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CNN Live At Daybreak

Sinclair Anti-Kerry Controversy; Bali Bombings; Yaser Hamdi Home in Saudi Arabia; Beslan Memorials; Stocks & Politics; War Games

Aired October 12, 2004 - 05:30   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.


CAROL COSTELLO, CNN ANCHOR: Good morning to you, welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news -- in Iraq, the U.S. military says it hit two terrorist sites in Fallujah today, one was a meeting center for the Abu Musab al-Zarqawi terrorist network, the other a safe house for terrorists. U.S. warplanes have been making daily bombing runs in Fallujah in recent weeks.

In Riyadh, Saudi Arabia, police today killed three suspected militants in a shootout. The incident was triggered after police noticed a car filled with suspicious individuals in a neighborhood where many Westerners live.

The Los Angeles School Board votes tonight on whether to save part of the Ambassador Hotel for a school. Senator Robert Kennedy was assassinated there while campaigning for president in 1968. The senator's family wants the hotel demolished.

Alan Keys and Barack Obama debate each other tonight in the Illinois U.S. Senate race. Obama gave the keynote address at the Democratic National Convention, you remember. Keys is a former Republican candidate for president.

Now to the Forecast Center and Chad.

I was just thinking about the debate, Obama is so far ahead.

CHAD MYERS, CNN METEOROLOGIST: Yes.

COSTELLO: Yes, it should be interesting, though. Would be fun to listen to, wouldn't it?

MYERS: But it's not going to be on national, it'd only be on local channels, so it would be hard to get to.

COSTELLO: No. No, only in Illinois.

MYERS: Yes.

COSTELLO: But they have such differing viewpoints. That always makes for good television.

MYERS: Well of course.

Hey, good morning.

(WEATHER REPORT)

MYERS: Carol, back to you.

COSTELLO: Thank you -- Chad.

MYERS: You're welcome.

COSTELLO: Twenty-one days until the presidential election. In the polls, Bush is falling back just a little, Kerry is moving ahead just a little. But you know it doesn't matter because the race is still in a dead heat heading into the final stretch, statistically speaking.

A CNN/"USA Today"/Gallup Poll taken over the weekend suggests Bush and Kerry's second debate on Friday had very little effect on the race. Among likely voters, 49 percent support Kerry, 48 percent Bush. Among registered voters, the two are tied at 48 percent. Ralph Nader gets one percent from both groups. The poll has a margin of error plus or minus three percentage points.

Who will do a better job in Wednesday's third and final presidential debate? Fifty-four percent think Kerry will, 36 percent pick Bush.

This campaign certainly has seen its share of political propaganda. There is the anti-Bush film, "Fahrenheit 9/11," and the anti-Kerry swift boat ads. Well now Sinclair Broadcasting, which owns 62 television stations, steps in with a 42-minute one-sided critique of John Kerry's anti-war testimony.

Howard Kurtz of CNN's Reliable Sources has more on that for you.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, "RELIABLE SOURCES" (voice-over): There are two sides to the John Kerry Vietnam story. Supporters highlight the combat heroism that won him a slew of medals. Detractors question the circumstances of some of those declarations and focus on Kerry's rhetoric as an anti-war activist when he returned home.

UNIDENTIFIED FEMALE: Accused all Vietnam veterans of unspeakable horrors.

KURTZ: In the days before the election, Sinclair Broadcasting will be showing only one side. The company has ordered its 62 stations, from Baltimore to Sacramento, to air the anti-Kerry film "Stolen Honor." It's made by former "Washington Times" reporter and decorated Vietnam veteran Carlton Sherwood. And it argues that with his anti-war testimony in 1971, Kerry was branding all American soldiers as baby killers, war criminals, and deranged, drug-addicted psychopaths.

Sinclair doesn't hide its conservative bent. Ninety-seven percent of the money that company executives have contributed in this campaign have gone to Republicans. Last spring, Sinclair took on "Nightline," refusing to air a program in which Ted Koppel read the names of all the U.S. soldiers killed in Iraq. Sinclair accused Koppel of pushing an anti-war agenda. He said he was simply showing the human cost of war.

Kerry spokesman David Wade calls Sinclair's decision to trumpet "Stolen Honor" a smear and a form of yellow journalism. A Sinclair vice president told "The Washington Post" that the film tells a -- quote -- "powerful story," and that the broadcast networks -- quote -- "are acting like Holocaust deniers about Kerry's past."

But even if the movie is newsworthy, airing only a one-sided attack on Kerry would be like the networks deciding that the end of October would be the ideal time to run Michael Moore's anti-Bush film "Fahrenheit 9/11."

(on camera): In the final days of a presidential campaign, media organizations generally try to avoid what in football would be called a late hit. Sinclair Broadcasting, apparently playing a different game, has decided to hit John Kerry hard. Now the Democratic National Committee is hitting back, announcing a complaint with the FEC that accuses Sinclair of making an unkind (ph) contribution to the Bush campaign.

Howard Kurtz, CNN's "RELIABLE SOURCES."

(END VIDEOTAPE)

COSTELLO: And it doesn't end there either. Michael Moore's controversial documentary, "Fahrenheit 9/11," may indeed be heading to your television set, but it will cost you. Sources say Moore is in talks to put his documentary on Pay-Per-View the night before the election.

Of course, that piece accuses President Bush of rushing to war in Iraq and of not pursuing the Saudi connection to the 9/11 attacks, even though 15 of the 19 hijackers were Saudis. Pay-Per-View would charge viewers about 10 bucks to watch the Michael Moore documentary.

We're just one day away from the final presidential debate. Our primetime coverage begins tomorrow night at 7:00 with Wolf Blitzer, Paula Zahn, Anderson Cooper and our entire CNN election team.

This is the fourth anniversary of al Qaeda's attack on the USS Cole, which killed 17 American Sailors. Suicide bombers rammed into a warship as it docked at a port in Yemen during a routine fuel stop. An explosion blew a 40-foot by 40-foot gash in the port side of the Cole.

Just two weeks ago, a judge in Yemen sentenced a Saudi and Yemeni militant to death by firing squad for that attack. In addition, the court ordered four other Yemenis jailed for five to 10 years.

And another tragic anniversary, too, today, this one in Indonesia. CNN's Maria Ressa is in Jakarta where mourners are marking the second anniversary of the Bali bombings, which killed more than 200 people.

And Nic Robertson will have the latest on Yaser Hamdi. Of course, as you know, the U.S. held him for nearly three years as an enemy combatant. He is now back in his native Saudi Arabia. Nic will join us from Hong Kong.

But let's start with Maria Ressa from Jakarta.

Good morning -- Maria.

MARIA RESSA, CNN CORRESPONDENT: Good morning, Carol.

A small solemn ceremony in Bali today to mark the explosions two years ago which killed more than 200 people. It also exposed al Qaeda's Southeast Asian arm, the Jemaah Islamiyah. Since then, more than 300 people have been arrested across the region, about 50 have been prosecuted and convicted here in Indonesia, the country with the world's largest Muslim population. Three of them have been sentenced to death.

But while there have been significant inroads in the law enforcement side, analysts point out much more needs to be done on the fight against the spread of the radical ideology. For example, Jemaah Islamiyah has not been banned as a terrorist organization here. It's been banned by the U.S. and the U.N.

Also, Imam Samudra, the field commander of the Bali bombings convicted to death, has been allowed to write a book from prison. That book has had a huge first print by Indonesian standards. Sold out within the first month. In it he justifies the Bali bombings and calls for more suicide attacks around the world -- Carol.

COSTELLO: Maria Ressa reporting live from Jakarta this morning.

More now on Yaser Hamdi. Our senior international correspondent Nic Robertson has been covering that story from Hong Kong.

Hello, Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hello, Carol.

Well Yaser Hamdi arrived back in Saudi Arabia about 24 hours ago. He had spent almost three years in solitary confinement, first in Guantanamo Bay and then in Navy brigs, both in South Carolina, before being transferred by a U.S. Air Force aircraft back to Saudi Arabia.

He met first with his father at the airport. Then, according to Interior Ministry officials, he was taken away for questioning. He is now, according to his father, back with the family in the town on the coast of Saudi Arabia next to the Persian Gulf. He is resting there with his family, according to his father. The family very pleased to see Yaser back at home. Saying he is very tired at this time. Saudi Arabia's Interior Ministry saying they will likely ask him more questions. Yaser will be taken in for more questioning. They believe what they want to find out is why he went to Afghanistan, who he met with there and what he was doing there -- Carol.

COSTELLO: What assurances does the United States have that Saudi Arabia will get to the bottom of that very question?

ROBERTSON: Very interesting, Carol. We don't know what's been happening in talks between Saudi and U.S. authorities over the last two weeks. Yaser Hamdi was supposed to go back to Saudi Arabia by the 30th of September, agreement worked out with Yaser Hamdi's lawyer and the Department of Justice.

Then those talks appeared to fall through, apparently because Saudi officials weren't happy about some of the implications for them, that they would have to, it appeared, to have to monitor Yaser Hamdi's movements. Yaser Hamdi not allowed to leave Saudi Arabia. That has been worked out over the last 12 days, but it's not clear what those details are.

It has happened essentially behind closed doors, diplomatically, very quiet talks. A big surprise for a lot of people when Yaser Hamdi suddenly showed up back in Saudi Arabia yesterday -- Carol.

COSTELLO: Fascinating. Nic Robertson live from Hong Kong. Maria Ressa live from Jakarta. Thanks to you both.

Now to that horrific terrorist attack in Beslan, Russia, which left hundreds of people dead, many of them children. Families there will undoubtedly mourn for some time to come. But today the official mourning period ends and memorial services marking that end are now under way.

Ryan Chilcote has the details for you.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT: The 40-day mourning period is drawing to a close for the more than 330 children, teachers and their parents that were killed in the school hostage crisis in the southern Russian town of Beslan in early September. And the memorial ceremonies that mark the end of that 40-day period are beginning.

The majority of them are expected to happen on Tuesday and Wednesday, but they will continue throughout this week. Thousands of Russians are expected to go to the Memorial Cemetery in Beslan to pay their last respects to the dead.

Now most of the dead were Orthodox Christians. And in accordance with Orthodox Christian faith, it is believed that the souls of the dead rise to heaven on the 40th day after their death. It is also on that day that the families who have been mourning for this whole period are allowed by the church to go on with their lives. That is something that in the town of Beslan they say will be very difficult to do. We'll never forget this, not after 40 days, not after years. You can't forget things like this. According to our customs, she tells me, I'm supposed to put my arms around the grave of my loved one. But there are four of them here and I can't put my arms around all of them.

It is also customary in this part of Russia to seek revenge for loved ones who have been murdered, and that is exactly what many of the men in the town of Beslan are saying they will do. They blame members of a rival ethnic group, mainly Muslim ethnic group, in the nearby Russian region of Ingushetia and Chechnya. And they say that they will pursue the people that were behind this.

Now the Russian government says it is their job, not the citizens' job, to go after terrorists. And they are urging the people here to not carry out any acts of revenge.

Lastly, it is sad and ironic that as the 40-day mourning period comes to a close, some people here are just beginning the grieving process as DNA results become available. Many of the people in Beslan are still burying their loved ones that died in the school hostage crisis. There are still more than three dozen unmarked empty graves in the Memorial Cemetery.

Ryan Chilcote, CNN, Vladikavkaz, Russia.

(END VIDEOTAPE)

COSTELLO: Politics and money, in five minutes, why a dip in the Dow is proving crucial for President Bush and why it's posing a problem for your pocketbooks.

Also, peanuts, cracker jacks and a curse? In eight minutes, as the Red Sox get set for Game 1 of the MLB playoffs, will a swirling spirit spoil the fun?

Our e-mail question of the morning, do you think there really is a curse on the Boston Red Sox? We'll read some of your e-mails coming up.

But first, here's a look at what else is making news this Tuesday morning.

(COMMERCIAL BREAK)

COSTELLO: Certainly no secret the stock market has not recovered from the boom of the '90s and investors have lost a bunch of money. When that happens, there's usually a backlash in the presidential race.

CNN's Allan Chernoff examines the link between stocks and politics.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): There is no debate on one pocketbook issue, the stock market has been lousy during the Bush presidency. Since George Bush took office in January of 2001, the Dow Jones industrial average is down 5 percent, the Nasdaq composite off 30 percent. Typically, the stock market rises during an election year. But so far this year, the major indices are down.

GREG VALLIERE, SCHWAB RESEARCH GROUP: In the last year, the stock market has not done very well. People keep getting quarterly statements that have minus signs in front of them. And I think that doesn't help the president.

CHERNOFF: The stock market is never purely a function of a president's performance, it plays off many factors, at home and overseas, beyond a president's control.

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: The stock market was heading down before Dick Cheney and I showed up in Washington. And then we had a recession just as soon as we showed up. And then we had some corporate scandals, which affected our economy.

CHERNOFF: Those who are most heavily invested in the market are wealthy Americans, earning more than $200,000 a year, a group that can expect higher taxes, if Senator Kerry were elected president.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Join me in rolling back the president's unaffordable tax cut for people earning more than $200,000 a year. That's all. Ninety-eight percent of America, I'm giving you a tax cut and I'm giving you health care.

CHERNOFF: One reason the stock market's poor performance may not hurt George Bush.

UNIDENTIFIED MALE: I think Bush is, you know, far better if not playing around (ph), you know, having lower taxes, lower interest rates, you see things like homeownership at an all-time high.

CHERNOFF: Still, stock market history is not on the president's side. In the past century, there have been six presidential elections when the stock market was down for the year on Election Day, the incumbent party won only twice, FDR in 1940 and Ronald Reagan in 1984.

Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

COSTELLO: Your news, money, weather and sports. It's 5:49 Eastern. Here is what's all new this morning.

The U.S. military says it destroyed a meeting center and a known terrorist safe house in Fallujah today. A person working for the U.S. in Fallujah says the first strike destroyed a restaurant and a nearby building.

The international group Human Rights Watch says at least 11 al Qaeda suspects have -- quote -- "disappeared from U.S. custody." But the U.S. government says it's holding them at undisclosed locations and they really have not disappeared. A CIA spokesman says the agency hasn't seen the report and has no comment.

In money news, oil prices, they are still high. U.S. light crude oil futures are trading up 10 cents at $53.74 a barrel. And yes, that would be a record.

In culture, six months after he escaped from his Iraqi captors, former U.S. hostage Thomas Hamill is detailing his experiences in a new book. "Escape From Iraq: The Thomas Hamill Story" hits stores today.

In sports, the Houston Astros won their first-ever post season series. The Astros blew away the Atlanta Braves 12 to 3 in the deciding game of the National League division series.

The poor Braves -- Chad.

MYERS: They always choke in the end there.

COSTELLO: They have like a whole new team. They got...

MYERS: I know.

COSTELLO: You would think that this team would like...

MYERS: Well they are a young team, too. I mean, you know, some of these guys were only drafted a couple of years ago and drafted in the 30th round, so.

COSTELLO: Yes, you know what they say about excuses.

MYERS: It's going to take some time. There's always next year.

Good morning, Carol. And Boston has been saying that for 86 years. So, maybe it's their year.

(WEATHER REPORT)

COSTELLO: I'm just laughing at the e-mails we have received this morning.

MYERS: There is one in there with a poem.

COSTELLO: Yes, I'm going to read that in just a second.

MYERS: OK.

COSTELLO: I have to read this story first. No matter what the weather is tonight in New York, I expect it to be hot on the field at Yankee Stadium. Game 1 of the American League Championship Series between the Boston Red Sox and the New York Yankees gets under way tonight at 8:00 p.m. Eastern. The NLCS starts tomorrow.

Now the Yankees come in with history on their side. They have not lost an ALCS since 1980 and have never lost a post season series to the Red Sox. In the meantime, Boston is trying to overcome their recent post season setbacks, which include losing last year's ALCS to the Yankees in Game 7.

So, we're asking you this morning: Do you think there really is a curse of the Bambino on the Red Sox? And we've gotten a lot of enjoyable responses.

This is from Michael (ph). He is from Boston. He says curse on the Red Sox, yes, it's the existence of the Yankees. That's short and to the point.

This is from James (ph) from San Diego, California. He says there has to be a curse on the Red Sox, 84 years of near misses just cannot be explained otherwise. So, I will go ahead and say congratulations to the New York Yankees on the AL Championship and trip to the World Series.

Ouch, I just hope St. Louis makes it in to compete against them.

And this is the poem that Chad was talking about. This is from Jim (ph). He is from Escondido, California. He says good morning, Carol, Chad, and the DAYBREAK crew. The curse is of course just a curve thrown by media trying to serve a hex on the Sox. But the Yanks have the pox. Beantown will win. Oh the nerve.

Jim, I think you should keep your day job, but we appreciate it this morning.

We'll be right back with more of DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: Well you just knew it had to happen, a video game based on John Kerry's life, no, not the U.S. Senate life, we're talking war games here.

Jeanne Moos volunteers for this story.

(BEGIN VIDEOTAPE)

KERRY: I'm John Kerry...

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When John Kerry the candidate said...

KERRY: ... reporting for duty.

MOOS: ... little did the former Vietnam vet know he'd soon be a war game.

And where else would he fight but aboard swift boats.

UNIDENTIFIED MALE: Right to them. Right to them.

UNIDENTIFIED MALE: Turning into the attack. MOOS: Talk about swift. It takes a mere three weeks for a company called Kuma\War to rip a battle out of the headlines and turn it into a video game.

UNIDENTIFIED MALE: You are the 4th Infantry Division capturing Saddam. You are the 10th Mountain Division hunting al Qaeda in Afghanistan.

MOOS: And now you can be alongside Lieutenant Kerry as he chases down the enemy and shoots it.

The scenario is based on a mission that resulted in a Silver Star for Kerry. The game maker used books, naval documents and a swift boat historian to ensure accuracy.

No matter which side of the swift boat brouhaha you're on, the game can always be improvised.

UNIDENTIFIED MALE: I'm out of bullets, oh, no.

MOOS: And accidents can happen.

(on camera): I just shot Kerry.

UNIDENTIFIED MALE: Do not shoot the candidate.

MOOS (voice-over): Kuma\War's CEO says they contacted the Kerry campaign.

UNIDENTIFIED MALE: They said that Mr. Kerry doesn't play video games.

MOOS: But this is the thinking man's video game. One minute you've see Fallujah on the news. The next thing you know, you're shooting insurgents.

Kuma\War charges 10 bucks a month and every month releases several new missions on its Web site. The Kerry mission is the latest.

MOOS (on camera): And where's the enemy?

UNIDENTIFIED MALE: There right in front of you.

MOOS: Who's that person?

UNIDENTIFIED MALE: That's kind of how it works with the enemy. They're the last thing you see.

I tried to board a moving swift boat, which is never a good policy.

MOOS (voice-over): Be in Lieutenant Kerry's boots as he's crawling through the mud, taking aim. Hey, the war game is not so different from the political campaign.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

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Aired October 12, 2004 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning to you, welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news -- in Iraq, the U.S. military says it hit two terrorist sites in Fallujah today, one was a meeting center for the Abu Musab al-Zarqawi terrorist network, the other a safe house for terrorists. U.S. warplanes have been making daily bombing runs in Fallujah in recent weeks.

In Riyadh, Saudi Arabia, police today killed three suspected militants in a shootout. The incident was triggered after police noticed a car filled with suspicious individuals in a neighborhood where many Westerners live.

The Los Angeles School Board votes tonight on whether to save part of the Ambassador Hotel for a school. Senator Robert Kennedy was assassinated there while campaigning for president in 1968. The senator's family wants the hotel demolished.

Alan Keys and Barack Obama debate each other tonight in the Illinois U.S. Senate race. Obama gave the keynote address at the Democratic National Convention, you remember. Keys is a former Republican candidate for president.

Now to the Forecast Center and Chad.

I was just thinking about the debate, Obama is so far ahead.

CHAD MYERS, CNN METEOROLOGIST: Yes.

COSTELLO: Yes, it should be interesting, though. Would be fun to listen to, wouldn't it?

MYERS: But it's not going to be on national, it'd only be on local channels, so it would be hard to get to.

COSTELLO: No. No, only in Illinois.

MYERS: Yes.

COSTELLO: But they have such differing viewpoints. That always makes for good television.

MYERS: Well of course.

Hey, good morning.

(WEATHER REPORT)

MYERS: Carol, back to you.

COSTELLO: Thank you -- Chad.

MYERS: You're welcome.

COSTELLO: Twenty-one days until the presidential election. In the polls, Bush is falling back just a little, Kerry is moving ahead just a little. But you know it doesn't matter because the race is still in a dead heat heading into the final stretch, statistically speaking.

A CNN/"USA Today"/Gallup Poll taken over the weekend suggests Bush and Kerry's second debate on Friday had very little effect on the race. Among likely voters, 49 percent support Kerry, 48 percent Bush. Among registered voters, the two are tied at 48 percent. Ralph Nader gets one percent from both groups. The poll has a margin of error plus or minus three percentage points.

Who will do a better job in Wednesday's third and final presidential debate? Fifty-four percent think Kerry will, 36 percent pick Bush.

This campaign certainly has seen its share of political propaganda. There is the anti-Bush film, "Fahrenheit 9/11," and the anti-Kerry swift boat ads. Well now Sinclair Broadcasting, which owns 62 television stations, steps in with a 42-minute one-sided critique of John Kerry's anti-war testimony.

Howard Kurtz of CNN's Reliable Sources has more on that for you.

(BEGIN VIDEOTAPE)

HOWARD KURTZ, HOST, "RELIABLE SOURCES" (voice-over): There are two sides to the John Kerry Vietnam story. Supporters highlight the combat heroism that won him a slew of medals. Detractors question the circumstances of some of those declarations and focus on Kerry's rhetoric as an anti-war activist when he returned home.

UNIDENTIFIED FEMALE: Accused all Vietnam veterans of unspeakable horrors.

KURTZ: In the days before the election, Sinclair Broadcasting will be showing only one side. The company has ordered its 62 stations, from Baltimore to Sacramento, to air the anti-Kerry film "Stolen Honor." It's made by former "Washington Times" reporter and decorated Vietnam veteran Carlton Sherwood. And it argues that with his anti-war testimony in 1971, Kerry was branding all American soldiers as baby killers, war criminals, and deranged, drug-addicted psychopaths.

Sinclair doesn't hide its conservative bent. Ninety-seven percent of the money that company executives have contributed in this campaign have gone to Republicans. Last spring, Sinclair took on "Nightline," refusing to air a program in which Ted Koppel read the names of all the U.S. soldiers killed in Iraq. Sinclair accused Koppel of pushing an anti-war agenda. He said he was simply showing the human cost of war.

Kerry spokesman David Wade calls Sinclair's decision to trumpet "Stolen Honor" a smear and a form of yellow journalism. A Sinclair vice president told "The Washington Post" that the film tells a -- quote -- "powerful story," and that the broadcast networks -- quote -- "are acting like Holocaust deniers about Kerry's past."

But even if the movie is newsworthy, airing only a one-sided attack on Kerry would be like the networks deciding that the end of October would be the ideal time to run Michael Moore's anti-Bush film "Fahrenheit 9/11."

(on camera): In the final days of a presidential campaign, media organizations generally try to avoid what in football would be called a late hit. Sinclair Broadcasting, apparently playing a different game, has decided to hit John Kerry hard. Now the Democratic National Committee is hitting back, announcing a complaint with the FEC that accuses Sinclair of making an unkind (ph) contribution to the Bush campaign.

Howard Kurtz, CNN's "RELIABLE SOURCES."

(END VIDEOTAPE)

COSTELLO: And it doesn't end there either. Michael Moore's controversial documentary, "Fahrenheit 9/11," may indeed be heading to your television set, but it will cost you. Sources say Moore is in talks to put his documentary on Pay-Per-View the night before the election.

Of course, that piece accuses President Bush of rushing to war in Iraq and of not pursuing the Saudi connection to the 9/11 attacks, even though 15 of the 19 hijackers were Saudis. Pay-Per-View would charge viewers about 10 bucks to watch the Michael Moore documentary.

We're just one day away from the final presidential debate. Our primetime coverage begins tomorrow night at 7:00 with Wolf Blitzer, Paula Zahn, Anderson Cooper and our entire CNN election team.

This is the fourth anniversary of al Qaeda's attack on the USS Cole, which killed 17 American Sailors. Suicide bombers rammed into a warship as it docked at a port in Yemen during a routine fuel stop. An explosion blew a 40-foot by 40-foot gash in the port side of the Cole.

Just two weeks ago, a judge in Yemen sentenced a Saudi and Yemeni militant to death by firing squad for that attack. In addition, the court ordered four other Yemenis jailed for five to 10 years.

And another tragic anniversary, too, today, this one in Indonesia. CNN's Maria Ressa is in Jakarta where mourners are marking the second anniversary of the Bali bombings, which killed more than 200 people.

And Nic Robertson will have the latest on Yaser Hamdi. Of course, as you know, the U.S. held him for nearly three years as an enemy combatant. He is now back in his native Saudi Arabia. Nic will join us from Hong Kong.

But let's start with Maria Ressa from Jakarta.

Good morning -- Maria.

MARIA RESSA, CNN CORRESPONDENT: Good morning, Carol.

A small solemn ceremony in Bali today to mark the explosions two years ago which killed more than 200 people. It also exposed al Qaeda's Southeast Asian arm, the Jemaah Islamiyah. Since then, more than 300 people have been arrested across the region, about 50 have been prosecuted and convicted here in Indonesia, the country with the world's largest Muslim population. Three of them have been sentenced to death.

But while there have been significant inroads in the law enforcement side, analysts point out much more needs to be done on the fight against the spread of the radical ideology. For example, Jemaah Islamiyah has not been banned as a terrorist organization here. It's been banned by the U.S. and the U.N.

Also, Imam Samudra, the field commander of the Bali bombings convicted to death, has been allowed to write a book from prison. That book has had a huge first print by Indonesian standards. Sold out within the first month. In it he justifies the Bali bombings and calls for more suicide attacks around the world -- Carol.

COSTELLO: Maria Ressa reporting live from Jakarta this morning.

More now on Yaser Hamdi. Our senior international correspondent Nic Robertson has been covering that story from Hong Kong.

Hello, Nic.

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hello, Carol.

Well Yaser Hamdi arrived back in Saudi Arabia about 24 hours ago. He had spent almost three years in solitary confinement, first in Guantanamo Bay and then in Navy brigs, both in South Carolina, before being transferred by a U.S. Air Force aircraft back to Saudi Arabia.

He met first with his father at the airport. Then, according to Interior Ministry officials, he was taken away for questioning. He is now, according to his father, back with the family in the town on the coast of Saudi Arabia next to the Persian Gulf. He is resting there with his family, according to his father. The family very pleased to see Yaser back at home. Saying he is very tired at this time. Saudi Arabia's Interior Ministry saying they will likely ask him more questions. Yaser will be taken in for more questioning. They believe what they want to find out is why he went to Afghanistan, who he met with there and what he was doing there -- Carol.

COSTELLO: What assurances does the United States have that Saudi Arabia will get to the bottom of that very question?

ROBERTSON: Very interesting, Carol. We don't know what's been happening in talks between Saudi and U.S. authorities over the last two weeks. Yaser Hamdi was supposed to go back to Saudi Arabia by the 30th of September, agreement worked out with Yaser Hamdi's lawyer and the Department of Justice.

Then those talks appeared to fall through, apparently because Saudi officials weren't happy about some of the implications for them, that they would have to, it appeared, to have to monitor Yaser Hamdi's movements. Yaser Hamdi not allowed to leave Saudi Arabia. That has been worked out over the last 12 days, but it's not clear what those details are.

It has happened essentially behind closed doors, diplomatically, very quiet talks. A big surprise for a lot of people when Yaser Hamdi suddenly showed up back in Saudi Arabia yesterday -- Carol.

COSTELLO: Fascinating. Nic Robertson live from Hong Kong. Maria Ressa live from Jakarta. Thanks to you both.

Now to that horrific terrorist attack in Beslan, Russia, which left hundreds of people dead, many of them children. Families there will undoubtedly mourn for some time to come. But today the official mourning period ends and memorial services marking that end are now under way.

Ryan Chilcote has the details for you.

(BEGIN VIDEOTAPE)

RYAN CHILCOTE, CNN CORRESPONDENT: The 40-day mourning period is drawing to a close for the more than 330 children, teachers and their parents that were killed in the school hostage crisis in the southern Russian town of Beslan in early September. And the memorial ceremonies that mark the end of that 40-day period are beginning.

The majority of them are expected to happen on Tuesday and Wednesday, but they will continue throughout this week. Thousands of Russians are expected to go to the Memorial Cemetery in Beslan to pay their last respects to the dead.

Now most of the dead were Orthodox Christians. And in accordance with Orthodox Christian faith, it is believed that the souls of the dead rise to heaven on the 40th day after their death. It is also on that day that the families who have been mourning for this whole period are allowed by the church to go on with their lives. That is something that in the town of Beslan they say will be very difficult to do. We'll never forget this, not after 40 days, not after years. You can't forget things like this. According to our customs, she tells me, I'm supposed to put my arms around the grave of my loved one. But there are four of them here and I can't put my arms around all of them.

It is also customary in this part of Russia to seek revenge for loved ones who have been murdered, and that is exactly what many of the men in the town of Beslan are saying they will do. They blame members of a rival ethnic group, mainly Muslim ethnic group, in the nearby Russian region of Ingushetia and Chechnya. And they say that they will pursue the people that were behind this.

Now the Russian government says it is their job, not the citizens' job, to go after terrorists. And they are urging the people here to not carry out any acts of revenge.

Lastly, it is sad and ironic that as the 40-day mourning period comes to a close, some people here are just beginning the grieving process as DNA results become available. Many of the people in Beslan are still burying their loved ones that died in the school hostage crisis. There are still more than three dozen unmarked empty graves in the Memorial Cemetery.

Ryan Chilcote, CNN, Vladikavkaz, Russia.

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COSTELLO: Politics and money, in five minutes, why a dip in the Dow is proving crucial for President Bush and why it's posing a problem for your pocketbooks.

Also, peanuts, cracker jacks and a curse? In eight minutes, as the Red Sox get set for Game 1 of the MLB playoffs, will a swirling spirit spoil the fun?

Our e-mail question of the morning, do you think there really is a curse on the Boston Red Sox? We'll read some of your e-mails coming up.

But first, here's a look at what else is making news this Tuesday morning.

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COSTELLO: Certainly no secret the stock market has not recovered from the boom of the '90s and investors have lost a bunch of money. When that happens, there's usually a backlash in the presidential race.

CNN's Allan Chernoff examines the link between stocks and politics.

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ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): There is no debate on one pocketbook issue, the stock market has been lousy during the Bush presidency. Since George Bush took office in January of 2001, the Dow Jones industrial average is down 5 percent, the Nasdaq composite off 30 percent. Typically, the stock market rises during an election year. But so far this year, the major indices are down.

GREG VALLIERE, SCHWAB RESEARCH GROUP: In the last year, the stock market has not done very well. People keep getting quarterly statements that have minus signs in front of them. And I think that doesn't help the president.

CHERNOFF: The stock market is never purely a function of a president's performance, it plays off many factors, at home and overseas, beyond a president's control.

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: The stock market was heading down before Dick Cheney and I showed up in Washington. And then we had a recession just as soon as we showed up. And then we had some corporate scandals, which affected our economy.

CHERNOFF: Those who are most heavily invested in the market are wealthy Americans, earning more than $200,000 a year, a group that can expect higher taxes, if Senator Kerry were elected president.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: Join me in rolling back the president's unaffordable tax cut for people earning more than $200,000 a year. That's all. Ninety-eight percent of America, I'm giving you a tax cut and I'm giving you health care.

CHERNOFF: One reason the stock market's poor performance may not hurt George Bush.

UNIDENTIFIED MALE: I think Bush is, you know, far better if not playing around (ph), you know, having lower taxes, lower interest rates, you see things like homeownership at an all-time high.

CHERNOFF: Still, stock market history is not on the president's side. In the past century, there have been six presidential elections when the stock market was down for the year on Election Day, the incumbent party won only twice, FDR in 1940 and Ronald Reagan in 1984.

Allan Chernoff, CNN Financial News, New York.

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COSTELLO: Your news, money, weather and sports. It's 5:49 Eastern. Here is what's all new this morning.

The U.S. military says it destroyed a meeting center and a known terrorist safe house in Fallujah today. A person working for the U.S. in Fallujah says the first strike destroyed a restaurant and a nearby building.

The international group Human Rights Watch says at least 11 al Qaeda suspects have -- quote -- "disappeared from U.S. custody." But the U.S. government says it's holding them at undisclosed locations and they really have not disappeared. A CIA spokesman says the agency hasn't seen the report and has no comment.

In money news, oil prices, they are still high. U.S. light crude oil futures are trading up 10 cents at $53.74 a barrel. And yes, that would be a record.

In culture, six months after he escaped from his Iraqi captors, former U.S. hostage Thomas Hamill is detailing his experiences in a new book. "Escape From Iraq: The Thomas Hamill Story" hits stores today.

In sports, the Houston Astros won their first-ever post season series. The Astros blew away the Atlanta Braves 12 to 3 in the deciding game of the National League division series.

The poor Braves -- Chad.

MYERS: They always choke in the end there.

COSTELLO: They have like a whole new team. They got...

MYERS: I know.

COSTELLO: You would think that this team would like...

MYERS: Well they are a young team, too. I mean, you know, some of these guys were only drafted a couple of years ago and drafted in the 30th round, so.

COSTELLO: Yes, you know what they say about excuses.

MYERS: It's going to take some time. There's always next year.

Good morning, Carol. And Boston has been saying that for 86 years. So, maybe it's their year.

(WEATHER REPORT)

COSTELLO: I'm just laughing at the e-mails we have received this morning.

MYERS: There is one in there with a poem.

COSTELLO: Yes, I'm going to read that in just a second.

MYERS: OK.

COSTELLO: I have to read this story first. No matter what the weather is tonight in New York, I expect it to be hot on the field at Yankee Stadium. Game 1 of the American League Championship Series between the Boston Red Sox and the New York Yankees gets under way tonight at 8:00 p.m. Eastern. The NLCS starts tomorrow.

Now the Yankees come in with history on their side. They have not lost an ALCS since 1980 and have never lost a post season series to the Red Sox. In the meantime, Boston is trying to overcome their recent post season setbacks, which include losing last year's ALCS to the Yankees in Game 7.

So, we're asking you this morning: Do you think there really is a curse of the Bambino on the Red Sox? And we've gotten a lot of enjoyable responses.

This is from Michael (ph). He is from Boston. He says curse on the Red Sox, yes, it's the existence of the Yankees. That's short and to the point.

This is from James (ph) from San Diego, California. He says there has to be a curse on the Red Sox, 84 years of near misses just cannot be explained otherwise. So, I will go ahead and say congratulations to the New York Yankees on the AL Championship and trip to the World Series.

Ouch, I just hope St. Louis makes it in to compete against them.

And this is the poem that Chad was talking about. This is from Jim (ph). He is from Escondido, California. He says good morning, Carol, Chad, and the DAYBREAK crew. The curse is of course just a curve thrown by media trying to serve a hex on the Sox. But the Yanks have the pox. Beantown will win. Oh the nerve.

Jim, I think you should keep your day job, but we appreciate it this morning.

We'll be right back with more of DAYBREAK.

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COSTELLO: Well you just knew it had to happen, a video game based on John Kerry's life, no, not the U.S. Senate life, we're talking war games here.

Jeanne Moos volunteers for this story.

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KERRY: I'm John Kerry...

JEANNE MOOS, CNN CORRESPONDENT (voice-over): When John Kerry the candidate said...

KERRY: ... reporting for duty.

MOOS: ... little did the former Vietnam vet know he'd soon be a war game.

And where else would he fight but aboard swift boats.

UNIDENTIFIED MALE: Right to them. Right to them.

UNIDENTIFIED MALE: Turning into the attack. MOOS: Talk about swift. It takes a mere three weeks for a company called Kuma\War to rip a battle out of the headlines and turn it into a video game.

UNIDENTIFIED MALE: You are the 4th Infantry Division capturing Saddam. You are the 10th Mountain Division hunting al Qaeda in Afghanistan.

MOOS: And now you can be alongside Lieutenant Kerry as he chases down the enemy and shoots it.

The scenario is based on a mission that resulted in a Silver Star for Kerry. The game maker used books, naval documents and a swift boat historian to ensure accuracy.

No matter which side of the swift boat brouhaha you're on, the game can always be improvised.

UNIDENTIFIED MALE: I'm out of bullets, oh, no.

MOOS: And accidents can happen.

(on camera): I just shot Kerry.

UNIDENTIFIED MALE: Do not shoot the candidate.

MOOS (voice-over): Kuma\War's CEO says they contacted the Kerry campaign.

UNIDENTIFIED MALE: They said that Mr. Kerry doesn't play video games.

MOOS: But this is the thinking man's video game. One minute you've see Fallujah on the news. The next thing you know, you're shooting insurgents.

Kuma\War charges 10 bucks a month and every month releases several new missions on its Web site. The Kerry mission is the latest.

MOOS (on camera): And where's the enemy?

UNIDENTIFIED MALE: There right in front of you.

MOOS: Who's that person?

UNIDENTIFIED MALE: That's kind of how it works with the enemy. They're the last thing you see.

I tried to board a moving swift boat, which is never a good policy.

MOOS (voice-over): Be in Lieutenant Kerry's boots as he's crawling through the mud, taking aim. Hey, the war game is not so different from the political campaign.

Jeanne Moos, CNN, New York.

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