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American Army Deserter Charles Jenkins Gives Interview to 'TIME'; U.S. Consulate Attacked in Saudi Arabia

Aired December 06, 2004 - 06:26   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: Life inside the communist and secretive North Korea, it's hard to imagine what it's like to live under such a brutal and repressive regime. Now an American Army deserter who spent almost 40 years there is talking about his experiences.
Army Sergeant Charles Jenkins deserted his post in South Korea in 1965 and he fled to the North. After nearly four decades, he turned himself into the Army in Japan in September. He was just recently freed from jail after serving a 30-day sentence for desertion.

Jenkins granted his first interview to "Time" magazine's Jim Frederick.

And joining us from Washington this morning with more on this exclusive story is "Time" magazine correspondent Viveca Novak.

Viveca, this is a fascinating article. You know, you read it and it's just unbelievable.

VIVECA NOVAK, "TIME" MAGAZINE: It is amazing and his picture of life inside North Korea is every bit as bleak as we've kind of heard over the years. But it's fascinating. You know, different people coped with the prospect of going to Vietnam in different ways. His way was to drink 10 beers. He was totally frightened of going over. He knew his unit was going. And he didn't want to be responsible for other soldiers' lives.

He walked to the North Korean border with his -- with a white handkerchief tied to his rifle and knew almost immediately he'd made a mistake. But there he was for four decades paying for it.

COSTELLO: So what happened to him? As he's waving that -- we're seeing pictures of he and his wife, by the way -- but what happened to him as he's waving that makeshift white flag?

NOVAK: Well, he came to a 10 foot fence. The North Koreans spotted him immediately, took him inside. And it was very tough conditions. He was forced to live in a one room house with no beds, no running water, very little electricity or heat, with four -- three other men. There were four of them in total who were also deserters. And they were forced to study Korean, study the, you know, doctrine of their -- the North Korean leader.

If anyone made a mistake, they were severely beaten by one of the other of the Americans. And it was just a horrible life for quite some time.

COSTELLO: Yes, he had a military tattoo on his arm, and they removed that quite painfully, didn't they?

VIVECA NOVAK, "TIME" MAGAZINE: Yes. After he was -- he was teaching English at a school, and he started to wear short-sleeved shirts in the warmer weather. They noticed he had an Army tattoo on his arm, and they cut it out with scissors and a knife with no anesthetic. They said anesthetic was saved for the battlefield.

COSTELLO: He eventually came to be married to a Japanese woman, I believe. And they had two daughters. So, what was life for them like?

NOVAK: Well, they had their own house at that point. And life was not easy, but Charles Jenkins believes that they were intended for the daughters -- the North Koreans for the daughters to become spies for North Korea.

So, they weren't -- you know, their lives could have been a lot worse. They weren't great, but they could have been a lot worse. They were sent to school. And eventually, the daughters were admitted to an elite language school. And at that point, Jenkins says he knew that their lives were -- that they were destined to be spies for North Korea, and he became very worried.

COSTELLO: Now, you have -- there is an interesting quote about that in the article, and I want to read it to our viewers now.

He says, "I knew what they were trying to do. They wanted to turn them into spies. My daughters, they could pass as South Korean. There are lots of children of American GIs and South Korea mothers in South Korea. No one would doubt them for a second."

So, it was almost like they were breeding spies in North Korea.

NOVAK: Right. And that's exactly what Jenkins thought they were doing. And his wife was one of the people that North Korea later admitted that they had kidnapped some Japanese, and she turned out to be one of the people that had been kidnapped by North Korea.

So, when eventually North Korea admitted this and Japan arranged for her to have a visit home to Japan, and she never went back. And from then on, Jenkins tried to get permission to go and visit her. Eventually, a neutral third country was arranged where they could meet, which was Indonesia. They met there with his daughters, and then because of medical reasons, he was sent to Japan briefly. And he showed up at an Army base outside of Tokyo and turned himself in on September 11 of this year.

COSTELLO: It's just an amazing story.

NOVAK: Yes.

COSTELLO: And much more in "TIME" magazine this week. Viveca Novak, thank you for joining DAYBREAK this morning. NOVAK: Good to be with you, Carol.

COSTELLO: We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: And good morning to you. Thank you for waking up with us. I'm Carol Costello. Let's get right to the headlines right now, shall we?

Right to one of our top stories. The pressure doesn't get any heavier than this: When Congress goes back to work today, President Bush will be leading the charge to shake lose the intelligence reform bill and get it to his desk.

Dick Uliano of CNN Radio joins us live by phone from Washington.

Dick -- what's going to happen today?

DICK ULIANO, CNN RADIO: Well, good morning, Carol.

Well, first of all, there is going to be more 9/11 family members on Capitol Hill pressing their case, urging Congress to pass this intelligence bill. And Senate Republican leader Bill Frist believes Congress will approve an intelligence bill by midweek. It overhauls the intelligence community.

Frist told ABC's This Week" there will be compromise. And as you know, Carol, two key House Republicans have been blocking the bill since before Thanksgiving, saying the bill needs to be improved. They say that it interferes with battlefield intelligence, and that it ought to do more against illegal immigration.

COSTELLO: Yes, Dick, we were looking at pictures of 9/11 families. They held a vigil this weekend, hoping that President Bush will meet face-to-face with those two congressmen who are so opposed to this measure.

I want to quote one of them. This is from Abraham Scott, whose wife was killed, actually at the Pentagon on 9/11. He says: "I think, No. 1, the president needs to get in line with his thinking. And I think he needs to meet face-to-face with congressman who oppose this bill and convince them they need to pass it."

Has the president done that?

NOVAK: Well, you know, there have also been family members, Carol. Last week, they held a news conference in support of these key House Republicans -- Duncan Hunter of California, Jim Sensenbrenner of Wisconsin. And these other family members say, maybe the bill does need to be improved.

As for President Bush, he used his Saturday radio address to urge Congress to pass the bill. He's for the bill. But he promised to send a letter last week to congressional leaders, urging the House to take up the bill. He didn't send that letter. It seems as if -- it seems -- it appears the White House is letting Congress fight this out among themselves and try to reach the compromise that the legislative branch, you know, just may to do in this case.

COSTELLO: Well, you know, you talk about compromise, Dick, and some people say that compromise has, like, diluted the bill already. So, what kind of compromise are we talking about?

NOVAK: Well, Carol, the bill would overhaul the intelligence community and bring all 15 of the nation's intelligence agencies under a national intelligence director. Duncan Hunter of California, the Republican who chairs the Armed Services Committee, has worried that might interfere with what the intelligence battlefield commanders get. Wisconsin Senator Jim Sensenbrenner says that there ought to be provisions in here against illegal immigration.

So, they say the changes they want would toughen the bill. And, indeed, Orrin Hatch, a key Senate Republican, told CNN's Wolf Blitzer the bill can be improved.

So, what Frist is saying, the No. 1 guy in the Senate, is, hang on, there will be compromises, let us hash it out and let's see what happens by midweek.

COSTELLO: Oh, we'll keep following this one. Dick Uliano, live from Washington this morning.

More now on our other top story: an attack in Saudi Arabia this morning on an American target. Smoke is still rising from that U.S. consulate building. Police are out in force.

Caroline Faraj is following the story for us from Dubai.

Caroline -- bring us up-to-date.

CAROLINE FARAJ, CNN CORRESPONDENT: Hey, Carol, we just got a confirmation from the U.S. embassy in Riyadh that none of the Americans who were taken hostage were injured nor killed. And they are now in the process of counting local hires, the local staff, and they believe that two of them were injured.

This is a confirmation that came just a few minutes ago from the spokeswoman in Riyadh of the U.S. embassy, and they are confirming this information.

There are also some reports, the Americans nor the Saudis were able to confirm, is that the operation is over, and that the security -- the Saudi security forces managed to kill three of the militants and injure two of them, and taking them, of course, arresting them.

And there are also some reports that quite a number of Saudi military people forces were also injured -- Carol.

COSTELLO: Do we know yet how this attack happened? Like, was a car bomb used? Was it just gunmen trying to storm this facility? FARAJ: Up to now, the U.S. embassy, they're declining to confirm exactly how the attack took place and nor the Saudis, of course. However, there are witnesses who are saying that they did not see an explosion taking place outside the consulate. It started by hearing an exchange of gunfire, and then they saw the smoke coming from inside the consulate. And then, there was a nonstop exchange of fire. They could hear it very, very easily.

Nobody is able to confirm this information yet. We are expecting, Carol, to receive an official statement coming from the Saudi government, telling us exactly how the whole attack actually happened -- Carol.

COSTELLO: Caroline Faraj reporting live for us from Dubai this morning, thank you.

Taking the icons on the road. Car and -- car enthusiasts, I should say, help our reporter test the hottest versions of some of the most famous American name plates. Come along for the ride.

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

(COMMERCIAL BREAK)

COSTELLO: It's time now for a little business buzz. You've heard that airlines have been in deep financial trouble since 9/11. But did you ever think about how your nearby airport has fared?

Carrie Lee has maybe the good news, maybe the bad news, from the Nasdaq Marketsite.

Good morning.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Carol.

It's a little surprising here. Airlines have done poorly since 9/11, since high fuel prices, causing a couple of big carriers to fly low. Also, three big airlines recently filed for chapter 11 bankruptcy protection: United, US Airways and ATA Airline.

But a "USA Today" report now estimates that these three owe more than $51 million to -- get this -- the airports. That's an unusual twist on this familiar story. Since September 11, airports as a group have pulled through the industry's worst economic downturn. And that's because, unlike the airlines, airports have limited competition, multiple sources of revenue, like government aid, and fees from airport concessionaries.

So, you'd think this whole business together would go to pot, Carol. But airports are doing better than the airlines themselves.

COSTELLO: That is insane!

LEE: Yes.

COSTELLO: Well, and some airports have shopping malls inside them now.

LEE: That's right, and they're getting more creating, trying to get people to spend more money and more time there. So, it seems like they've pulled through all right.

COSTELLO: A quick look at the futures before you go.

LEE: Things are looking a little bit flat to slightly lower today. For today's session, one stock to watch: Cisco Systems. The networking gear company is kicking off its analyst meeting later today. It goes through Wednesday on the heels of a positive Intel fourth quarter update last week. So, we'll see how Cisco does in trading today.

COSTELLO: Carrie Lee live from the Nasdaq Marketsite, thank you.

Do you love the smell of exhaust in the morning? Well, then our next segment is definitely for you.

DAYBREAK contributor Ali Velshi did some road research on a couple of American classics. He takes us along on his test drives.

(BEGIN VIDEOTAPE)

ALI VELSHI, CNN DAYBREAK CONTRIBUTOR (voice over): On a crisp autumn day, I took to the Palisades Parkway, outside of New York City, with auto writer Peter Valdes-Dapena from "CNN MONEY." Michael Quincy is on the left. He's the car guy from "Consumer Reports."

Peter has a family, so we gave him the more practical Mustang.

PETER VALDES-DAPENA, CNN MONEY: I love this Mustang. The great thing about it, it's a car I can completely imagine myself living with every day, you know, take the kid to school, go grocery shopping.

VELSHI: My set of wheels is normally a motorcycle. So even the cozier Corvette interior was a step up.

(on camera): At least in this thing, I can take some bread and some milk and bring it home. So, it's not as practical as that, but, boy, I got some looks when I came up here.

MICHAEL QUINCEY, "CONSUMER REPORTS": Well, all of this talk about laps and driving and everything, let's take it for a ride.

VELSHI: Michael, tell me what I need to know about this.

QUINCEY: The Chevrolet Corvette, this is American icon, a great car, big power. This has a 6-liter, V8, about 400 horsepower.

VELSHI: It handles nicely.

QUINCEY: Yes, you get a good steering feedback, a lot of communication with the road.

VELSHI: Is this appealing to a buyer who may not have bought a Corvette in the past?

QUINCEY: I think so. This car is so easy to drive. You could drive this thing every day. It probably goes for between $44,000 and about $51,000. So, here we've got the Ford Mustang GT. Peter, what do you think so far?

VALDES-DAPENA: I'll tell you, I love this car. It is just so much fun. Even in just ordinary driving, it's just thrilling.

QUINCEY: It comes with a 4.6 liter V8. It does 300 horsepower. For a price between about $19,000 and $25,000, this is, like, a performance bargain.

VALDES-DAPENA: Oh, it is.

VELSHI (voice over): This is not a fair test drive. The Corvette is a faster, more expensive car. But the Mustang is the more affordable, practical car, if you can call either of them practical.

Ali Velshi, CNN on the road.

(END VIDEOTAPE)

COSTELLO: I like both of them myself.

Your news, money, weather and sports. It is 6:46. Here's what's all new this morning.

An attack was carried out this morning against the U.S. consulate in Jeddah, Saudi Arabia. Sources tell CNN that there have some casualties resulting from a firefight. There are also reports that some people have been taken hostage, but we believe most of them have been freed now.

Ohio is set to finally certify its presidential election results. Unofficial results give President Bush a 136,000 margin over John Kerry. Legal challenges to the vote are also expected today.

In money news, or should I say in treasure news, the movie, "National Treasure," topped the box office for the third straight weekend. The Nicolas Cage film took in $17 million to raise its total take to $110 million.

In culture, John Travolta is just the 20th celebrity to be given the Golden Urn by the Museum of the Moving Image. He was honored for his more than 30 years in show biz. Travolta joins the likes of Robert DeNiro and Al Pacino as winners of this award.

In sports, players at the center of that brawl between Pacers' and Pistons' fans won't get a fight from the NBA. It says it will not block a grievance hearing over suspensions stemming from the brawl.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

Let's head to the "AMERICAN MORNING" studios to check in with Miles and Soledad for a look at what's coming up on their program.

Good morning.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol. Good morning to you.

MILES O'BRIEN, CNN ANCHOR: Good morning, Carol.

S. O'BRIEN: Some of the headlines that we're taking a look at this morning, the continuing battle over the 9/11 legislation. That bill might be running out of time. The president supports it. So, why are key GOP leaders against it? This morning, we talk to Congressman Christopher Shays. He's a member of the Select Committee on Homeland Security.

M. O'BRIEN: We're also going to be talking about food safety this morning. Is your food safe from terrorists? A special CNN security watch, we'll talk to a host of experts, an FBI counterterrorism expert, as well as Dr. Sanjay Gupta, who has answers on all subjects. So, we might as well ask him about this, right?

S. O'BRIEN: The medical, too.

M. O'BRIEN: Absolutely.

S. O'BRIEN: Also this morning, more information about the death of Army Ranger Pat Tillman. There is a new report that's now alleging an Army cover-up after more details about that friendly-fire incident that killed him. The question is: Who was that meant to protect? We're going to talk with Steve Call (ph) of "The Washington Post." That and much, much more ahead on this "AMERICAN MORNING."

Carol -- back to you.

COSTELLO: All right, thanks to you both. We'll catch you in about 10 minutes.

More breaking news to tell you about right now; this Charles County, Maryland. These are live pictures from WTTG, our affiliate there. Charles County firefighters are battling this huge fire in the Potomac Heights vicinity near Indian Head. Now, the fire on Hunters Brook Drive off of Hawthorne Road has spread to at least 12 homes. This is a brand-new development. No reports of injuries. But as you can see, firefighters have quite a battle on their hands. This is Indian Head, Maryland, and it's happening right now.

You're watching DAYBREAK. We'll be back after this.

(COMMERCIAL BREAK)

COSTELLO: Need something ultra-new for that special someone? Christmas is upon us. And, boy, do we have ideas for you. Electronics and software companies are selling so many innovations in home entertainment that it is possible your loved one will never want to leave home ever.

Joel Dreyfuss, editor of "Red Herring" magazine joins us from San Francisco to talk about having it all right there in your living room.

And, you know, you guys predicted that TiVo would be the big thing last year, and you were right.

JOEL DREYFUSS, "RED HERRING" MAGAZINE: Well, we try to stay ahead. It's a little tough, because it's changing so quickly.

COSTELLO: Boy, you're not kidding. Tell us about this latest thing from Sony.

DREYFUSS: They've invented something. Well, first, the background is there's this great battle going on for your living room today between the old, you know, stereo makers like Sony and then the new companies like, you know, Apple, which has made the iPod.

Sony has come out with something called a location-free TV. And what it allows you to do is, (1), take -- it's got a little flat screen television. It's wireless, so you can walk around the house, take it to the bathroom, take it to the yard, whatever you want to watch your show.

But what makes it even more exciting is it really uses the Internet very well. And you can actually plug a box into your Internet connection at home and take your little flat screen with you on the road. And then you can watch your shows back at home with that flat screen TV if you have a broadband connection, which, of course, most hotels have and most places we go today.

COSTELLO: That is insane! I like that idea, though. Imagine where people could watch DAYBREAK, because I'm always afraid of whether they're watching DAYBREAK now.

DREYFUSS: The only problem is you have to watch it in the original time zone you came from.

COSTELLO: Oh, I understand. There is one catch. OK, new stuff from Microsoft.

DREYFUSS: Well, Microsoft also wants a piece of your living room. They realized that the computer market is pretty much saturated, and there isn't a lot more growth in the PC market. So, they're trying to move into consumer products. And they've come up with something called a media center PC, which is aimed at sort of controlling all of the digital stuff that we have in our homes today.

So, you know, everything has gone digital. You know, you watch DVDs. Your picture is digital. Your music is digital. And so, they're trying to sell you a PC that will sort of collect all of that stuff. So, you can lie on your couch, play your music, watch your DVDs, play your video games and play the music that you might have on your portable device and on the stereo all over your house. So...

COSTELLO: Oh, that's...

DREYFUSS: Yes.

COSTELLO: That sounds terrific. It sounds so convenient. It sounds so, like "The Jetsons." Let's talk about...

DREYFUSS: Well...

COSTELLO: Let's talk about location-free TV. What's that?

DREYFUSS: The location-free TV is that Sony TV I was talking about, which, you know, the idea of a location of where you are in this new digital age becomes less and less important. That's the TV where you can take it with you and watch it wherever you are.

COSTELLO: Right. Oh, I thought they were two different things, but they are indeed the same.

DREYFUSS: Right. So...

COSTELLO: Joel Dreyfuss...

DREYFUSS: Right.

COSTELLO: Well, you know, before you go, I should ask you. Are these things available now? And how much will they cost?

DREYFUSS: I believe the location-free TV is about $1,200 or so. The media center PC is sold by a number of manufacturers. As usual, Microsoft doesn't make the hardware. They just -- you know, they come up with a concept and the software to make it work. They're available instead of your regular PC. It's kind of a souped-up PC, trying to take away some of the fire from Apple, which has sort of made itself a big player in the idea of playing back music, as we all know with the iPod.

COSTELLO: Absolutely, absolutely. Joel Dreyfuss, thanks for joining DAYBREAK this morning.

Coming up, memorable moments from the Kennedy Center Honors. This is DAYBREAK for a Monday morning.

(COMMERCIAL BREAK)

COSTELLO: Oh, you're looking at Warren Beatty and now Elton John. The stars were certainly out at the Kennedy Center this weekend. Among this year's honorees: oh, those two actors you just saw -- one's a singer and one's an actor, I should say, Elton John and Warren Beatty. Beatty had Jack Nicholson on hand to introduce him, while Sir Elton had a host of well-wishers, including Robert Downey, Jr.

(BEGIN VIDEO CLIP)

ROBERT DOWNEY, JR., ACTOR: And the first one that comes to mind is, of course, genius. And the second, on a more personal note, is lifesaver. And I've got a third thought. The third thought is maybe -- see how this feels. The other first lady? I don't know.

(END VIDEO CLIP)

COSTELLO: Does Bush have a sense of humor? "AMERICAN MORNING" starts right now.

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Aired December 6, 2004 - 06:26   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Life inside the communist and secretive North Korea, it's hard to imagine what it's like to live under such a brutal and repressive regime. Now an American Army deserter who spent almost 40 years there is talking about his experiences.
Army Sergeant Charles Jenkins deserted his post in South Korea in 1965 and he fled to the North. After nearly four decades, he turned himself into the Army in Japan in September. He was just recently freed from jail after serving a 30-day sentence for desertion.

Jenkins granted his first interview to "Time" magazine's Jim Frederick.

And joining us from Washington this morning with more on this exclusive story is "Time" magazine correspondent Viveca Novak.

Viveca, this is a fascinating article. You know, you read it and it's just unbelievable.

VIVECA NOVAK, "TIME" MAGAZINE: It is amazing and his picture of life inside North Korea is every bit as bleak as we've kind of heard over the years. But it's fascinating. You know, different people coped with the prospect of going to Vietnam in different ways. His way was to drink 10 beers. He was totally frightened of going over. He knew his unit was going. And he didn't want to be responsible for other soldiers' lives.

He walked to the North Korean border with his -- with a white handkerchief tied to his rifle and knew almost immediately he'd made a mistake. But there he was for four decades paying for it.

COSTELLO: So what happened to him? As he's waving that -- we're seeing pictures of he and his wife, by the way -- but what happened to him as he's waving that makeshift white flag?

NOVAK: Well, he came to a 10 foot fence. The North Koreans spotted him immediately, took him inside. And it was very tough conditions. He was forced to live in a one room house with no beds, no running water, very little electricity or heat, with four -- three other men. There were four of them in total who were also deserters. And they were forced to study Korean, study the, you know, doctrine of their -- the North Korean leader.

If anyone made a mistake, they were severely beaten by one of the other of the Americans. And it was just a horrible life for quite some time.

COSTELLO: Yes, he had a military tattoo on his arm, and they removed that quite painfully, didn't they?

VIVECA NOVAK, "TIME" MAGAZINE: Yes. After he was -- he was teaching English at a school, and he started to wear short-sleeved shirts in the warmer weather. They noticed he had an Army tattoo on his arm, and they cut it out with scissors and a knife with no anesthetic. They said anesthetic was saved for the battlefield.

COSTELLO: He eventually came to be married to a Japanese woman, I believe. And they had two daughters. So, what was life for them like?

NOVAK: Well, they had their own house at that point. And life was not easy, but Charles Jenkins believes that they were intended for the daughters -- the North Koreans for the daughters to become spies for North Korea.

So, they weren't -- you know, their lives could have been a lot worse. They weren't great, but they could have been a lot worse. They were sent to school. And eventually, the daughters were admitted to an elite language school. And at that point, Jenkins says he knew that their lives were -- that they were destined to be spies for North Korea, and he became very worried.

COSTELLO: Now, you have -- there is an interesting quote about that in the article, and I want to read it to our viewers now.

He says, "I knew what they were trying to do. They wanted to turn them into spies. My daughters, they could pass as South Korean. There are lots of children of American GIs and South Korea mothers in South Korea. No one would doubt them for a second."

So, it was almost like they were breeding spies in North Korea.

NOVAK: Right. And that's exactly what Jenkins thought they were doing. And his wife was one of the people that North Korea later admitted that they had kidnapped some Japanese, and she turned out to be one of the people that had been kidnapped by North Korea.

So, when eventually North Korea admitted this and Japan arranged for her to have a visit home to Japan, and she never went back. And from then on, Jenkins tried to get permission to go and visit her. Eventually, a neutral third country was arranged where they could meet, which was Indonesia. They met there with his daughters, and then because of medical reasons, he was sent to Japan briefly. And he showed up at an Army base outside of Tokyo and turned himself in on September 11 of this year.

COSTELLO: It's just an amazing story.

NOVAK: Yes.

COSTELLO: And much more in "TIME" magazine this week. Viveca Novak, thank you for joining DAYBREAK this morning. NOVAK: Good to be with you, Carol.

COSTELLO: We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: And good morning to you. Thank you for waking up with us. I'm Carol Costello. Let's get right to the headlines right now, shall we?

Right to one of our top stories. The pressure doesn't get any heavier than this: When Congress goes back to work today, President Bush will be leading the charge to shake lose the intelligence reform bill and get it to his desk.

Dick Uliano of CNN Radio joins us live by phone from Washington.

Dick -- what's going to happen today?

DICK ULIANO, CNN RADIO: Well, good morning, Carol.

Well, first of all, there is going to be more 9/11 family members on Capitol Hill pressing their case, urging Congress to pass this intelligence bill. And Senate Republican leader Bill Frist believes Congress will approve an intelligence bill by midweek. It overhauls the intelligence community.

Frist told ABC's This Week" there will be compromise. And as you know, Carol, two key House Republicans have been blocking the bill since before Thanksgiving, saying the bill needs to be improved. They say that it interferes with battlefield intelligence, and that it ought to do more against illegal immigration.

COSTELLO: Yes, Dick, we were looking at pictures of 9/11 families. They held a vigil this weekend, hoping that President Bush will meet face-to-face with those two congressmen who are so opposed to this measure.

I want to quote one of them. This is from Abraham Scott, whose wife was killed, actually at the Pentagon on 9/11. He says: "I think, No. 1, the president needs to get in line with his thinking. And I think he needs to meet face-to-face with congressman who oppose this bill and convince them they need to pass it."

Has the president done that?

NOVAK: Well, you know, there have also been family members, Carol. Last week, they held a news conference in support of these key House Republicans -- Duncan Hunter of California, Jim Sensenbrenner of Wisconsin. And these other family members say, maybe the bill does need to be improved.

As for President Bush, he used his Saturday radio address to urge Congress to pass the bill. He's for the bill. But he promised to send a letter last week to congressional leaders, urging the House to take up the bill. He didn't send that letter. It seems as if -- it seems -- it appears the White House is letting Congress fight this out among themselves and try to reach the compromise that the legislative branch, you know, just may to do in this case.

COSTELLO: Well, you know, you talk about compromise, Dick, and some people say that compromise has, like, diluted the bill already. So, what kind of compromise are we talking about?

NOVAK: Well, Carol, the bill would overhaul the intelligence community and bring all 15 of the nation's intelligence agencies under a national intelligence director. Duncan Hunter of California, the Republican who chairs the Armed Services Committee, has worried that might interfere with what the intelligence battlefield commanders get. Wisconsin Senator Jim Sensenbrenner says that there ought to be provisions in here against illegal immigration.

So, they say the changes they want would toughen the bill. And, indeed, Orrin Hatch, a key Senate Republican, told CNN's Wolf Blitzer the bill can be improved.

So, what Frist is saying, the No. 1 guy in the Senate, is, hang on, there will be compromises, let us hash it out and let's see what happens by midweek.

COSTELLO: Oh, we'll keep following this one. Dick Uliano, live from Washington this morning.

More now on our other top story: an attack in Saudi Arabia this morning on an American target. Smoke is still rising from that U.S. consulate building. Police are out in force.

Caroline Faraj is following the story for us from Dubai.

Caroline -- bring us up-to-date.

CAROLINE FARAJ, CNN CORRESPONDENT: Hey, Carol, we just got a confirmation from the U.S. embassy in Riyadh that none of the Americans who were taken hostage were injured nor killed. And they are now in the process of counting local hires, the local staff, and they believe that two of them were injured.

This is a confirmation that came just a few minutes ago from the spokeswoman in Riyadh of the U.S. embassy, and they are confirming this information.

There are also some reports, the Americans nor the Saudis were able to confirm, is that the operation is over, and that the security -- the Saudi security forces managed to kill three of the militants and injure two of them, and taking them, of course, arresting them.

And there are also some reports that quite a number of Saudi military people forces were also injured -- Carol.

COSTELLO: Do we know yet how this attack happened? Like, was a car bomb used? Was it just gunmen trying to storm this facility? FARAJ: Up to now, the U.S. embassy, they're declining to confirm exactly how the attack took place and nor the Saudis, of course. However, there are witnesses who are saying that they did not see an explosion taking place outside the consulate. It started by hearing an exchange of gunfire, and then they saw the smoke coming from inside the consulate. And then, there was a nonstop exchange of fire. They could hear it very, very easily.

Nobody is able to confirm this information yet. We are expecting, Carol, to receive an official statement coming from the Saudi government, telling us exactly how the whole attack actually happened -- Carol.

COSTELLO: Caroline Faraj reporting live for us from Dubai this morning, thank you.

Taking the icons on the road. Car and -- car enthusiasts, I should say, help our reporter test the hottest versions of some of the most famous American name plates. Come along for the ride.

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

(COMMERCIAL BREAK)

COSTELLO: It's time now for a little business buzz. You've heard that airlines have been in deep financial trouble since 9/11. But did you ever think about how your nearby airport has fared?

Carrie Lee has maybe the good news, maybe the bad news, from the Nasdaq Marketsite.

Good morning.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Carol.

It's a little surprising here. Airlines have done poorly since 9/11, since high fuel prices, causing a couple of big carriers to fly low. Also, three big airlines recently filed for chapter 11 bankruptcy protection: United, US Airways and ATA Airline.

But a "USA Today" report now estimates that these three owe more than $51 million to -- get this -- the airports. That's an unusual twist on this familiar story. Since September 11, airports as a group have pulled through the industry's worst economic downturn. And that's because, unlike the airlines, airports have limited competition, multiple sources of revenue, like government aid, and fees from airport concessionaries.

So, you'd think this whole business together would go to pot, Carol. But airports are doing better than the airlines themselves.

COSTELLO: That is insane!

LEE: Yes.

COSTELLO: Well, and some airports have shopping malls inside them now.

LEE: That's right, and they're getting more creating, trying to get people to spend more money and more time there. So, it seems like they've pulled through all right.

COSTELLO: A quick look at the futures before you go.

LEE: Things are looking a little bit flat to slightly lower today. For today's session, one stock to watch: Cisco Systems. The networking gear company is kicking off its analyst meeting later today. It goes through Wednesday on the heels of a positive Intel fourth quarter update last week. So, we'll see how Cisco does in trading today.

COSTELLO: Carrie Lee live from the Nasdaq Marketsite, thank you.

Do you love the smell of exhaust in the morning? Well, then our next segment is definitely for you.

DAYBREAK contributor Ali Velshi did some road research on a couple of American classics. He takes us along on his test drives.

(BEGIN VIDEOTAPE)

ALI VELSHI, CNN DAYBREAK CONTRIBUTOR (voice over): On a crisp autumn day, I took to the Palisades Parkway, outside of New York City, with auto writer Peter Valdes-Dapena from "CNN MONEY." Michael Quincy is on the left. He's the car guy from "Consumer Reports."

Peter has a family, so we gave him the more practical Mustang.

PETER VALDES-DAPENA, CNN MONEY: I love this Mustang. The great thing about it, it's a car I can completely imagine myself living with every day, you know, take the kid to school, go grocery shopping.

VELSHI: My set of wheels is normally a motorcycle. So even the cozier Corvette interior was a step up.

(on camera): At least in this thing, I can take some bread and some milk and bring it home. So, it's not as practical as that, but, boy, I got some looks when I came up here.

MICHAEL QUINCEY, "CONSUMER REPORTS": Well, all of this talk about laps and driving and everything, let's take it for a ride.

VELSHI: Michael, tell me what I need to know about this.

QUINCEY: The Chevrolet Corvette, this is American icon, a great car, big power. This has a 6-liter, V8, about 400 horsepower.

VELSHI: It handles nicely.

QUINCEY: Yes, you get a good steering feedback, a lot of communication with the road.

VELSHI: Is this appealing to a buyer who may not have bought a Corvette in the past?

QUINCEY: I think so. This car is so easy to drive. You could drive this thing every day. It probably goes for between $44,000 and about $51,000. So, here we've got the Ford Mustang GT. Peter, what do you think so far?

VALDES-DAPENA: I'll tell you, I love this car. It is just so much fun. Even in just ordinary driving, it's just thrilling.

QUINCEY: It comes with a 4.6 liter V8. It does 300 horsepower. For a price between about $19,000 and $25,000, this is, like, a performance bargain.

VALDES-DAPENA: Oh, it is.

VELSHI (voice over): This is not a fair test drive. The Corvette is a faster, more expensive car. But the Mustang is the more affordable, practical car, if you can call either of them practical.

Ali Velshi, CNN on the road.

(END VIDEOTAPE)

COSTELLO: I like both of them myself.

Your news, money, weather and sports. It is 6:46. Here's what's all new this morning.

An attack was carried out this morning against the U.S. consulate in Jeddah, Saudi Arabia. Sources tell CNN that there have some casualties resulting from a firefight. There are also reports that some people have been taken hostage, but we believe most of them have been freed now.

Ohio is set to finally certify its presidential election results. Unofficial results give President Bush a 136,000 margin over John Kerry. Legal challenges to the vote are also expected today.

In money news, or should I say in treasure news, the movie, "National Treasure," topped the box office for the third straight weekend. The Nicolas Cage film took in $17 million to raise its total take to $110 million.

In culture, John Travolta is just the 20th celebrity to be given the Golden Urn by the Museum of the Moving Image. He was honored for his more than 30 years in show biz. Travolta joins the likes of Robert DeNiro and Al Pacino as winners of this award.

In sports, players at the center of that brawl between Pacers' and Pistons' fans won't get a fight from the NBA. It says it will not block a grievance hearing over suspensions stemming from the brawl.

(WEATHER REPORT)

COSTELLO: Those are the latest headlines for you.

Let's head to the "AMERICAN MORNING" studios to check in with Miles and Soledad for a look at what's coming up on their program.

Good morning.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol. Good morning to you.

MILES O'BRIEN, CNN ANCHOR: Good morning, Carol.

S. O'BRIEN: Some of the headlines that we're taking a look at this morning, the continuing battle over the 9/11 legislation. That bill might be running out of time. The president supports it. So, why are key GOP leaders against it? This morning, we talk to Congressman Christopher Shays. He's a member of the Select Committee on Homeland Security.

M. O'BRIEN: We're also going to be talking about food safety this morning. Is your food safe from terrorists? A special CNN security watch, we'll talk to a host of experts, an FBI counterterrorism expert, as well as Dr. Sanjay Gupta, who has answers on all subjects. So, we might as well ask him about this, right?

S. O'BRIEN: The medical, too.

M. O'BRIEN: Absolutely.

S. O'BRIEN: Also this morning, more information about the death of Army Ranger Pat Tillman. There is a new report that's now alleging an Army cover-up after more details about that friendly-fire incident that killed him. The question is: Who was that meant to protect? We're going to talk with Steve Call (ph) of "The Washington Post." That and much, much more ahead on this "AMERICAN MORNING."

Carol -- back to you.

COSTELLO: All right, thanks to you both. We'll catch you in about 10 minutes.

More breaking news to tell you about right now; this Charles County, Maryland. These are live pictures from WTTG, our affiliate there. Charles County firefighters are battling this huge fire in the Potomac Heights vicinity near Indian Head. Now, the fire on Hunters Brook Drive off of Hawthorne Road has spread to at least 12 homes. This is a brand-new development. No reports of injuries. But as you can see, firefighters have quite a battle on their hands. This is Indian Head, Maryland, and it's happening right now.

You're watching DAYBREAK. We'll be back after this.

(COMMERCIAL BREAK)

COSTELLO: Need something ultra-new for that special someone? Christmas is upon us. And, boy, do we have ideas for you. Electronics and software companies are selling so many innovations in home entertainment that it is possible your loved one will never want to leave home ever.

Joel Dreyfuss, editor of "Red Herring" magazine joins us from San Francisco to talk about having it all right there in your living room.

And, you know, you guys predicted that TiVo would be the big thing last year, and you were right.

JOEL DREYFUSS, "RED HERRING" MAGAZINE: Well, we try to stay ahead. It's a little tough, because it's changing so quickly.

COSTELLO: Boy, you're not kidding. Tell us about this latest thing from Sony.

DREYFUSS: They've invented something. Well, first, the background is there's this great battle going on for your living room today between the old, you know, stereo makers like Sony and then the new companies like, you know, Apple, which has made the iPod.

Sony has come out with something called a location-free TV. And what it allows you to do is, (1), take -- it's got a little flat screen television. It's wireless, so you can walk around the house, take it to the bathroom, take it to the yard, whatever you want to watch your show.

But what makes it even more exciting is it really uses the Internet very well. And you can actually plug a box into your Internet connection at home and take your little flat screen with you on the road. And then you can watch your shows back at home with that flat screen TV if you have a broadband connection, which, of course, most hotels have and most places we go today.

COSTELLO: That is insane! I like that idea, though. Imagine where people could watch DAYBREAK, because I'm always afraid of whether they're watching DAYBREAK now.

DREYFUSS: The only problem is you have to watch it in the original time zone you came from.

COSTELLO: Oh, I understand. There is one catch. OK, new stuff from Microsoft.

DREYFUSS: Well, Microsoft also wants a piece of your living room. They realized that the computer market is pretty much saturated, and there isn't a lot more growth in the PC market. So, they're trying to move into consumer products. And they've come up with something called a media center PC, which is aimed at sort of controlling all of the digital stuff that we have in our homes today.

So, you know, everything has gone digital. You know, you watch DVDs. Your picture is digital. Your music is digital. And so, they're trying to sell you a PC that will sort of collect all of that stuff. So, you can lie on your couch, play your music, watch your DVDs, play your video games and play the music that you might have on your portable device and on the stereo all over your house. So...

COSTELLO: Oh, that's...

DREYFUSS: Yes.

COSTELLO: That sounds terrific. It sounds so convenient. It sounds so, like "The Jetsons." Let's talk about...

DREYFUSS: Well...

COSTELLO: Let's talk about location-free TV. What's that?

DREYFUSS: The location-free TV is that Sony TV I was talking about, which, you know, the idea of a location of where you are in this new digital age becomes less and less important. That's the TV where you can take it with you and watch it wherever you are.

COSTELLO: Right. Oh, I thought they were two different things, but they are indeed the same.

DREYFUSS: Right. So...

COSTELLO: Joel Dreyfuss...

DREYFUSS: Right.

COSTELLO: Well, you know, before you go, I should ask you. Are these things available now? And how much will they cost?

DREYFUSS: I believe the location-free TV is about $1,200 or so. The media center PC is sold by a number of manufacturers. As usual, Microsoft doesn't make the hardware. They just -- you know, they come up with a concept and the software to make it work. They're available instead of your regular PC. It's kind of a souped-up PC, trying to take away some of the fire from Apple, which has sort of made itself a big player in the idea of playing back music, as we all know with the iPod.

COSTELLO: Absolutely, absolutely. Joel Dreyfuss, thanks for joining DAYBREAK this morning.

Coming up, memorable moments from the Kennedy Center Honors. This is DAYBREAK for a Monday morning.

(COMMERCIAL BREAK)

COSTELLO: Oh, you're looking at Warren Beatty and now Elton John. The stars were certainly out at the Kennedy Center this weekend. Among this year's honorees: oh, those two actors you just saw -- one's a singer and one's an actor, I should say, Elton John and Warren Beatty. Beatty had Jack Nicholson on hand to introduce him, while Sir Elton had a host of well-wishers, including Robert Downey, Jr.

(BEGIN VIDEO CLIP)

ROBERT DOWNEY, JR., ACTOR: And the first one that comes to mind is, of course, genius. And the second, on a more personal note, is lifesaver. And I've got a third thought. The third thought is maybe -- see how this feels. The other first lady? I don't know.

(END VIDEO CLIP)

COSTELLO: Does Bush have a sense of humor? "AMERICAN MORNING" starts right now.

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