making news across America this Friday.

The government's star witness against Martha Stewart learns his fate today. Douglas Faneuil, who was the assistant to broker Peter Bacanovic, will be sentenced for his part in the shady stock deal. Faneuil faces up to a year in prison. Stewart and Bacanovic got five months.

John Gotti, Jr. is slated to get out of jail in September. But it might be a short stint on the outside. Gotti was indicted on charges of attempted murder, kidnapping and securities fraud. Some of the charges stem from an alleged plot to kill Guardian Angels' founder Curtis Sliwa in 1992. Gotti is serving time for racketeering.

The judge in the Kobe Bryant case changed an earlier ruling and will now allow some physical evidence that had been excluded from the trial. The results of a police physical exam on Bryant will be entered into evidence. The change came after the defense said it would use the exam findings as part of the case.

Police in Utah are still working on the puzzling case of a missing pregnant woman. We have an update on the case and take a look at who investigators are looking to question.

Also, will picket lines greet Kerry in Boston, John Kerry, that is, along with the Democratic convention delegates? We'll get that update.

Plus, at the half hour, a former Green Beret who worked for the CIA in Afghanistan defends himself online. We'll look at what he has to say about the assault charges he's facing. (COMMERCIAL BREAK)

NGUYEN: Welcome back on this Friday.

Your news, money, weather and sports.

The time right now is 5:15 Eastern.

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

The families of September 11 attack victims are hopeful the 9/11 Commission's report will lead to important changes in the nation's intelligence gathering community. Many of them echo the Commission's finding that intelligence agencies were negligent before the terror attacks.

A warning today for Sudan. The U.S. is threatening sanctions against Sudan if it doesn't put an end to militia attacks in the Darfur region. A proposed U.N. resolution would give the government a 30 day deadline to comply.

In money, the U.S. military may be getting some much needed emergency funds for Iraq. Congress approved a massive defense bill and sent it on to President Bush. Earlier this week, a government report highlighted shortfalls that were compromising the safety of American soldiers.

In culture, a battle is brewing over new technology from TiVo. Movie studios and the NFL cite copyright concerns over their opposition to TiVo's plan to make its systems compatible with home computers.

And in sports, after more than three decades, Monday Night Football may have to find a new home. Early indications point to ESPN possibly taking over the telecast when ABC's contract with the NFL expires after the 2005 season.

What? Monday Night Football is moving? Chad -- say it isn't so.

MYERS: I won't be able to find it.

NGUYEN: Yes.

MYERS: There's no chance.

NGUYEN: And if you don't have cable, how are you going to watch it?

MYERS: Well, exactly. I don't think -- I'm not so sure that'll happen. We'll just -- that's just like that old Coke/new Coke thing.

NGUYEN: Right.

MYERS: We'll see.

(WEATHER REPORT) NGUYEN: Let's see how the European markets are wrapping up the week.

For that, we want to turn to our Robyn Curnow, checking the financial numbers for us in London.

Good morning, across the pond to you -- Robin.

ROBYN CURNOW, CNN CORRESPONDENT: Good morning here from London.

Happy Friday to you, Betty.

I want to show you how these markets are doing. As you can see, some positive movements. Earlier, the Swiss SMI bucking the trend. We are seeing some more positive signs here in Europe after a pretty dreadful session yesterday. There's a little bit of bargain hunting going on this morning.

I want to show you these tech and chip sectors, following Wall Street -- I think echoing Wall Street's slight tick rebound yesterday. However, this sector is not really, at the moment, feeling the pinch of those downward movements in the Amazon and Microsoft share prices after trading closed in Wall Street. We're still seeing some pretty strong numbers here, except for Phillips, of course, down, just down .1 of a percent -- .5 of a percent.

Now, I do want to show you one auto sector that has going to be -- is going to be focusing a lot of attention for European investors. DaimlerChrysler has come out and said that it has sorted out a labor dispute and that's why we're seeing some positive movements there in its share price. DaimlerChrysler, of course, makes Mercedes Benz. And real concerns about very tight labor laws in Germany over the past few years and the fact that this labor dispute has been sorted out is maybe giving some hint that these labor laws might be easing in this -- in these difficult times, particularly because Germany is Europe's largest economy, if you remember.

And we're waiting for V.W. Volkswagen results out in the next hour. At the moment, we're getting some sense that 2004 sales volumes will fall well short of original expectations. But we're still seeing V.W. hit just nearly under 3 percent there. So still Volkswagen, which is Europe's largest car company, making some profits there, despite the fact that we are going to see some falling sales in V.W. -- back to you, Betty.

Have a good weekend.

NGUYEN: You, too.

Thank you, Robyn.

Well, with the Democratic National Convention coming to town, an independent arbitrator has awarded Boston police a four year pay raise of 14 1/2 percent. And the head of the Patrolman's Association is discussing that ruling with other union leaders. The police union had threatened to picket the site of the convention, but Boston's mayor says there's no reason to do that now.

(BEGIN VIDEO CLIP)

MAYOR THOMAS MENINO, BOSTON: I would think the union should give up whatever they planned to do because it doesn't make any sense right now -- 14.5 percent over four years, that's a decent contract in these times.

(END VIDEO CLIP)

NGUYEN: Pickets at Boston's Fleet Center could present a dilemma for labor friendly Democratic delegates and for the party's presidential nominee.

The John Kerry/John Edwards team leaves Denver today on a campaign road trip to Boston and the Democratic convention. A kickoff event was to be held outdoors in Aurora, where Kerry was born some 60 years ago. But rainy weather forced it to be moved to Denver's Fillmore Auditorium.

Meanwhile, President Bush heads for Detroit this morning to address the annual meeting of the National Urban League. Mr. Bush follows John Kerry, who addressed the group yesterday. The president flies to Texas this evening for a fund-raising dinner at the Broken Spoke Ranch, which is near Crawford.

Mr. Bush's speech to the Urban League is set for 10:00 Eastern, 7:00 Pacific this morning, and CNN will, of course, carry it live.

Police in Salt Lake City have no suspects in the disappearance of 27-year-old Lori Hacking, but they have designated her husband as a person of interest in the case. And while police look into an alleged lie told by Mark Hacking, volunteers remain vigilant in searching for the pregnant woman.

CNN's Kimberly Osias updates us.

(BEGIN VIDEOTAPE)

KIMBERLY OSIAS, CNN CORRESPONDENT (voice-over): To friends, 27- year-old Lori Hacking seemed to have it all -- a business career of her own, a baby on the way and a loving husband who said he was following family footsteps and heading to medical school.

REBECCA CARROLL, LORI HACKING'S FRIEND: She had no idea, we had no idea. It's just, it's so hard to believe that how could he pull that off for all this time?

OSIAS: Lori's best friend Rebecca Carroll says Mark Hacking told Lori that he had graduated from college and was going on to med school. But all of that was lie after lie. She says the pair even visited several North Carolina campuses.

UNIDENTIFIED MALE: Along 11th Avenue, 11th Ave. is, you know, the jogging route that goes down... OSIAS: Carroll and dozens of other volunteers continued to search today where Lori was last seen heading out for a run just before dawn Monday. Police have seized both of the couple's cars, as well as a dumpster and some bedding. At this point, there are no suspects in the case. But police are calling Mark Hacking a person of interest and have questioned him several times.

DET. DWAYNE BAIRD, SALT LAKE CITY POLICE: We have to look at everything he's told us with some speculation. But, you know, we want to reserve judgment at this point.

OSIAS: As for Mark Hacking's whereabouts, family members say he's under a doctor's care in a local psychiatric hospital.

DOUGLAS HACKING, MARK HACKING'S FATHER: He wishes he could be out here going door to door, beating the brush and whatever he could do. He's just so incapacitated with his grieving that he's just not able to be here.

OSIAS: They say he would never do anything to hurt his now missing wife.

Kimberly Osias, CNN, Salt Lake City.

(END VIDEOTAPE)

NGUYEN: Well, some people would certainly call it a medical health miracle. Next, the story of a toddler who received six -- yes, that's right -- six new organs.

And later on DAYBREAK, getting to know the president's daughters -- how you can talk politics with Jenna and Barbara.

(COMMERCIAL BREAK)

NGUYEN: The Navy's newest aircraft carrier, the USS Ronald Reagan, is getting a big welcome home celebration when it arrives at its home port in San Diego today. About 10,000 people are expected to turn out for a pier side ceremony to welcome the ship. Former First Lady Nancy Reagan and the late president's son Michael will take part in those ceremonies. The USS Ronald Reagan was in the middle of its inaugural voyage from Norfolk, Virginia around the tip of South America when the crew got word of Reagan's death last month.

It's time for our DAYBREAK "Eye Opener."

Before and after for little Addie McGriff (ph). Two-year-old Addie looks much better these days after successful transplant surgery saved her life. She actually had multiple transplants. Addie received six organs in all, including a new stomach, liver and intestines. Amazing. Doctors say the little girl has an excellent chance of having a normal life. The cutest little thing.

Well, pretty soon you may be able to just call in your order at McDonald's. How convenient. More than a dozen outlets across the country are taking advantage of a Colorado Springs call center to place their orders. The company says the call center eliminates mistakes from hurried employees and saves customers about 30 seconds in the drive through line. We all like that.

Well, many of the world's top comedians are in Montreal this week for the annual Just For Laughs festival. Among the special events scheduled is the only live performance by Triumph, the insult comic dog. You know who we're talking about. His show is called, get this, "Make Poop, Not War." No, we don't make this stuff up.

Other performers include Drew Carey, Tim Allen and Lewis Black.

And here's what's all new in the next half hour.

We've heard from the Commission, from the president and several other politicians on the 9/11 report. Ahead, what some of the families really think of the 500 plus page document.

Plus, later, Marion Jones and allegations of steroid use in Sydney. Hear what her ex-husband is saying.

And how political groups are trying to make sure young people make it to the polls this November.

(COMMERCIAL BREAK)

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Aired July 23, 2004 - 05:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: U.S. forces in Iraq strike a blow against insurgents.
It's Friday, July 23, and this is DAYBREAK.

Well, good morning.

From the CNN Headquarters here in Atlanta, I'm Betty Nguyen in for Carol Costello.

Now in the news, suspected Iraqi insurgents have been targeted in Fallujah. A coalition spokesman says today's air strike was against a dozen insurgents with ties to terror suspect Abu Musab al-Zarqawi. The strike was conducted in coordination with the Iraqi government.

An investigation is going on right now into a deadly high speed train wreck in Turkey that killed 36 people and injured 79 more. The new high speed train began operating just last month.

President Bush is traveling to Detroit this morning. He's speaking at the National Urban League conference in an effort to connect with African-American voters. CNN will carry the president's talk live at 10:00 Eastern today.

The aircraft carrier Ronald Reagan is making its first home port docking in San Diego this morning. Former First Lady Nancy Reagan will be there and CNN's Miguel Marquez is aboard with live reports throughout the day.

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

Chad -- good morning to you.

It's Friday.

CHAD MYERS, CNN METEOROLOGIST: It is for me.

NGUYEN: Yes, for you, of course. Not me.

MYERS: Not for you, because you have to work the weekend, as well.

NGUYEN: Oh, yes.

MYERS: It's only Wednesday for you.

Good morning, everybody.

NGUYEN: It's only Monday.

MYERS: It's only Monday for you.

NGUYEN: Yes.

MYERS: Oh, all right. Sorry about that.

NGUYEN: Yes, exactly. Let's not talk about that.

(WEATHER REPORT)

NGUYEN: Well, on the attack in Iraq, U.S. forces strike at targets in Fallujah. Plus, a deadly roadside bombing in Baghdad. And north of the city, two more U.S. troops are killed.

We want to go live now to our Michael Holmes in Baghdad for details on these developments.

Good morning to you.

It's been a busy and a rough night -- Michael.

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, Betty, that's right. It's, in fact, been a busy month in Fallujah in particular. This is, by our count, the seventh strike by U.S. forces against what they describe as targets linked to the wanted Jordanian, Abu Musab al- Zarqawi, the man they say is responsible for numerous large scale attacks in Iraq.

Now, this attack happened overnight. Multinational forcers -- in fact, they were U.S. forces -- conducting what they said was a precision attack on the courtyard of a house in Fallujah. They said that they had heard of 10 to 12 -- had had intelligence that 10 to 12 what they called terrorists with known ties to al-Zarqawi were in that courtyard. And the forces were struck, the house left intact, they say.

The military not saying specifically whether the attack caused any casualties. We've been talking to the ministry of health. They say they've heard of one wounded, but other news agencies are saying, hospital officials are telling them that they received five civilian wounded, two adults and three children. Still checking into that.

That IED or roadside bomb in Baghdad, an extraordinary story. One of our people on the scene there tells us that locals said they saw this roadside bomb being planted at about 1:00 in the morning, overnight our time, and called the police. Now, the police blocked off the road and this bus driver, the driver of the bus you see in the pictures there, apparently drove around the roadblock and headed down into the kill zone. The explosive was detonated and the results you can see there.

We're told that two people were killed, the driver of that bus and also a 5-year-old girl who was a passenger. Now, two U.S. soldiers have been killed, as well, one wounded, in another roadside bomb attack. This happened in Samarra. Now, that's according to the U.S. military spokesman. The attack happened as a convoy was passing by on Thursday. The wounded soldier said to be in a stable condition.

So, as you can see, the violence still continuing around Iraq -- Betty.

NGUYEN: Samarra has been a real difficult area for U.S. troops in the region. A lot of violence in that area.

HOLMES: Yes, there has. In fact, we had a briefing with a multinational force representative a few days ago and he said that Samarra does have the potential, in his words, to become another Fallujah. U.S. troops don't go very far into the city. They're mainly on the outside. When they do, they invariably encounter things like this. There's been numerous instances of clashes there over the last few weeks. And Fallujah, as we know, still remains a hotbed of the insurgency and a place where U.S. forces strike pretty much only from the air.

And this view that Samarra could become "another Fallujah" certainly very disturbing -- Betty.

NGUYEN: Disturbing and a lot of folks do not want that to happen.

All right, Michael Holmes in Baghdad, thank you.

The 9/11 Commission's final report recommends a number of dramatic changes across many levels of government.

CNN justice correspondent Kelli Arena looks at what the panel says the intelligence community can do to better protect us.

(BEGIN VIDEOTAPE)

THOMAS KEAN, 9/11 COMMISSION CHAIRMAN: This report represents the unanimous conclusion.

KELLI ARENA, CNN CORRESPONDENT (voice-over): The message from the Commission is clear -- the U.S. cannot afford to wait to make changes.

KEAN: Every expert with whom we spoke told us an attack of even greater magnitude is now possible and even probable. We do not have the luxury of time.

ARENA: The 9/11 report calls for significant reform, covering everything from the way the U.S. deals with Muslim nations to putting together response plans in the case of another attack.

LEE HAMILTON, 9/11 COMMISSION CO-CHAIRMAN: There is no silver bullet or decisive blow that can defeat Islamist terrorism. It will take unity of effort. ARENA: The Commission recommends creating a new counter- terrorism center to coordinate more than a dozen intelligence agencies. In charge would be a new national intelligence director, reporting to the president, confirmed by the Senate. The director would have control over intelligence budgets and the ability to hire and fire deputies, including the CIA director and top intelligence officials at the FBI, Homeland Security and Defense Departments.

The Commission did not endorse the creation of a new domestic intelligence agency. But it did back the FBI's move toward a new intelligence service within the Bureau. The report also called for a reworking of congressional committees to provide stronger oversight.

HAMILTON: The intelligence community needs a shift in mind set and organization.

ARENA: The FBI embraced many of the recommendations and says it will look closely at others. Senior CIA officials say they want to proceed carefully. "We are in the middle of a war," one said, "and do not want to disrupt that activity."

The president called the report "constructive," but made no commitments.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I look forward to studying their recommendations and look forward to working with responsible parties within my administration to move forward on those recommendations.

ARENA: Commission member and former Senator Bob Kerrey says he's hopeful changes will be implemented, but not optimistic.

BOB KERREY, 9/11 COMMISSION MEMBER: In my experience in politics, when somebody is asked to give up something, they will come up with all kinds of reasons other than the most important one, which is they don't want to surrender authority.

ARENA (on camera): Commission members say even though their charter expires, they won't be going out of business. They promise to return in a year with a report card judging what, if any, progress has been made.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

NGUYEN: New York Mayor Michael Bloomberg says he hasn't read the 9/11 Commission report just yet, but he's pleased the panel agrees that New York needs more federal funding to fight the threat of terrorism.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG, NEW YORK: The important thing for the city is it's a big victory and that this Commission agrees with us that we've got to get homeland security in this country funds allocated based on where the risks are. This should not be a pork barrel bill. There are plenty of other ways to get monies for other purposes to other locations. But the monies that you spend to defend this country have to be used where the problems and the risks are.

(END VIDEO CLIP)

NGUYEN: Homeland security funding for New York has dropped from $187 million to $96 million, even though New York is considered the city most likely to be attacked by terrorists.

So much has changed in our world since the September 11 attacks.

Our Keith Oppenheim looks at some of the new security measures already in place.

(BEGIN VIDEOTAPE)

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): In Chicago, you can't just walk into one of America's oldest ballparks anymore. Backpacks are now checked for hazards.

In New York, you can't just park at one of the city's largest hotels. Cars are checked for explosives and crisis plans are ready.

MIKE STENGEL, MARRIOTT MARQUIS TIMES SQUARE: If we had to house people in our ballroom, we're prepared to do that within minutes.

OPPENHEIM: In post-9/11 America, technology as a form of security has taken flight. In Arizona, unmanned planes patrol the Mexican border. In Minneapolis, a pilot program was launched to screen airline passengers faster by scanning retinas and fingerprints.

UNIDENTIFIED FEMALE: I'm just going to take three scans of each index finger.

OPPENHEIM: Surveillance is getting higher tech, too. Consider this crisis center in Chicago.

(on camera): It's a state-of-the-art facility that can integrate live video feeds with a computerized layout of all the floor plans in the city's major high rises, enabling emergency managers to see and evaluate a crisis in ways they never could before.

RON HUBERMAN, CHICAGO EMERGENCY MANAGEMENT & COMMITTEE: The city has invested heavily in cameras around key infrastructure and other locations, giving us the capacity in real time to monitor what's going on.

UNIDENTIFIED MALE: Everybody has a different attitude about terrorism and terrorists and just, you know, everybody's more paranoid.

OPPENHEIM: Perhaps. But some believe paranoia is one change that's fading. At this Illinois supply store, sales of gas masks and water jugs spiked after September 11. PHILIP CABLE, AMERICAN SCIENCE AND SURPLUS: And we haven't seen any significant increase in sales on any of these types of products since then. It's been as if 9/11 never happened.

OPPENHEIM: But in some places, the changes are simple. This paralegal service near ground zero now has an emergency plan.

SALVADOR UV, AMERICAN CLERICAL SERVICE: I wish I had told people to evacuate a little earlier that day. I'm much more prepared to make that decision.

OPPENHEIM: Feelings of regret or loss come with memories of that day, something no level of higher security and technology can easily diminish.

Keith Oppenheim, CNN, Chicago.

(END VIDEOTAPE)

NGUYEN: And you can log onto our Web site for more on the 9/11 report. You can read the entire document, all 500 plus pages, and find out what victims' families are saying, plus much more. You know the address. It is cnn.com.

Here are some of the stories making news across America this Friday.

The government's star witness against Martha Stewart learns his fate today. Douglas Faneuil, who was the assistant to broker Peter Bacanovic, will be sentenced for his part in the shady stock deal. Faneuil faces up to a year in prison. Stewart and Bacanovic got five months.

John Gotti, Jr. is slated to get out of jail in September. But it might be a short stint on the outside. Gotti was indicted on charges of attempted murder, kidnapping and securities fraud. Some of the charges stem from an alleged plot to kill Guardian Angels' founder Curtis Sliwa in 1992. Gotti is serving time for racketeering.

The judge in the Kobe Bryant case changed an earlier ruling and will now allow some physical evidence that had been excluded from the trial. The results of a police physical exam on Bryant will be entered into evidence. The change came after the defense said it would use the exam findings as part of the case.

Police in Utah are still working on the puzzling case of a missing pregnant woman. We have an update on the case and take a look at who investigators are looking to question.

Also, will picket lines greet Kerry in Boston, John Kerry, that is, along with the Democratic convention delegates? We'll get that update.

Plus, at the half hour, a former Green Beret who worked for the CIA in Afghanistan defends himself online. We'll look at what he has to say about the assault charges he's facing. (COMMERCIAL BREAK)

NGUYEN: Welcome back on this Friday.

Your news, money, weather and sports.

The time right now is 5:15 Eastern.

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

The families of September 11 attack victims are hopeful the 9/11 Commission's report will lead to important changes in the nation's intelligence gathering community. Many of them echo the Commission's finding that intelligence agencies were negligent before the terror attacks.

A warning today for Sudan. The U.S. is threatening sanctions against Sudan if it doesn't put an end to militia attacks in the Darfur region. A proposed U.N. resolution would give the government a 30 day deadline to comply.

In money, the U.S. military may be getting some much needed emergency funds for Iraq. Congress approved a massive defense bill and sent it on to President Bush. Earlier this week, a government report highlighted shortfalls that were compromising the safety of American soldiers.

In culture, a battle is brewing over new technology from TiVo. Movie studios and the NFL cite copyright concerns over their opposition to TiVo's plan to make its systems compatible with home computers.

And in sports, after more than three decades, Monday Night Football may have to find a new home. Early indications point to ESPN possibly taking over the telecast when ABC's contract with the NFL expires after the 2005 season.

What? Monday Night Football is moving? Chad -- say it isn't so.

MYERS: I won't be able to find it.

NGUYEN: Yes.

MYERS: There's no chance.

NGUYEN: And if you don't have cable, how are you going to watch it?

MYERS: Well, exactly. I don't think -- I'm not so sure that'll happen. We'll just -- that's just like that old Coke/new Coke thing.

NGUYEN: Right.

MYERS: We'll see.

(WEATHER REPORT) NGUYEN: Let's see how the European markets are wrapping up the week.

For that, we want to turn to our Robyn Curnow, checking the financial numbers for us in London.

Good morning, across the pond to you -- Robin.

ROBYN CURNOW, CNN CORRESPONDENT: Good morning here from London.

Happy Friday to you, Betty.

I want to show you how these markets are doing. As you can see, some positive movements. Earlier, the Swiss SMI bucking the trend. We are seeing some more positive signs here in Europe after a pretty dreadful session yesterday. There's a little bit of bargain hunting going on this morning.

I want to show you these tech and chip sectors, following Wall Street -- I think echoing Wall Street's slight tick rebound yesterday. However, this sector is not really, at the moment, feeling the pinch of those downward movements in the Amazon and Microsoft share prices after trading closed in Wall Street. We're still seeing some pretty strong numbers here, except for Phillips, of course, down, just down .1 of a percent -- .5 of a percent.

Now, I do want to show you one auto sector that has going to be -- is going to be focusing a lot of attention for European investors. DaimlerChrysler has come out and said that it has sorted out a labor dispute and that's why we're seeing some positive movements there in its share price. DaimlerChrysler, of course, makes Mercedes Benz. And real concerns about very tight labor laws in Germany over the past few years and the fact that this labor dispute has been sorted out is maybe giving some hint that these labor laws might be easing in this -- in these difficult times, particularly because Germany is Europe's largest economy, if you remember.

And we're waiting for V.W. Volkswagen results out in the next hour. At the moment, we're getting some sense that 2004 sales volumes will fall well short of original expectations. But we're still seeing V.W. hit just nearly under 3 percent there. So still Volkswagen, which is Europe's largest car company, making some profits there, despite the fact that we are going to see some falling sales in V.W. -- back to you, Betty.

Have a good weekend.

NGUYEN: You, too.

Thank you, Robyn.

Well, with the Democratic National Convention coming to town, an independent arbitrator has awarded Boston police a four year pay raise of 14 1/2 percent. And the head of the Patrolman's Association is discussing that ruling with other union leaders. The police union had threatened to picket the site of the convention, but Boston's mayor says there's no reason to do that now.

(BEGIN VIDEO CLIP)

MAYOR THOMAS MENINO, BOSTON: I would think the union should give up whatever they planned to do because it doesn't make any sense right now -- 14.5 percent over four years, that's a decent contract in these times.

(END VIDEO CLIP)

NGUYEN: Pickets at Boston's Fleet Center could present a dilemma for labor friendly Democratic delegates and for the party's presidential nominee.

The John Kerry/John Edwards team leaves Denver today on a campaign road trip to Boston and the Democratic convention. A kickoff event was to be held outdoors in Aurora, where Kerry was born some 60 years ago. But rainy weather forced it to be moved to Denver's Fillmore Auditorium.

Meanwhile, President Bush heads for Detroit this morning to address the annual meeting of the National Urban League. Mr. Bush follows John Kerry, who addressed the group yesterday. The president flies to Texas this evening for a fund-raising dinner at the Broken Spoke Ranch, which is near Crawford.

Mr. Bush's speech to the Urban League is set for 10:00 Eastern, 7:00 Pacific this morning, and CNN will, of course, carry it live.

Police in Salt Lake City have no suspects in the disappearance of 27-year-old Lori Hacking, but they have designated her husband as a person of interest in the case. And while police look into an alleged lie told by Mark Hacking, volunteers remain vigilant in searching for the pregnant woman.

CNN's Kimberly Osias updates us.

(BEGIN VIDEOTAPE)

KIMBERLY OSIAS, CNN CORRESPONDENT (voice-over): To friends, 27- year-old Lori Hacking seemed to have it all -- a business career of her own, a baby on the way and a loving husband who said he was following family footsteps and heading to medical school.

REBECCA CARROLL, LORI HACKING'S FRIEND: She had no idea, we had no idea. It's just, it's so hard to believe that how could he pull that off for all this time?

OSIAS: Lori's best friend Rebecca Carroll says Mark Hacking told Lori that he had graduated from college and was going on to med school. But all of that was lie after lie. She says the pair even visited several North Carolina campuses.

UNIDENTIFIED MALE: Along 11th Avenue, 11th Ave. is, you know, the jogging route that goes down... OSIAS: Carroll and dozens of other volunteers continued to search today where Lori was last seen heading out for a run just before dawn Monday. Police have seized both of the couple's cars, as well as a dumpster and some bedding. At this point, there are no suspects in the case. But police are calling Mark Hacking a person of interest and have questioned him several times.

DET. DWAYNE BAIRD, SALT LAKE CITY POLICE: We have to look at everything he's told us with some speculation. But, you know, we want to reserve judgment at this point.

OSIAS: As for Mark Hacking's whereabouts, family members say he's under a doctor's care in a local psychiatric hospital.

DOUGLAS HACKING, MARK HACKING'S FATHER: He wishes he could be out here going door to door, beating the brush and whatever he could do. He's just so incapacitated with his grieving that he's just not able to be here.

OSIAS: They say he would never do anything to hurt his now missing wife.

Kimberly Osias, CNN, Salt Lake City.

(END VIDEOTAPE)

NGUYEN: Well, some people would certainly call it a medical health miracle. Next, the story of a toddler who received six -- yes, that's right -- six new organs.

And later on DAYBREAK, getting to know the president's daughters -- how you can talk politics with Jenna and Barbara.

(COMMERCIAL BREAK)

NGUYEN: The Navy's newest aircraft carrier, the USS Ronald Reagan, is getting a big welcome home celebration when it arrives at its home port in San Diego today. About 10,000 people are expected to turn out for a pier side ceremony to welcome the ship. Former First Lady Nancy Reagan and the late president's son Michael will take part in those ceremonies. The USS Ronald Reagan was in the middle of its inaugural voyage from Norfolk, Virginia around the tip of South America when the crew got word of Reagan's death last month.

It's time for our DAYBREAK "Eye Opener."

Before and after for little Addie McGriff (ph). Two-year-old Addie looks much better these days after successful transplant surgery saved her life. She actually had multiple transplants. Addie received six organs in all, including a new stomach, liver and intestines. Amazing. Doctors say the little girl has an excellent chance of having a normal life. The cutest little thing.

Well, pretty soon you may be able to just call in your order at McDonald's. How convenient. More than a dozen outlets across the country are taking advantage of a Colorado Springs call center to place their orders. The company says the call center eliminates mistakes from hurried employees and saves customers about 30 seconds in the drive through line. We all like that.

Well, many of the world's top comedians are in Montreal this week for the annual Just For Laughs festival. Among the special events scheduled is the only live performance by Triumph, the insult comic dog. You know who we're talking about. His show is called, get this, "Make Poop, Not War." No, we don't make this stuff up.

Other performers include Drew Carey, Tim Allen and Lewis Black.

And here's what's all new in the next half hour.

We've heard from the Commission, from the president and several other politicians on the 9/11 report. Ahead, what some of the families really think of the 500 plus page document.

Plus, later, Marion Jones and allegations of steroid use in Sydney. Hear what her ex-husband is saying.

And how political groups are trying to make sure young people make it to the polls this November.

(COMMERCIAL BREAK)

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