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American Morning

Terror Threat: New York; Missing Woman Arrest; Iraqi Tactics

Aired August 03, 2004 - 8:59   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.


ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.
HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. From New York and just a few miles up the river, you saw here there, Lady Liberty. The statue reopening this morning nearly three years after it was closed in the aftermath of the 9/11 attacks.

Also this morning, a very high-level meeting going on between the secretary of Homeland Security and a group of state, local and business leaders talking about the current terror warnings. We'll have more on the security crackdown and where officials go from here. That's the question.

BILL HEMMER, CNN ANCHOR: Also, as we move away from that story, we'll look at where the Bush and Kerry campaigns are headed today. A lot of material, new material for the campaigns to discuss on the road after both candidates mix it up on -- on terrorism yesterday.

COLLINS: True. Also, in Iraq, a gun battle at the home of Muqtada al-Sadr. Are U.S. troops trying to send a message or kill the radical cleric? We'll talk to retired Major General Don Shepperd about that strategy.

HEMMER: Also get back to Jack in a moment here. His e-mail question dealing with the issue of terrorism. Back to Jack in a moment on that.

In the meantime, though, amid the elevated terror warning, Homeland Security Secretary Tom Ridge today, in fact, this hour, expected to meet with key financial and political leaders here in New York. Deborah Feyerick outside the Citigroup headquarters in Midtown Manhattan. That meeting is taking place there.

Deb, good morning.

DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, Bill.

Well, the meeting was scheduled to begin at about 8:30. The call went out to different financial institutions across New York City, corporate executives, as well as the security directors from these major banking firms. These include, of course, JP Morgan, Bear Stearns, Citigroup, which is where we are and which is where the meeting is taking place.

A spokesman for Secretary Ridge tells CNN that this is really an opportunity for the secretary to talk to these people about security, about what is known, about what information is out there. And also to really offer a message of reassurance to these people.

Of course, the latest intelligence showing that terror operatives were out scouting different financial institutions throughout New York City. We are told by a police spokesperson that the financial community really has been one of the best to respond after 9/11. They have really been proactive in taking measures to make sure that their buildings are secure. They have protected their heating and their air-conditioning systems. Also, they have made sure that they've got secondary communications systems, so that if anything does happen, then they can respond very quickly.

So homeland security secretary here talking about what more can be done, what more these people need to know. But on the whole, there is a level of confidence that the financial institutions really have done what needs to be done so that their buildings are secure -- Bill.

HEMMER: Deborah, we talked with the mayor, Michael Bloomberg, here in New York City about two hours ago, and the question to him is this, in a month's time you've got the Republican National Convention coming here. We already knew of the security measures in place for that event. Given the latest stepped-up threat and the posture throughout this city, how long can this continue in terms of the current posture for security in New York?

FEYERICK: It's an excellent question, Bill. One of the big things about having this much security is it is extremely costly. And Mayor Bloomberg has often repeated the fact that keeping the city safe really comes with a very, very heavy price tag.

Clearly, they're going to keep these measures up throughout the Republican National Convention. With this latest information, they're really going to have to not play it by ear, so much as keep it at a higher level, perhaps even higher than they ordinarily would for as long a period as they have to. And the mayor has made that point before. He said we will spare no expense to make sure that this city is safe.

But at some point, it definitely wears, not only on the police officers who are doing these huge shifts, and in 100-degree heat, all dressed in these -- these uniforms and the vests and the hats, it really takes not only a physical toll, but clearly a financial toll as well. But the mayor says the city is ready and the city is willing.

HEMMER: And also, the mayor saying as long as it takes. But you make some excellent points, especially when it comes down to the cost of all this. Deb, thanks. Deborah Feyerick near the Citigroup building in Midtown Manhattan.

About 9:30 local time, that's about 27 minutes on the clock from now, Tom Ridge expected to speak with reporters. The mayor, Michael Bloomberg, will be there, too, we are told. We will watch that for you and bring it to you live when it happens -- Heidi.

COLLINS: President Bush returning to the campaign trail today in Dallas, and Senator John Kerry touring the Midwest with stops in Wisconsin. CNN's Dana Bash is with the Kerry campaign. She joins us now.

Good morning to you, Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. And they're both back on the campaign trail after heated sparring over who's the best guy to lead the fight against terrorism. And that started with some stepped-up rhetoric from Senator Kerry right on this show yesterday when he said the administration was actually encouraging the recruitment of terrorists.

(BEGIN VIDEOTAPE)

BASH (voice-over): Determined not to cede any ground on a political advantage, even his opponent's team admits he still has a Rose Garden embrace of intelligence reforms to better fight terrorism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are a nation in danger. We're doing everything we can in our power to confront the danger.

BASH: The president's proposals tracked two-week-old recommendations from the 9/11 Commission, Ideas John Kerry had immediately and wholly endorsed. There are some differences.

Kerry and the 9/11 Commission call for a national director of intelligence with full budget authority over 15 intelligence agencies. Kerry calls that power central to making reforms work. The president's proposed intelligence director would coordinate budgets, but not control intelligence purse strings. Kerry calls for the intelligence director to work inside the White House to have the ear of the president. Mr. Bush rejects that, saying the director would be subjected to too much internal pressure.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: There's a "Kerry" sign out there on that boat.

BASH: Bussing and boating through the Midwest, the Kerry camp conceded the president endorsed much of what the independent commission proposed, but only after running out of political choices. They say he cried uncle.

KERRY: September 11, 2001, September 11, 2002 came and went. September 11, 2003 came and went. September 11, 2004 is almost here, and only finally are we doing some of the things that some of us have been calling for all that period of time. We need leadership.

BASH: Kerry aides privately tip their hat to a president using his incumbent status for political advantage, but won't let go of the senator's, "He won't make you as safe as I will" stump line. He issued a challenge.

KERRY: If the president had a sense of urgency about this director of intelligence and about the needs to strengthen America, he would call the Congress back and get the job done now.

(END VIDEOTAPE) BASH: And Bush aides mocked Kerry's pitch, saying -- or at least noting his own absence in Congress this campaign year. And the president said he had no intention of calling Congress back from summer recess. He said the committees are already doing their work and they can begin to take action in September -- Heidi.

COLLINS: All right. Dana Bash, thanks so much for that -- Bill.

HEMMER: To weather news now, Heidi, six minutes past the hour here. Hurricane -- Hurricane Alex, rather, 90-mile-an-hour winds, getting very close to North Carolina. Chad Myers is there waiting, Atlantic Beach, there live.

Chad, how are conditions this hour?

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks. Taking a few hits on the satellite. To our viewers at home, just be a bit patient with us as we work through this. That's what happens when you're in a -- right there in that storm.

Chad, thanks. We'll check back in again before we go throughout the hour here -- Heidi.

COLLINS: Police in Salt Lake City say Mark Hacking is responsible for his wife's disappearance, and ultimately her death. Hacking was arrested yesterday on suspicion of aggravated murder, even though Lori Hacking's body has still not been found.

Rebecca Carroll is one of Lori Hacking's closet friends. She joins us now from Cedar Hills, Utah.

And I can understand what a difficult time this must be for you. Thanks for being with us this morning. We know that Mark is in the county jail on suicide watch. Were you surprised by his arrest?

REBECCA CARROLL, FRIEND OF LORI & MARK HACKING: You know, I don't know. I had been thinking about the case, and thinking about what was going on, and hoping there would be details about what had happened to her. But I wasn't -- for some reason that hadn't occurred to me. But when it happened, I know that it was probably the -- you know, it was the next step in the case.

COLLINS: Can you talk at all about his mental condition?

CARROLL: No, I have no idea about his mental condition.

COLLINS: Has he ever lied to you?

CARROLL: No, not that I know of.

COLLINS: Talk to us a little bit about how well you know Mark. What kind of a guy is he?

CARROLL: You know, I don't -- what I know of him is mostly just what -- from Lori, because I've known Lori since junior high. So I didn't know him as well. I haven't seen him in a couple of years, because we usually just went out with the girls. So I just -- from what -- with Lori, he was always kind and good. I never saw him treat her badly.

COLLINS: Did Lori ever tell you that she was pregnant? You mentioned, of course, you've had a tight and strong relationship with her. I would think that maybe she spoke to you about that?

CARROLL: No, I didn't know that. She had only found out about a week and a half before. I don't think even her family knew. So I didn't know yet either. I knew that she had told me that they were wanting to have a baby, though.

COLLINS: Have you been able to speak with either one of the families of Mark or Lori?

CARROLL: I haven't spoken to them in about a week.

COLLINS: What did they tell you one week ago about how they were feeling about all of this?

CARROLL: Well, when I -- we spoke at the candlelight vigil. It was just a week ago Sunday. So it was hard. They were obviously upset. I mean, this is a horrible situation.

COLLINS: It certainly is. Tell us a little bit about the search. Were you able to help in the search for Lori?

CARROLL: Yes, I went up a few of the days, and we searched the first day up on the mountain when they had us search above the park. And then another -- and then we did a neighborhood search another day, another trail search.

COLLINS: Rebecca, tell us about Lori then herself. She's your friend. What kind of a woman was she? Was she excited to become a doctor's wife?

CARROLL: Oh, yes, very. She was real excited to get to medical school, and for a new adventure. She was always excited for the next adventure.

And she loved life. And she just loved doing things. And she loved being with Mark. She loved Mark. And of course she was excited about him becoming a doctor.

But she loved him, and she would have loved him no matter what he did. But she was -- she was really excited about their new life and what was going to be next.

COLLINS: Rebecca Carroll, we certainly appreciate your time this morning. We do understand it's a really difficult time for you and the families of both of these people. Thanks again, Rebecca.

CARROLL: Thank you.

HEMMER: Ten minutes now past the hour. To other news now. Back to the CNN Center and Daryn Kagan.

Daryn, good morning.

DARYN KAGAN, CNN ANCHOR: Bill, good morning to you.

For that, we begin in Iraq, where police there say they have arrested a man in connection with a blast in Baquba, north of Baghdad. Military sources say the car bombing killed three Iraqi national guardsmen and wounded four others. And in northern Iraq, insurgents have damaged a key pipeline again. The attack comes just days before officials were expecting oil exports to resume.

Here in the U.S., the Justice Department is resuming its fight against a type of late-term abortion. At issue is a Bill that President Bush signed last November prohibiting what critics call partial birth abortions.

Earlier this year, a district court judge in San Francisco blocked that law, ruling it unconstitutional. Justice Department lawyers plan to appeal the ruling. The case is expected to reach the Supreme Court.

Digital technology could finally tell us if Lee Harvey Oswald acted alone in the Kennedy assassination. Archivists are trying to preserve and copy the only sound recording of the 1963 assassination. The tape is now brittle and it becomes damaged with each play. Researchers hope to make a copy of it using optical digital scanning.

It was a smooth -- smooth liftoff for the Messenger Probe. The spacecraft is now traveling five billion miles to Mercury. Think about those frequent flier miles. It will start orbiting the planet closest to the sun if everything goes well in the year 2011.

And back down here on Earth, finally, you want to check out this video. An 80-foot whale carcass has been spotted off the south coast of England. It is a rare sight in that region. It's due to wash ashore in the next couple of days.

So if you're going to be on the south shore in England, you might want to look out. I guess if whales beach there -- I learned this morning -- they tend to do it on the east coast, not on the south coast. There you go.

HEMMER: I've been warned. Thank you, Daryn.

KAGAN: You got it.

HEMMER: From the state of California there, the state considering a law that provides an added incentive for owners of hybrid gas and electric cars. As Miguel Marquez reports today, not everyone there in California thinks that's a good idea.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Ah, LA traffic. If you're driving by yourself anytime, anyplace, you stand a pretty good chance of getting stuck, staring at brake lights as far as the eye can see.

UNIDENTIFIED FEMALE: The traffic going home, especially on a Friday, it's just awful.

MARQUEZ: But now comes a plan backed by Governor Schwarzenegger to allow single drivers behind the wheel of hybrid cars to take the fast lane, normally reserved for autos with more than one person.

FRAN PAVLEY, CALIFORNIA ASSEMBLYWOMAN: The idea behind the Bill was to incentivize the hybrid technology, create public awareness.

MARQUEZ: Fran Pavley, a California Democrat, says the Bill would allow hybrids that get at least 40 miles per gallon and have nearly zero emissions to take the HOV lane. But one traffic guru says opening HOV to hybrids would only slow traffic for everyone.

BRIAN TAYLOR, DIRECTOR, UCLA DIRECTOR OF TRANSPORTATION: One car coming down the roadway that exceeds capacity can cause a backup to start to occur. So you can have a small change in vehicles have a big effect on traffic.

MARQUEZ: Besides, says Taylor, it's not like consumers need more incentives to buy hybrids. At dealerships across California there are months-long waiting lists to buy one, and that's with consumers paying more than sticker price. But for some consumers with an HOV carrot hanging over their heads, it may make them move a little faster for hybrid technology.

SHERYL GORCHOW STUART, CARPOOLING SINCE 2001: We've been thinking about buying one of those cars in our family for a variety of reasons. And so, of course, I think it would be a wonderful thing.

MARQUEZ (on camera): California's Department of Transportation says there are now almost 24,000 hybrids on California roads. And that number is expected to triple by 2008. The bill's sponsor says if traffic snarls ensue, the law would contain a provision allowing it to be pulled over and junked.

Miguel Marquez, CNN, Los Angeles.

(END VIDEOTAPE)

COLLINS: Still to come this morning, the face of the Abu Ghraib prison scandal goes to court. But Lynne England's lawyer says his client is just a scapegoat. We'll talk to her attorney.

HEMMER: Also in a moment, the latest in the Kobe Bryant case. There may be a crack in the prosecution's resolve. New details in that case in a moment.

COLLINS: And John Kerry promises to bring home some troops from Iraq if elected president. But is that even possible? We'll talk to retired General and military analyst, Don Shepperd, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK) COLLINS: Radical Iraqi cleric Muqtada al-Sadr says U.S. troops are involved in an operation against his forces in Najaf. But the coalition denies any such operation. The U.S. has agreed to a cease- fire with al-Sadr in Najaf.

Retired Major General Don Shepperd, a CNN military analyst, is with us this morning from Tucson, Arizona.

General, hello to you. Thanks for being with us.

So what about this? The U.S. forces, as we have said, are denying that there was this battle in Najaf. Why is that? Why is it so important that Iraqi forces take charge of situations like this?

MAJ. GEN. DONALD SHEPPERD, U.S. AIR FORCE (RET.): Well, it's extremely important, Heidi. We're looking again for this phrase "tipping points," if you will, in which the people of Iraq say they've had enough of the insurgents, they've had enough of this type of thing, and they take over their own defense and their own police forces, and take their buildings back in all of these cities.

It's very important that the U.S. forces, if at all possible, stop the offensive operations and let the Iraqis do that. Their intelligence is better. They're better at almost everything that remains to be done now than U.S. forces.

This appears to be Iraqi forces, paramilitary forces and police forces that were moving against al-Sadr in his own home. So it's a message that he doesn't have freedom of movement. And he's getting weaker, not stronger, Heidi.

COLLINS: Well, how important is it then that al-Sadr himself is either captured or killed? I mean, how much of a role does he have in the insurgency now?

SHEPPERD: He's still a very big symbol to his own followers. There used to be a huge following with a fairly substantial militia, it started out in the neighborhood of 2,000 to 3,000, then grew to about 10,000 supporters, mainly in the area of Najaf, and also in north -- northeastern Baghdad, the poorer sections of northeastern Baghdad called Al-Sadr City up there. So it's important that he be dealt with.

He's also indicted for the murder of a cleric, Al-Howi (ph), and he was indicted. And remember that Lieutenant General Sanchez from U.S. coalition forces in April said that he is going to be captured or killed. We've simply backed off that with some type of truce with him. And he says now he may run for political office.

His newspaper is back in circulation by the order of the -- of the interim government. And so he is definitely a factor. And the new government's going to have to figure out how to deal with him. And if they can deal with him, it will be a real feather in their cap of strength that will be seen by the other Iraqis around the country.

COLLINS: Yes, I do remember Sanchez's comments on that. What about these deadly attacks, though, General Shepperd, on the Christian churches, both in Baghdad and Mosul? Who do you believe is behind these attacks then? Could it be al-Sadr?

SHEPPERD: I don't believe it's al-Sadr at all. The attacks are being attributed to Zarqawi, although that's still unclear who did them.

The Christians are about three percent of the population of Iraq. There's about 750,000 of them. And clearly, the insurgence, probably the foreign insurgents, are trying to sow discord between the various factions.

If they could launch a civil war between the Shia and Sunni, or a movement against the Christians, it would just sow chaos and have, again, less -- less confidence in the new government. So again, you're looking for confidence in this new government. And this is a step in the wrong direction. By the way, a very effective tactic.

COLLINS: Well, as you know, clearly a very hot-button issue in the presidential campaign, the situation in Iraq. Senator Kerry saying that by the end of his first term, he would significantly reduce forces in Iraq. Is that even possible?

SHEPPERD: It is possible. And it's possible either by Senator Kerry, also by President Bush, if the following things happen.

First of all, there have been some discussions about bringing in Arab nations, an Arab force of surrounding countries, or Arab countries from wherever to replace some of the coalition forces so they can be brought home. That could happen. And if that happens, it is possible to reduce coalition forces.

Also, there's an acceleration of movement of making the Iraqi army stronger. The 7th Battalion out of 27 has just been trained and put on the streets out there, if you will. So if the training is accelerated by the Iraqis of their forces, they'll be able to take over some of their defense. And you could come down in numbers of coalition forces sooner than we contemplated.

COLLINS: Retired Major General Don Shepperd this morning from Tucson. Thanks so much, General.

SHEPPERD: Pleasure.

HEMMER: Back here in New York, at 22 minutes past the hour, waiting Tom Ridge, homeland security secretary, meeting with New York's mayor, Rudy Giuliani, also the governor, George Pataki. We'll get more information of what's been handed out to the financial institutions, how the city of New York is reacting, too, in a moment when they greet reporters here.

Also, the 9/11 Commission hitting the road today. If it convinces most Americans that action is necessary, can it still convince Congress? That's ahead, too, when we continue in a moment.

(COMMERCIAL BREAK) HEMMER: Back to the "Question of the Day," and Jack now.

JACK CAFFERTY, CNN ANCHOR: Thanks, Bill.

Intelligence suggests that al Qaeda intends to disrupt the elections and the democratic process by possibly carrying out some sort of large-scale attack here in this country before November. President Bush warned yesterday that "We are a nation in danger," and both candidates, Bush and Kerry, vow to be tough on the war against terrorism.

How would a terrorist attack affect the outcome of the election is the question we're pondering here this morning.

Karen in Glendale, California, "I don't think an attack would change the election at all. It would make the people who believe in Bush believe more, and the same with John Kerry. We Americans simply are divided in how we think things should be handled."

Shirley in St. Petersburg, "An attack would help Bush. He has united the terrorists against us, he has alienated our allies who we need as terrorists are scattered around the world. They want him to be the president. It helps them."

Lucien writes, "Almost all of Bush's speeches are about how America is safer now since we invaded a Iraq. If a terrorist attack would occur, it would basically say Bush was wrong and could make a lot of people more favorable to Kerry's side. It could cost Bush the election."

And Roger, in Crystal, Minnesota, "It depends on the read of the fickle media. If their take is that the current administration's plan has failed, then it will turn the voters on Bush. If it's that it's too risky to change plans midstream, then Kerry loses."

HEMMER: Was there much reflection on what happened in Spain, March 11?

CAFFERTY: There's some people alluding to it. But it's a little tough. I mean, it's kind of apples and oranges.

This ain't Spain. And, you know, it's a little heavier rock to move, one way or the other, than that one.

HEMMER: All right. Thank you, Jack.

CAFFERTY: Sure.

HEMMER: Still waiting for Tom Ridge. We'll get you there when that happens.

The president meeting with leaders from Australia in a moment here. Perhaps he has something to say regarding the same issue that we've talked about through the morning. Watching the monitors here for the latest there. Also in a moment, the face of the Abu Ghraib prison scandal has her first day in court today. We'll talk to Lynndie England's attorney about that.

And in a moment, back to Atlantic Beach in North Carolina. Chad is standing by for Alex.

Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Live from the White House, listening to the president. His comments with leaders from Australia.

As that continues there, also watching the podium here in New York City. Homeland Security Secretary Tom Ridge meeting with leaders from New York City. We'll get a comment when that opens up as well to reporters in a moment.

Also, live from the New York Stock Exchange on Wall Street, opening bell right on cue, 10170 is your opening mark, up 39 points in trading yesterday. This really bucking the trend that a lot of analysts thought would play out given the security warnings on Sunday.

Nasdaq mark site, not a bad day. Up five points yesterday, given the news, swirling around the markets. 1892 is your opening mark there.

And welcome back, everybody, to New York City. And good morning again.

COLLINS: Other things happening right now, too. The momentum is certainly picking up in Washington on the recommendations from the 9/11 Commission. Congress holding hearings today, looking at how the proposals match up with the president's ideas. We're going to have a report on that in just a few moments.

HEMMER: Also, from the attorney this morning representing Army Reservist Lynndie England as she faces a hearing today in the Abu Ghraib prison abuse scandal. She arrived about 90 minutes ago. He says he's very concerned that she will not get a fair trial. We'll look at why in a moment.

COLLINS: Also, we'll check back in with Chad Myers in North Carolina, watching Hurricane Alex as it heads by the outer banks. You see those pictures there, definitely churning things up.

HEMMER: He says he feels gusts about 60 miles an hour or so. We'll get back to him in a moment.

A sense of urgency in Washington. Both houses of Congress today follow the president in looking for ways to implement the recommendations off the 9/11 Commission. Ed Henry waiting and listening there on Capitol Hill.

Good morning, Ed. ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, again, Bill.

That's right. In about 30 minutes, both the House and Senate will kick off more hearings on the 9/11 Commission's final report. And these new threats are really giving the commission more impetus to prod Congress and the president to go much further than the president went yesterday in endorsing reform.

(BEGIN VIDEOTAPE)

HENRY (voice-over): 9/11 commissioners believe President Bush took a strong first step, but they urged Congress to act quickly, especially in the wake of the latest warnings of terrorist attacks.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: I can't think of a higher priority than implementing some of these reforms quickly and smartly and efficiently. Al Qaeda is not on a vacation schedule.

SEN. SUSAN COLLINS (R), MAINE: The specificity of the new threat underscores the urgency of the action.

HENRY: Senator Susan Collins is generally supportive of the push for a national director of intelligence. But at a hearing this morning she'll take a close look at the call for a national counterterrorism center. It would tear down the wall between the FBI and CIA, which critics charge could lead to abuses.

COLLINS: This does raise important civil liberties questions. We need to make sure that we have safeguards in place.

HENRY: 9/11 commissioners start hitting the road today to rally support for their proposals. They want lawmakers to feel some pressure.

ROEMER: Well, I would strongly encourage the Congress to work in a bipartisan way to try to get a number of these recommendations, many of which are not new, implemented and protect this country so that when they run for reelection in November, they can run with a good conscience, fulfilling their job description and job responsibilities to defend and protect this great country.

HENRY: Democratic presidential nominee John Kerry wants Congress called back for a special session to follow up hearings with legislative action this month. The president disagrees.

BUSH: Congress has been thinking about some of these ideas. They can think about them over August and come back and act on them in September.

(END VIDEOTAPE)

HENRY: And, in fact, House Republican leaders are now privately talking about acting right after the Republican National Convention. Of course, that would be the first week in September, when Congress comes back into session. Significance there, that would be right on the eve of the third anniversary of the 9/11 tragedies -- Bill.

HEMMER: Ed Henry from Capitol Hill -- Heidi.

COLLINS: Army Private Lynndie England has arrived for a military hearing this morning at Fort Bragg, North Carolina. Now six months pregnant, she's one of the soldiers charged with abusing inmates at Iraq's Abu Ghraib prison. The Article 32 hearing will determine if Private England is to face court-martial.

Rick Hernandez is the attorney representing Private England. Once again, Rick Hernandez is the attorney representing Private England. He spoke with us a little bit earlier. Private England's Article 32 hearing is expected to last most of the week.

Back over to Bill now.

HEMMER: All right. Heidi, a bit of a problem, technical difficulty there. Once we get it straightened out, we'll get back to it.

In the meantime, Daryn Kagan standing by at the CNN Center.

Good morning, Daryn.

KAGAN: It's my job to come off the bench for you guys, ready to go with the headlines. We begin here in the U.S.

Rescuers are expanding their search to find a 9-year-old boy who is missing in California's San Bernardino Mountains. David Gonzaelz (ph) disappeared Saturday while camping with his family near Big Bear Lake. He went to the family car to get some cookies and never returned. Rescuers fear that David is lost in the woods.

Also in California, officials have arrested a woman whose 8-year- old son was found wandering alone at Disneyland. Robin Freeman (ph) and her 11-year-old daughter split from the boy at the amusement park last month. A passerby recognized them yesterday and alerted police. Freeman has been booked on suspicion of felony child endangerment.

The judge in Kobe Bryant's sexual assault case has reluctantly released some transcripts there from a closed-door hearing on the accuser's sexual history. And they detail defense expert testimony on DNA evidence. It suggests the woman had a sexual encounter with another man after her incident with Bryant. The accuser's legal team strongly denies that took place.

Check this one out. It's the annual lawn mower races in Pulborough, England. Riders jumped into action for this year's race. It's named the Weapons of Grass Destruction. Thirty-five teams battle it out on riding lawn mowers.

You know, it looks fun, but they did this for 12 hours. This year's winner called Cupid Team. Heidi, weapons of grass destruction. Best line of the morning.

COLLINS: Yes, that probably is the best line of this morning. I give it a nine. All right.

KAGAN: But for 12 hours on a lawn mower.

COLLINS: Not a lot of fun, that's for sure. All right. Daryn, thanks so much for that.

I want to try once again now to get to our interview with Rick Hernandez. He is the attorney representing Lynndie England, who is now six months pregnant, but today will be heading to an Article 32 hearing to determine whether or not she will be facing court-martial for prison abuses at Abu Ghraib. Let's listen in.

(BEGIN VIDEOTAPE)

COLLINS: Some pretty compelling evidence, including pictures, are going to be presented at this hearing today. We know you cannot speak about specifics in this case. But broadly, what will the defense be?

RICK HERNANDEZ, LYNNDIE ENGLAND'S ATTORNEY: Well, one thing we want to make absolutely clear is that these photographs that they intend to use for the new charges have absolutely nothing to do with prisoner abuse scandal or Iraqi detainees. They're intimate photos of a young girl with her boyfriend at the time, another soldier. And these photographs are just intimate photographs. They're not something that had anything to do with prisoner abuse.

COLLINS: But won't the case, as it proceeds, won't other issues be brought up other than these photos that we keep talking about this morning?

HERNANDEZ: Absolutely. And we're hoping to concentrate on what actually happened at Abu Ghraib instead of what happened outside of Iraq and while these young people thought that they were having a private moment.

So we're hoping to concentrate on what actually happened in Iraq. But as you can see, this whole thing takes the focus away from actual detainee abuse and puts it on a young girl. And that's the way the government wants it. We want the focus to be on Abu Ghraib, where other abuses occurred at the direction of the government.

COLLINS: In fact, you claim that Lynndie England is a scapegoat. And I know that you want to question the higher-ups in all of this. How high will you go?

HERNANDEZ: It's not how high I'll go, it's how high the government will let us go. What we want -- what the government wants you to believe is this was a rogue band of adequately trained soldiers who went behind their chain of command to do whatever they wanted to do.

Nothing could be further from the truth. They know that this goes through MI. They know it's a systematic problem. And you don't have to take my word for it. The International Red Cross, Amnesty International, the Army's own Taguba Report have all reported that that is widespread abuse and that these incidents, such as underwear on the head, didn't occur just at Abu Ghraib, it occurred all over Iraq.

COLLINS: OK. But you actually claim that England was ordered to do these types of things that you talk about. Meanwhile, last month the White House released some documents saying that -- they were internal policy documents, I should be clear -- saying that these types of torture methods, if you will, were not sanctioned. How will that impact your case?

HERNANDEZ: Well, the White House can release all the documents they want as to what was happening in the White House. But what was happening in Iraq was absolutely different. What was happening there was being passed on to the soldiers on the ground. And MI had control of Abu Ghraib, not the White House.

COLLINS: Are you concerned at all about your client getting a fair trial here?

HERNANDEZ: I'm absolutely concerned about my client getting a fair trial. As you can see, this isn't the same as being in a civilian world. In a civilian world, if there were intimate photos of a young girl, such as at Mardi Gras, if she exposed her breasts, she would get beads. Here, in this case, they're offering my client 30 years for intimate photos.

(END VIDEOTAPE)

COLLINS: Once again, Rick Hernandez, the attorney representing Private Lynndie England, speaking with us a little bit earlier this morning -- Bill.

HEMMER: All right, Heidi. About 20 minutes before the hour. Chad's watching Alex today off the coast of North Carolina, Atlantic Beach there.

Chad, how are things now this hour?

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks for that. Good work down there, too, off the coast of North Carolina.

CHAD MYERS, CNN METEOROLOGIST: Thank you.

COLLINS: Still to come, it seems some very expensive arthritis drugs don't live up to the hype. Dr. Sanjay Gupta stops by to tell you about what might be a much cheaper and more effective alternative.

HEMMER: Also, in a moment here, why Bill Clinton could soon have something in common with Wayne and Garth, the church lady and the Coneheads. Back in a moment. "Political Pop" straight ahead this half-hour in a moment.

(COMMERCIAL BREAK) HEMMER: Welcome back, everyone. Arthritis sufferers may get more relief from over-the-counter drugs than costly prescription painkillers. Is that true? Dr. Sanjay Gupta here now with more on this.

Good morning, doctor.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Good morning.

This is a really big deal, these drugs. Just the two drugs, Celebrex and Vioxx, $6 billion a year. Big numbers, right? A lot of people spending a lot of money on them.

Why they were touted as being tough on pain but also easy on the stomach, the concern about a lot of these anti-inflammatories was they caused stomach upset, possibly stomach bleeding, all sorts of things like that. But there might be other side effects to be concerned about.

Vioxx, for example, may have an increased risk of heart attacks. For example, take a look at the numbers there. Twenty-four percent increased risk of heart attack with Vioxx, no increased risk with Celebrex.

Now, these were based on observational studies. They didn't actually find patients to take Vioxx and not take Vioxx. They just observed them for a while and found these numbers. Sill a bit of a concern there.

Merck Pharmaceuticals, we talked to them. They are the makers of Vioxx. They stand behind the safety of their medication saying, in their own studies, in fact, Vioxx was no more dangerous. But a lot of people paying attention to this.

HEMMER: If people are taking Celebrex or Vioxx, those two drugs, specifically, what do they do based on this information?

GUPTA: Well, here's the thing. I think that both drugs are probably good drugs in terms of being tough on pain and easy on the stomach. If you are concerned about heart problems, blood pressure problems, things like that, Vioxx may be something you want to talk to your doctor about.

Celebrex, both -- all three of the medication -- I'm sorry, both medications are very expensive, though. Take a look at the numbers. And if cost is something you're concerned about, then always pay attention to this.

Vioxx, $138, $139 a month. Celebrex, $96 a month, almost, compared to over-the-counter Ibuprofen, over-the-counter Naprosyn, a lot cheaper there.

If you're insured, a lot of patients will get the more expensive drugs. That's just the way the system has gone. But if you're uninsured, Bill, I think the best thing to do is probably to buy one of the medications that work well, Ibuprofen or Aleve, and combine it with the medication that protects your stomach, like a Prilosec or something like that.

HEMMER: Good information. Nice to see you here, too, Sanjay.

GUPTA: Good to see you, yes.

HEMMER: All right. Talk later.

GUPTA: Stay healthy.

HEMMER: A break here in a moment. Some "Political Pop." The man who wins the White House in November will be the most powerful man in the world. But will he have the tie to match? Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Watching Tom Ridge now, now speaking at the podium, talking with members from the New York community, from the political world, the financial world, the security sectors here. We'll listen for the address now at the Citigroup building in Midtown Manhattan.

(JOINED IN PROGRESS)

TOM RIDGE, SECY. OF HOMELAND SECURITY: So I don't want anyone to disabuse themselves of the seriousness of this information simply because there are some reports that much of it is dated. It might be two or three years old. This is a resilient organization that does its homework, and we just have to accept that reality.

The other reality we have to accept is you've got some extraordinary professionals, law enforcement and security professionals that can take this information and act upon it.

This information we received from our allies in Pakistan. And with its detail and thoroughness, particularly with the detail and thoroughness, we felt it was essential to share it with the appropriate communities and the companies so they could act upon it.

Now, the governor, the mayor and the commissioner and I just met with 25, 30 representatives from the financial services sector in this community and region. And as one of them pointed out, as soon as we get information, not even all of us, as soon as one or two of us get information, we can get on a conference call within hours and begin to figure out additional ways we can support one another, based on the kind of information you give us.

So, again, the fact that it is old -- you need to know that it was updated. More importantly, you need to know that people who are responsible for your security, whether it's law enforcement or the security professionals associated with Citicorp or any of these other companies, acted upon it immediately.

The leadership of these affected institutions, the local officials, the law enforcement personnel here in New York, as well as northern New Jersey and Washington, D.C., should all be commended, should all be commended for their swift and extensive efforts to ramp up security procedures.

Most importantly, I think we ought to note our gratitude to the employees. In the face of very difficult and very sobering news on a Sunday afternoon, probably were enjoying their day with their family, came Monday morning, the thoughts and anxiety associated with Monday morning. But on Monday morning, you were at your desks, you were in staff meetings, and you were carrying on with your daily tasks.

The terrorists wish to make Americans that live in freedom live in fear. And just by showing up at work, you have made a powerful statement that they will not succeed.

RIDGE: Thanks to the many steps that have already been taken by this government in the financial sector since September 11th to secure and protect our economy, we have made it much more difficult for the terrorists to achieve their broad objectives.

Those measures include improved communication systems between and among financial regulators and critical financial institutions, guidance on business continuity planning, and numerous drills and exercises to test backup systems and prepare financial professionals.

Now, that connectivity and that communications between these companies also go into the commissioner's office, and there's a line that goes into the governor's office. So both the connectivity within the financial services industry and to the support services provided by law enforcement exists today and gets stronger every day.

Now we have in place numerous backup systems to ensure that funds can be made available instantly to prevent any major financial disruption. These layered protections throughout the financial community are part of a larger and overarching effort by this administration to raise our standard of security and readiness to new and greater heights with each passing day.

Permanent security measures we have put in place since the attack of September 11th at our ports of entry, our borders, air, land and sea, mean that we are better protected than ever before. We've made progress. We know we have to make additional progress, as well.

And the American people can rest assured that thousands, literally hundreds of thousands of dedicated and talented security and law enforcement professionals are working very hard at this very moment, as they do every single day, to secure this country.

Right here in New York an already high state of security has been increased to reflect to show this new threat. At this time, trucks and vans are prohibited from entering the city by certain bridges or tunnels that lead to lower Manhattan. Vehicle stops and searches have been implemented, and concrete barriers have been put up at various locations. Local officials and law enforcement are doing their part to make us safer.

And I would ask citizens of this great city and all across the country to continue to do your part, to remain vigilant and ever watchful for suspicious activity and behavior and to report that activity. This intelligence is a solemn and serious reminder that we are a nation at war. And the terrorist enemies we face will not stop until we defeat them.

I understand, believe me, I understand that these warnings and information of this type are difficult to digest.

RIDGE: They're very difficult to accept, to take in, and can easily and understandably give rise to feelings of anxiety and fear.

Americans, as reflected in this great city, have shown time and time again that we are not a people that gives way in the face of great difficulty or great challenge.

And so, at this time, let us press on with the resolve and perhaps a bit of defiance, to say to our enemies, "We know what you want to do, but we are not going to let you do it. We will not become fortress America. We're going to continue to lead our lives and keep moving forward and hold fast to our freedoms. Nothing, nothing will ever change that."

I thank you. And I'm going to ask the governor to share a few thoughts with you, and then Mayor Bloomberg.

Governor Pataki?

GOV. GEORGE PATAKI, NEW YORK: Thank you, sir.

(APPLAUSE)

Thank you, Secretary Ridge. Secretary Ridge, thank you, again, for being here and for all the help that you have provided and will continue to provide to this city and state and the leadership you're providing for our country.

Now, it's incredible to think that the Office of Homeland Security didn't even exist just a matter of months back. And the progress you have made, in pulling together the different elements that are important agencies in protecting our freedom, has been extraordinary.

And I want to thank you, as well, for taking the extraordinary step of sharing this intelligence over the course of this weekend, not just with the political leadership, but with the people of New York and the people of America.

We are a strong people, and we do not cower and we do not live in fear. And having knowledge of what those who detest our freedoms would try to do to us doesn't cower us, it makes us stronger. And as you put it, perhaps there is that touch of defiance.

PATAKI: I have seen New Yorkers on September 11th respond with incredible courage and strength in the face not of threats, but of the most horrendous attacks this country has ever seen. And certainly now, with threats, we will show that same courage, that same resolve, that same defiance, and go about our lives. In fact, yesterday morning, the mayor and I went down, and the mayor rang the bell to open the New York Stock Exchange, one of the identified targets, because it is a symbol of American economic strength. And the report at the end of the day was, not only did the stock market go up, but there were more employees on the floor of the exchange yesterday than for a normal Monday in August.

That's the way New Yorkers respond, and that's the way we will continue to respond.

This is the financial capital of the world, and it will be for a long time to come.

And from there, the mayor and I went to the ground breaking of a new headquarters for the Bank of America on 42nd Street; another symbol of the economic strength of our country and a symbol of New York, a sign of New York is the financial capital of the world.

We take these threats seriously.

In the meeting we just had, it was a little bit different because it didn't focus so much on public security -- bridges and tunnels and train stations and mass transit facilities -- it focused on private security.

And I can tell you that I was enormously encouraged, because not only does this city have the finest public security forces commissioner anywhere in the world, let alone America, but our private-sector companies are lightyears ahead of where they may have been a few years back in understanding the needs of security in institutions like financial institutions.

Mr. Secretary, we have made enormous progress because of the partnership that we have had with the federal government, the state government, the city government, private sector and, most importantly, with the people of New York and the people of America.

Your leadership and the president's leadership in making this happen gives me tremendous confidence that our best days are still clearly ahead of us. And to all the employees here at Citicorp, you're here. Thank you for your courage and your strength. But we expect nothing less, because you are New Yorkers and you are Americans.

I'll let the mayor say a few words, and then we need you to get back to work.

(LAUGHTER)

This has to be a productive company.

(APPLAUSE)

Thank you. God bless you all.

MYR. MICHAEL BLOOMBERG, NEW YORK CITY: Governor, thank you. Mr. Secretary, welcome to New York. I'm glad the sandwiches were good and the run in the park was invigorating. New Yorkers do those things every day, and they're going to continue to do that.

I think if you go out and you look around this city, yesterday, today, what you see is the hotels full, the theaters doing well, restaurants and bars packed, subways, people are taking them and getting to work. No company is thinking of leaving. Every company is thinking of growing here.

And that's because New York City is open for business. New York City is open for education. New York City is open for the arts and recreation. New York City, most importantly, is open for democracy, and it is going to stay open.

Nobody is going to dissuade us from making this our home. Nobody is going to change our minds that this is the place where you have the ultimate opportunity for yourself and for your family, that this is the place where you can enjoy yourself and you can say what you want to say and not have your rights trampled on by others.

Crime continues to come down in this city. The NYPD continues to make you safer here than anyplace else you could live, and our commitment is to continue to do that.

I'm going from here with the governor to the opening of the Statue of Liberty, something that was shut after 9/11. It's another symbol and another reason for tourists to come here. It's good for our psyche, it's good for our image, and it's good for our economy.

We will continue to do these things. The governor pointed out, yesterday, we were out going around participating in all of the great things about New York. We will continue to do that.

And we are going to also make sure that the police department helps the private security part of every organization in the city take care of their own buildings and their own employees. People should be able to come here without fear, work in these buildings, go out in the street and enjoy themselves without having to look over their shoulder.

And I think, partially because of the help from Washington, partially because of the help from Albany, partially because of the help from the city government, but most importantly because of the help from the people who live and work in this city, the best days for New York are yet to come, and the terrorists are not going to win.

And, Mr. Secretary, thank you for everything you and the administration does for this city.

(APPLAUSE)

QUESTION: (OFF-MIKE) this meeting, the government or the corporations? And also, what are the major issues that the companies raised, the concerns that they have? RIDGE: Well, first of all, I think it was the collective desire of all of us to get together after the news of Sunday. And it took us a day to pull everybody together. But it was a very impressive array of the security officials from the major financial institutions around this great city.

And, frankly, one of the points that several of the members -- several security professionals emphasized was the hope and the desire that we continue to get them this kind of specific information in advance of everybody else.

I know over the weekend there's always a great deal of concern about going public and when you go public. But, in fact, we wanted to get some of this information to security professionals before we went public so they can begin notifying their employees.

I'd much rather have these men and women who showed up at work on Monday morning begin to receive notification from their employer before they get it, with all due respect, from the local news channel. It just makes it a little more comforting for them to get some kind of information from a private source rather than public.

QUESTION: If I could clarify then, then corporate (ph) security was notified far before...

RIDGE: Not far before, but we began discussing, particularly with the major institutions, the details -- not the specific details, but alerted them to the fact the institutions that we were discussing internally within the intelligence community, there was volumes of information about them, and then over the past 24 hours, have begun to share that information. This is actionable information.

I think at the end of the day, when we take a look at these reports, we'll get some insight into what they were looking for and the means by which they acquired this information. And I think that will not only enable us to enhance security in the financial services sector, but that's good information for all security professionals to have.

QUESTION: Can you speak to any evidence you have or any concerns you have about Al Qaeda operatives here in the United States, so- called sleeper cells? And does the new information from Pakistan have any bearing on that?

RIDGE: You know, I think in this day and age, in a country that is as open and as diverse as ours, when we literally have 600 million people that come across our borders every year, I think within the department and I think around the country we just assume that there are operatives here.

Obviously, the law enforcement community has their eyes on people they believe are connected or sympathetic to the cause, but we don't have the luxury of waiting to identify somebody coming across the border.

We just have to accept, for our planning and preparation purposes, the notion that they're here, they're looking to attack us, and we need to do everything we can every single day to try to detect, deter and prepare for it.

QUESTION: (OFF-MIKE)

RIDGE: I'm sorry, the acoustics aren't real good. My ears aren't real good either.

QUESTION: Is there anything in the information that would indicate (OFF-MIKE)

RIDGE: You mean infiltrated the corporate entities themselves? No. There's no such information.

It's interesting, when the security professionals in the financial services arena alerted me, they -- there's some fairly rigorous background checks that they do before you can have critical positions in some of these companies as well.

But the answer to your specific question is no.

QUESTION: Do you have any concrete evidence, a plan or a plot or recent surveillance? And how long will this high-level mobilization, specifically targeted mobilization, continue?

RIDGE: Well, we have -- again, just because we don't know when it might occur, when you see this kind of detailed planning you have to take preemptive action to prevent it from occurring.

And one could argue logically, if you've taken a look at potential sites with this kind of information, at least you're thinking about it. And we've got to take that very seriously.

And we will review the facts associated with going up to orange in these three regions in the financial services sector once we completely digest all the information we're reviewing now. There's still quite a bit of information that we're analyzing.

QUESTION: Do you have any evidence of a plot or a plan or recent surveillance?

RIDGE: There's no evidence of recent surveillance.

But again, I will tell you that the information about the casings that we revealed on Sunday have been updated as recently as January of this year. And we know this is an organization that plans in advance, that prepares and has patience.

And if anything else, the thoroughness of this information reflects the seriousness, as well as the event -- the seriousness of our effort to combat and bring these terrorists to justice overseas. It also speaks to their sophistication as an operation.

You know, there's a lot of suggestion out there that it's -- these are serious folks. They're patient folks. There's a lot of resolve -- not as much as ours. We're more serious, more patient and more highly motivated and more resolved.

But I think you need to take a look at it. It's sobering, but it's not stifling information. We'll deal with it.

QUESTION: Mr. Secretary, there are a lot of New Yorkers that are skeptical about these kinds of threat alarms. And some even see a political motive in all this (inaudible) Republican administration faces (inaudible). What can you say to those New Yorkers to dissuade them? Thank you.

RIDGE: Well, I guess I wish I could give them all top-secret clearances and let them review the information that some of us have the responsibility to review.

We don't do politics in the Department of Homeland Security. Our job is to identify the threat, match that threat information with the -- potentially the targets that have been identified, to integrate an entire country, to build partnerships with the state and local government, to invest in technology so that as we combat international terrorism we can put more people and technology in place to make ourselves safer.

But it is -- frankly, I would point out that this is the most significant, detailed pieces of information about any particular region that we've come across in a long, long time, perhaps ever. And that's why we needed to share it publicly. It's always a judgment call, always a judgment call. But here, went above any kind of threshold we might have had previously.

Every single day, just about every day, there's probably the notation of a community or a company or something like that in the threat-reporting stream. You have to assess the source and the credibility and whether you can corroborate it. And sometimes we pick up the phone and call the company or call the region.

The detailed and sophistication, the thoroughness of this information, if you had access to it, you'd say we did the right thing. Let the public -- government should let the public know about situations like this. It's not about politics. It's about confidence in government telling you when they get the information.

QUESTION: Mr. Secretary, to what degree of confidence do you think (OFF-MIKE) tells you about a possible ongoing plot?

RIDGE: We have publicly stated that, again, from several sources, that there has been an expressed intention to disrupt the democratic process. Could be interpreted throughout the election year, could be interpreted to Election Day.

But we need to understand, we shouldn't be limiting ourselves or expanding ourselves to that time frame. This is an organization that will attack whenever they feel that they can achieve -- they can be successful.

And so you've got the general reporting stream from credible sources. They've always talked about undermining America's economy. They began to frame it a little bit around the elective process.

But I don't think you ought to get too carried away about the time frame. When they're ready to move, they'll move.

QUESTION: Short of Congress changing the funding formula for...

RIDGE: Yes.

QUESTION: ... what means are there, at this point, for New York City...

RIDGE: Well, you can well imagine, whenever I come to town, Mayor Bloomberg raises the issue with me -- and very appropriately, I might add -- and so does the governor. So we are in lock step, as is the president.

And we will continue to work the Congress and continue to convince Congress that more money should be shifted to those areas that are high-risk.

Let me say this. We're still not done with the appropriations process this year. There are two pools of funds. One distributed per capita, and the mayor and the governor have talked about that a lot. So does your congressional delegation; so do the senators. The other goes to the urban areas, where we take a look at the population density, the threat.

And what the president asked this year was to reduce this pot that is distributed per capita substantially and put that into the other, where New York City would be the primary beneficiary.

Thank you very much.

HEMMER: Governor Pataki, the mayor, Michael Bloomberg, Tom Ridge, homeland security secretary. As the mayor steps up to the podium now, we're going to break away. We are out of time, huh?

COLLINS: We are, indeed.

HEMMER: Much more to come tomorrow. A busy day today. We'll see what tomorrow holds.

Andy, thanks.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: You're welcome.

HEMMER: Jack Cafferty as well.

We'll see you again tomorrow, OK? Here's Daryn at the CNN Center.

Daryn, good morning.

COLLINS: Hey, Daryn.

KAGAN: All right. You guys have a great day in New York City. We'll get started here.

Good morning from CNN headquarters in Atlanta. I'm Daryn Kagan.

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 August 3, 2004 - 8:59   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.
HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. From New York and just a few miles up the river, you saw here there, Lady Liberty. The statue reopening this morning nearly three years after it was closed in the aftermath of the 9/11 attacks.

Also this morning, a very high-level meeting going on between the secretary of Homeland Security and a group of state, local and business leaders talking about the current terror warnings. We'll have more on the security crackdown and where officials go from here. That's the question.

BILL HEMMER, CNN ANCHOR: Also, as we move away from that story, we'll look at where the Bush and Kerry campaigns are headed today. A lot of material, new material for the campaigns to discuss on the road after both candidates mix it up on -- on terrorism yesterday.

COLLINS: True. Also, in Iraq, a gun battle at the home of Muqtada al-Sadr. Are U.S. troops trying to send a message or kill the radical cleric? We'll talk to retired Major General Don Shepperd about that strategy.

HEMMER: Also get back to Jack in a moment here. His e-mail question dealing with the issue of terrorism. Back to Jack in a moment on that.

In the meantime, though, amid the elevated terror warning, Homeland Security Secretary Tom Ridge today, in fact, this hour, expected to meet with key financial and political leaders here in New York. Deborah Feyerick outside the Citigroup headquarters in Midtown Manhattan. That meeting is taking place there.

Deb, good morning.

DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, Bill.

Well, the meeting was scheduled to begin at about 8:30. The call went out to different financial institutions across New York City, corporate executives, as well as the security directors from these major banking firms. These include, of course, JP Morgan, Bear Stearns, Citigroup, which is where we are and which is where the meeting is taking place.

A spokesman for Secretary Ridge tells CNN that this is really an opportunity for the secretary to talk to these people about security, about what is known, about what information is out there. And also to really offer a message of reassurance to these people.

Of course, the latest intelligence showing that terror operatives were out scouting different financial institutions throughout New York City. We are told by a police spokesperson that the financial community really has been one of the best to respond after 9/11. They have really been proactive in taking measures to make sure that their buildings are secure. They have protected their heating and their air-conditioning systems. Also, they have made sure that they've got secondary communications systems, so that if anything does happen, then they can respond very quickly.

So homeland security secretary here talking about what more can be done, what more these people need to know. But on the whole, there is a level of confidence that the financial institutions really have done what needs to be done so that their buildings are secure -- Bill.

HEMMER: Deborah, we talked with the mayor, Michael Bloomberg, here in New York City about two hours ago, and the question to him is this, in a month's time you've got the Republican National Convention coming here. We already knew of the security measures in place for that event. Given the latest stepped-up threat and the posture throughout this city, how long can this continue in terms of the current posture for security in New York?

FEYERICK: It's an excellent question, Bill. One of the big things about having this much security is it is extremely costly. And Mayor Bloomberg has often repeated the fact that keeping the city safe really comes with a very, very heavy price tag.

Clearly, they're going to keep these measures up throughout the Republican National Convention. With this latest information, they're really going to have to not play it by ear, so much as keep it at a higher level, perhaps even higher than they ordinarily would for as long a period as they have to. And the mayor has made that point before. He said we will spare no expense to make sure that this city is safe.

But at some point, it definitely wears, not only on the police officers who are doing these huge shifts, and in 100-degree heat, all dressed in these -- these uniforms and the vests and the hats, it really takes not only a physical toll, but clearly a financial toll as well. But the mayor says the city is ready and the city is willing.

HEMMER: And also, the mayor saying as long as it takes. But you make some excellent points, especially when it comes down to the cost of all this. Deb, thanks. Deborah Feyerick near the Citigroup building in Midtown Manhattan.

About 9:30 local time, that's about 27 minutes on the clock from now, Tom Ridge expected to speak with reporters. The mayor, Michael Bloomberg, will be there, too, we are told. We will watch that for you and bring it to you live when it happens -- Heidi.

COLLINS: President Bush returning to the campaign trail today in Dallas, and Senator John Kerry touring the Midwest with stops in Wisconsin. CNN's Dana Bash is with the Kerry campaign. She joins us now.

Good morning to you, Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Good morning, Heidi. And they're both back on the campaign trail after heated sparring over who's the best guy to lead the fight against terrorism. And that started with some stepped-up rhetoric from Senator Kerry right on this show yesterday when he said the administration was actually encouraging the recruitment of terrorists.

(BEGIN VIDEOTAPE)

BASH (voice-over): Determined not to cede any ground on a political advantage, even his opponent's team admits he still has a Rose Garden embrace of intelligence reforms to better fight terrorism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are a nation in danger. We're doing everything we can in our power to confront the danger.

BASH: The president's proposals tracked two-week-old recommendations from the 9/11 Commission, Ideas John Kerry had immediately and wholly endorsed. There are some differences.

Kerry and the 9/11 Commission call for a national director of intelligence with full budget authority over 15 intelligence agencies. Kerry calls that power central to making reforms work. The president's proposed intelligence director would coordinate budgets, but not control intelligence purse strings. Kerry calls for the intelligence director to work inside the White House to have the ear of the president. Mr. Bush rejects that, saying the director would be subjected to too much internal pressure.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: There's a "Kerry" sign out there on that boat.

BASH: Bussing and boating through the Midwest, the Kerry camp conceded the president endorsed much of what the independent commission proposed, but only after running out of political choices. They say he cried uncle.

KERRY: September 11, 2001, September 11, 2002 came and went. September 11, 2003 came and went. September 11, 2004 is almost here, and only finally are we doing some of the things that some of us have been calling for all that period of time. We need leadership.

BASH: Kerry aides privately tip their hat to a president using his incumbent status for political advantage, but won't let go of the senator's, "He won't make you as safe as I will" stump line. He issued a challenge.

KERRY: If the president had a sense of urgency about this director of intelligence and about the needs to strengthen America, he would call the Congress back and get the job done now.

(END VIDEOTAPE) BASH: And Bush aides mocked Kerry's pitch, saying -- or at least noting his own absence in Congress this campaign year. And the president said he had no intention of calling Congress back from summer recess. He said the committees are already doing their work and they can begin to take action in September -- Heidi.

COLLINS: All right. Dana Bash, thanks so much for that -- Bill.

HEMMER: To weather news now, Heidi, six minutes past the hour here. Hurricane -- Hurricane Alex, rather, 90-mile-an-hour winds, getting very close to North Carolina. Chad Myers is there waiting, Atlantic Beach, there live.

Chad, how are conditions this hour?

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks. Taking a few hits on the satellite. To our viewers at home, just be a bit patient with us as we work through this. That's what happens when you're in a -- right there in that storm.

Chad, thanks. We'll check back in again before we go throughout the hour here -- Heidi.

COLLINS: Police in Salt Lake City say Mark Hacking is responsible for his wife's disappearance, and ultimately her death. Hacking was arrested yesterday on suspicion of aggravated murder, even though Lori Hacking's body has still not been found.

Rebecca Carroll is one of Lori Hacking's closet friends. She joins us now from Cedar Hills, Utah.

And I can understand what a difficult time this must be for you. Thanks for being with us this morning. We know that Mark is in the county jail on suicide watch. Were you surprised by his arrest?

REBECCA CARROLL, FRIEND OF LORI & MARK HACKING: You know, I don't know. I had been thinking about the case, and thinking about what was going on, and hoping there would be details about what had happened to her. But I wasn't -- for some reason that hadn't occurred to me. But when it happened, I know that it was probably the -- you know, it was the next step in the case.

COLLINS: Can you talk at all about his mental condition?

CARROLL: No, I have no idea about his mental condition.

COLLINS: Has he ever lied to you?

CARROLL: No, not that I know of.

COLLINS: Talk to us a little bit about how well you know Mark. What kind of a guy is he?

CARROLL: You know, I don't -- what I know of him is mostly just what -- from Lori, because I've known Lori since junior high. So I didn't know him as well. I haven't seen him in a couple of years, because we usually just went out with the girls. So I just -- from what -- with Lori, he was always kind and good. I never saw him treat her badly.

COLLINS: Did Lori ever tell you that she was pregnant? You mentioned, of course, you've had a tight and strong relationship with her. I would think that maybe she spoke to you about that?

CARROLL: No, I didn't know that. She had only found out about a week and a half before. I don't think even her family knew. So I didn't know yet either. I knew that she had told me that they were wanting to have a baby, though.

COLLINS: Have you been able to speak with either one of the families of Mark or Lori?

CARROLL: I haven't spoken to them in about a week.

COLLINS: What did they tell you one week ago about how they were feeling about all of this?

CARROLL: Well, when I -- we spoke at the candlelight vigil. It was just a week ago Sunday. So it was hard. They were obviously upset. I mean, this is a horrible situation.

COLLINS: It certainly is. Tell us a little bit about the search. Were you able to help in the search for Lori?

CARROLL: Yes, I went up a few of the days, and we searched the first day up on the mountain when they had us search above the park. And then another -- and then we did a neighborhood search another day, another trail search.

COLLINS: Rebecca, tell us about Lori then herself. She's your friend. What kind of a woman was she? Was she excited to become a doctor's wife?

CARROLL: Oh, yes, very. She was real excited to get to medical school, and for a new adventure. She was always excited for the next adventure.

And she loved life. And she just loved doing things. And she loved being with Mark. She loved Mark. And of course she was excited about him becoming a doctor.

But she loved him, and she would have loved him no matter what he did. But she was -- she was really excited about their new life and what was going to be next.

COLLINS: Rebecca Carroll, we certainly appreciate your time this morning. We do understand it's a really difficult time for you and the families of both of these people. Thanks again, Rebecca.

CARROLL: Thank you.

HEMMER: Ten minutes now past the hour. To other news now. Back to the CNN Center and Daryn Kagan.

Daryn, good morning.

DARYN KAGAN, CNN ANCHOR: Bill, good morning to you.

For that, we begin in Iraq, where police there say they have arrested a man in connection with a blast in Baquba, north of Baghdad. Military sources say the car bombing killed three Iraqi national guardsmen and wounded four others. And in northern Iraq, insurgents have damaged a key pipeline again. The attack comes just days before officials were expecting oil exports to resume.

Here in the U.S., the Justice Department is resuming its fight against a type of late-term abortion. At issue is a Bill that President Bush signed last November prohibiting what critics call partial birth abortions.

Earlier this year, a district court judge in San Francisco blocked that law, ruling it unconstitutional. Justice Department lawyers plan to appeal the ruling. The case is expected to reach the Supreme Court.

Digital technology could finally tell us if Lee Harvey Oswald acted alone in the Kennedy assassination. Archivists are trying to preserve and copy the only sound recording of the 1963 assassination. The tape is now brittle and it becomes damaged with each play. Researchers hope to make a copy of it using optical digital scanning.

It was a smooth -- smooth liftoff for the Messenger Probe. The spacecraft is now traveling five billion miles to Mercury. Think about those frequent flier miles. It will start orbiting the planet closest to the sun if everything goes well in the year 2011.

And back down here on Earth, finally, you want to check out this video. An 80-foot whale carcass has been spotted off the south coast of England. It is a rare sight in that region. It's due to wash ashore in the next couple of days.

So if you're going to be on the south shore in England, you might want to look out. I guess if whales beach there -- I learned this morning -- they tend to do it on the east coast, not on the south coast. There you go.

HEMMER: I've been warned. Thank you, Daryn.

KAGAN: You got it.

HEMMER: From the state of California there, the state considering a law that provides an added incentive for owners of hybrid gas and electric cars. As Miguel Marquez reports today, not everyone there in California thinks that's a good idea.

(BEGIN VIDEOTAPE)

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Ah, LA traffic. If you're driving by yourself anytime, anyplace, you stand a pretty good chance of getting stuck, staring at brake lights as far as the eye can see.

UNIDENTIFIED FEMALE: The traffic going home, especially on a Friday, it's just awful.

MARQUEZ: But now comes a plan backed by Governor Schwarzenegger to allow single drivers behind the wheel of hybrid cars to take the fast lane, normally reserved for autos with more than one person.

FRAN PAVLEY, CALIFORNIA ASSEMBLYWOMAN: The idea behind the Bill was to incentivize the hybrid technology, create public awareness.

MARQUEZ: Fran Pavley, a California Democrat, says the Bill would allow hybrids that get at least 40 miles per gallon and have nearly zero emissions to take the HOV lane. But one traffic guru says opening HOV to hybrids would only slow traffic for everyone.

BRIAN TAYLOR, DIRECTOR, UCLA DIRECTOR OF TRANSPORTATION: One car coming down the roadway that exceeds capacity can cause a backup to start to occur. So you can have a small change in vehicles have a big effect on traffic.

MARQUEZ: Besides, says Taylor, it's not like consumers need more incentives to buy hybrids. At dealerships across California there are months-long waiting lists to buy one, and that's with consumers paying more than sticker price. But for some consumers with an HOV carrot hanging over their heads, it may make them move a little faster for hybrid technology.

SHERYL GORCHOW STUART, CARPOOLING SINCE 2001: We've been thinking about buying one of those cars in our family for a variety of reasons. And so, of course, I think it would be a wonderful thing.

MARQUEZ (on camera): California's Department of Transportation says there are now almost 24,000 hybrids on California roads. And that number is expected to triple by 2008. The bill's sponsor says if traffic snarls ensue, the law would contain a provision allowing it to be pulled over and junked.

Miguel Marquez, CNN, Los Angeles.

(END VIDEOTAPE)

COLLINS: Still to come this morning, the face of the Abu Ghraib prison scandal goes to court. But Lynne England's lawyer says his client is just a scapegoat. We'll talk to her attorney.

HEMMER: Also in a moment, the latest in the Kobe Bryant case. There may be a crack in the prosecution's resolve. New details in that case in a moment.

COLLINS: And John Kerry promises to bring home some troops from Iraq if elected president. But is that even possible? We'll talk to retired General and military analyst, Don Shepperd, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK) COLLINS: Radical Iraqi cleric Muqtada al-Sadr says U.S. troops are involved in an operation against his forces in Najaf. But the coalition denies any such operation. The U.S. has agreed to a cease- fire with al-Sadr in Najaf.

Retired Major General Don Shepperd, a CNN military analyst, is with us this morning from Tucson, Arizona.

General, hello to you. Thanks for being with us.

So what about this? The U.S. forces, as we have said, are denying that there was this battle in Najaf. Why is that? Why is it so important that Iraqi forces take charge of situations like this?

MAJ. GEN. DONALD SHEPPERD, U.S. AIR FORCE (RET.): Well, it's extremely important, Heidi. We're looking again for this phrase "tipping points," if you will, in which the people of Iraq say they've had enough of the insurgents, they've had enough of this type of thing, and they take over their own defense and their own police forces, and take their buildings back in all of these cities.

It's very important that the U.S. forces, if at all possible, stop the offensive operations and let the Iraqis do that. Their intelligence is better. They're better at almost everything that remains to be done now than U.S. forces.

This appears to be Iraqi forces, paramilitary forces and police forces that were moving against al-Sadr in his own home. So it's a message that he doesn't have freedom of movement. And he's getting weaker, not stronger, Heidi.

COLLINS: Well, how important is it then that al-Sadr himself is either captured or killed? I mean, how much of a role does he have in the insurgency now?

SHEPPERD: He's still a very big symbol to his own followers. There used to be a huge following with a fairly substantial militia, it started out in the neighborhood of 2,000 to 3,000, then grew to about 10,000 supporters, mainly in the area of Najaf, and also in north -- northeastern Baghdad, the poorer sections of northeastern Baghdad called Al-Sadr City up there. So it's important that he be dealt with.

He's also indicted for the murder of a cleric, Al-Howi (ph), and he was indicted. And remember that Lieutenant General Sanchez from U.S. coalition forces in April said that he is going to be captured or killed. We've simply backed off that with some type of truce with him. And he says now he may run for political office.

His newspaper is back in circulation by the order of the -- of the interim government. And so he is definitely a factor. And the new government's going to have to figure out how to deal with him. And if they can deal with him, it will be a real feather in their cap of strength that will be seen by the other Iraqis around the country.

COLLINS: Yes, I do remember Sanchez's comments on that. What about these deadly attacks, though, General Shepperd, on the Christian churches, both in Baghdad and Mosul? Who do you believe is behind these attacks then? Could it be al-Sadr?

SHEPPERD: I don't believe it's al-Sadr at all. The attacks are being attributed to Zarqawi, although that's still unclear who did them.

The Christians are about three percent of the population of Iraq. There's about 750,000 of them. And clearly, the insurgence, probably the foreign insurgents, are trying to sow discord between the various factions.

If they could launch a civil war between the Shia and Sunni, or a movement against the Christians, it would just sow chaos and have, again, less -- less confidence in the new government. So again, you're looking for confidence in this new government. And this is a step in the wrong direction. By the way, a very effective tactic.

COLLINS: Well, as you know, clearly a very hot-button issue in the presidential campaign, the situation in Iraq. Senator Kerry saying that by the end of his first term, he would significantly reduce forces in Iraq. Is that even possible?

SHEPPERD: It is possible. And it's possible either by Senator Kerry, also by President Bush, if the following things happen.

First of all, there have been some discussions about bringing in Arab nations, an Arab force of surrounding countries, or Arab countries from wherever to replace some of the coalition forces so they can be brought home. That could happen. And if that happens, it is possible to reduce coalition forces.

Also, there's an acceleration of movement of making the Iraqi army stronger. The 7th Battalion out of 27 has just been trained and put on the streets out there, if you will. So if the training is accelerated by the Iraqis of their forces, they'll be able to take over some of their defense. And you could come down in numbers of coalition forces sooner than we contemplated.

COLLINS: Retired Major General Don Shepperd this morning from Tucson. Thanks so much, General.

SHEPPERD: Pleasure.

HEMMER: Back here in New York, at 22 minutes past the hour, waiting Tom Ridge, homeland security secretary, meeting with New York's mayor, Rudy Giuliani, also the governor, George Pataki. We'll get more information of what's been handed out to the financial institutions, how the city of New York is reacting, too, in a moment when they greet reporters here.

Also, the 9/11 Commission hitting the road today. If it convinces most Americans that action is necessary, can it still convince Congress? That's ahead, too, when we continue in a moment.

(COMMERCIAL BREAK) HEMMER: Back to the "Question of the Day," and Jack now.

JACK CAFFERTY, CNN ANCHOR: Thanks, Bill.

Intelligence suggests that al Qaeda intends to disrupt the elections and the democratic process by possibly carrying out some sort of large-scale attack here in this country before November. President Bush warned yesterday that "We are a nation in danger," and both candidates, Bush and Kerry, vow to be tough on the war against terrorism.

How would a terrorist attack affect the outcome of the election is the question we're pondering here this morning.

Karen in Glendale, California, "I don't think an attack would change the election at all. It would make the people who believe in Bush believe more, and the same with John Kerry. We Americans simply are divided in how we think things should be handled."

Shirley in St. Petersburg, "An attack would help Bush. He has united the terrorists against us, he has alienated our allies who we need as terrorists are scattered around the world. They want him to be the president. It helps them."

Lucien writes, "Almost all of Bush's speeches are about how America is safer now since we invaded a Iraq. If a terrorist attack would occur, it would basically say Bush was wrong and could make a lot of people more favorable to Kerry's side. It could cost Bush the election."

And Roger, in Crystal, Minnesota, "It depends on the read of the fickle media. If their take is that the current administration's plan has failed, then it will turn the voters on Bush. If it's that it's too risky to change plans midstream, then Kerry loses."

HEMMER: Was there much reflection on what happened in Spain, March 11?

CAFFERTY: There's some people alluding to it. But it's a little tough. I mean, it's kind of apples and oranges.

This ain't Spain. And, you know, it's a little heavier rock to move, one way or the other, than that one.

HEMMER: All right. Thank you, Jack.

CAFFERTY: Sure.

HEMMER: Still waiting for Tom Ridge. We'll get you there when that happens.

The president meeting with leaders from Australia in a moment here. Perhaps he has something to say regarding the same issue that we've talked about through the morning. Watching the monitors here for the latest there. Also in a moment, the face of the Abu Ghraib prison scandal has her first day in court today. We'll talk to Lynndie England's attorney about that.

And in a moment, back to Atlantic Beach in North Carolina. Chad is standing by for Alex.

Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Live from the White House, listening to the president. His comments with leaders from Australia.

As that continues there, also watching the podium here in New York City. Homeland Security Secretary Tom Ridge meeting with leaders from New York City. We'll get a comment when that opens up as well to reporters in a moment.

Also, live from the New York Stock Exchange on Wall Street, opening bell right on cue, 10170 is your opening mark, up 39 points in trading yesterday. This really bucking the trend that a lot of analysts thought would play out given the security warnings on Sunday.

Nasdaq mark site, not a bad day. Up five points yesterday, given the news, swirling around the markets. 1892 is your opening mark there.

And welcome back, everybody, to New York City. And good morning again.

COLLINS: Other things happening right now, too. The momentum is certainly picking up in Washington on the recommendations from the 9/11 Commission. Congress holding hearings today, looking at how the proposals match up with the president's ideas. We're going to have a report on that in just a few moments.

HEMMER: Also, from the attorney this morning representing Army Reservist Lynndie England as she faces a hearing today in the Abu Ghraib prison abuse scandal. She arrived about 90 minutes ago. He says he's very concerned that she will not get a fair trial. We'll look at why in a moment.

COLLINS: Also, we'll check back in with Chad Myers in North Carolina, watching Hurricane Alex as it heads by the outer banks. You see those pictures there, definitely churning things up.

HEMMER: He says he feels gusts about 60 miles an hour or so. We'll get back to him in a moment.

A sense of urgency in Washington. Both houses of Congress today follow the president in looking for ways to implement the recommendations off the 9/11 Commission. Ed Henry waiting and listening there on Capitol Hill.

Good morning, Ed. ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, again, Bill.

That's right. In about 30 minutes, both the House and Senate will kick off more hearings on the 9/11 Commission's final report. And these new threats are really giving the commission more impetus to prod Congress and the president to go much further than the president went yesterday in endorsing reform.

(BEGIN VIDEOTAPE)

HENRY (voice-over): 9/11 commissioners believe President Bush took a strong first step, but they urged Congress to act quickly, especially in the wake of the latest warnings of terrorist attacks.

TIMOTHY ROEMER, 9/11 COMMISSION MEMBER: I can't think of a higher priority than implementing some of these reforms quickly and smartly and efficiently. Al Qaeda is not on a vacation schedule.

SEN. SUSAN COLLINS (R), MAINE: The specificity of the new threat underscores the urgency of the action.

HENRY: Senator Susan Collins is generally supportive of the push for a national director of intelligence. But at a hearing this morning she'll take a close look at the call for a national counterterrorism center. It would tear down the wall between the FBI and CIA, which critics charge could lead to abuses.

COLLINS: This does raise important civil liberties questions. We need to make sure that we have safeguards in place.

HENRY: 9/11 commissioners start hitting the road today to rally support for their proposals. They want lawmakers to feel some pressure.

ROEMER: Well, I would strongly encourage the Congress to work in a bipartisan way to try to get a number of these recommendations, many of which are not new, implemented and protect this country so that when they run for reelection in November, they can run with a good conscience, fulfilling their job description and job responsibilities to defend and protect this great country.

HENRY: Democratic presidential nominee John Kerry wants Congress called back for a special session to follow up hearings with legislative action this month. The president disagrees.

BUSH: Congress has been thinking about some of these ideas. They can think about them over August and come back and act on them in September.

(END VIDEOTAPE)

HENRY: And, in fact, House Republican leaders are now privately talking about acting right after the Republican National Convention. Of course, that would be the first week in September, when Congress comes back into session. Significance there, that would be right on the eve of the third anniversary of the 9/11 tragedies -- Bill.

HEMMER: Ed Henry from Capitol Hill -- Heidi.

COLLINS: Army Private Lynndie England has arrived for a military hearing this morning at Fort Bragg, North Carolina. Now six months pregnant, she's one of the soldiers charged with abusing inmates at Iraq's Abu Ghraib prison. The Article 32 hearing will determine if Private England is to face court-martial.

Rick Hernandez is the attorney representing Private England. Once again, Rick Hernandez is the attorney representing Private England. He spoke with us a little bit earlier. Private England's Article 32 hearing is expected to last most of the week.

Back over to Bill now.

HEMMER: All right. Heidi, a bit of a problem, technical difficulty there. Once we get it straightened out, we'll get back to it.

In the meantime, Daryn Kagan standing by at the CNN Center.

Good morning, Daryn.

KAGAN: It's my job to come off the bench for you guys, ready to go with the headlines. We begin here in the U.S.

Rescuers are expanding their search to find a 9-year-old boy who is missing in California's San Bernardino Mountains. David Gonzaelz (ph) disappeared Saturday while camping with his family near Big Bear Lake. He went to the family car to get some cookies and never returned. Rescuers fear that David is lost in the woods.

Also in California, officials have arrested a woman whose 8-year- old son was found wandering alone at Disneyland. Robin Freeman (ph) and her 11-year-old daughter split from the boy at the amusement park last month. A passerby recognized them yesterday and alerted police. Freeman has been booked on suspicion of felony child endangerment.

The judge in Kobe Bryant's sexual assault case has reluctantly released some transcripts there from a closed-door hearing on the accuser's sexual history. And they detail defense expert testimony on DNA evidence. It suggests the woman had a sexual encounter with another man after her incident with Bryant. The accuser's legal team strongly denies that took place.

Check this one out. It's the annual lawn mower races in Pulborough, England. Riders jumped into action for this year's race. It's named the Weapons of Grass Destruction. Thirty-five teams battle it out on riding lawn mowers.

You know, it looks fun, but they did this for 12 hours. This year's winner called Cupid Team. Heidi, weapons of grass destruction. Best line of the morning.

COLLINS: Yes, that probably is the best line of this morning. I give it a nine. All right.

KAGAN: But for 12 hours on a lawn mower.

COLLINS: Not a lot of fun, that's for sure. All right. Daryn, thanks so much for that.

I want to try once again now to get to our interview with Rick Hernandez. He is the attorney representing Lynndie England, who is now six months pregnant, but today will be heading to an Article 32 hearing to determine whether or not she will be facing court-martial for prison abuses at Abu Ghraib. Let's listen in.

(BEGIN VIDEOTAPE)

COLLINS: Some pretty compelling evidence, including pictures, are going to be presented at this hearing today. We know you cannot speak about specifics in this case. But broadly, what will the defense be?

RICK HERNANDEZ, LYNNDIE ENGLAND'S ATTORNEY: Well, one thing we want to make absolutely clear is that these photographs that they intend to use for the new charges have absolutely nothing to do with prisoner abuse scandal or Iraqi detainees. They're intimate photos of a young girl with her boyfriend at the time, another soldier. And these photographs are just intimate photographs. They're not something that had anything to do with prisoner abuse.

COLLINS: But won't the case, as it proceeds, won't other issues be brought up other than these photos that we keep talking about this morning?

HERNANDEZ: Absolutely. And we're hoping to concentrate on what actually happened at Abu Ghraib instead of what happened outside of Iraq and while these young people thought that they were having a private moment.

So we're hoping to concentrate on what actually happened in Iraq. But as you can see, this whole thing takes the focus away from actual detainee abuse and puts it on a young girl. And that's the way the government wants it. We want the focus to be on Abu Ghraib, where other abuses occurred at the direction of the government.

COLLINS: In fact, you claim that Lynndie England is a scapegoat. And I know that you want to question the higher-ups in all of this. How high will you go?

HERNANDEZ: It's not how high I'll go, it's how high the government will let us go. What we want -- what the government wants you to believe is this was a rogue band of adequately trained soldiers who went behind their chain of command to do whatever they wanted to do.

Nothing could be further from the truth. They know that this goes through MI. They know it's a systematic problem. And you don't have to take my word for it. The International Red Cross, Amnesty International, the Army's own Taguba Report have all reported that that is widespread abuse and that these incidents, such as underwear on the head, didn't occur just at Abu Ghraib, it occurred all over Iraq.

COLLINS: OK. But you actually claim that England was ordered to do these types of things that you talk about. Meanwhile, last month the White House released some documents saying that -- they were internal policy documents, I should be clear -- saying that these types of torture methods, if you will, were not sanctioned. How will that impact your case?

HERNANDEZ: Well, the White House can release all the documents they want as to what was happening in the White House. But what was happening in Iraq was absolutely different. What was happening there was being passed on to the soldiers on the ground. And MI had control of Abu Ghraib, not the White House.

COLLINS: Are you concerned at all about your client getting a fair trial here?

HERNANDEZ: I'm absolutely concerned about my client getting a fair trial. As you can see, this isn't the same as being in a civilian world. In a civilian world, if there were intimate photos of a young girl, such as at Mardi Gras, if she exposed her breasts, she would get beads. Here, in this case, they're offering my client 30 years for intimate photos.

(END VIDEOTAPE)

COLLINS: Once again, Rick Hernandez, the attorney representing Private Lynndie England, speaking with us a little bit earlier this morning -- Bill.

HEMMER: All right, Heidi. About 20 minutes before the hour. Chad's watching Alex today off the coast of North Carolina, Atlantic Beach there.

Chad, how are things now this hour?

(WEATHER REPORT)

HEMMER: All right, Chad. Thanks for that. Good work down there, too, off the coast of North Carolina.

CHAD MYERS, CNN METEOROLOGIST: Thank you.

COLLINS: Still to come, it seems some very expensive arthritis drugs don't live up to the hype. Dr. Sanjay Gupta stops by to tell you about what might be a much cheaper and more effective alternative.

HEMMER: Also, in a moment here, why Bill Clinton could soon have something in common with Wayne and Garth, the church lady and the Coneheads. Back in a moment. "Political Pop" straight ahead this half-hour in a moment.

(COMMERCIAL BREAK) HEMMER: Welcome back, everyone. Arthritis sufferers may get more relief from over-the-counter drugs than costly prescription painkillers. Is that true? Dr. Sanjay Gupta here now with more on this.

Good morning, doctor.

DR. SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Good morning.

This is a really big deal, these drugs. Just the two drugs, Celebrex and Vioxx, $6 billion a year. Big numbers, right? A lot of people spending a lot of money on them.

Why they were touted as being tough on pain but also easy on the stomach, the concern about a lot of these anti-inflammatories was they caused stomach upset, possibly stomach bleeding, all sorts of things like that. But there might be other side effects to be concerned about.

Vioxx, for example, may have an increased risk of heart attacks. For example, take a look at the numbers there. Twenty-four percent increased risk of heart attack with Vioxx, no increased risk with Celebrex.

Now, these were based on observational studies. They didn't actually find patients to take Vioxx and not take Vioxx. They just observed them for a while and found these numbers. Sill a bit of a concern there.

Merck Pharmaceuticals, we talked to them. They are the makers of Vioxx. They stand behind the safety of their medication saying, in their own studies, in fact, Vioxx was no more dangerous. But a lot of people paying attention to this.

HEMMER: If people are taking Celebrex or Vioxx, those two drugs, specifically, what do they do based on this information?

GUPTA: Well, here's the thing. I think that both drugs are probably good drugs in terms of being tough on pain and easy on the stomach. If you are concerned about heart problems, blood pressure problems, things like that, Vioxx may be something you want to talk to your doctor about.

Celebrex, both -- all three of the medication -- I'm sorry, both medications are very expensive, though. Take a look at the numbers. And if cost is something you're concerned about, then always pay attention to this.

Vioxx, $138, $139 a month. Celebrex, $96 a month, almost, compared to over-the-counter Ibuprofen, over-the-counter Naprosyn, a lot cheaper there.

If you're insured, a lot of patients will get the more expensive drugs. That's just the way the system has gone. But if you're uninsured, Bill, I think the best thing to do is probably to buy one of the medications that work well, Ibuprofen or Aleve, and combine it with the medication that protects your stomach, like a Prilosec or something like that.

HEMMER: Good information. Nice to see you here, too, Sanjay.

GUPTA: Good to see you, yes.

HEMMER: All right. Talk later.

GUPTA: Stay healthy.

HEMMER: A break here in a moment. Some "Political Pop." The man who wins the White House in November will be the most powerful man in the world. But will he have the tie to match? Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Watching Tom Ridge now, now speaking at the podium, talking with members from the New York community, from the political world, the financial world, the security sectors here. We'll listen for the address now at the Citigroup building in Midtown Manhattan.

(JOINED IN PROGRESS)

TOM RIDGE, SECY. OF HOMELAND SECURITY: So I don't want anyone to disabuse themselves of the seriousness of this information simply because there are some reports that much of it is dated. It might be two or three years old. This is a resilient organization that does its homework, and we just have to accept that reality.

The other reality we have to accept is you've got some extraordinary professionals, law enforcement and security professionals that can take this information and act upon it.

This information we received from our allies in Pakistan. And with its detail and thoroughness, particularly with the detail and thoroughness, we felt it was essential to share it with the appropriate communities and the companies so they could act upon it.

Now, the governor, the mayor and the commissioner and I just met with 25, 30 representatives from the financial services sector in this community and region. And as one of them pointed out, as soon as we get information, not even all of us, as soon as one or two of us get information, we can get on a conference call within hours and begin to figure out additional ways we can support one another, based on the kind of information you give us.

So, again, the fact that it is old -- you need to know that it was updated. More importantly, you need to know that people who are responsible for your security, whether it's law enforcement or the security professionals associated with Citicorp or any of these other companies, acted upon it immediately.

The leadership of these affected institutions, the local officials, the law enforcement personnel here in New York, as well as northern New Jersey and Washington, D.C., should all be commended, should all be commended for their swift and extensive efforts to ramp up security procedures.

Most importantly, I think we ought to note our gratitude to the employees. In the face of very difficult and very sobering news on a Sunday afternoon, probably were enjoying their day with their family, came Monday morning, the thoughts and anxiety associated with Monday morning. But on Monday morning, you were at your desks, you were in staff meetings, and you were carrying on with your daily tasks.

The terrorists wish to make Americans that live in freedom live in fear. And just by showing up at work, you have made a powerful statement that they will not succeed.

RIDGE: Thanks to the many steps that have already been taken by this government in the financial sector since September 11th to secure and protect our economy, we have made it much more difficult for the terrorists to achieve their broad objectives.

Those measures include improved communication systems between and among financial regulators and critical financial institutions, guidance on business continuity planning, and numerous drills and exercises to test backup systems and prepare financial professionals.

Now, that connectivity and that communications between these companies also go into the commissioner's office, and there's a line that goes into the governor's office. So both the connectivity within the financial services industry and to the support services provided by law enforcement exists today and gets stronger every day.

Now we have in place numerous backup systems to ensure that funds can be made available instantly to prevent any major financial disruption. These layered protections throughout the financial community are part of a larger and overarching effort by this administration to raise our standard of security and readiness to new and greater heights with each passing day.

Permanent security measures we have put in place since the attack of September 11th at our ports of entry, our borders, air, land and sea, mean that we are better protected than ever before. We've made progress. We know we have to make additional progress, as well.

And the American people can rest assured that thousands, literally hundreds of thousands of dedicated and talented security and law enforcement professionals are working very hard at this very moment, as they do every single day, to secure this country.

Right here in New York an already high state of security has been increased to reflect to show this new threat. At this time, trucks and vans are prohibited from entering the city by certain bridges or tunnels that lead to lower Manhattan. Vehicle stops and searches have been implemented, and concrete barriers have been put up at various locations. Local officials and law enforcement are doing their part to make us safer.

And I would ask citizens of this great city and all across the country to continue to do your part, to remain vigilant and ever watchful for suspicious activity and behavior and to report that activity. This intelligence is a solemn and serious reminder that we are a nation at war. And the terrorist enemies we face will not stop until we defeat them.

I understand, believe me, I understand that these warnings and information of this type are difficult to digest.

RIDGE: They're very difficult to accept, to take in, and can easily and understandably give rise to feelings of anxiety and fear.

Americans, as reflected in this great city, have shown time and time again that we are not a people that gives way in the face of great difficulty or great challenge.

And so, at this time, let us press on with the resolve and perhaps a bit of defiance, to say to our enemies, "We know what you want to do, but we are not going to let you do it. We will not become fortress America. We're going to continue to lead our lives and keep moving forward and hold fast to our freedoms. Nothing, nothing will ever change that."

I thank you. And I'm going to ask the governor to share a few thoughts with you, and then Mayor Bloomberg.

Governor Pataki?

GOV. GEORGE PATAKI, NEW YORK: Thank you, sir.

(APPLAUSE)

Thank you, Secretary Ridge. Secretary Ridge, thank you, again, for being here and for all the help that you have provided and will continue to provide to this city and state and the leadership you're providing for our country.

Now, it's incredible to think that the Office of Homeland Security didn't even exist just a matter of months back. And the progress you have made, in pulling together the different elements that are important agencies in protecting our freedom, has been extraordinary.

And I want to thank you, as well, for taking the extraordinary step of sharing this intelligence over the course of this weekend, not just with the political leadership, but with the people of New York and the people of America.

We are a strong people, and we do not cower and we do not live in fear. And having knowledge of what those who detest our freedoms would try to do to us doesn't cower us, it makes us stronger. And as you put it, perhaps there is that touch of defiance.

PATAKI: I have seen New Yorkers on September 11th respond with incredible courage and strength in the face not of threats, but of the most horrendous attacks this country has ever seen. And certainly now, with threats, we will show that same courage, that same resolve, that same defiance, and go about our lives. In fact, yesterday morning, the mayor and I went down, and the mayor rang the bell to open the New York Stock Exchange, one of the identified targets, because it is a symbol of American economic strength. And the report at the end of the day was, not only did the stock market go up, but there were more employees on the floor of the exchange yesterday than for a normal Monday in August.

That's the way New Yorkers respond, and that's the way we will continue to respond.

This is the financial capital of the world, and it will be for a long time to come.

And from there, the mayor and I went to the ground breaking of a new headquarters for the Bank of America on 42nd Street; another symbol of the economic strength of our country and a symbol of New York, a sign of New York is the financial capital of the world.

We take these threats seriously.

In the meeting we just had, it was a little bit different because it didn't focus so much on public security -- bridges and tunnels and train stations and mass transit facilities -- it focused on private security.

And I can tell you that I was enormously encouraged, because not only does this city have the finest public security forces commissioner anywhere in the world, let alone America, but our private-sector companies are lightyears ahead of where they may have been a few years back in understanding the needs of security in institutions like financial institutions.

Mr. Secretary, we have made enormous progress because of the partnership that we have had with the federal government, the state government, the city government, private sector and, most importantly, with the people of New York and the people of America.

Your leadership and the president's leadership in making this happen gives me tremendous confidence that our best days are still clearly ahead of us. And to all the employees here at Citicorp, you're here. Thank you for your courage and your strength. But we expect nothing less, because you are New Yorkers and you are Americans.

I'll let the mayor say a few words, and then we need you to get back to work.

(LAUGHTER)

This has to be a productive company.

(APPLAUSE)

Thank you. God bless you all.

MYR. MICHAEL BLOOMBERG, NEW YORK CITY: Governor, thank you. Mr. Secretary, welcome to New York. I'm glad the sandwiches were good and the run in the park was invigorating. New Yorkers do those things every day, and they're going to continue to do that.

I think if you go out and you look around this city, yesterday, today, what you see is the hotels full, the theaters doing well, restaurants and bars packed, subways, people are taking them and getting to work. No company is thinking of leaving. Every company is thinking of growing here.

And that's because New York City is open for business. New York City is open for education. New York City is open for the arts and recreation. New York City, most importantly, is open for democracy, and it is going to stay open.

Nobody is going to dissuade us from making this our home. Nobody is going to change our minds that this is the place where you have the ultimate opportunity for yourself and for your family, that this is the place where you can enjoy yourself and you can say what you want to say and not have your rights trampled on by others.

Crime continues to come down in this city. The NYPD continues to make you safer here than anyplace else you could live, and our commitment is to continue to do that.

I'm going from here with the governor to the opening of the Statue of Liberty, something that was shut after 9/11. It's another symbol and another reason for tourists to come here. It's good for our psyche, it's good for our image, and it's good for our economy.

We will continue to do these things. The governor pointed out, yesterday, we were out going around participating in all of the great things about New York. We will continue to do that.

And we are going to also make sure that the police department helps the private security part of every organization in the city take care of their own buildings and their own employees. People should be able to come here without fear, work in these buildings, go out in the street and enjoy themselves without having to look over their shoulder.

And I think, partially because of the help from Washington, partially because of the help from Albany, partially because of the help from the city government, but most importantly because of the help from the people who live and work in this city, the best days for New York are yet to come, and the terrorists are not going to win.

And, Mr. Secretary, thank you for everything you and the administration does for this city.

(APPLAUSE)

QUESTION: (OFF-MIKE) this meeting, the government or the corporations? And also, what are the major issues that the companies raised, the concerns that they have? RIDGE: Well, first of all, I think it was the collective desire of all of us to get together after the news of Sunday. And it took us a day to pull everybody together. But it was a very impressive array of the security officials from the major financial institutions around this great city.

And, frankly, one of the points that several of the members -- several security professionals emphasized was the hope and the desire that we continue to get them this kind of specific information in advance of everybody else.

I know over the weekend there's always a great deal of concern about going public and when you go public. But, in fact, we wanted to get some of this information to security professionals before we went public so they can begin notifying their employees.

I'd much rather have these men and women who showed up at work on Monday morning begin to receive notification from their employer before they get it, with all due respect, from the local news channel. It just makes it a little more comforting for them to get some kind of information from a private source rather than public.

QUESTION: If I could clarify then, then corporate (ph) security was notified far before...

RIDGE: Not far before, but we began discussing, particularly with the major institutions, the details -- not the specific details, but alerted them to the fact the institutions that we were discussing internally within the intelligence community, there was volumes of information about them, and then over the past 24 hours, have begun to share that information. This is actionable information.

I think at the end of the day, when we take a look at these reports, we'll get some insight into what they were looking for and the means by which they acquired this information. And I think that will not only enable us to enhance security in the financial services sector, but that's good information for all security professionals to have.

QUESTION: Can you speak to any evidence you have or any concerns you have about Al Qaeda operatives here in the United States, so- called sleeper cells? And does the new information from Pakistan have any bearing on that?

RIDGE: You know, I think in this day and age, in a country that is as open and as diverse as ours, when we literally have 600 million people that come across our borders every year, I think within the department and I think around the country we just assume that there are operatives here.

Obviously, the law enforcement community has their eyes on people they believe are connected or sympathetic to the cause, but we don't have the luxury of waiting to identify somebody coming across the border.

We just have to accept, for our planning and preparation purposes, the notion that they're here, they're looking to attack us, and we need to do everything we can every single day to try to detect, deter and prepare for it.

QUESTION: (OFF-MIKE)

RIDGE: I'm sorry, the acoustics aren't real good. My ears aren't real good either.

QUESTION: Is there anything in the information that would indicate (OFF-MIKE)

RIDGE: You mean infiltrated the corporate entities themselves? No. There's no such information.

It's interesting, when the security professionals in the financial services arena alerted me, they -- there's some fairly rigorous background checks that they do before you can have critical positions in some of these companies as well.

But the answer to your specific question is no.

QUESTION: Do you have any concrete evidence, a plan or a plot or recent surveillance? And how long will this high-level mobilization, specifically targeted mobilization, continue?

RIDGE: Well, we have -- again, just because we don't know when it might occur, when you see this kind of detailed planning you have to take preemptive action to prevent it from occurring.

And one could argue logically, if you've taken a look at potential sites with this kind of information, at least you're thinking about it. And we've got to take that very seriously.

And we will review the facts associated with going up to orange in these three regions in the financial services sector once we completely digest all the information we're reviewing now. There's still quite a bit of information that we're analyzing.

QUESTION: Do you have any evidence of a plot or a plan or recent surveillance?

RIDGE: There's no evidence of recent surveillance.

But again, I will tell you that the information about the casings that we revealed on Sunday have been updated as recently as January of this year. And we know this is an organization that plans in advance, that prepares and has patience.

And if anything else, the thoroughness of this information reflects the seriousness, as well as the event -- the seriousness of our effort to combat and bring these terrorists to justice overseas. It also speaks to their sophistication as an operation.

You know, there's a lot of suggestion out there that it's -- these are serious folks. They're patient folks. There's a lot of resolve -- not as much as ours. We're more serious, more patient and more highly motivated and more resolved.

But I think you need to take a look at it. It's sobering, but it's not stifling information. We'll deal with it.

QUESTION: Mr. Secretary, there are a lot of New Yorkers that are skeptical about these kinds of threat alarms. And some even see a political motive in all this (inaudible) Republican administration faces (inaudible). What can you say to those New Yorkers to dissuade them? Thank you.

RIDGE: Well, I guess I wish I could give them all top-secret clearances and let them review the information that some of us have the responsibility to review.

We don't do politics in the Department of Homeland Security. Our job is to identify the threat, match that threat information with the -- potentially the targets that have been identified, to integrate an entire country, to build partnerships with the state and local government, to invest in technology so that as we combat international terrorism we can put more people and technology in place to make ourselves safer.

But it is -- frankly, I would point out that this is the most significant, detailed pieces of information about any particular region that we've come across in a long, long time, perhaps ever. And that's why we needed to share it publicly. It's always a judgment call, always a judgment call. But here, went above any kind of threshold we might have had previously.

Every single day, just about every day, there's probably the notation of a community or a company or something like that in the threat-reporting stream. You have to assess the source and the credibility and whether you can corroborate it. And sometimes we pick up the phone and call the company or call the region.

The detailed and sophistication, the thoroughness of this information, if you had access to it, you'd say we did the right thing. Let the public -- government should let the public know about situations like this. It's not about politics. It's about confidence in government telling you when they get the information.

QUESTION: Mr. Secretary, to what degree of confidence do you think (OFF-MIKE) tells you about a possible ongoing plot?

RIDGE: We have publicly stated that, again, from several sources, that there has been an expressed intention to disrupt the democratic process. Could be interpreted throughout the election year, could be interpreted to Election Day.

But we need to understand, we shouldn't be limiting ourselves or expanding ourselves to that time frame. This is an organization that will attack whenever they feel that they can achieve -- they can be successful.

And so you've got the general reporting stream from credible sources. They've always talked about undermining America's economy. They began to frame it a little bit around the elective process.

But I don't think you ought to get too carried away about the time frame. When they're ready to move, they'll move.

QUESTION: Short of Congress changing the funding formula for...

RIDGE: Yes.

QUESTION: ... what means are there, at this point, for New York City...

RIDGE: Well, you can well imagine, whenever I come to town, Mayor Bloomberg raises the issue with me -- and very appropriately, I might add -- and so does the governor. So we are in lock step, as is the president.

And we will continue to work the Congress and continue to convince Congress that more money should be shifted to those areas that are high-risk.

Let me say this. We're still not done with the appropriations process this year. There are two pools of funds. One distributed per capita, and the mayor and the governor have talked about that a lot. So does your congressional delegation; so do the senators. The other goes to the urban areas, where we take a look at the population density, the threat.

And what the president asked this year was to reduce this pot that is distributed per capita substantially and put that into the other, where New York City would be the primary beneficiary.

Thank you very much.

HEMMER: Governor Pataki, the mayor, Michael Bloomberg, Tom Ridge, homeland security secretary. As the mayor steps up to the podium now, we're going to break away. We are out of time, huh?

COLLINS: We are, indeed.

HEMMER: Much more to come tomorrow. A busy day today. We'll see what tomorrow holds.

Andy, thanks.

ANDY SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: You're welcome.

HEMMER: Jack Cafferty as well.

We'll see you again tomorrow, OK? Here's Daryn at the CNN Center.

Daryn, good morning.

COLLINS: Hey, Daryn.

KAGAN: All right. You guys have a great day in New York City. We'll get started here.

Good morning from CNN headquarters in Atlanta. I'm Daryn Kagan.

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