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AMERICAN MORNING

CIA Report Provides Ammunition to Both Men Heading into Tonight's Debate; Martha Stewart Heads to Prison Today to Serve Five- Month Sentence

Aired October 8, 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: Each side with a golden opportunity in debate No. 2. Is it George Bush or John Kerry with the upper hand tonight?
Dozens dead. The death toll expected to rise at the Egyptian resorts bombed by terrorists.

Another bombing overnight, this time in Paris. Authorities wonder why this embassy would be a target.

The Nobel Peace prize is announced. A powerful statement about the environment.

And here in the U.S., the time has come. Today is the day for Martha Stewart on her way to prison 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: Good morning, everyone. A busy morning here. Good morning on this Friday. Nice to see you, Heidi. Back here in New York now.

HEIDI COLLINS, CNN ANCHOR: Nice to see you, too.

HEMMER: A lot of breaking news from overnight around the world, a lot of political news to talk about as well, and we'll get to all of it this morning.

Tonight, of course, the second debate between George Bush and John Kerry. We'll talk about the strategy, and also what's at stake with former Senator Bob Kerrey, a Kerry supporter, and Karen Hughes an adviser for the president who is already in St. Louis, getting ready for tonight's debate No. 2.

COLLINS: Also, we're going to look at some of the battleground states and some that we didn't realize were battleground states. We have new polls out in three hotly contested states, Wisconsin, New Mexico and Colorado. Are they leaning red or blue? We're going to get a snapshot of that.

Of course, Jack Cafferty is still off on this Friday. But Andy Borowitz is here today. He's going to read the e-mail and have a little bit of his shockers for us.

HEMMER: I like that.

Let's get you overseas right now, update you on what's happening in these terrorist attacks, in three cities already today. Police in Paris searching for an explanation, a bombing outside the Indonesian embassy there. Ten people were injured after a package exploded beneath a balcony. Most of the injured were hit by flying glass.

Also in Afghanistan, the day before historic elections, two rockets were launched in Kabul. One exploded. The other did not. The blast happened several hundred yards from U.N. peacekeeping headquarters and very near the U.S. embassy. Embassy staff members ordered to take cover in an underground bunker. Nobody was hurt. That was Afghanistan.

Also today, Egyptian and Israeli officials sifting through the rubble at three resorts in the Sinai Peninsula. More than two dozen were killed when car bombs and suicide bombs went off at the resorts, all near the Egyptian-Israeli border. More than 100 others were injured. The Hilton Hotel in the town of Taba sustained the worst damage. Part of that structure collapsed. Nearly 40 people are listed as missing at this point. The resorts are popular destinations for Israelis, and many were there this week celebrating a Jewish holiday. The Israeli government warned residents from traveling to the Sinai Peninsula for fear of attacks there. No one has taken responsibility for those blasts.

COLLINS: I want to check on the stories now in the news with Kelly Wallace once again this morning. Directly to Iraq, Kelly.

KELLY WALLACE, CNN CORRESPONDENT: That's right. Good morning to you. Good morning, everyone.

We are beginning in Iraq, where a search is under way for victims of a major U.S. air strike in the city of Fallujah. A doctor says the strike hit a wedding celebration, killing the bride and groom, and at least a dozen others. Police are searching for more bodies beneath the rubble of the house. Some 16 people are wounded, including children.

Continuing in Iraq, where photos and layouts of several U.S. schools have been found. The military recovered two computer disks with images and floor plans of schools in Fort Myers, Florida, Salem, Oregon, Jones County, Georgia, New Jersey, Michigan and California. The schools are on alert, but there is no indication of a threat. Officials say the materials associated with a person involved with school planning in Iraq.

A proposal to change intelligence gathering has been shot down on Capitol Hill. The House voted overnight to reject the Senate's version of a bill based on recommendations from the September 11th Commission. Republican leaders say the measure doesn't do enough to address flaws in the national security system. The House is expected to vote on its own version of the bill later today.

And, finally, Kenyan environmentalist Wangari Maathai has won the 2004 Nobel Peace Prize. Maathai is the first African woman to win the award. She was honored for leading the Green Belt movement, planting more than 30 million trees across Africa. The Nobel Committee calls her an inspiration in the quest for sustainable development, democracy and peace, and a member of her family was on CNN a short time ago, saying they are already celebrating.

HEMMER: Good for her.

COLLINS: That they are. Said she just kind of stumbled onto this whole activist role in her life while she was being a professor at one of the universities there.

WALLACE: Amazing story.

COLLINS: Yes.

All right, Kelly, we'll check back a little bit later on. Thanks.

COLLINS: Well, the candidates' positions on Iraq are sure to be at the center of tonight's debate. Iraq dominated last week's confrontation, and the president's lead in the polls shrank. The just-released CNN/"USA Today"/Gallup polls from three battleground states now show the race at nearly a dead heat.

Likely voters in New Mexico favor President Bush by three percentage points, and Senator Kerry is one point behind among registered voters.

The president holds a similar edge in Wisconsin, but all of these numbers are within the margin of error.

And in Colorado, an absolute toss-up, 49 percent apiece for both candidates among likely voters.

The CIA's report on the absence of weapons of mass destruction in Iraq poured fuel on yesterday's campaign fires.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRES. OF THE UNITED STATES: Based on all the information we had to date, I believe we were right to take action, and America is safer today with Saddam Hussein in prison.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The president of the United States, the vice president of the United States may well be the last two people on the planet who won't face the truth about Iraq.

Mr. President, the American people deserve more than spin about this war.

(END VIDEO CLIP)

COLLINS: The CIA report provides ammunition to both men heading into tonight's debate. It also says Saddam Hussein never lost his desire to obtain weapons of mass destruction.

HEMMER: Bob Kerrey is a member of 9/11 commission, also a John Kerry supporter. He's in New York this morning.

Welcome back here, senator. Good morning to you.

BOB KERREY, KERRY CAMPAIGN SUPPORTER: Good morning.

HEMMER: A lot has been made about Paul Bremer's comments earlier in the week. An op-ed piece today in "The New York Times" clarifies his report. He writes in part, "Mr. Kerry" -- meaning Senator Kerry -- "is free to quote my comments about Iraq. But for the sake of honesty, he should also point out that I have repeatedly said, including in all speeches in recent weeks, that President Bush made a correct and courageous decision to liberate Iraq from Saddam Hussein's brutality, and that the president is correct to see the war in Iraq as a central front in the war on terrorism." Was it not right to remove that threat?

KERREY: I mean, John Kerry hasn't even repudiated his vote. What he's saying is the war has been waged in a mismanaged fashion, and the intelligence that was delivered to the Congress wasn't the full story of what was going on inside of Iraq, that the case was made based upon a shaky foundation.

But he isn't disagreeing with what Mr. Bremer is saying. What he's say something that when Mr. Bremer said there wasn't enough forces in place, that that indicates a part of the mismanagement of the Bush administration of the war in Iraq itself.

I mean, I don't think he could of -- if you went there intentionally trying to screw up what you were going to do after the war, I'm not sure you could have done it any better than what's happened since the major fighting ended.

HEMMER: What the president's saying, what the White House is saying, is that Saddam Hussein was gaming the system. It was just a matter of time before he waited folks out, including the weapons inspectors and the U.N.

KERREY: Yes, well, there is an awful lot of countries on this Earth that are trying to acquire weapons of mass destruction. In fact, while we've been worried about Iraq, both Iran and North Korea have been accelerating their movement to try to acquire nuclear weapons. I mean, the whole counterproliferation effort, in my view, has not been properly funded and properly executed.

But in this particular case, a war in fact that I support, the principal point that John Kerry is trying to make is that this war has been badly mismanaged, that there wasn't enough forces on the ground to begin with, that we disbanded the Iraqi army. We spent a half a billion dollars trying to find weapons of mass destruction, almost nothing to try to round up 2 1/2 million tons of conventional weapons that have been used against U.S. forces ever since.

So just from the standpoint of managing this war, it's been very poorly done; it's been largely driven by ideology, not by practical consideration. HEMMER: Back to the first question and your first answer. Senator Kerry had access to the same intelligence. And again, he voted for the war.

KERREY: That isn't true. The president has much more access to intelligence than members of Congress does. Ask any member of Congress. Ask a Republican member of Congress, do you get the same access to intelligence that the president does? Look at these aluminum tube stories that came out the president delivered to the Congress -- we believe these would be used for centrifuges, didn't deliver to Congress the full range of objections from the Department of Energy experts, nuclear weapons experts, that said it's unlikely they were for centrifuges, more likely that they were for rockets, which was a pre-existing use. The president has much more access to intelligence than any member of Congress.

HEMMER: Let me go to tonight's debate. How important is this for Senator Kerry to keep what Democrats consider his momentum going forward?

KERREY: Well, I think it's very important for both men. Look, I thought both the presidential debate and vice presidential debate delineated very clear differences. I thought they were very spirited and helpful for the American people in trying to identify differences on foreign policy, differences on domestic policy. And my suspicions are we're going to see more of the same tonight.

HEMMER: Bob Kerrey, thanks for your time, here in New York City with us today.

KERREY: You're welcome.

HEMMER: Nine minutes past the hour.

From the other side now, from the Bush campaign, a few moments ago, I talked with Karen Hughes, a senior adviser to the president's team.

(BEGIN VIDEOTAPE)

HEMMER: Karen, this report says that Iraq's WMD program was essentially destroyed after the first Persian Gulf War, 1991. How is it that the U.S. could not know that?

KAREN HUGHES, BUSH CAMPAIGN SR. ADVISER: Well, Bill, obviously our intelligence was wrong. The accumulated body of 15 years, not only U.S. intelligence, but intelligence throughout the world. '

But what this report -- and President Bush is working on reforming that intelligence, that's why he named a commission, because it's very important that the president receive good information from our intelligence community, particularly at a time of such grave threats in the world.

But what the report also has is new information that Saddam Hussein was gaming the system, using the oil-for-food program, the U.N. program, to essentially try to bribe companies and countries to undermine the sanctions, and that the sanctions were actually crumbling and that Saddam had the clear intent of reconstituting his programs and the capability of doing so once the world looked the other way.

HEMMER: Let me stop you there. Senator Kerry said this about this very topic yesterday.

KERRY: My fellow Americans, you don't make up or find reasons to go to war after the fact. That's not how to it works in the United States of America.

HEMMER: Karen, the suggestion there is that the White House is now changing its story.

HUGHES: Well, Bill, that kind of makes me want to make a face, as the president joked the other day. It's the height of hypocrisy for Senator Kerry to make that suggestion. He himself stood, as the president quoted him yesterday, Senator Kerry, on the floor of the United States Senate when he voted for this war and talked about Saddam Hussein's weapons, talked about the fact that he felt he was developing a nuclear weapon, warned that it would be naive to the point of grave danger to underestimate Saddam Hussein, warned that the world had to confront him before he shared his information with terrorist groups.

So it's the height of hypocrisy for Senator Kerry to now suggest that when he said the same thing, reached the same conclusions, voted for the war, and said President Bush was right to invade Iraq, who is misleading whom is the question I would ask.

HEMMER: The suggestion from Senator Kerry is that the president is not leveling with the American people and not telling the truth about the reality on the ground in Iraq.

HUGHES: Well, and again, Bill, Senator Kerry himself talked about the Saddam Hussein's weapons. We all thought that Saddam Hussein had weapons. As the president said yesterday, it's now -- this Duelfer Report has made it clear, as the earlier Kay report did, that he did not have the stockpiles that we all thought he had.

Nonetheless, as Senator Kerry himself recognized when he voted for the war, Saddam Hussein was a threat. And this report underscores the fact that he was trying to game the system and get the world to look the other way so that he could reconstitute his weapons of mass destruction program.

HEMMER: All right, another topic -- debate tonight. How much do you believe is riding on this tonight there in St. Louis?

HUGHES: Bill, every debate is important, and every debate is a factor in the decision that the American people ultimately have to make. You know, it's...

HEMMER: Would you say tonight is do or die? HUGHES: No, no. I think the process of the American people making a choice in a presidential election is an accumulated process, and I think in this one, it will come down to who do the American people trust.

HEMMER: Let me stop there just to interject there in the interest of time. You mentioned facial expressions a few moments ago. Will the president do anything differently tonight that he did not do a week ago in debate No. 1?

HUGHES: Well, the president is very aware, as I said. Listening to Senator Kerry's litany of misrepresentations, he joked the other day, makes one want to make a face. I'm sure that he'll -- this format is a little different. He'll have a chance to look at people. The format last week was kind of sterile. The audience was out there in the dark. This is a townhall format. The president really likes people, enjoys interacting with people, and so I think he'll enjoy this format.

(END VIDEOTAPE)

HEMMER: CNN's debate coverage begins later tonight in St. Louis, 7:00 Eastern Time. I'll be back in Columbus, Ohio, the heart of it all, with a group of undecided voters, gauging their debate reactions in real time. Fascinating stuff, too, to watch it -- Heidi.

(WEATHER REPORT)

HEMMER: In a moment here, there's a significant jobs report due out about an hour from now. What can we expect in that? How will that expect the effect the race tonight, and where is it going to factor into tonight's debate, too.

COLLINS: I'm sure we'll hear more about those numbers tonight, for sure.

The battleground for -- excuse me -- the battle for the battleground, new polling shows the race is tightening in key swing states. We'll breakdown the numbers for you in just a moment.

HEMMER: Also Martha Stewart heads to prison today to serve her five-month sentence. What will life be like for her? We'll have a look ahead, on this AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: Martha Stewart surrenders to federal authorities today in Alderson, West Virginia. She'll begin serving her five-month sentence for lying about a stock sale at Alderson Federal Prison for women.

Senior legal analyst Jeffrey Toobin with us now to talk about Martha's new digs, if you will, and her immediate future.

Now you have written about Martha in "The New Yorker." What do you think is going through her mind as she goes to prison today? JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: You know, I was thinking about that this morning, and I was thinking about something she said to me about a year and a half ago. She said, you know, I'm a very physically strong person, unusual thing for a woman in her mid 60s to say.

COLLINS: Was she trying to scare you?

TOOBIN: Not at that point. But, no, I think she is very tough. And this is awful. It's humiliating, it's embarrassing, but you know, she'll be OK. And I think when she gets out, a lot of people will be rooting for her.

COLLINS: It's not going to be easy though. Any of it, I'm sure. What will be the toughest part for her?

TOOBIN: The lack of control. This is a woman who is used to controlling her physical space, controlling her schedule, controlling other people around her, and that is over for the next five months. Surrendering that control, as she knows she has to, will be the most difficult part of it. It's not going to be physically threatening. It's not going to be any sort of danger to her, but just the opportunity not to control her environment is going to be very hard for her.

COLLINS: In fact, we saw some video just the other day, other inmates welcoming her to the prison.

TOOBIN: Yes. I think all of them, frankly, will look up to her. A prison like Alderson is made up almost entirely of young, non- violent narcotics offenders, women who got caught carrying drugs for their boyfriends. And these are not generally hardened criminals, they're not violent people. Martha Stewart is someone that a lot of people in America look up to, and I think that's going to be true in prison as well.

COLLINS: But help me with something here. We know that yesterday, on a legal front of things, her lawyers accused the prosecutors of withholding evidence that might have really had a bearing on this case and quite possibly Martha's innocence. How will that factor in now? I mean, she's already going to jail. She's going to serve the time. What does it matter at this point?

TOOBIN: Right, I think a lot of people are confused by the idea of her still appealing her conviction, even though she's going to prison. There are other implications of her conviction other than prison. If her conviction stands, she can't serve as an officer of her own company anymore. It has a bearing on the many civil suits against her. So she's trying to get her conviction overturned to get those problems out of the way, even though by the time her appeal is completed, she will have completed her prison sentence. So it's about some things other than prison.

COLLINS: If in fact it happens, some of it about clearing her name, I would imagine. TOOBIN: Absolutely. There's the reputation aspect as well. But it's going to be a very long shot. That was a very fair trial as far as I could tell, and I think overturning this conviction is going to be really difficult.

COLLINS: Jeffrey Toobin, thank you so much for that.

TOOBIN: We're going to be on duty to see if we get to see Martha go in.

COLLINS: Yes, I was going to say, I think the cameras will be there today.

TOOBIN: Indeed.

COLLINS: All right, thanks again, Jeff -- Bill.

HEMMER: In a moment here, cost cuts and competition hit employees at one major phone company. We'll get to that with Andy in a second here.

Also, that critical jobs report due out in about an hour.

And stay with later tonight, our primetime coverage starts at 7:00 eastern for debate No. 2, live in St. Louis. Back after this.

(COMMERCIAL BREAK)

HEMMER: It is all about jobs today, just about an hour away from a significant report. Andy is here "Mining Your Business," significant for the political front and the financial front.

Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Yes. Good morning to you, Bill. Everyone is going to be watching this report coming out at 8:30 Eastern. It's the last jobs report before the election. Economists are looking for 150,000 jobs to be created in the month of September, and they're looking for the unemployment rate to hold steady at 5.4 percent.

Let's look and see how job creation has gone since the beginning of the year. And you can see it was very robust there in the spring months, and then has tailed down a little bit, and that of course is of grave concern to economists. You're usually looking for around 250,000 jobs a month to be created in a recovery at a point in time like this. And we've been trailing below that.

Meanwhile, anecdotal evidence continues to mount that the job picture is not so rosy. Yesterday, some very significant layoffs from a couple of big companies, including AT&T yesterday, saying they were cutting 7,400 jobs. That's on top of 60,000 that they cut earlier this year. Bank of America laying off 4,500 workers. That in the wake of the Fleet Boston merger. And of course, Bill, these numbers won't be included in the September report. But still, it suggests that the environment right now is not so great in the job market.

HEMMER: Don't go far. We're going to need you at 8:30 Eastern Time.

SERWER: I'll be here.

HEMMER: All right, Andy, thanks.

COLLINS: Andy Borowitz here now for Jack Cafferty with the Question of the Day this morning.

Good morning to you.

ANDY BOROWITZ, BOROWITZREPORT.COM: Good morning, Heidi.

It's all about the debates, of course. Now in the first presidential debate, much was made of President Bush's facial expresses during the so-called cut-aways. Some say he looked peevish. Mr. Bush's camp said he looked pensive. I thought he looked like he had made other plans and was hoping to TiVo the debate.

As for Senator Kerry, some commentators singled out his chopping hand motions, which seem to have been inspired by a lawn sprinkler. But are we paying too much attention to how these guys look and not enough on what they say? So as we head into tonight's debate, here is the Question of the Day. Should a way the candidate looks during the debate really matter? E-mail now us at am@CNN.com.

COLLINS: Interpersonal communication.

BOROWITZ: Absolutely.

HEMMER: Bring it on.

COLLINS: It's more like this. Don't they all do that?

BOROWITZ: Now it's the thumb thing.

COLLINS: Because you're not supposed to point, but can you do this.

BOROWITZ: I've got your back.

HEMMER: Thank you, Andy.

It's a Friday, time for "90-Second Pop" a bit later this hour.

It took 37 years. Beach boy Brian Wilson ready to release a new album now. Plus, the Botox case: one L.A. socialite taking its maker and the doctor who injected her to court. Those stories ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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