Return to Transcripts main page

American Morning

Move to Name Al Qaeda Operative Ends Pakistani Sting Operation

Aired August 09, 2004 - 07:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


BILL HEMMER, CNN ANCHOR: Good morning. Specific new details of al Qaeda plans to attack America by water and by land. Meanwhile, a crucial source of intelligence may have dried up.
Iraq today in turmoil, a one-time ally of the U.S., Ahmed Chalabi called to face criminal charges in that country. His nephew accused in connection with murder.

Also.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He doesn't really actually meet criteria for admission to our camp because he is not severely malnourished. He is moderately malnourished.

(END VIDEO CLIP)

HEMMER: And a doctor goes to war with a killer in Sudan, the fight to save a nation's children on this AMERICAN MORNING.

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

HEMMER: All right. Time to start a whole new week here at AMERICAN MORNING, a good Monday morning. Soledad is out resting and waiting. And Daryn Kagan is here in the big city.

DARYN KAGAN, CNN ANCHOR: Good morning. It's been too long, don't you think?

HEMMER: It's been awhile.

KAGAN: I had to come check on my friend, Billy.

HEMMER: Well, we have three hours to catch up.

KAGAN: All right, and then afterwards as well.

HEMMER: It's very true.

Among our top stories this morning, financial centers in three U.S. cities still remain under orange alert. Now there are details on what might be al Qaeda's plans for its next big attack.

"Time" magazine has an exclusive look. We'll talk to the "Time" magazine news director about all the specifics in a moment here. KAGAN: Also, we'll check in on the world of politics, some thoughts that John Kerry -- get this -- might have been too nice to his opponent. They come from what might be an unlikely source. We will talk with our likely source. And that is Jeff Greenfield.

HEMMER: Too nice in the year 2004.

KAGAN: Yes, imagine that.

HEMMER: Also, the latest on the two-year-old formerly conjoined twins who were just separated last week. Right now, their vital signs are good, not out of the woods yet, though. We'll talk to the lead pediatrician this morning.

Jack Cafferty is on vacation.

KAGAN: Good for him.

HEMMER: All week long, in fact.

KAGAN: Do you think there's -- I come up and then Jack's gone?

HEMMER: No, I don't think so.

KAGAN: Should I take that personally?

HEMMER: No.

KAGAN: No?

HEMMER: Not for a second.

KAGAN: OK.

HEMMER: Andy Borowitz, our AMERICAN MORNING regular, is here to fill Jack's shoes.

KAGAN: Look forward to that.

HEMMER: So we'll get to that.

First of all, let's start this morning here with this.

Developments now in the war on terror, the White House defending the decision to raise the terror level. It says past intelligence has pointed to threats against the capitol and specific members of Congress, but it would not provide details on all of that.

"Time" magazine reporting that al Qaeda has considered using limousines packed with explosives, hijacked helicopters and speed boats in terror attacks. And meanwhile, efforts by U.S. officials to justify the elevated alert level may have shut down an important source of information regarding al Qaeda.

All this, this morning now, as we go to throughout the morning. First though, from the White House and Elaine Quijano with more. (BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice-over): He's the man whose information helped lead to raising the threat level, according to U.S. officials. But Pakistani intelligence sources say the move to name al Qaeda operative Mohammad Naeem Noor Khan means one fruitful information source has dried up.

Khan, a computer expert secretly arrested in Pakistan last month was being used in a sting operation to try to net other al Qaeda members. But that ended when he was identified.

CONDOLEEZZA RICE, U.S. NATIONAL SECURITY ADVISER: The problem is that when you're trying to strike a balance between giving enough information to the public so that they know that you're dealing with a specific, credible, different kind of threat than you've dealt with in the past, you're always weighing that against kind of operational considerations.

QUIJANO: It was last week that questions swirled about why the alert level was raised for financial sectors of New York, New Jersey and Washington. Against that backdrop, unnamed U.S. officials said Khan was one source of intelligence, which prompted the U.S. to act.

One Republican is criticizing the move.

SEN. GEORGE ALLEN (R), VIRGINIA: They should have kept their mouths shut and just said, we have information. Trust us.

QUIJANO: While the Bush administration isn't laying out more details of a possible plot, "Time" magazine is reporting some specifics saying Osama bin Laden himself desires a pre-election strike, and that limousine bombs, speed boats and divers might be their tools of choice according to al Qaeda surveillance reports.

In Washington where police have built up protective measures around Capitol Hill, local authorities say they have been told of threats against members of Congress. At least one lawmaker said it's enough to be concerned but not alarmed.

SEN. JOE BIDEN (D), DELAWARE: I don't want the American people or, specifically, my wife listening to this thinking that there is hard data that is incontrovertible from hard sources.

QUIJANO (on camera): The Bush administration continues to worry al Qaeda will try to disrupt the election process. But officials have no detailed information on timing and are hoping to glean more intelligence from Britain and Pakistan.

Elaine Quijano, CNN, the White House.

(END VIDEOTAPE)

HEMMER: Much more now this morning from "Time" magazine's upcoming exclusive report on these operations. The news director for "Time" magazine with us now. Howard Chua-Eoan, our guest here in AMERICAN MORNING studios.

Good morning to you.

HOWARD CHUA-EOAN, NEWS DIRECTOR, "TIME" MAGAZINE: Good morning, Bill.

HEMMER: When the warning came out last weekend from Tom Ridge on that Sunday afternoon, why did it take a week for these details to come out and go public?

CHUA-EOAN: They were still going through a lot of it because a lot of information came from these disks, which they basically only picked up on July 25th. And he made the announcement six days later.

So a lot of this information and all the details were only becoming clearer to everyone as the week went on. I mean, it was clear to them. They had seen a lot of it. That's what prompted by them.

HEMMER: It was a question of time before going through it, deciphering and getting the word out.

First about the limousines, what are you reporting on that? What was the strategy behind using those?

CHUA-EOAN: The strategy was that trucks would have been too obvious and it wouldn't have been, they wouldn't have been able to bring them too close to the building, they thought.

But a limo, stripped out and packed with explosives, driven up, no one seemed to mind and no one seemed to would have stopped the limo.

HEMMER: Because you can see those vehicles in the streets of Manhattan.

CHUA-EOAN: They're all over the place.

HEMMER: Plenty, you're exactly right.

The heliports in New York City, what was the idea behind those?

CHUA-EOAN: Perhaps hijacking helicopters and launching attacks on the New York, New Jersey area. Parts of New York -- there were photographs that are marked midtown, downtown so that whoever had taken over the helicopter would be able to tell what part of town they were in.

HEMMER: What about the Citigroup building? There were similarities that it found to the World Trade Center?

CHUA-EOAN: The analysis they had was that the building was built very much like the World Trade Center. So a large gasoline bomb, a tank or truck, would probably bring it down, they surmised.

And it's interesting, they had stopped doing that -- they had stopped thinking about that because they had realized that these tanker truckers, trucks, have GPS trackers, so they decided maybe it is not the right way to go.

HEMMER: What was the specifics about the train schedule in New Jersey?

CHUA-EOAN: Well, interesting thing about train schedules was that it seemed like they may have driven a limo up, but they weren't planning to commit suicide. They were thinking of a getaway plan.

The people who would have done that in the Prudential building in New Jersey would then have, somehow, just left the truck there and gone off and taken an escape route.

HEMMER: Does that then suggest that they would not use suicide bombers in an attack like that?

CHUA-EOAN: It seems like they're, you can't really predict them. They seem to be going one route, and then it seems like they seem to be preparing for others.

HEMMER: In all the information that you've gone through, was there any indication as to the whereabouts of Osama bin Laden?

CHUA-EOAN: No, just the indication that he seems to have taken a particular interest in attacking the United States as opposed to other parts of the world.

HEMMER: Do you believe, at this point, all the information is out, or is more to come on this?

CHUA-EOAN: I'm sure there's more to come. We had lots more information that we couldn't quite triangulate and confirm ourselves, so this is -- but this is an amazing article.

HEMMER: It's a fascinating article, too.

Howard Chua-Eoan, thanks from "Time" magazine here with us.

CHUA-EOAN: Thank you.

HEMMER: All right -- Daryn?

KAGAN: And now to Iraq where security forces and U.S. troops clash once again with insurgents loyal to cleric Muqtada Al-Sadr in Najaf. That as former Iraqi governing council member Ahmed Chalabi, once closely aligned with the U.S., now faces criminal charges.

Matthew Chance is live in Baghdad -- Matthew?

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Thanks, Daryn.

We'll start with that violence in Najaf where this fighting has been continuing for the past four days. We've had some latest casualty figures given to us by U.S. officials. They're saying that they've killed 360 of the 2,000 members of the Medhi army loyal to the Shiite radical cleric Muqtada Al-Sadr in that holy city of Najaf over the past four days.

We understand at least four U.S. soldiers have also been killed in that fighting. There had been appeals from the interim Iraqi government for the fighting in Najaf to stop. Muqtada Al-Sadr, though, repeatedly refusing to back down and promising instead to fight to the death.

Well, the latest, we understand, is that U.S. military officials have surrounded the Imam Ali mosque, which is one of the holiest shrines in Shiite Islam at the center of Najaf. It's also the place where members of the Medhi army have been hold up and launching attacks against U.S. forces from.

They're saying at this stage, the U.S. Army that they're not preparing to enter the sacred compound, but they're also saying that they do have permission from the governor of Najaf to do that if they feel it is necessary.

Obviously, they're very mindful of the impact of the repercussions that may have if they set foot inside that mosque -- Daryn?

KAGAN: And Matthew, talk about repercussions and talk about a turnaround in face, Ahmed Chalabi and his nephew. Tell us more about the charges they face today.

CHANCE: He was once the darling, of course, of the Pentagon, and the man for many months tipped as being the new leader of the new Iraq, but he's certainly fallen from grace.

Ahmed Chalabi has been accused of a number of things over the past few months. He's been accused of spying for Iran. He's been accused of passing false intelligence on to the coalition about the presence of weapons of mass destruction here in Iraq.

He's now been served with this arrest warrant which has something to do with a money-laundering scam involving counterfeit Iraqi dinars being exchanged on the street. This is something he totally denies.

Interestingly though, his nephew, Salem Chalabi, has also been issued with an arrest warrant, this time for murder. Salem Chalabi a key figure because he's the man overseeing the trial of Saddam Hussein.

KAGAN: Matthew Chance, more on that later in the day. Thank you -- Bill?

HEMMER: All right, Daryn. Ten minutes past hour. To Carol Costello now watching the other news for us at the CNN Center.

Good morning, Carol, nice to see you on a Monday.

CAROL COSTELLO, CNN ANCHOR: Nice to see you too, Bill, thank you.

In just about three hours, Oklahoma City bombing conspirator Terry Nichols is set to be formerly sentenced to life in prison. Nichols was convicted in state court last May on 161 counts of murder for the 1995 attack on the Alfred P. Murrah federal building. And there is some speculation that Nichols may speak out this morning, his first public statement since the trial began.

The Republicans officially have a candidate to compete against Democrat Barack Obama set for a U.S. Senate seat from Illinois, conservative talk show host Alan Keyes. Keyes lives in Maryland. He'll move to Illinois to launch his campaign. His Democratic rival gave the keynote speech at the Democratic National Convention last month.

Overseas now in Afghanistan, two U.S. soldiers and an Afghan interpreter were killed over the weekend in a roadside bombing in Ghazni province southwest of Kabul. A third soldier was injured in that attack.

And there are reports this morning of an accident at a Japanese nuclear power plant. According to Japanese media, at least four people were killed and several others injured by a steam leak at a plant some 200 miles west of Tokyo. No radiation leaks outside the facility have been reported.

And in Maryland, health officials are awaiting lab results to determine why more than 100 students got sick at a leadership conference. The teenagers were taken to hospitals after complaining of nausea at the University of Maryland over the weekend. Most were treated and have since been released.

Back to New York and Daryn.

KAGAN: All right, Carol, thank you for that.

Let's go ahead and check, for the first time this morning, the weather forecast. Chad Myers at the CNN Center with the latest weather update.

Chad, I don't know who you're paying off, but up and down the East Coast it is looking beautiful.

CHAD MYERS, CNN METEOROLOGIST: You know, Daryn, for some reason you just went away in my ear. So I can't even hear what you were saying, but I'll wing it and go from here.

(WEATHER BREAK)

MYERS: Daryn back to you.

KAGAN: Lovely. Chad, thank you so much.

HEMMER: In a moment here, watching and waiting on Wall Street today -- will the fed still raise interest rates even in the wake of Friday's job news, which was way under the expectations. So, we'll look at that in a moment this morning.

KAGAN: And speaking of expectations, after landmark surgery, there is reason for optimism for separated twins. We're going to talk to with one of the doctors for the twins and get an update on their progress, just ahead.

HEMMER: Also this hour, is a presidential campaign about to go negative? Analysis this morning from Jeff Greenfield on that when we continue after this.

(COMMERCIAL BREAK)

HEMMER: Live pictures just in to us here at CNN south side of Chicago, WFLD, our affiliate there -- this is a warehouse burning.

The fire broke out just about an hour ago, 5:18 local time, 6:18 East Coast time, four alarm fire, firefighters responding there. The good news in all of this, that building is abandoned.

We will watch it burn throughout the morning here and bring you updates when we get it. South side of Chicago right now in a live picture -- Daryn?

KAGAN: Let's see what's burning in the world of politics. To hear the Bush campaign tell it, the Democrats weren't tough enough on the president during their convention. So will the Republicans be shooting from the lip, so to speak, later this month?

Our senior analyst, Jeff Greenfield, here to talk about that. Good morning.

JEFF GREENFIELD, CNN SR. ANALYST: Terrible tongue.

KAGAN: Sorry. It's just - it's early. I'm getting warmed up.

GREENFIELD: Fair enough.

KAGAN: Check with me in a couple of hours.

GREENFIELD: Fair enough.

KAGAN: All right. But for right now, you've got to help me here. Are Republicans actually complaining that John Kerry was not tough enough and mean enough on President Bush?

GREENFIELD: They're not really complaining, but what they are saying, at least according to the AP story, is that Kerry may have made a strategic error at the Democratic convention by now laying out a compelling case against the president.

Kerry's speech contained criticisms to be sure, but they were kind of indirect, as when he said, "saying mission accomplished doesn't make it so."

The goal of the Kerry campaign clearly was directed at sounding optimistically positive. And what the Bush's argument seems to be is that he didn't make a case against the Bush second term the way, say Ronald Reagan did against Jimmy Carter in 1980, or the way Bill Clinton did against the first President Bush. KAGAN: So, are they also giving us a hint as to what we can expect a little bit later this month with this convention?

GREENFIELD: Yes, I really think we are, but it tells us, I think, that they plan to lay out a very strong case against Kerry. And it's really not exactly a secret about what they intend to say because they've been kind of saying this four months.

First, they and, in fact, some journalists such as David Broder of the "Washington Post" have noted that Kerry barely mentioned the last 20 years of his life spent in the U.S. Senate.

My guess as or hunch is that the Bush campaign is going to point to votes of Kerry's on defense and intelligence to rebut the idea that Kerry's Vietnam service taught him lessons about the presidency.

I mean, if you learned that lesson, I think they'll say, why did you vote to cut defense? Why did you vote against the first Persian Gulf War?

As the second thing, clearly, is that they're going to go very hard on values. They're argument is going to be that Kerry it out of the mainstream. And they are going to point to things like his vote against banning so-called partial birth abortions, his refusal to back a gay marriage ban in the Constitution.

Look, they read the same polls everybody else does, probably more intensely. They know that if it's a straight up or down vote right now, most voters would go to choose a new president.

They have got to make John Kerry unacceptable as an alternative. And personal note, there's nothing wrong with "negative campaigning" if it's an honest attempt to lay out a case against the other guy.

KAGAN: OK. Well then let's look at those numbers and use those as a case for the Kerry campaign to say, we might be playing it safe, yes, but perhaps with good reason.

GREENFIELD: Well, I do think there is some of that. I mean Kerry is reaching out to the middle geographically. He's going to rural Ohio, Michigan. He's going to Pennsylvania. He campaigned in Colorado, which is a pretty red state. And he's sounding very centrist themes about fiscal discipline and military strength.

But, you know, compare who he's talking to with Bush. I think this is interesting.

In the last couple of weeks, Bush went to the Urban League, a prominent civil rights group, where he argued that blacks ought to move away from the Democratic Party. Bush went to the Unity Conference of Minority Journalists and faced some very tough questions, OK.

By contrast, Kerry has not yet gone in to a lion's den of, say, white evangelicals to answer their tough questions about abortion or gay marriage. He really hasn't confronted a hard-line foreign policy group to say, you and I have differences, well let's talk about them.

Now, I think the Kerry campaign looks at the poll numbers. They say he's 5 points up in the "Time" poll. They see that he's up in Florida and New Hampshire by about six or seven points. And they believe, I think, that they are on a winning path.

But, you know, between the debates coming in October and the unforeseeable events that we've all talked about for months and can foresee, there may actually be some risk in a relatively risk-averse approach. So, I think that's where we are.

KAGAN: And we will see. And still a lot of campaigning left to do before the election?

GREENFIELD: Oh, yes.

KAGAN: Oh, yes.

GREENFIELD: You know, the country is just beginning to open up its eyes after three and a half years of our obsessions -- yes, we're going to have to vote in November.

KAGAN: Yes, there is an election in November.

GREENFIELD: I think that's right.

KAGAN: All right, Jeff Greenfield, thank you for your insight.

The president and first lady, I want to remind you of this, they're sitting down with Larry King this week. It's an exclusive interview. That is Thursday night, 9:00 Eastern on "LARRY KING LIVE" -- Bill?

HEMMER: All right. Back on the campaign trail from over the weekend, Democratic vice presidential candidate, John Edwards, went back to Lawrence, Kansas yesterday. He went back for a very specific reason, to greet supporters and apologizing for a problem that happened late on Saturday night.

The train carrying the Democratic ticket went through Lawrence, Kansas late on Saturday, but it did not stop as it was scheduled to. There were hundreds of supporters there waiting and waving and the train just kept on going.

That snafu blamed on miscommunication, which meant Senator Edwards went back on Sunday afternoon to pay his respects.

See you in a moment here on AMERICAN MORNING.

The latest on the formerly conjoined twins, the toddlers survived risky separation surgery about a week ago, but now there are more challenges to come.

We'll talk to the twins doctor when we continue after this on a Monday morning.

(COMMERCIAL BREAK)

HEMMER: All right, welcome back everyone. The critical question, the money question today on Wall Street and Main Street, will the Federal Reserve raise interest rates? Maybe. But what about this jobs report on Friday? A change of thought, perhaps?

Christine Romans "Minding Your Business," in for Andy Serwer.

Good morning to you.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Gosh, could you believe that jobs report on Friday?

HEMMER: No.

ROMANS: I mean 32,000 jobs created in July, completely blew the street away, took everyone by surprise, a lot weaker than expected.

And tomorrow, the Fed meets. So does a week job situation, a week labor market situation in the summer complicate things for Alan Greenspan and the Federal Reserve?

Most people on Wall Street still expect the fed to raise interest rates by a quarter of a percentage point, but they'll still be very, very low, these interest rates. And we'll look to see what the fed has to say.

Maybe they'll, you know, tip their hat toward this week's jobs situation. Greenspan had said before that he thinks that weakness in the second quarter was transitory. That's their word. I think that means temporary in human speech.

HEMMER: We talk about that a lot around here.

Thursday and Friday really tough days, though, triple digit losses on the Dow 30.

ROMANS: You're right. And now we have stocks at the lowest level of the year. The Dow last week down 3 percent.

Look at the NASDAQ, below 1,800, down 6 percent last week. It's down 11 percent for the year, very tough going for the stock market over the past few days.

Of course, there are always a few people who'll say let's -- listen, when everyone starts jumping out, that's when you need to start taking a look and finding some stocks that are good stocks with good names that you want to hold for a while.

But in the meantime, you've got a lot of different things going on and the fed meeting tomorrow.

HEMMER: It's just transitory.

ROMANS: Transitory, of course. You use that word all the time.

HEMMER: Thank you, Christine.

KAGAN: Well, time for the "Question of the Day." Though the question is, where is Jack Cafferty. He's on vacation somewhere, but...

ANDY BOROWITZ, "BOROWITZREPORT.COM": He's transitory.

KAGAN: He is transitory, but Andy Borowitz is very much here in the present.

You're here.

BOROWITZ: I'm here.

KAGAN: And you have the "Question of the Day."

BOROWITZ: I certainly do have one. It's a good one.

Republican Congressman Doug Ose from California has introduced legislation to carve Ronald Reagan's face in to Mount Rushmore. And he's not the only one who wants to see the Gipper on the mount.

So far, George Washington, Thomas Jefferson, Theodore Roosevelt and Abraham Lincoln and are already there. So as long as we're talking about adding someone else, our question is, whose face do you think should be added to Mount Rushmore?

E-mail us now at am@cnn.com.

KAGAN: Why do I have a feeling you're going to come up with something funny to finish?

BOROWITZ: Well no. I have actually a serious suggestion.

KAGAN: Oh, you do? What is that?

BOROWITZ: Yes, which is Scott Baio, Sir Charles. "Charles In Charge" underrated. I think that's a way of making amends.

HEMMER: I think Eric Estrada goes there too, while we're on the topic.

BOROWITZ: There you go.

KAGAN: Joni would show up because Joni loves Chachi.

BOROWITZ: She does. She really does.

HEMMER: Let's get a break here.

In a moment, start your work week off right, "90-Second Pop" a bit later this hour.

The queen of all media now extending her reign, but will she overstay her welcome?

Plus, how much damage did "Collateral" do at the box office?

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

KAGAN: All right, we're coming up on just half past the hour on this AMERICAN MORNING.

In just a moment, Christiane Amanpour will join us from Sudan where violence and starvation have left the country in crisis. She'll tell us about one doctor who is fighting to save the lives of Sudan's smallest victims.

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 9, 2004 - 07:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Good morning. Specific new details of al Qaeda plans to attack America by water and by land. Meanwhile, a crucial source of intelligence may have dried up.
Iraq today in turmoil, a one-time ally of the U.S., Ahmed Chalabi called to face criminal charges in that country. His nephew accused in connection with murder.

Also.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He doesn't really actually meet criteria for admission to our camp because he is not severely malnourished. He is moderately malnourished.

(END VIDEO CLIP)

HEMMER: And a doctor goes to war with a killer in Sudan, the fight to save a nation's children on this AMERICAN MORNING.

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

HEMMER: All right. Time to start a whole new week here at AMERICAN MORNING, a good Monday morning. Soledad is out resting and waiting. And Daryn Kagan is here in the big city.

DARYN KAGAN, CNN ANCHOR: Good morning. It's been too long, don't you think?

HEMMER: It's been awhile.

KAGAN: I had to come check on my friend, Billy.

HEMMER: Well, we have three hours to catch up.

KAGAN: All right, and then afterwards as well.

HEMMER: It's very true.

Among our top stories this morning, financial centers in three U.S. cities still remain under orange alert. Now there are details on what might be al Qaeda's plans for its next big attack.

"Time" magazine has an exclusive look. We'll talk to the "Time" magazine news director about all the specifics in a moment here. KAGAN: Also, we'll check in on the world of politics, some thoughts that John Kerry -- get this -- might have been too nice to his opponent. They come from what might be an unlikely source. We will talk with our likely source. And that is Jeff Greenfield.

HEMMER: Too nice in the year 2004.

KAGAN: Yes, imagine that.

HEMMER: Also, the latest on the two-year-old formerly conjoined twins who were just separated last week. Right now, their vital signs are good, not out of the woods yet, though. We'll talk to the lead pediatrician this morning.

Jack Cafferty is on vacation.

KAGAN: Good for him.

HEMMER: All week long, in fact.

KAGAN: Do you think there's -- I come up and then Jack's gone?

HEMMER: No, I don't think so.

KAGAN: Should I take that personally?

HEMMER: No.

KAGAN: No?

HEMMER: Not for a second.

KAGAN: OK.

HEMMER: Andy Borowitz, our AMERICAN MORNING regular, is here to fill Jack's shoes.

KAGAN: Look forward to that.

HEMMER: So we'll get to that.

First of all, let's start this morning here with this.

Developments now in the war on terror, the White House defending the decision to raise the terror level. It says past intelligence has pointed to threats against the capitol and specific members of Congress, but it would not provide details on all of that.

"Time" magazine reporting that al Qaeda has considered using limousines packed with explosives, hijacked helicopters and speed boats in terror attacks. And meanwhile, efforts by U.S. officials to justify the elevated alert level may have shut down an important source of information regarding al Qaeda.

All this, this morning now, as we go to throughout the morning. First though, from the White House and Elaine Quijano with more. (BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice-over): He's the man whose information helped lead to raising the threat level, according to U.S. officials. But Pakistani intelligence sources say the move to name al Qaeda operative Mohammad Naeem Noor Khan means one fruitful information source has dried up.

Khan, a computer expert secretly arrested in Pakistan last month was being used in a sting operation to try to net other al Qaeda members. But that ended when he was identified.

CONDOLEEZZA RICE, U.S. NATIONAL SECURITY ADVISER: The problem is that when you're trying to strike a balance between giving enough information to the public so that they know that you're dealing with a specific, credible, different kind of threat than you've dealt with in the past, you're always weighing that against kind of operational considerations.

QUIJANO: It was last week that questions swirled about why the alert level was raised for financial sectors of New York, New Jersey and Washington. Against that backdrop, unnamed U.S. officials said Khan was one source of intelligence, which prompted the U.S. to act.

One Republican is criticizing the move.

SEN. GEORGE ALLEN (R), VIRGINIA: They should have kept their mouths shut and just said, we have information. Trust us.

QUIJANO: While the Bush administration isn't laying out more details of a possible plot, "Time" magazine is reporting some specifics saying Osama bin Laden himself desires a pre-election strike, and that limousine bombs, speed boats and divers might be their tools of choice according to al Qaeda surveillance reports.

In Washington where police have built up protective measures around Capitol Hill, local authorities say they have been told of threats against members of Congress. At least one lawmaker said it's enough to be concerned but not alarmed.

SEN. JOE BIDEN (D), DELAWARE: I don't want the American people or, specifically, my wife listening to this thinking that there is hard data that is incontrovertible from hard sources.

QUIJANO (on camera): The Bush administration continues to worry al Qaeda will try to disrupt the election process. But officials have no detailed information on timing and are hoping to glean more intelligence from Britain and Pakistan.

Elaine Quijano, CNN, the White House.

(END VIDEOTAPE)

HEMMER: Much more now this morning from "Time" magazine's upcoming exclusive report on these operations. The news director for "Time" magazine with us now. Howard Chua-Eoan, our guest here in AMERICAN MORNING studios.

Good morning to you.

HOWARD CHUA-EOAN, NEWS DIRECTOR, "TIME" MAGAZINE: Good morning, Bill.

HEMMER: When the warning came out last weekend from Tom Ridge on that Sunday afternoon, why did it take a week for these details to come out and go public?

CHUA-EOAN: They were still going through a lot of it because a lot of information came from these disks, which they basically only picked up on July 25th. And he made the announcement six days later.

So a lot of this information and all the details were only becoming clearer to everyone as the week went on. I mean, it was clear to them. They had seen a lot of it. That's what prompted by them.

HEMMER: It was a question of time before going through it, deciphering and getting the word out.

First about the limousines, what are you reporting on that? What was the strategy behind using those?

CHUA-EOAN: The strategy was that trucks would have been too obvious and it wouldn't have been, they wouldn't have been able to bring them too close to the building, they thought.

But a limo, stripped out and packed with explosives, driven up, no one seemed to mind and no one seemed to would have stopped the limo.

HEMMER: Because you can see those vehicles in the streets of Manhattan.

CHUA-EOAN: They're all over the place.

HEMMER: Plenty, you're exactly right.

The heliports in New York City, what was the idea behind those?

CHUA-EOAN: Perhaps hijacking helicopters and launching attacks on the New York, New Jersey area. Parts of New York -- there were photographs that are marked midtown, downtown so that whoever had taken over the helicopter would be able to tell what part of town they were in.

HEMMER: What about the Citigroup building? There were similarities that it found to the World Trade Center?

CHUA-EOAN: The analysis they had was that the building was built very much like the World Trade Center. So a large gasoline bomb, a tank or truck, would probably bring it down, they surmised.

And it's interesting, they had stopped doing that -- they had stopped thinking about that because they had realized that these tanker truckers, trucks, have GPS trackers, so they decided maybe it is not the right way to go.

HEMMER: What was the specifics about the train schedule in New Jersey?

CHUA-EOAN: Well, interesting thing about train schedules was that it seemed like they may have driven a limo up, but they weren't planning to commit suicide. They were thinking of a getaway plan.

The people who would have done that in the Prudential building in New Jersey would then have, somehow, just left the truck there and gone off and taken an escape route.

HEMMER: Does that then suggest that they would not use suicide bombers in an attack like that?

CHUA-EOAN: It seems like they're, you can't really predict them. They seem to be going one route, and then it seems like they seem to be preparing for others.

HEMMER: In all the information that you've gone through, was there any indication as to the whereabouts of Osama bin Laden?

CHUA-EOAN: No, just the indication that he seems to have taken a particular interest in attacking the United States as opposed to other parts of the world.

HEMMER: Do you believe, at this point, all the information is out, or is more to come on this?

CHUA-EOAN: I'm sure there's more to come. We had lots more information that we couldn't quite triangulate and confirm ourselves, so this is -- but this is an amazing article.

HEMMER: It's a fascinating article, too.

Howard Chua-Eoan, thanks from "Time" magazine here with us.

CHUA-EOAN: Thank you.

HEMMER: All right -- Daryn?

KAGAN: And now to Iraq where security forces and U.S. troops clash once again with insurgents loyal to cleric Muqtada Al-Sadr in Najaf. That as former Iraqi governing council member Ahmed Chalabi, once closely aligned with the U.S., now faces criminal charges.

Matthew Chance is live in Baghdad -- Matthew?

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Thanks, Daryn.

We'll start with that violence in Najaf where this fighting has been continuing for the past four days. We've had some latest casualty figures given to us by U.S. officials. They're saying that they've killed 360 of the 2,000 members of the Medhi army loyal to the Shiite radical cleric Muqtada Al-Sadr in that holy city of Najaf over the past four days.

We understand at least four U.S. soldiers have also been killed in that fighting. There had been appeals from the interim Iraqi government for the fighting in Najaf to stop. Muqtada Al-Sadr, though, repeatedly refusing to back down and promising instead to fight to the death.

Well, the latest, we understand, is that U.S. military officials have surrounded the Imam Ali mosque, which is one of the holiest shrines in Shiite Islam at the center of Najaf. It's also the place where members of the Medhi army have been hold up and launching attacks against U.S. forces from.

They're saying at this stage, the U.S. Army that they're not preparing to enter the sacred compound, but they're also saying that they do have permission from the governor of Najaf to do that if they feel it is necessary.

Obviously, they're very mindful of the impact of the repercussions that may have if they set foot inside that mosque -- Daryn?

KAGAN: And Matthew, talk about repercussions and talk about a turnaround in face, Ahmed Chalabi and his nephew. Tell us more about the charges they face today.

CHANCE: He was once the darling, of course, of the Pentagon, and the man for many months tipped as being the new leader of the new Iraq, but he's certainly fallen from grace.

Ahmed Chalabi has been accused of a number of things over the past few months. He's been accused of spying for Iran. He's been accused of passing false intelligence on to the coalition about the presence of weapons of mass destruction here in Iraq.

He's now been served with this arrest warrant which has something to do with a money-laundering scam involving counterfeit Iraqi dinars being exchanged on the street. This is something he totally denies.

Interestingly though, his nephew, Salem Chalabi, has also been issued with an arrest warrant, this time for murder. Salem Chalabi a key figure because he's the man overseeing the trial of Saddam Hussein.

KAGAN: Matthew Chance, more on that later in the day. Thank you -- Bill?

HEMMER: All right, Daryn. Ten minutes past hour. To Carol Costello now watching the other news for us at the CNN Center.

Good morning, Carol, nice to see you on a Monday.

CAROL COSTELLO, CNN ANCHOR: Nice to see you too, Bill, thank you.

In just about three hours, Oklahoma City bombing conspirator Terry Nichols is set to be formerly sentenced to life in prison. Nichols was convicted in state court last May on 161 counts of murder for the 1995 attack on the Alfred P. Murrah federal building. And there is some speculation that Nichols may speak out this morning, his first public statement since the trial began.

The Republicans officially have a candidate to compete against Democrat Barack Obama set for a U.S. Senate seat from Illinois, conservative talk show host Alan Keyes. Keyes lives in Maryland. He'll move to Illinois to launch his campaign. His Democratic rival gave the keynote speech at the Democratic National Convention last month.

Overseas now in Afghanistan, two U.S. soldiers and an Afghan interpreter were killed over the weekend in a roadside bombing in Ghazni province southwest of Kabul. A third soldier was injured in that attack.

And there are reports this morning of an accident at a Japanese nuclear power plant. According to Japanese media, at least four people were killed and several others injured by a steam leak at a plant some 200 miles west of Tokyo. No radiation leaks outside the facility have been reported.

And in Maryland, health officials are awaiting lab results to determine why more than 100 students got sick at a leadership conference. The teenagers were taken to hospitals after complaining of nausea at the University of Maryland over the weekend. Most were treated and have since been released.

Back to New York and Daryn.

KAGAN: All right, Carol, thank you for that.

Let's go ahead and check, for the first time this morning, the weather forecast. Chad Myers at the CNN Center with the latest weather update.

Chad, I don't know who you're paying off, but up and down the East Coast it is looking beautiful.

CHAD MYERS, CNN METEOROLOGIST: You know, Daryn, for some reason you just went away in my ear. So I can't even hear what you were saying, but I'll wing it and go from here.

(WEATHER BREAK)

MYERS: Daryn back to you.

KAGAN: Lovely. Chad, thank you so much.

HEMMER: In a moment here, watching and waiting on Wall Street today -- will the fed still raise interest rates even in the wake of Friday's job news, which was way under the expectations. So, we'll look at that in a moment this morning.

KAGAN: And speaking of expectations, after landmark surgery, there is reason for optimism for separated twins. We're going to talk to with one of the doctors for the twins and get an update on their progress, just ahead.

HEMMER: Also this hour, is a presidential campaign about to go negative? Analysis this morning from Jeff Greenfield on that when we continue after this.

(COMMERCIAL BREAK)

HEMMER: Live pictures just in to us here at CNN south side of Chicago, WFLD, our affiliate there -- this is a warehouse burning.

The fire broke out just about an hour ago, 5:18 local time, 6:18 East Coast time, four alarm fire, firefighters responding there. The good news in all of this, that building is abandoned.

We will watch it burn throughout the morning here and bring you updates when we get it. South side of Chicago right now in a live picture -- Daryn?

KAGAN: Let's see what's burning in the world of politics. To hear the Bush campaign tell it, the Democrats weren't tough enough on the president during their convention. So will the Republicans be shooting from the lip, so to speak, later this month?

Our senior analyst, Jeff Greenfield, here to talk about that. Good morning.

JEFF GREENFIELD, CNN SR. ANALYST: Terrible tongue.

KAGAN: Sorry. It's just - it's early. I'm getting warmed up.

GREENFIELD: Fair enough.

KAGAN: Check with me in a couple of hours.

GREENFIELD: Fair enough.

KAGAN: All right. But for right now, you've got to help me here. Are Republicans actually complaining that John Kerry was not tough enough and mean enough on President Bush?

GREENFIELD: They're not really complaining, but what they are saying, at least according to the AP story, is that Kerry may have made a strategic error at the Democratic convention by now laying out a compelling case against the president.

Kerry's speech contained criticisms to be sure, but they were kind of indirect, as when he said, "saying mission accomplished doesn't make it so."

The goal of the Kerry campaign clearly was directed at sounding optimistically positive. And what the Bush's argument seems to be is that he didn't make a case against the Bush second term the way, say Ronald Reagan did against Jimmy Carter in 1980, or the way Bill Clinton did against the first President Bush. KAGAN: So, are they also giving us a hint as to what we can expect a little bit later this month with this convention?

GREENFIELD: Yes, I really think we are, but it tells us, I think, that they plan to lay out a very strong case against Kerry. And it's really not exactly a secret about what they intend to say because they've been kind of saying this four months.

First, they and, in fact, some journalists such as David Broder of the "Washington Post" have noted that Kerry barely mentioned the last 20 years of his life spent in the U.S. Senate.

My guess as or hunch is that the Bush campaign is going to point to votes of Kerry's on defense and intelligence to rebut the idea that Kerry's Vietnam service taught him lessons about the presidency.

I mean, if you learned that lesson, I think they'll say, why did you vote to cut defense? Why did you vote against the first Persian Gulf War?

As the second thing, clearly, is that they're going to go very hard on values. They're argument is going to be that Kerry it out of the mainstream. And they are going to point to things like his vote against banning so-called partial birth abortions, his refusal to back a gay marriage ban in the Constitution.

Look, they read the same polls everybody else does, probably more intensely. They know that if it's a straight up or down vote right now, most voters would go to choose a new president.

They have got to make John Kerry unacceptable as an alternative. And personal note, there's nothing wrong with "negative campaigning" if it's an honest attempt to lay out a case against the other guy.

KAGAN: OK. Well then let's look at those numbers and use those as a case for the Kerry campaign to say, we might be playing it safe, yes, but perhaps with good reason.

GREENFIELD: Well, I do think there is some of that. I mean Kerry is reaching out to the middle geographically. He's going to rural Ohio, Michigan. He's going to Pennsylvania. He campaigned in Colorado, which is a pretty red state. And he's sounding very centrist themes about fiscal discipline and military strength.

But, you know, compare who he's talking to with Bush. I think this is interesting.

In the last couple of weeks, Bush went to the Urban League, a prominent civil rights group, where he argued that blacks ought to move away from the Democratic Party. Bush went to the Unity Conference of Minority Journalists and faced some very tough questions, OK.

By contrast, Kerry has not yet gone in to a lion's den of, say, white evangelicals to answer their tough questions about abortion or gay marriage. He really hasn't confronted a hard-line foreign policy group to say, you and I have differences, well let's talk about them.

Now, I think the Kerry campaign looks at the poll numbers. They say he's 5 points up in the "Time" poll. They see that he's up in Florida and New Hampshire by about six or seven points. And they believe, I think, that they are on a winning path.

But, you know, between the debates coming in October and the unforeseeable events that we've all talked about for months and can foresee, there may actually be some risk in a relatively risk-averse approach. So, I think that's where we are.

KAGAN: And we will see. And still a lot of campaigning left to do before the election?

GREENFIELD: Oh, yes.

KAGAN: Oh, yes.

GREENFIELD: You know, the country is just beginning to open up its eyes after three and a half years of our obsessions -- yes, we're going to have to vote in November.

KAGAN: Yes, there is an election in November.

GREENFIELD: I think that's right.

KAGAN: All right, Jeff Greenfield, thank you for your insight.

The president and first lady, I want to remind you of this, they're sitting down with Larry King this week. It's an exclusive interview. That is Thursday night, 9:00 Eastern on "LARRY KING LIVE" -- Bill?

HEMMER: All right. Back on the campaign trail from over the weekend, Democratic vice presidential candidate, John Edwards, went back to Lawrence, Kansas yesterday. He went back for a very specific reason, to greet supporters and apologizing for a problem that happened late on Saturday night.

The train carrying the Democratic ticket went through Lawrence, Kansas late on Saturday, but it did not stop as it was scheduled to. There were hundreds of supporters there waiting and waving and the train just kept on going.

That snafu blamed on miscommunication, which meant Senator Edwards went back on Sunday afternoon to pay his respects.

See you in a moment here on AMERICAN MORNING.

The latest on the formerly conjoined twins, the toddlers survived risky separation surgery about a week ago, but now there are more challenges to come.

We'll talk to the twins doctor when we continue after this on a Monday morning.

(COMMERCIAL BREAK)

HEMMER: All right, welcome back everyone. The critical question, the money question today on Wall Street and Main Street, will the Federal Reserve raise interest rates? Maybe. But what about this jobs report on Friday? A change of thought, perhaps?

Christine Romans "Minding Your Business," in for Andy Serwer.

Good morning to you.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Gosh, could you believe that jobs report on Friday?

HEMMER: No.

ROMANS: I mean 32,000 jobs created in July, completely blew the street away, took everyone by surprise, a lot weaker than expected.

And tomorrow, the Fed meets. So does a week job situation, a week labor market situation in the summer complicate things for Alan Greenspan and the Federal Reserve?

Most people on Wall Street still expect the fed to raise interest rates by a quarter of a percentage point, but they'll still be very, very low, these interest rates. And we'll look to see what the fed has to say.

Maybe they'll, you know, tip their hat toward this week's jobs situation. Greenspan had said before that he thinks that weakness in the second quarter was transitory. That's their word. I think that means temporary in human speech.

HEMMER: We talk about that a lot around here.

Thursday and Friday really tough days, though, triple digit losses on the Dow 30.

ROMANS: You're right. And now we have stocks at the lowest level of the year. The Dow last week down 3 percent.

Look at the NASDAQ, below 1,800, down 6 percent last week. It's down 11 percent for the year, very tough going for the stock market over the past few days.

Of course, there are always a few people who'll say let's -- listen, when everyone starts jumping out, that's when you need to start taking a look and finding some stocks that are good stocks with good names that you want to hold for a while.

But in the meantime, you've got a lot of different things going on and the fed meeting tomorrow.

HEMMER: It's just transitory.

ROMANS: Transitory, of course. You use that word all the time.

HEMMER: Thank you, Christine.

KAGAN: Well, time for the "Question of the Day." Though the question is, where is Jack Cafferty. He's on vacation somewhere, but...

ANDY BOROWITZ, "BOROWITZREPORT.COM": He's transitory.

KAGAN: He is transitory, but Andy Borowitz is very much here in the present.

You're here.

BOROWITZ: I'm here.

KAGAN: And you have the "Question of the Day."

BOROWITZ: I certainly do have one. It's a good one.

Republican Congressman Doug Ose from California has introduced legislation to carve Ronald Reagan's face in to Mount Rushmore. And he's not the only one who wants to see the Gipper on the mount.

So far, George Washington, Thomas Jefferson, Theodore Roosevelt and Abraham Lincoln and are already there. So as long as we're talking about adding someone else, our question is, whose face do you think should be added to Mount Rushmore?

E-mail us now at am@cnn.com.

KAGAN: Why do I have a feeling you're going to come up with something funny to finish?

BOROWITZ: Well no. I have actually a serious suggestion.

KAGAN: Oh, you do? What is that?

BOROWITZ: Yes, which is Scott Baio, Sir Charles. "Charles In Charge" underrated. I think that's a way of making amends.

HEMMER: I think Eric Estrada goes there too, while we're on the topic.

BOROWITZ: There you go.

KAGAN: Joni would show up because Joni loves Chachi.

BOROWITZ: She does. She really does.

HEMMER: Let's get a break here.

In a moment, start your work week off right, "90-Second Pop" a bit later this hour.

The queen of all media now extending her reign, but will she overstay her welcome?

Plus, how much damage did "Collateral" do at the box office?

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

KAGAN: All right, we're coming up on just half past the hour on this AMERICAN MORNING.

In just a moment, Christiane Amanpour will join us from Sudan where violence and starvation have left the country in crisis. She'll tell us about one doctor who is fighting to save the lives of Sudan's smallest victims.

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