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CNN Live At Daybreak

Multiple Suicide Car Bombings; President Bush Expected to Name New York's Former Top Police Officer to Head Homeland Security Agency

Aired December 03, 2004 - 05:00   ET

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


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


CAROL COSTELLO, CNN ANCHOR: Straight ahead, multiple suicide car bombings. Dozens are dead. We're live in Baghdad and in Falluja.
Plus, new information this morning in the Jason Giambi steroids allegation. And find out what another sports star is saying about what he used.

Also, the teacher and the student -- newly released audiotapes in the secret sex conversations between Debra Lafave and a 14-year-old.

And fit for a lady -- a new car that puts women in the driver's seat.

It is Friday, December 3.

You are watching DAYBREAK.

And good morning to you.

Thank you for waking up with us.

I'm Carol Costello.

Let's get to the headlines right now.

There has been a settlement overnight in a huge sex abuse case against the Catholic Church in California. The settlement involves the diocese of Orange County and 87 victims of clergy abuse. Settlement talks have been going on for two years now. No word on the terms of the agreement. We'll have a live report for you shortly.

Two major attacks today in Baghdad, both in the same neighborhood. This is video from an attack on a police station. Word of casualties there, but no details. Nearby, a suicide minibus bomber targeted a mosque, killing 11 people and wounding seven.

Administration officials say President Bush will nominate Bernard Kerik to be the new Homeland Security Department secretary. Kerik was New York City police commissioner during the 2001 terrorist attacks.

And in Milan, Italy, defense attorneys are making closing arguments in the trial of Italian Premier Silvio Berlusconi. That's him on the left, as you're looking at the screen. He's accused of bribing judges back in the 1980s.

To the forecast center now and Rob Marciano in for Chad -- good morning.

ROB MARCIANO, CNN METEOROLOGIST: Good morning, Carol.

How are you doing?

COSTELLO: Good.

(WEATHER REPORT)

COSTELLO: Right now, a close quarter gun battle is going on in part of Falluja. Our international desk has been on the phone within the last hour with Jane Arraf, who was with a Marine unit sent to assist some civilians. Apparently it was an ambush.

We have Jane on the phone right now from Falluja.

Tell us about this -- Jane.

JANE ARRAF, CNN CORRESPONDENT: Carol, a very dramatic scene unfolding in front of us still. This has been going on for a couple of hours and at least two insurgents are believed to be dead, judging by the fact that they are likely still in a building that we're seeing that has been hit by the main guns from tanks, hit by missiles and other weapons, as U.S. forces, the Marines we're with, fight these insurgents who have lodged themselves very close to the humanitarian headquarters of the Iraqi Red Crescent.

The Marines are working with Iraqi forces and it was the Iraqi forces who first saw these insurgents. They believe they wounded two of them. Now, the problem is they were right next door to a family, one of the very few remaining families. We watched as this family was led outside the house and then the Marines attacked this house. It is burning as we speak.

Now, this firefight is still going on -- Carol.

COSTELLO: You know, Jane, it just illustrates once again the difficulty of this battle in Falluja that's still ongoing. You're going to help someone and it's an ambush.

How are they dealing with that?

ARRAF: It's very, very tricky. This is classic urban warfare in all of its complexity. This one was more of a process of discovering these insurgents were there rather than an ambush. But they appear to have come back to a neighborhood.

Now, this was a street, one of the few remaining streets that has not yet been cleared by Marines, who have been going door to door, house to house, looking for weapons and insurgents and still finding them. But the problem is that there are still a few families here. There are only, perhaps, 150 families left in Falluja. But those who are here make it very, very difficult to fight those insurgents. They had to get them out of here and there do appear to have been some wounded, Carol, three wounded, including one Marine and two Iraqis. Now, no fatalities known as of yet. But the gunmen certainly, the insurgents certainly have died. But they have had to proceed, the Marines have, with extreme care in this fight because of the civilians -- Carol.

COSTELLO: One Marine wounded and two Iraqis wounded, and maybe more.

Jane Arraf live on the phone from Falluja.

Thank you.

The Roman Catholic Church in Los Angeles is preaching hope and healing after a reported settlement in that long drawn out clergy sex abuse case involving at least 30 clergy.

Live now to Drew Griffin.

He's outside the Los Angeles Superior Court building -- Drew, I know you have been up all night. Do you know any of the terms of the settlement?

DREW GRIFFIN, CNN CORRESPONDENT: We do know some, Carol, and we should make it very clear, this case is being heard in Los Angeles, but this is the case against the diocese of Orange, Orange County, which is just to the south. It came down just three hours ago, after all day and a late night negotiating settlement. The exact dollar amounts remain a secret, sealed under a seven day temporary gag order.

But sources are telling CNN this will be the largest settlement in the history of this Catholic Church sexual abuse scandal and it will exceed the $85 million settlement in the case against the church in Boston.

Again, a very dramatic moment at 11:00 tonight Pacific time, when church officials, lawyers and victims all gathered outside the courtroom to announce a settlement. And then Bishop Todd Brown, the bishop of Orange, read a statement apologizing to the victims and then began giving and receiving hugs from these sexual abuse victims themselves. Many of them are telling us that that apology that the bishop read, more than anything else, is what they have been waiting to hear.

(BEGIN VIDEO CLIP)

DAVID GUERRERO, ALLEGED ABUSE VICTIM: For once, them coming in tonight and settling these cases and apologizing, and for Bishop Brown, saying that he's going to hand write a letter of apology to each and every victim, I mean I couldn't stop crying.

(END VIDEO CLIP)

GRIFFIN: This deal involves 87 victims, victims of 43 different priests, nuns, counselors, teachers, even a choir teacher, who are all detailed in this settlement. And part of the settlement, Carol, along with this huge dollar amount that we expect to learn in seven days will be the release of court documents. And the victims say those court documents, once they are released, will absolutely horrify the people of Orange County and the people of this country as to what went on in Orange County over the past 30 years.

Again, a settlement reached under a gag order for the next seven days as to the terms, both the church and its eight insurance carriers agreeing to the largest settlement, we're being told, in the history of this Catholic Church scandal -- back to you.

COSTELLO: Drew, I was just going to ask you how the church would pay for this. But -- through insurance partly, but they're going to have to maybe sell some things off.

Do you know anything about that?

GRIFFIN: It's all part of the negotiations.

Now, in his statement read, Bishop Todd Brown said that this settlement allows, one, compensation for all of these victims to be fair; and also for the church to continue its mission.

So it doesn't appear like there is any bankruptcy talks going on. There are eight insurance carriers who are in on the negotiations. The exact details of how much the church will pay, how much the church might have to sell to pay for this and how much the insurance will pick up, we should learn in the coming days, if not a week.

COSTELLO: Drew Griffin reporting live from Los Angeles this morning.

Thank you.

Later today, President Bush is expected to name New York's former top police officer to head the homeland security agency. Bernard Kerik was police commissioner when terrorists struck on September 11.

Elaine Quijano tells us more about it.

(BEGIN VIDEO TAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): He was the face of the New York City police force on September 11 and in the days after. Former New York City Police Commissioner Bernard Kerik will be President Bush's nominee to head up the Homeland Security Department. A White House official calls Kerik a proven crisis manager with credibility and a firsthand understanding of the war on terror. In Kerik, the president finds a strong supporter of the administration's strategy in fighting terrorism. BERNARD KERIK, HOMELAND SECURITY SECRETARY NOMINEE: We must stand firm, stay preemptive and never believe for one minute that this war is over.

QUIJANO: Kerik also leant his support to the president's reelection bid, briefly joining Mr. Bush on the campaign trail in New Jersey.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm proud to have been standing on the stage with Bernie Kerik. He knows something about security. He's lived security all his life.

QUIJANO: If confirmed by the Senate, Kerik will face a daunting task -- to protect the homeland by overseeing and coordinating more than 180,000 federal employees responsible for everything from border security to immigration to airline screening.

This will not be the first time the White House has asked Kerik to serve. Last year at the president's request, Kerik traveled to Iraq to help train the new Iraqi police force. Despite his loyalty to the White House, some Democrats are already praising the president's choice.

SEN. CHARLES SCHUMER (D), NEW YORK: He will make a strong argument, I believe, that we need to do more on homeland security. And I think he won't win every argument, but he'll succeed in a lot of them.

(END VIDEO TAPE)

COSTELLO: If confirmed, Kerik will head an agency with close to 180,000 employees and a $36 billion budget. And while the president is filling one slot at Homeland Security, another is being vacated. Sources close to Asa Hutchinson, a Homeland Security secretary, says he's leaving. Hutchinson had been mentioned as a possible successor to Tom Ridge, the job President Bush wants Bernard Kerik to handle.

In other news across America this morning, a jury of the United Methodist Church in Pennsylvania has defrocked lesbian minister Elizabeth Stroud. She had been accused of violating the denomination's ban on actively gay clergy. Stroud says she's saddened by the jury's action, but has not decided if she'll appeal.

In Tucson, a purse snatching at a Kmart. See it right there? Oh, it was caught on tape. That was back on November 23. Police watched this tape over and over and during a traffic stop a week later, they arrested that guy. John Paul Flores is charged with aggravated assault and robbery.

The Democratic candidate for governor in Washington State is asking her party to request a statewide recount. The Republican beat her by just 42 votes. The Democratic Party is trying to raise the $700,000 it would cost for a recount. She says if the party doesn't request a recount by 5:00, she will give up.

Yankees slugger Jason Giambi may himself be the one to get knocked out of the park. Giambi publicly denies using chemical helpers on the field. His grand jury testimony reportedly says otherwise.

Frank Buckley has more on that in seven minutes.

From life on the front lines to life on campus, in 23 minutes we'll hear from some college students now sharing war stories.

And designing the automobile of the future by women for women. We take you live to London to find out more about the new Volvo in 40 minutes.

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

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

COSTELLO: Your news, money, weather and sports.

It's 5:16 Eastern.

Here's what's all new this morning.

After two years of negotiations, a sex abuse case involving the Catholic Church is settled in California. The Diocese of Orange reached an agreement with 87 victims who alleged sexual misconduct by priests and others. The terms have not been disclosed.

The retrial of former NBA star Jayson Williams on reckless manslaughter charges has been delayed until March 7. The retrial is necessary because of a split verdict last April in the shotgun killing of Williams' limousine driver.

In money news, IBM has reportedly put its personal computer business up for sale. The "New York Times" reports the deal could be worth $1 billion to $2 billion.

In culture, Prince Charles has commissioned a piece of classical music to commemorate his late grandmother. His office says the piece will be a 27-minute work for cello. The Queen Mother died in 2002.

In sports, Dallas Mavericks forward Dirk Nowitzki -- oh, I'm sorry -- he was shot last night. He was hot last night, rather. He scored 53 points and pulled down 16 rebounds in a 113-106 overtime win over the Houston Rockets.

Oh, I apologize for butchering his name, but at least we got his hot performance on the air -- Rob.

MARCIANO: That's all that matters. Watching the footage...

COSTELLO: I'm sure.

MARCIANO: ... put it through the hoop, Carol.

It's almost the weekend.

Nice to have you.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

The "San Francisco Chronicle" quotes Barry Bonds as saying he used a cream and a clear substance given to him by a trainer. Yes, that trainer. But Bonds, the Giants' slugger who won his seventh MVP award this year, says he was not told the substances were steroids. Bonds allegedly made the statement during federal grand jury testimony last year and the trainer has since been indicted on steroid distribution charges.

Now, the "Chronicle" reported earlier that New York Yankees slugger Jason Giambi has admitted to taking steroids and growth hormones. The report quoted alleged grand jury testimony by Giambi.

CNN's Frank Buckley has more for you.

(BEGIN VIDEO TAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): Jason Giambi reportedly told a San Francisco grand jury that he took several different steroids and performance enhancing drugs. The "San Francisco Chronicle," which reviewed Giambi's secret testimony, said Giambi was granted immunity and he identified Greg Anderson as his alleged steroid source.

Anderson is currently charged, along with three other men, with conspiracy, money laundering and illegally distributing steroids as part of the federal investigation into Balco, a firm that provided nutritional help to top athletes.

Anderson was a weight trainer who worked with home run hitter Barry Bonds and Giambi told the grand jury that's what attracted him to Anderson. "So I started to ask him, hey, what are the things you're doing with Barry?"

Bonds has consistently denied using steroids and trainer Greg Anderson's attorney told CNN that his client never knowingly provided illegal substances to anyone. Giambi has also denied using steroids. Now, Giambi's apparent admission is sure to inspire critics of major league baseball's drug policy, which they say is easy to thwart.

MARK FAINARU-WADA, "SAN FRANCISCO CHRONICLE": One expert in the area called the testing program last year an I.Q. test as opposed to a steroids test.

BUCKLEY: Baseball Commissioner Bud Selig plans to speak with Giambi, as he pushes for tougher steroid penalties.

BUD SELIG, BASEBALL COMMISSIONER: I'm going to leave no stone unturned until we have that policy in place by spring training of next year.

BUCKLEY: A representative for Jason Giambi said the slugger had no comment.

Frank Buckley, CNN, Los Angeles.

(END VIDEO TAPE)

COSTELLO: Well, there was a lot of talk this morning about what sort of backlash Giambi might face over reports of his admitted steroid use. In fact, if you look at the "New York Post" this morning: "Boot The Bomb!" and on the back it says "Lying King." People are very angry in New York at Jason Giambi.

So we want to look beyond the sound bite now.

"Sports Illustrated" senior writer Tom Verducci discusses what might happen to Giambi.

(BEGIN VIDEO CLIP)

TOM VERDUCCI, "SPORTS ILLUSTRATED" SENIOR WRITER: I don't think the league is going to do anything, even with this admission, because he is admitting using steroids in the time where there was no penalty phase to steroid testing in major league baseball. I week what should happen is he should be placed on their so-called clinical track, where he is now subject to random testing throughout the season, whereas now players are only tested once. But even that, there's no certainty there because the clubs can only ask for that provision if someone has shown use in the immediate 12 months prior to asking for it. By Giambi's account, he stopped in July of 2003,18 months ago. So even that might be dicey.

He might come out of this, if you will, scot-free as far as baseball goes. But I think in the court of public opinion he's definitely been convicted.

(END VIDEO CLIP)

COSTELLO: And that's where I might disagree with what he just said, because if Jason Giambi were playing well, let's say like he helped the Yankees beat the Boston Red Sox in the World Series, maybe people wouldn't be quite so angry at him. But, of course, as you know, Jason Giambi hasn't been playing well. Plus, people really like to see players hit home runs. I mean they're making baseball parks smaller so they can belt it out of the park. It makes the game more exciting.

And that brings us to our DAYBREAK E-Mail Question of the Day. Do you really care if athletes use performance enhancing drugs? Do you really care? Let you know what you think at daybreak@cnn.com. That's daybreak@cnn.com.

Ride of a lifetime. This isn't excellent the Tour de France, but it was just as rewarding. We'll explain.

And President Bush lights up the national Christmas tree and it certainly pushes some late night comedy buttons. We're coming back with some "Late Night Laughs."

You are watching DAYBREAK for Friday, December 3.

(COMMERCIAL BREAK)

COSTELLO: If you are in the nation's capital, be sure to catch the national Christmas tree at the White House. It's on the Ellipse. Last night, President Bush pushed the button to turn on 15,000 colored lights on the 40-foot tall blue spruce. The president urging Americans to remember U.S. troops this Christmas.

And, well, you might expect this, David Letterman had a little something to add about the lighting of the national Christmas tree -- Rob.

MARCIANO: Did he?

COSTELLO: He absolutely did. And in his Dave fashion, he also had a comment about the inevitable Christmas specials.

But first, the tree.

(BEGIN VIDEO CLIP FROM "THE LATE SHOW WITH DAVID LETTERMAN, COURTESY CBS/WORLDWIDE PANTS)

DAVID LETTERMAN, HOST: Earlier tonight down in Washington, they had the lighting of the national White House Christmas tree. They threw the switch and the tree came to life. And it worked so well, they're going to try the same thing with Dick Cheney.

How about those holiday specials? Last night did you see the Nick and Jessica Christmas special? How many of you saw that? Yes. Apparently the Bush administration knew all about it but did nothing to stop it. I didn't realize that. But it was a wonderful special. The whole family gathered around the fireplace and lip synched carols.

(END VIDEO CLIP)

COSTELLO: See, actually Simpson is never going to like get over that, even though it was her sister that was on the special.

MARCIANO: Yes, it didn't matter, you know? He lumped it all together. This is the favorite part of my show. I don't know about Chad, but I get to sit on the couch and then, and because we sleep through "Letterman," which is one of my favorite shows, we get to see the highlights in all of 30 seconds. So it's a...

COSTELLO: We aim to please on DAYBREAK.

MARCIANO: You guys are on it.

COSTELLO: By the way, we were talking about what Chad named his baby, Chad and Sally, I should say.

MARCIANO: Right.

COSTELLO: And they came up with -- they were going to name the baby Cole Myers. But then he thought that sounded too much like coal miner.

MARCIANO: Right. And he didn't take your suggestion of Oscar Myer.

COSTELLO: No, he didn't like Oscar at all. In fact, that made Sally quite angry.

MARCIANO: Are we going to tell folks now or are we going to tease it for later so people stick to the station?

COSTELLO: Oh, yes, do we have the list from one of our viewers? We got this e-mail yesterday because we were making fun of baby names for Chad. So, a very nice DAYBREAK viewer gave some suggestions to Chad and Sally about what they might name the baby. Stormy was number one. Hurrie Cane.

MARCIANO: Bo Echo. I like that.

COSTELLO: Isn't that great? Bo Echo Myers. Bo Myers. That sounds good.

MARCIANO: That sounds like an athlete.

COSTELLO: Relative Humititie. Humititie. Get it?

MARCIANO: Oh, that's just a mouthful. I get it.

COSTELLO: Yes, that's too bad.

Isa Barr is pretty good, though.

MARCIANO: Very cute. Very cute.

COSTELLO: Isa Barr Myers.

MARCIANO: Why are they all weather related?

COSTELLO: Well, because Chad's a weatherman.

MARCIANO: Did you notice Chad's body was smaller than the baby's body in that picture?

COSTELLO: But he said the baby has a really big head, just like him.

MARCIANO: No. The baby's cute. (UNINTELLIGIBLE).

COSTELLO: Anyway, they finally decided on the name Grant. So Grant Myers, welcome to the world.

MARCIANO: I think the middle name was a sticking point, so that's why we had to go away.

COSTELLO: Excellent.

MARCIANO: Anyway, congratulations.

COSTELLO: Here's what's all new in the next half hour of DAYBREAK.

From the battlefield to the classroom, imagine returning from Iraq to become just an every day college student. You'll meet someone who knows what's that -- who knows what that's like.

A Florida teacher accused of having sex with a student. New phone conversations released between the two of them.

And a car designed by and for women.

From New York, this is DAYBREAK for a Friday morning.

(COMMERCIAL BREAK)

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Aired December 3, 2004 - 05:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Straight ahead, multiple suicide car bombings. Dozens are dead. We're live in Baghdad and in Falluja.
Plus, new information this morning in the Jason Giambi steroids allegation. And find out what another sports star is saying about what he used.

Also, the teacher and the student -- newly released audiotapes in the secret sex conversations between Debra Lafave and a 14-year-old.

And fit for a lady -- a new car that puts women in the driver's seat.

It is Friday, December 3.

You are watching DAYBREAK.

And good morning to you.

Thank you for waking up with us.

I'm Carol Costello.

Let's get to the headlines right now.

There has been a settlement overnight in a huge sex abuse case against the Catholic Church in California. The settlement involves the diocese of Orange County and 87 victims of clergy abuse. Settlement talks have been going on for two years now. No word on the terms of the agreement. We'll have a live report for you shortly.

Two major attacks today in Baghdad, both in the same neighborhood. This is video from an attack on a police station. Word of casualties there, but no details. Nearby, a suicide minibus bomber targeted a mosque, killing 11 people and wounding seven.

Administration officials say President Bush will nominate Bernard Kerik to be the new Homeland Security Department secretary. Kerik was New York City police commissioner during the 2001 terrorist attacks.

And in Milan, Italy, defense attorneys are making closing arguments in the trial of Italian Premier Silvio Berlusconi. That's him on the left, as you're looking at the screen. He's accused of bribing judges back in the 1980s.

To the forecast center now and Rob Marciano in for Chad -- good morning.

ROB MARCIANO, CNN METEOROLOGIST: Good morning, Carol.

How are you doing?

COSTELLO: Good.

(WEATHER REPORT)

COSTELLO: Right now, a close quarter gun battle is going on in part of Falluja. Our international desk has been on the phone within the last hour with Jane Arraf, who was with a Marine unit sent to assist some civilians. Apparently it was an ambush.

We have Jane on the phone right now from Falluja.

Tell us about this -- Jane.

JANE ARRAF, CNN CORRESPONDENT: Carol, a very dramatic scene unfolding in front of us still. This has been going on for a couple of hours and at least two insurgents are believed to be dead, judging by the fact that they are likely still in a building that we're seeing that has been hit by the main guns from tanks, hit by missiles and other weapons, as U.S. forces, the Marines we're with, fight these insurgents who have lodged themselves very close to the humanitarian headquarters of the Iraqi Red Crescent.

The Marines are working with Iraqi forces and it was the Iraqi forces who first saw these insurgents. They believe they wounded two of them. Now, the problem is they were right next door to a family, one of the very few remaining families. We watched as this family was led outside the house and then the Marines attacked this house. It is burning as we speak.

Now, this firefight is still going on -- Carol.

COSTELLO: You know, Jane, it just illustrates once again the difficulty of this battle in Falluja that's still ongoing. You're going to help someone and it's an ambush.

How are they dealing with that?

ARRAF: It's very, very tricky. This is classic urban warfare in all of its complexity. This one was more of a process of discovering these insurgents were there rather than an ambush. But they appear to have come back to a neighborhood.

Now, this was a street, one of the few remaining streets that has not yet been cleared by Marines, who have been going door to door, house to house, looking for weapons and insurgents and still finding them. But the problem is that there are still a few families here. There are only, perhaps, 150 families left in Falluja. But those who are here make it very, very difficult to fight those insurgents. They had to get them out of here and there do appear to have been some wounded, Carol, three wounded, including one Marine and two Iraqis. Now, no fatalities known as of yet. But the gunmen certainly, the insurgents certainly have died. But they have had to proceed, the Marines have, with extreme care in this fight because of the civilians -- Carol.

COSTELLO: One Marine wounded and two Iraqis wounded, and maybe more.

Jane Arraf live on the phone from Falluja.

Thank you.

The Roman Catholic Church in Los Angeles is preaching hope and healing after a reported settlement in that long drawn out clergy sex abuse case involving at least 30 clergy.

Live now to Drew Griffin.

He's outside the Los Angeles Superior Court building -- Drew, I know you have been up all night. Do you know any of the terms of the settlement?

DREW GRIFFIN, CNN CORRESPONDENT: We do know some, Carol, and we should make it very clear, this case is being heard in Los Angeles, but this is the case against the diocese of Orange, Orange County, which is just to the south. It came down just three hours ago, after all day and a late night negotiating settlement. The exact dollar amounts remain a secret, sealed under a seven day temporary gag order.

But sources are telling CNN this will be the largest settlement in the history of this Catholic Church sexual abuse scandal and it will exceed the $85 million settlement in the case against the church in Boston.

Again, a very dramatic moment at 11:00 tonight Pacific time, when church officials, lawyers and victims all gathered outside the courtroom to announce a settlement. And then Bishop Todd Brown, the bishop of Orange, read a statement apologizing to the victims and then began giving and receiving hugs from these sexual abuse victims themselves. Many of them are telling us that that apology that the bishop read, more than anything else, is what they have been waiting to hear.

(BEGIN VIDEO CLIP)

DAVID GUERRERO, ALLEGED ABUSE VICTIM: For once, them coming in tonight and settling these cases and apologizing, and for Bishop Brown, saying that he's going to hand write a letter of apology to each and every victim, I mean I couldn't stop crying.

(END VIDEO CLIP)

GRIFFIN: This deal involves 87 victims, victims of 43 different priests, nuns, counselors, teachers, even a choir teacher, who are all detailed in this settlement. And part of the settlement, Carol, along with this huge dollar amount that we expect to learn in seven days will be the release of court documents. And the victims say those court documents, once they are released, will absolutely horrify the people of Orange County and the people of this country as to what went on in Orange County over the past 30 years.

Again, a settlement reached under a gag order for the next seven days as to the terms, both the church and its eight insurance carriers agreeing to the largest settlement, we're being told, in the history of this Catholic Church scandal -- back to you.

COSTELLO: Drew, I was just going to ask you how the church would pay for this. But -- through insurance partly, but they're going to have to maybe sell some things off.

Do you know anything about that?

GRIFFIN: It's all part of the negotiations.

Now, in his statement read, Bishop Todd Brown said that this settlement allows, one, compensation for all of these victims to be fair; and also for the church to continue its mission.

So it doesn't appear like there is any bankruptcy talks going on. There are eight insurance carriers who are in on the negotiations. The exact details of how much the church will pay, how much the church might have to sell to pay for this and how much the insurance will pick up, we should learn in the coming days, if not a week.

COSTELLO: Drew Griffin reporting live from Los Angeles this morning.

Thank you.

Later today, President Bush is expected to name New York's former top police officer to head the homeland security agency. Bernard Kerik was police commissioner when terrorists struck on September 11.

Elaine Quijano tells us more about it.

(BEGIN VIDEO TAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): He was the face of the New York City police force on September 11 and in the days after. Former New York City Police Commissioner Bernard Kerik will be President Bush's nominee to head up the Homeland Security Department. A White House official calls Kerik a proven crisis manager with credibility and a firsthand understanding of the war on terror. In Kerik, the president finds a strong supporter of the administration's strategy in fighting terrorism. BERNARD KERIK, HOMELAND SECURITY SECRETARY NOMINEE: We must stand firm, stay preemptive and never believe for one minute that this war is over.

QUIJANO: Kerik also leant his support to the president's reelection bid, briefly joining Mr. Bush on the campaign trail in New Jersey.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm proud to have been standing on the stage with Bernie Kerik. He knows something about security. He's lived security all his life.

QUIJANO: If confirmed by the Senate, Kerik will face a daunting task -- to protect the homeland by overseeing and coordinating more than 180,000 federal employees responsible for everything from border security to immigration to airline screening.

This will not be the first time the White House has asked Kerik to serve. Last year at the president's request, Kerik traveled to Iraq to help train the new Iraqi police force. Despite his loyalty to the White House, some Democrats are already praising the president's choice.

SEN. CHARLES SCHUMER (D), NEW YORK: He will make a strong argument, I believe, that we need to do more on homeland security. And I think he won't win every argument, but he'll succeed in a lot of them.

(END VIDEO TAPE)

COSTELLO: If confirmed, Kerik will head an agency with close to 180,000 employees and a $36 billion budget. And while the president is filling one slot at Homeland Security, another is being vacated. Sources close to Asa Hutchinson, a Homeland Security secretary, says he's leaving. Hutchinson had been mentioned as a possible successor to Tom Ridge, the job President Bush wants Bernard Kerik to handle.

In other news across America this morning, a jury of the United Methodist Church in Pennsylvania has defrocked lesbian minister Elizabeth Stroud. She had been accused of violating the denomination's ban on actively gay clergy. Stroud says she's saddened by the jury's action, but has not decided if she'll appeal.

In Tucson, a purse snatching at a Kmart. See it right there? Oh, it was caught on tape. That was back on November 23. Police watched this tape over and over and during a traffic stop a week later, they arrested that guy. John Paul Flores is charged with aggravated assault and robbery.

The Democratic candidate for governor in Washington State is asking her party to request a statewide recount. The Republican beat her by just 42 votes. The Democratic Party is trying to raise the $700,000 it would cost for a recount. She says if the party doesn't request a recount by 5:00, she will give up.

Yankees slugger Jason Giambi may himself be the one to get knocked out of the park. Giambi publicly denies using chemical helpers on the field. His grand jury testimony reportedly says otherwise.

Frank Buckley has more on that in seven minutes.

From life on the front lines to life on campus, in 23 minutes we'll hear from some college students now sharing war stories.

And designing the automobile of the future by women for women. We take you live to London to find out more about the new Volvo in 40 minutes.

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

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(STOCK MARKET REPORT)

COSTELLO: Your news, money, weather and sports.

It's 5:16 Eastern.

Here's what's all new this morning.

After two years of negotiations, a sex abuse case involving the Catholic Church is settled in California. The Diocese of Orange reached an agreement with 87 victims who alleged sexual misconduct by priests and others. The terms have not been disclosed.

The retrial of former NBA star Jayson Williams on reckless manslaughter charges has been delayed until March 7. The retrial is necessary because of a split verdict last April in the shotgun killing of Williams' limousine driver.

In money news, IBM has reportedly put its personal computer business up for sale. The "New York Times" reports the deal could be worth $1 billion to $2 billion.

In culture, Prince Charles has commissioned a piece of classical music to commemorate his late grandmother. His office says the piece will be a 27-minute work for cello. The Queen Mother died in 2002.

In sports, Dallas Mavericks forward Dirk Nowitzki -- oh, I'm sorry -- he was shot last night. He was hot last night, rather. He scored 53 points and pulled down 16 rebounds in a 113-106 overtime win over the Houston Rockets.

Oh, I apologize for butchering his name, but at least we got his hot performance on the air -- Rob.

MARCIANO: That's all that matters. Watching the footage...

COSTELLO: I'm sure.

MARCIANO: ... put it through the hoop, Carol.

It's almost the weekend.

Nice to have you.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

The "San Francisco Chronicle" quotes Barry Bonds as saying he used a cream and a clear substance given to him by a trainer. Yes, that trainer. But Bonds, the Giants' slugger who won his seventh MVP award this year, says he was not told the substances were steroids. Bonds allegedly made the statement during federal grand jury testimony last year and the trainer has since been indicted on steroid distribution charges.

Now, the "Chronicle" reported earlier that New York Yankees slugger Jason Giambi has admitted to taking steroids and growth hormones. The report quoted alleged grand jury testimony by Giambi.

CNN's Frank Buckley has more for you.

(BEGIN VIDEO TAPE)

FRANK BUCKLEY, CNN CORRESPONDENT (voice-over): Jason Giambi reportedly told a San Francisco grand jury that he took several different steroids and performance enhancing drugs. The "San Francisco Chronicle," which reviewed Giambi's secret testimony, said Giambi was granted immunity and he identified Greg Anderson as his alleged steroid source.

Anderson is currently charged, along with three other men, with conspiracy, money laundering and illegally distributing steroids as part of the federal investigation into Balco, a firm that provided nutritional help to top athletes.

Anderson was a weight trainer who worked with home run hitter Barry Bonds and Giambi told the grand jury that's what attracted him to Anderson. "So I started to ask him, hey, what are the things you're doing with Barry?"

Bonds has consistently denied using steroids and trainer Greg Anderson's attorney told CNN that his client never knowingly provided illegal substances to anyone. Giambi has also denied using steroids. Now, Giambi's apparent admission is sure to inspire critics of major league baseball's drug policy, which they say is easy to thwart.

MARK FAINARU-WADA, "SAN FRANCISCO CHRONICLE": One expert in the area called the testing program last year an I.Q. test as opposed to a steroids test.

BUCKLEY: Baseball Commissioner Bud Selig plans to speak with Giambi, as he pushes for tougher steroid penalties.

BUD SELIG, BASEBALL COMMISSIONER: I'm going to leave no stone unturned until we have that policy in place by spring training of next year.

BUCKLEY: A representative for Jason Giambi said the slugger had no comment.

Frank Buckley, CNN, Los Angeles.

(END VIDEO TAPE)

COSTELLO: Well, there was a lot of talk this morning about what sort of backlash Giambi might face over reports of his admitted steroid use. In fact, if you look at the "New York Post" this morning: "Boot The Bomb!" and on the back it says "Lying King." People are very angry in New York at Jason Giambi.

So we want to look beyond the sound bite now.

"Sports Illustrated" senior writer Tom Verducci discusses what might happen to Giambi.

(BEGIN VIDEO CLIP)

TOM VERDUCCI, "SPORTS ILLUSTRATED" SENIOR WRITER: I don't think the league is going to do anything, even with this admission, because he is admitting using steroids in the time where there was no penalty phase to steroid testing in major league baseball. I week what should happen is he should be placed on their so-called clinical track, where he is now subject to random testing throughout the season, whereas now players are only tested once. But even that, there's no certainty there because the clubs can only ask for that provision if someone has shown use in the immediate 12 months prior to asking for it. By Giambi's account, he stopped in July of 2003,18 months ago. So even that might be dicey.

He might come out of this, if you will, scot-free as far as baseball goes. But I think in the court of public opinion he's definitely been convicted.

(END VIDEO CLIP)

COSTELLO: And that's where I might disagree with what he just said, because if Jason Giambi were playing well, let's say like he helped the Yankees beat the Boston Red Sox in the World Series, maybe people wouldn't be quite so angry at him. But, of course, as you know, Jason Giambi hasn't been playing well. Plus, people really like to see players hit home runs. I mean they're making baseball parks smaller so they can belt it out of the park. It makes the game more exciting.

And that brings us to our DAYBREAK E-Mail Question of the Day. Do you really care if athletes use performance enhancing drugs? Do you really care? Let you know what you think at daybreak@cnn.com. That's daybreak@cnn.com.

Ride of a lifetime. This isn't excellent the Tour de France, but it was just as rewarding. We'll explain.

And President Bush lights up the national Christmas tree and it certainly pushes some late night comedy buttons. We're coming back with some "Late Night Laughs."

You are watching DAYBREAK for Friday, December 3.

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COSTELLO: If you are in the nation's capital, be sure to catch the national Christmas tree at the White House. It's on the Ellipse. Last night, President Bush pushed the button to turn on 15,000 colored lights on the 40-foot tall blue spruce. The president urging Americans to remember U.S. troops this Christmas.

And, well, you might expect this, David Letterman had a little something to add about the lighting of the national Christmas tree -- Rob.

MARCIANO: Did he?

COSTELLO: He absolutely did. And in his Dave fashion, he also had a comment about the inevitable Christmas specials.

But first, the tree.

(BEGIN VIDEO CLIP FROM "THE LATE SHOW WITH DAVID LETTERMAN, COURTESY CBS/WORLDWIDE PANTS)

DAVID LETTERMAN, HOST: Earlier tonight down in Washington, they had the lighting of the national White House Christmas tree. They threw the switch and the tree came to life. And it worked so well, they're going to try the same thing with Dick Cheney.

How about those holiday specials? Last night did you see the Nick and Jessica Christmas special? How many of you saw that? Yes. Apparently the Bush administration knew all about it but did nothing to stop it. I didn't realize that. But it was a wonderful special. The whole family gathered around the fireplace and lip synched carols.

(END VIDEO CLIP)

COSTELLO: See, actually Simpson is never going to like get over that, even though it was her sister that was on the special.

MARCIANO: Yes, it didn't matter, you know? He lumped it all together. This is the favorite part of my show. I don't know about Chad, but I get to sit on the couch and then, and because we sleep through "Letterman," which is one of my favorite shows, we get to see the highlights in all of 30 seconds. So it's a...

COSTELLO: We aim to please on DAYBREAK.

MARCIANO: You guys are on it.

COSTELLO: By the way, we were talking about what Chad named his baby, Chad and Sally, I should say.

MARCIANO: Right.

COSTELLO: And they came up with -- they were going to name the baby Cole Myers. But then he thought that sounded too much like coal miner.

MARCIANO: Right. And he didn't take your suggestion of Oscar Myer.

COSTELLO: No, he didn't like Oscar at all. In fact, that made Sally quite angry.

MARCIANO: Are we going to tell folks now or are we going to tease it for later so people stick to the station?

COSTELLO: Oh, yes, do we have the list from one of our viewers? We got this e-mail yesterday because we were making fun of baby names for Chad. So, a very nice DAYBREAK viewer gave some suggestions to Chad and Sally about what they might name the baby. Stormy was number one. Hurrie Cane.

MARCIANO: Bo Echo. I like that.

COSTELLO: Isn't that great? Bo Echo Myers. Bo Myers. That sounds good.

MARCIANO: That sounds like an athlete.

COSTELLO: Relative Humititie. Humititie. Get it?

MARCIANO: Oh, that's just a mouthful. I get it.

COSTELLO: Yes, that's too bad.

Isa Barr is pretty good, though.

MARCIANO: Very cute. Very cute.

COSTELLO: Isa Barr Myers.

MARCIANO: Why are they all weather related?

COSTELLO: Well, because Chad's a weatherman.

MARCIANO: Did you notice Chad's body was smaller than the baby's body in that picture?

COSTELLO: But he said the baby has a really big head, just like him.

MARCIANO: No. The baby's cute. (UNINTELLIGIBLE).

COSTELLO: Anyway, they finally decided on the name Grant. So Grant Myers, welcome to the world.

MARCIANO: I think the middle name was a sticking point, so that's why we had to go away.

COSTELLO: Excellent.

MARCIANO: Anyway, congratulations.

COSTELLO: Here's what's all new in the next half hour of DAYBREAK.

From the battlefield to the classroom, imagine returning from Iraq to become just an every day college student. You'll meet someone who knows what's that -- who knows what that's like.

A Florida teacher accused of having sex with a student. New phone conversations released between the two of them.

And a car designed by and for women.

From New York, this is DAYBREAK for a Friday morning.

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