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American Morning

Susan Collins Discusses Intel Reform Bill; High-Rise Fire; Legal Grapevine

Aired December 07, 2004 - 07:29 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.

SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody. It's just about half past the hour on this AMERICAN MORNING. Bill Hemmer has got the day off. Miles is in for him and has been. We appreciate it.
MILES O'BRIEN, CNN ANCHOR: It's great to be here.

S. O'BRIEN: In just a few moments, we're going to hear more from two of the key players in the intelligence reform debate. Senator Susan Collins is going to join us. She's one of the lead negotiators for the legislation. Also, we'll have more of our interview with Congressman James Sensenbrenner. He's one of the holdouts in the House.

M. O'BRIEN: Also, we'll hear what it was like last night on the 38th floor when a fire tore through the LaSalle Building in downtown Chicago a few stories beneath. One survivor story coming up in just a few moments.

And let's get the headlines now from Heidi Collins.

Good morning - Heidi.

HEIDI COLLINS, CNN ANCHOR: And good morning. Good morning to you, Soledad. Good morning, everybody.

"Now in the News."

Grim CIA assessments are raising serious questions about future prospects in Iraq. "The New York Times" reporting two senior agency officials issued candid warnings that Iraqi security is deteriorating and unlikely to get better anytime soon. The CIA reports go on to say there could be more violence unless the Iraqi government improves its ability to assert authority and to build the economy.

An American soldier who claims the war in Iraq is illegal is trying to get political refugee status in Canada. Private Jeremy Hinzman appeared before a Canadian immigration board in Toronto yesterday. The 26-year-old Hinzman fled Fort Bragg, North Carolina, for Canada last January. Senior Canadian immigration officials have ruled the legality of the war is irrelevant in Hinzman's case.

In California, a judge is putting off the start of actor Robert Blake's murder trial, at least until December 20. The trail was supposed to start yesterday, but was delayed because of a computer belonging to Blake's attorney was stolen. Prosecutors charged Blake in the May shooting of his wife, Bonnie Lee Bakely, back in 2001. In Maryland, the FBI is investigating more than 20 arson fires as a possible case of ecoterrorism. The fires yesterday destroyed a dozen homes and damaged 29 others in a Charles County subdivision. Environmentalists had criticized the development for threatening wetlands and historical sites. The total fire damage is estimated at $10 million.

S. O'BRIEN: Wow!

COLLINS: Quite a bit of damage there, as you can see.

S. O'BRIEN: Unbelievable. Those pictures are really just incredible.

COLLINS: Yes.

S. O'BRIEN: All right, Heidi, thanks.

COLLINS: You bet.

(WEATHER REPORT)

S. O'BRIEN: Well, more than four months after the 9/11 Commission demanded action, it appears they're about to get it. The House could vote today on intelligence reform now that a key congressional holdout is finally on board.

Maine Senator Susan Collins was a lead negotiator on the compromise bill. She's at the Capitol this morning.

Nice see you, Senator. Thanks for being with us.

SEN. SUSAN COLLINS (R), MAINE: Good morning.

S. O'BRIEN: Let's talk about these four words. They are "respect and not abrogate" the role of the director of national intelligence that's been added now to the legislation. What specifically does those four words change?

COLLINS: Those few words help to satisfy concerns that were raised by Congressmen Duncan and Hunter, and others, who were concerned that in some way, the bill would lessen the authority of the secretary of defense over battlefield intelligence.

Personally, I believe strongly that nothing in the original bill in any way hindered military operations or readiness. But by making this small change, we were able to provide some additional comfort to Congressman Hunter and get him on board. And I very much welcome his support.

S. O'BRIEN: So, if the secretary of defense's power has not been lessened, then is it fair to say the national intelligence director's power has been?

COLLINS: No. The national intelligence director is a powerful position, who will, for the first time, have budgetary control over all of the intelligence agencies. The difference is we made clear that that control does not diminish the chain of command in the Pentagon. But certainly, for the first time, we've created a position, where one person will be in charge of our intelligence efforts. And we've needed that for a long time.

S. O'BRIEN: Congressman James Sensenbrenner says nothing has been done that he'd like to see on immigration reform. And he, frankly, points the finger directly at you. Here's what he had to say a little bit earlier on AMERICAN MORNING, Senator.

(BEGIN VIDEO CLIP)

SEN. JAMES SENSENBRENNER (R), WISCONSIN: I think this is a no- brainer issue, but I lay blame for the fact that this isn't in the bill specifically on Senator Susan Collins of Maine and Joseph Lieberman of Connecticut, who are absolutely high-bound not to have meaningful immigration and driver's license reform in this bill.

The failure of the bill to contain these two items, people should be asking Senator Collins and Senator Lieberman why they didn't put something in that is supported by an overwhelming majority of the American public. And more importantly, essential to prevent the same thing from happening that happened on 9/11.

(END VIDEO CLIP)

S. O'BRIEN: All right, I'll bite. I'll ask the question. Why don't you want immigration reform to be part of this legislation?

COLLINS: Well, first of all, we did take several of Mr. Sensenbrenner's provisions and put them in the bill. We took in his proposal for more border patrol agents, for more detention beds so that illegal aliens can be detained when they are arrested rather than just released. We took several strong law enforcement provisions that he's the author of.

S. O'BRIEN: But not the critical one. I mean, not the one that he really wanted, which is essentially, to make sure that illegal immigrants cannot get driver's licenses. Nineteen of the hijackers had 63 driver's licenses. On the face of it, it seems like a common- sense measure.

COLLINS: Well, let me say two things about that. First of all, those hijackers under Mr. Sensenbrenner's proposal would be able to get driver's licenses today, because they had valid immigration documents with them.

But the more important point is that the president has said that immigration reform is going to be a major issue next year, and that it's more appropriate for these highly-controversial issues to be considered then. I may well vote for those proposals in the context of an overhaul of our immigration laws.

But I agree with the president of the United States that these proposals, which had no hearings at all, which did not have the kind of thorough consideration that the intelligence reform provisions had, belong in a bill next year. And that's the position held by the president, and it's the position held by the 9/11 Commission.

But I look forward to working with the chairman next year to overhaul immigration laws. That is very much needed.

S. O'BRIEN: This legislation is going to be discussed in caucus this morning. Do you expect, in fact, that there will be a vote, and that it will pass?

COLLINS: I really do. These reforms are long overdue. The 9/11 Commission called for them, but previous commissions have pointed to the flaws in our intelligence system that leaves us ill-prepared to detect and deter terrorist attacks.

We've now modernized the intelligence structure. It had been designed for the Cold War. We're now making sure that it's agile enough to respond to the threat of terrorism.

S. O'BRIEN: Senator Susan Collins, a Republican from Maine. Nice to see you, Senator. Thanks for your time this morning.

COLLINS: Thank you.

S. O'BRIEN: Miles.

M. O'BRIEN: A towering inferno last night in Chicago. And this morning, the Loop is a mess. Many streets are now closed near the scene of a five-alarm fire in an office tower. Firefighters battled the flames for more than five hours last night. Thirty-seven injured. It happened at the LaSalle Bank Building.

Sarah Nadelhoffer, a lawyer, was working on the 39th floor. That's 10 floors above the scene you see right there. She was rescued. And she joins us this morning from Chicago.

Ms. Nadelhoffer, I'm glad you're safe and sound this morning. Just tell us what happened last night, what you saw, what you heard.

SARAH NADELHOFFER, RESCUED DURING FIRE: We were working late, and the office started filling up with smoke. So, my partners and I left the office and went to the nearest stairwell. And we went down one flight, and it was very smoky. And it seemed to be worse in the stairwell, especially going, descending. So, we exited the stairwell, and we went back into our office.

And I went straight to my phone, and I called 9/11, because I didn't know where the fire was or how to get out. And 9/11 connected with the fire department, and they told -- they told me, they told us to stay in our office and the Chicago Fire Department would come and get us.

M. O'BRIEN: That must have been quite a moment right there. When they told to you stay put, you knew a fire was beneath you, and you didn't really know how serious it was.

NADELHOFFER: Right.

M. O'BRIEN: But you knew you were basically at the mercy of the rescuers. What went through everybody's mind? What was said?

NADELHOFFER: Well, we were in our separate offices on our phones. Our windows open up in our office. So, I started opened my window, and I started breathing out my window. And I stayed on the phone with 9/11 and kept asking if they knew where we were and they were coming for us. And they kept reassuring us.

And then as the time went on, it was about a half an hour later, I was with my partners in one office and we had the window open, and we were breathing out the window and calling 9/11, and, you know, praying for the Chicago Fire Department to come get us quickly. And the office suite was filling up with smoke. It was very scary.

M. O'BRIEN: You must have been quite gratified that you were in a building where you could open the windows. A lot of buildings you can't do that.

NADELHOFFER: Right.

M. O'BRIEN: Did you think the worst would happen? Did you talk about that with your partners?

NADELHOFFER: No. I didn't talk about it with my partners. Of course, every thought was going through my head. And I just kept thinking, it couldn't end this way. I kept thinking of my family. And I had faith and hope that the Chicago Fire Department would come and get us and get us out. And I knew I had to stay calm and breathe out the window.

And, you know, there really wasn't a lot that I could do other than do the best I could to breathe and to keep calling 911 and have confidence that the fire department would come and get us as they had said they would.

M. O'BRIEN: And when they finally came, how long did it take? And how were they able to get you down safely?

NADELHOFFER: I believe it was about a half an hour before they -- from when they entered and they told us to stay there. It may have been longer. And three firemen -- we were in a very remote part of our office near the window breathing. And it was remote. But they came into our office, and they must have checked all of the inner offices, and they found us. And I was so relieved. We were all so relieved, my two partners and.

And they led us out. One of them gave me his breathing mask. And they held us by the hands, and they led us out through the smoke, out through our office suite. And they turned on one of the elevators manually and took us down.

M. O'BRIEN: All right, Sarah Nadelhoffer, that's a harrowing tale. And I'm glad you're able to tell it to us this morning. And we wish you and everybody there who was affected well, and we're glad that the injuries were limited somewhat. Sarah Nadelhoffer in Chicago -- Soledad.

S. O'BRIEN: Thank you. Wow! What a story she has to tell, huh?

M. O'BRIEN: Yes. Yes.

S. O'BRIEN: You can tell she's still grappling with it a little bit.

M. O'BRIEN: A little bit shaken up. I didn't have time to ask her. I wonder if she'll be pleased about returning to the 39th floor when the time comes.

S. O'BRIEN: I'm sure she's just thinking about how you thank the guys who pulled you out.

M. O'BRIEN: Yes, that too, yes.

S. O'BRIEN: Wow! Good for them.

Still to come this morning, is the personal check going the way of the dinosaur? Andy Serwer is "Minding Your Business" just ahead.

M. O'BRIEN: Plus, the wine industry wants to reach customers directly over the Internet. But there's one little problem: The Constitution gets in the way, and some states don't allow it. Jeff Toobin will try to sort it all out for us. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: These days, you can buy anything on the Internet, right? Well, there is a big exception that has some small vineyards whining, shall we say. A few dozens states prohibit direct sales of beer and wine to consumers across state lines. Some merchants and some wine connoisseurs are taking their case to the Supreme Court.

We get from more CNN's David Mattingly.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice over): Connoisseurs with a special taste for the grape may find it difficult to purchase their favorite California wines. Twenty-four states prohibit direct alcohol sales from out-of-state sources.

But a case now before the U.S. Supreme Court, with the wine industry targeting laws in New York, Florida and Michigan, could change that.

TRACY GENESEN, COUNCIL FOR FREE TRADE: We will be able to use that decision and state legislatures around the country to indicate that the court is promoting a free and open market in these 50 states.

MATTINGLY: The growth of the Internet brought the issue to a head, as more and more customers try to point and click their way into virtual wine shops and liquor stores. Direct sales bypass local distributors. They're the middlemen, who argue that direct purchases lack control and could lead to more underage drinking. Going online, I did find that it's easy to get, so long as you're not in a hurry and price is no object. In one case, shipping costs more than doubled the total bill. And it took over a week before all of the purchases were delivered to my doorstep. The packages, however, also were left without a signature or ID check, a point opponents make with their own demonstrations.

JOHN FITZPATRICK WINE & SPIRITS WHOLESALERS OF AMER.: So, you would think all of the checks and balances were in place, but they weren't. The truck driver simply left this on the step and went on to the next job.

MATTINGLY: According to wine industry analysts, a favorable ruling could be a boon to small wineries whose products aren't carried by distributors. But they say the sales increase would only be a small bump to total industry sales already exceeding $20 billion.

David Mattingly, CNN, Atlanta.

(END VIDEOTAPE)

M. O'BRIEN: All right. Joining us now to sample some issues in this case, CNN's senior legal analyst, Jeff Toobin.

Good to have you with us. Let's talk about some real issues here. First of all, you've got the 21st Amendment, which...

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Everybody's favorite amendment.

M. O'BRIEN: Everybody's favorite.

TOOBIN: Right. Repeal Prohibition...

M. O'BRIEN: Repeal Prohibition.

TOOBIN: ... and gave the power to regulate alcohol mostly to the states.

M. O'BRIEN: Which is the best name for a bar ever in Washington. There was the 21st Amendment at one time.

TOOBIN: I think it's still there.

M. O'BRIEN: It might still be there. Now, on the other side of this argument is basically interstate commerce laws, right?

TOOBIN: Right. Which the Constitution protects commerce among the states, and states are not allowed to discriminate against each other. New York State can't sell New York apples for a cheaper price than Washington apples. That is a well-established principle in the Constitution. So, you have, as in a lot of difficult constitutional issues, clashes between apparently contradictory parts.

M. O'BRIEN: All right. So, when you have the Constitution at odds with itself, what does the Supreme Court do? How do they decide which one supersedes?

TOOBIN: Well, they try to figure out which value protected is more important. And is there some way to harmonize the two principles here? But it's pretty difficult. And, of course, as in most issues so-called constitutional principle, there's lot of money involved here, because wholesalers want to protect their turf, and wineries want to get direct access to consumers and expand their market.

M. O'BRIEN: And on the one hand, you have a lot of these small vineyards out there and wineries that are selling all kinds of boutique-type wines. They want to make it available to a bigger market. You can see that.

On the other hand, these distributors have -- you know, they've got a protected vested interest as well. And their argument is that by shipping wine willy-nilly around the country, you're encouraging minors to be drinking.

TOOBIN: Right. And their theory is that, you know, when kids want to crank up a party, they will use the Internet to buy wine from a winery in, you know, Napa Valley. That's a little hard argument to make. I think, you know, everybody wants to wrap themselves in a drunk driving -- that is always the most popular position to have. I think the Supreme Court is going to have a little bit of a hard time seeing this as an issue about minors drinking. It's really an issue of an economic contest.

M. O'BRIEN: Unless there's a spigot on your computer which sends it out right away...

TOOBIN: Yes.

M. O'BRIEN: .. you've have a little bit of lag time.

TOOBIN: Which doesn't work on my computer.

M. O'BRIEN: Yes. So, that argument may not do so well. Are there any other arguments the distributors can hold that might play well before the court?

TOOBIN: Well, I think the 21st Amendment mentions states specifically. So, their traditional right to regulate this corner of commerce is a legitimate concern, and it is one that I think that very likely is going to win, because the Supreme Court always has somewhat of a bias towards the status quo. And the status quo is that states regulate liquor, and these wholesalers have been operating for a long time. If it ain't (ph) broke, don't fix it.

M. O'BRIEN: All right, Jeff Toobin, you heard it here. We'll watch it and see what happens.

TOOBIN: All right.

M. O'BRIEN: All right, thanks very much -- Soledad.

S. O'BRIEN: Still to come this morning, are Americans ready to throw away their checkbooks? Andy has got that ahead on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: The future lies in one word: plastic. Here with that and a market preview, Andy Serwer, "Minding Your Business."

Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Isn't that from "The Graduate?"

S. O'BRIEN: Yes, I stole that, yes.

SERWER: That was very cute.

S. O'BRIEN: Thank you.

SERWER: Very good. Let's talk about the market yesterday, a mixed session on Wall Street. The Dow was down 45 points. The Nasdaq up a little bit. Why? Violence in the Middle East, higher oil prices, some downgrades of some big blue chip stocks, like Pfizer didn't do well.

This morning, we're looking at Guidant and Johnson & Johnson. "The New York Times" reporting a merger in the works perhaps between those two companies. Johnson & Johnson down in the news there. The acquired Guidant is up.

And an unusual announcement from Colgate-Palmolive. They are announcing they are laying up to 12 percent of their workforce. It could be up to 4,000 jobs, the first earnings warning from this company in a decade. And the reason this is so unusual is because it's a very well-run company. So, you just don't usually hear things like this from Colgate-Palmolive. That stock is up in pre-market trading. They're cutting costs.

Now, as far as the plastic thing goes, the Federal Reserve is reporting for the first time credit card transactions and debit card transactions are outnumbering the number of checks that Americans are writing. Here we go: 44.5 billion credit card or debit card transactions last year versus 36 billion checks, a 2003 number. The Federal Reserve is a little slow in calculating that, I guess.

S. O'BRIEN: Yes...

(CROSSTALK)

SERWER: But the wheels of government turn slowly. You will know...

S. O'BRIEN: So, in three years we'll know next year's numbers.

SERWER: Yes.

M. O'BRIEN: Counting all of those checks takes some time.

S. O'BRIEN: That's still a lot of checks. SERWER: Do you pay checks -- do you go online or do you still write the checks?

S. O'BRIEN: I do. I write the check. I don't go online.

SERWER: Yes.

S. O'BRIEN: I live having...

SERWER: It's 50/50 if you ask people usually.

M. O'BRIEN: Yes, I'm online, you know. But that's me.

SERWER: You're a modern guy.

M. O'BRIEN: Yes. This guy, stamps, paper...

SERWER: I bet he is.

M. O'BRIEN: ... stick with it.

S. O'BRIEN: Again, Jack...

JACK CAFFERTY, CNN ANCHOR: I carry rolls of quarters to the power company every month.

SERWER: One of those guys, huh? They love you. They love you.

CAFFERTY: I've got to do something about my reputation on this program. The "Question of the Day" is as follows: Would the intelligence -- what are you laughing at?

(CROSSTALK)

CAFFERTY: With the intelligence reform bill expected to pass, still unresolved, are calls for tougher border security and immigration policies, the issues that would stop states from issuing driver's licenses to illegal aliens, make it easier to deport illegal aliens -- get the use of the word "illegal" there -- without judicial review, limit the use of ID cards issued by foreign consulates as legal proof of identity.

The administration says the issue will be taken up in legislation next year. Hold your breath. As it stands now, 11 states issue driver's licenses to illegal aliens.

The question is: How would you change America's immigration policies?

Ian in Providence, Rhode Island: "It ain't the policy side that needs fixing, Jack. It's the enforcement. Take the term, 'undocumented worker,' for example. Do we refer to car thieves as 'undocumented drivers?' These people are criminals. Sure, they want better lives for themselves. So do bank robbers."

Jean in Redding, California: "I'd make sure that each"... S. O'BRIEN: Ouch!

CAFFERTY: What?

S. O'BRIEN: I said, 'ouch!' Wow! Just editorialize as ouch. Go on.

CAFFERTY: Thank you.

Jean in Redding, California: "I would make sure that each person crossing our borders and wanting to stay here have sufficient funds to live here for a year without us paying anything for them."

Jim, in North Carolina: "I feel for those in the third world that want to come to America. I really do. But we're a nation of 300 million. The third world population is in the billions. Do the math."

Jerry in Rogers, Arkansas: "Open all the borders. They're coming in anyway. We're spending money hand-over-fist to keep them out, and it's not working. Put the border guards to work on incoming shipping."

And Leslie in Norfolk writes: "Everybody should be deported back to where they came from. Let's see, Jack, you're from Nevada?"

SERWER: Well, what would happen if they opened all the borders? I mean, you know...

CAFFERTY: I don't know.

SERWER: I don't know if more people would come in.

(CROSSTALK)

M. O'BRIEN: Not much would change.

SERWER: I don't think it would, because I think everyone who wants to get in -- a lot of people want to get in this country and ultimately do. I mean, it takes a long time.

CAFFERTY: Well, there's a huge hypocrisy. Corporate America wants these people here.

SERWER: Right.

CAFFERTY: They work cheap. You don't have to pay of benefits for them. It causes corporate profits to rise, which means stock prices go up. I mean, hello. We're not in Afghanistan here.

SERWER: Yes (UNINTELLIGIBLE).

S. O'BRIEN: And if they didn't have driver's licenses, it would be much of a bigger problem for the workers than for the employers.

SERWER: All of the lawn care the people are doing. CAFFERTY: The problem is...

SERWER: Restaurant workers.

CAFFERTY: ... we don't know who the hell is in the country. That's the problem. I mean, I think there are two issues. One is whether or not we let people come in here to work. Maybe we do. I don't know. But shouldn't we ought to know who they are and where they're from and why they're here? We don't have a clue.

S. O'BRIEN: Tomorrow's "Question of the Day," I think.

CAFFERTY: Will you say "ouch" again tomorrow?

S. O'BRIEN: Anytime you want me to say ouch.

SERWER: Maybe later in this program.

S. O'BRIEN: They're playing the music, and they're playing it loud. You know what that means.

SERWER: Yes. Ouch!

S. O'BRIEN: Time to go. In a moment, today's top stories, including suspicions of ecoterrorism. What or who was behind that massive blaze in Maryland? We're going to talk with an investigator ahead on AMERICAN MORNING.

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

Aired December 7, 2004 - 07:29 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody. It's just about half past the hour on this AMERICAN MORNING. Bill Hemmer has got the day off. Miles is in for him and has been. We appreciate it.
MILES O'BRIEN, CNN ANCHOR: It's great to be here.

S. O'BRIEN: In just a few moments, we're going to hear more from two of the key players in the intelligence reform debate. Senator Susan Collins is going to join us. She's one of the lead negotiators for the legislation. Also, we'll have more of our interview with Congressman James Sensenbrenner. He's one of the holdouts in the House.

M. O'BRIEN: Also, we'll hear what it was like last night on the 38th floor when a fire tore through the LaSalle Building in downtown Chicago a few stories beneath. One survivor story coming up in just a few moments.

And let's get the headlines now from Heidi Collins.

Good morning - Heidi.

HEIDI COLLINS, CNN ANCHOR: And good morning. Good morning to you, Soledad. Good morning, everybody.

"Now in the News."

Grim CIA assessments are raising serious questions about future prospects in Iraq. "The New York Times" reporting two senior agency officials issued candid warnings that Iraqi security is deteriorating and unlikely to get better anytime soon. The CIA reports go on to say there could be more violence unless the Iraqi government improves its ability to assert authority and to build the economy.

An American soldier who claims the war in Iraq is illegal is trying to get political refugee status in Canada. Private Jeremy Hinzman appeared before a Canadian immigration board in Toronto yesterday. The 26-year-old Hinzman fled Fort Bragg, North Carolina, for Canada last January. Senior Canadian immigration officials have ruled the legality of the war is irrelevant in Hinzman's case.

In California, a judge is putting off the start of actor Robert Blake's murder trial, at least until December 20. The trail was supposed to start yesterday, but was delayed because of a computer belonging to Blake's attorney was stolen. Prosecutors charged Blake in the May shooting of his wife, Bonnie Lee Bakely, back in 2001. In Maryland, the FBI is investigating more than 20 arson fires as a possible case of ecoterrorism. The fires yesterday destroyed a dozen homes and damaged 29 others in a Charles County subdivision. Environmentalists had criticized the development for threatening wetlands and historical sites. The total fire damage is estimated at $10 million.

S. O'BRIEN: Wow!

COLLINS: Quite a bit of damage there, as you can see.

S. O'BRIEN: Unbelievable. Those pictures are really just incredible.

COLLINS: Yes.

S. O'BRIEN: All right, Heidi, thanks.

COLLINS: You bet.

(WEATHER REPORT)

S. O'BRIEN: Well, more than four months after the 9/11 Commission demanded action, it appears they're about to get it. The House could vote today on intelligence reform now that a key congressional holdout is finally on board.

Maine Senator Susan Collins was a lead negotiator on the compromise bill. She's at the Capitol this morning.

Nice see you, Senator. Thanks for being with us.

SEN. SUSAN COLLINS (R), MAINE: Good morning.

S. O'BRIEN: Let's talk about these four words. They are "respect and not abrogate" the role of the director of national intelligence that's been added now to the legislation. What specifically does those four words change?

COLLINS: Those few words help to satisfy concerns that were raised by Congressmen Duncan and Hunter, and others, who were concerned that in some way, the bill would lessen the authority of the secretary of defense over battlefield intelligence.

Personally, I believe strongly that nothing in the original bill in any way hindered military operations or readiness. But by making this small change, we were able to provide some additional comfort to Congressman Hunter and get him on board. And I very much welcome his support.

S. O'BRIEN: So, if the secretary of defense's power has not been lessened, then is it fair to say the national intelligence director's power has been?

COLLINS: No. The national intelligence director is a powerful position, who will, for the first time, have budgetary control over all of the intelligence agencies. The difference is we made clear that that control does not diminish the chain of command in the Pentagon. But certainly, for the first time, we've created a position, where one person will be in charge of our intelligence efforts. And we've needed that for a long time.

S. O'BRIEN: Congressman James Sensenbrenner says nothing has been done that he'd like to see on immigration reform. And he, frankly, points the finger directly at you. Here's what he had to say a little bit earlier on AMERICAN MORNING, Senator.

(BEGIN VIDEO CLIP)

SEN. JAMES SENSENBRENNER (R), WISCONSIN: I think this is a no- brainer issue, but I lay blame for the fact that this isn't in the bill specifically on Senator Susan Collins of Maine and Joseph Lieberman of Connecticut, who are absolutely high-bound not to have meaningful immigration and driver's license reform in this bill.

The failure of the bill to contain these two items, people should be asking Senator Collins and Senator Lieberman why they didn't put something in that is supported by an overwhelming majority of the American public. And more importantly, essential to prevent the same thing from happening that happened on 9/11.

(END VIDEO CLIP)

S. O'BRIEN: All right, I'll bite. I'll ask the question. Why don't you want immigration reform to be part of this legislation?

COLLINS: Well, first of all, we did take several of Mr. Sensenbrenner's provisions and put them in the bill. We took in his proposal for more border patrol agents, for more detention beds so that illegal aliens can be detained when they are arrested rather than just released. We took several strong law enforcement provisions that he's the author of.

S. O'BRIEN: But not the critical one. I mean, not the one that he really wanted, which is essentially, to make sure that illegal immigrants cannot get driver's licenses. Nineteen of the hijackers had 63 driver's licenses. On the face of it, it seems like a common- sense measure.

COLLINS: Well, let me say two things about that. First of all, those hijackers under Mr. Sensenbrenner's proposal would be able to get driver's licenses today, because they had valid immigration documents with them.

But the more important point is that the president has said that immigration reform is going to be a major issue next year, and that it's more appropriate for these highly-controversial issues to be considered then. I may well vote for those proposals in the context of an overhaul of our immigration laws.

But I agree with the president of the United States that these proposals, which had no hearings at all, which did not have the kind of thorough consideration that the intelligence reform provisions had, belong in a bill next year. And that's the position held by the president, and it's the position held by the 9/11 Commission.

But I look forward to working with the chairman next year to overhaul immigration laws. That is very much needed.

S. O'BRIEN: This legislation is going to be discussed in caucus this morning. Do you expect, in fact, that there will be a vote, and that it will pass?

COLLINS: I really do. These reforms are long overdue. The 9/11 Commission called for them, but previous commissions have pointed to the flaws in our intelligence system that leaves us ill-prepared to detect and deter terrorist attacks.

We've now modernized the intelligence structure. It had been designed for the Cold War. We're now making sure that it's agile enough to respond to the threat of terrorism.

S. O'BRIEN: Senator Susan Collins, a Republican from Maine. Nice to see you, Senator. Thanks for your time this morning.

COLLINS: Thank you.

S. O'BRIEN: Miles.

M. O'BRIEN: A towering inferno last night in Chicago. And this morning, the Loop is a mess. Many streets are now closed near the scene of a five-alarm fire in an office tower. Firefighters battled the flames for more than five hours last night. Thirty-seven injured. It happened at the LaSalle Bank Building.

Sarah Nadelhoffer, a lawyer, was working on the 39th floor. That's 10 floors above the scene you see right there. She was rescued. And she joins us this morning from Chicago.

Ms. Nadelhoffer, I'm glad you're safe and sound this morning. Just tell us what happened last night, what you saw, what you heard.

SARAH NADELHOFFER, RESCUED DURING FIRE: We were working late, and the office started filling up with smoke. So, my partners and I left the office and went to the nearest stairwell. And we went down one flight, and it was very smoky. And it seemed to be worse in the stairwell, especially going, descending. So, we exited the stairwell, and we went back into our office.

And I went straight to my phone, and I called 9/11, because I didn't know where the fire was or how to get out. And 9/11 connected with the fire department, and they told -- they told me, they told us to stay in our office and the Chicago Fire Department would come and get us.

M. O'BRIEN: That must have been quite a moment right there. When they told to you stay put, you knew a fire was beneath you, and you didn't really know how serious it was.

NADELHOFFER: Right.

M. O'BRIEN: But you knew you were basically at the mercy of the rescuers. What went through everybody's mind? What was said?

NADELHOFFER: Well, we were in our separate offices on our phones. Our windows open up in our office. So, I started opened my window, and I started breathing out my window. And I stayed on the phone with 9/11 and kept asking if they knew where we were and they were coming for us. And they kept reassuring us.

And then as the time went on, it was about a half an hour later, I was with my partners in one office and we had the window open, and we were breathing out the window and calling 9/11, and, you know, praying for the Chicago Fire Department to come get us quickly. And the office suite was filling up with smoke. It was very scary.

M. O'BRIEN: You must have been quite gratified that you were in a building where you could open the windows. A lot of buildings you can't do that.

NADELHOFFER: Right.

M. O'BRIEN: Did you think the worst would happen? Did you talk about that with your partners?

NADELHOFFER: No. I didn't talk about it with my partners. Of course, every thought was going through my head. And I just kept thinking, it couldn't end this way. I kept thinking of my family. And I had faith and hope that the Chicago Fire Department would come and get us and get us out. And I knew I had to stay calm and breathe out the window.

And, you know, there really wasn't a lot that I could do other than do the best I could to breathe and to keep calling 911 and have confidence that the fire department would come and get us as they had said they would.

M. O'BRIEN: And when they finally came, how long did it take? And how were they able to get you down safely?

NADELHOFFER: I believe it was about a half an hour before they -- from when they entered and they told us to stay there. It may have been longer. And three firemen -- we were in a very remote part of our office near the window breathing. And it was remote. But they came into our office, and they must have checked all of the inner offices, and they found us. And I was so relieved. We were all so relieved, my two partners and.

And they led us out. One of them gave me his breathing mask. And they held us by the hands, and they led us out through the smoke, out through our office suite. And they turned on one of the elevators manually and took us down.

M. O'BRIEN: All right, Sarah Nadelhoffer, that's a harrowing tale. And I'm glad you're able to tell it to us this morning. And we wish you and everybody there who was affected well, and we're glad that the injuries were limited somewhat. Sarah Nadelhoffer in Chicago -- Soledad.

S. O'BRIEN: Thank you. Wow! What a story she has to tell, huh?

M. O'BRIEN: Yes. Yes.

S. O'BRIEN: You can tell she's still grappling with it a little bit.

M. O'BRIEN: A little bit shaken up. I didn't have time to ask her. I wonder if she'll be pleased about returning to the 39th floor when the time comes.

S. O'BRIEN: I'm sure she's just thinking about how you thank the guys who pulled you out.

M. O'BRIEN: Yes, that too, yes.

S. O'BRIEN: Wow! Good for them.

Still to come this morning, is the personal check going the way of the dinosaur? Andy Serwer is "Minding Your Business" just ahead.

M. O'BRIEN: Plus, the wine industry wants to reach customers directly over the Internet. But there's one little problem: The Constitution gets in the way, and some states don't allow it. Jeff Toobin will try to sort it all out for us. That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: These days, you can buy anything on the Internet, right? Well, there is a big exception that has some small vineyards whining, shall we say. A few dozens states prohibit direct sales of beer and wine to consumers across state lines. Some merchants and some wine connoisseurs are taking their case to the Supreme Court.

We get from more CNN's David Mattingly.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice over): Connoisseurs with a special taste for the grape may find it difficult to purchase their favorite California wines. Twenty-four states prohibit direct alcohol sales from out-of-state sources.

But a case now before the U.S. Supreme Court, with the wine industry targeting laws in New York, Florida and Michigan, could change that.

TRACY GENESEN, COUNCIL FOR FREE TRADE: We will be able to use that decision and state legislatures around the country to indicate that the court is promoting a free and open market in these 50 states.

MATTINGLY: The growth of the Internet brought the issue to a head, as more and more customers try to point and click their way into virtual wine shops and liquor stores. Direct sales bypass local distributors. They're the middlemen, who argue that direct purchases lack control and could lead to more underage drinking. Going online, I did find that it's easy to get, so long as you're not in a hurry and price is no object. In one case, shipping costs more than doubled the total bill. And it took over a week before all of the purchases were delivered to my doorstep. The packages, however, also were left without a signature or ID check, a point opponents make with their own demonstrations.

JOHN FITZPATRICK WINE & SPIRITS WHOLESALERS OF AMER.: So, you would think all of the checks and balances were in place, but they weren't. The truck driver simply left this on the step and went on to the next job.

MATTINGLY: According to wine industry analysts, a favorable ruling could be a boon to small wineries whose products aren't carried by distributors. But they say the sales increase would only be a small bump to total industry sales already exceeding $20 billion.

David Mattingly, CNN, Atlanta.

(END VIDEOTAPE)

M. O'BRIEN: All right. Joining us now to sample some issues in this case, CNN's senior legal analyst, Jeff Toobin.

Good to have you with us. Let's talk about some real issues here. First of all, you've got the 21st Amendment, which...

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Everybody's favorite amendment.

M. O'BRIEN: Everybody's favorite.

TOOBIN: Right. Repeal Prohibition...

M. O'BRIEN: Repeal Prohibition.

TOOBIN: ... and gave the power to regulate alcohol mostly to the states.

M. O'BRIEN: Which is the best name for a bar ever in Washington. There was the 21st Amendment at one time.

TOOBIN: I think it's still there.

M. O'BRIEN: It might still be there. Now, on the other side of this argument is basically interstate commerce laws, right?

TOOBIN: Right. Which the Constitution protects commerce among the states, and states are not allowed to discriminate against each other. New York State can't sell New York apples for a cheaper price than Washington apples. That is a well-established principle in the Constitution. So, you have, as in a lot of difficult constitutional issues, clashes between apparently contradictory parts.

M. O'BRIEN: All right. So, when you have the Constitution at odds with itself, what does the Supreme Court do? How do they decide which one supersedes?

TOOBIN: Well, they try to figure out which value protected is more important. And is there some way to harmonize the two principles here? But it's pretty difficult. And, of course, as in most issues so-called constitutional principle, there's lot of money involved here, because wholesalers want to protect their turf, and wineries want to get direct access to consumers and expand their market.

M. O'BRIEN: And on the one hand, you have a lot of these small vineyards out there and wineries that are selling all kinds of boutique-type wines. They want to make it available to a bigger market. You can see that.

On the other hand, these distributors have -- you know, they've got a protected vested interest as well. And their argument is that by shipping wine willy-nilly around the country, you're encouraging minors to be drinking.

TOOBIN: Right. And their theory is that, you know, when kids want to crank up a party, they will use the Internet to buy wine from a winery in, you know, Napa Valley. That's a little hard argument to make. I think, you know, everybody wants to wrap themselves in a drunk driving -- that is always the most popular position to have. I think the Supreme Court is going to have a little bit of a hard time seeing this as an issue about minors drinking. It's really an issue of an economic contest.

M. O'BRIEN: Unless there's a spigot on your computer which sends it out right away...

TOOBIN: Yes.

M. O'BRIEN: .. you've have a little bit of lag time.

TOOBIN: Which doesn't work on my computer.

M. O'BRIEN: Yes. So, that argument may not do so well. Are there any other arguments the distributors can hold that might play well before the court?

TOOBIN: Well, I think the 21st Amendment mentions states specifically. So, their traditional right to regulate this corner of commerce is a legitimate concern, and it is one that I think that very likely is going to win, because the Supreme Court always has somewhat of a bias towards the status quo. And the status quo is that states regulate liquor, and these wholesalers have been operating for a long time. If it ain't (ph) broke, don't fix it.

M. O'BRIEN: All right, Jeff Toobin, you heard it here. We'll watch it and see what happens.

TOOBIN: All right.

M. O'BRIEN: All right, thanks very much -- Soledad.

S. O'BRIEN: Still to come this morning, are Americans ready to throw away their checkbooks? Andy has got that ahead on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: The future lies in one word: plastic. Here with that and a market preview, Andy Serwer, "Minding Your Business."

Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Isn't that from "The Graduate?"

S. O'BRIEN: Yes, I stole that, yes.

SERWER: That was very cute.

S. O'BRIEN: Thank you.

SERWER: Very good. Let's talk about the market yesterday, a mixed session on Wall Street. The Dow was down 45 points. The Nasdaq up a little bit. Why? Violence in the Middle East, higher oil prices, some downgrades of some big blue chip stocks, like Pfizer didn't do well.

This morning, we're looking at Guidant and Johnson & Johnson. "The New York Times" reporting a merger in the works perhaps between those two companies. Johnson & Johnson down in the news there. The acquired Guidant is up.

And an unusual announcement from Colgate-Palmolive. They are announcing they are laying up to 12 percent of their workforce. It could be up to 4,000 jobs, the first earnings warning from this company in a decade. And the reason this is so unusual is because it's a very well-run company. So, you just don't usually hear things like this from Colgate-Palmolive. That stock is up in pre-market trading. They're cutting costs.

Now, as far as the plastic thing goes, the Federal Reserve is reporting for the first time credit card transactions and debit card transactions are outnumbering the number of checks that Americans are writing. Here we go: 44.5 billion credit card or debit card transactions last year versus 36 billion checks, a 2003 number. The Federal Reserve is a little slow in calculating that, I guess.

S. O'BRIEN: Yes...

(CROSSTALK)

SERWER: But the wheels of government turn slowly. You will know...

S. O'BRIEN: So, in three years we'll know next year's numbers.

SERWER: Yes.

M. O'BRIEN: Counting all of those checks takes some time.

S. O'BRIEN: That's still a lot of checks. SERWER: Do you pay checks -- do you go online or do you still write the checks?

S. O'BRIEN: I do. I write the check. I don't go online.

SERWER: Yes.

S. O'BRIEN: I live having...

SERWER: It's 50/50 if you ask people usually.

M. O'BRIEN: Yes, I'm online, you know. But that's me.

SERWER: You're a modern guy.

M. O'BRIEN: Yes. This guy, stamps, paper...

SERWER: I bet he is.

M. O'BRIEN: ... stick with it.

S. O'BRIEN: Again, Jack...

JACK CAFFERTY, CNN ANCHOR: I carry rolls of quarters to the power company every month.

SERWER: One of those guys, huh? They love you. They love you.

CAFFERTY: I've got to do something about my reputation on this program. The "Question of the Day" is as follows: Would the intelligence -- what are you laughing at?

(CROSSTALK)

CAFFERTY: With the intelligence reform bill expected to pass, still unresolved, are calls for tougher border security and immigration policies, the issues that would stop states from issuing driver's licenses to illegal aliens, make it easier to deport illegal aliens -- get the use of the word "illegal" there -- without judicial review, limit the use of ID cards issued by foreign consulates as legal proof of identity.

The administration says the issue will be taken up in legislation next year. Hold your breath. As it stands now, 11 states issue driver's licenses to illegal aliens.

The question is: How would you change America's immigration policies?

Ian in Providence, Rhode Island: "It ain't the policy side that needs fixing, Jack. It's the enforcement. Take the term, 'undocumented worker,' for example. Do we refer to car thieves as 'undocumented drivers?' These people are criminals. Sure, they want better lives for themselves. So do bank robbers."

Jean in Redding, California: "I'd make sure that each"... S. O'BRIEN: Ouch!

CAFFERTY: What?

S. O'BRIEN: I said, 'ouch!' Wow! Just editorialize as ouch. Go on.

CAFFERTY: Thank you.

Jean in Redding, California: "I would make sure that each person crossing our borders and wanting to stay here have sufficient funds to live here for a year without us paying anything for them."

Jim, in North Carolina: "I feel for those in the third world that want to come to America. I really do. But we're a nation of 300 million. The third world population is in the billions. Do the math."

Jerry in Rogers, Arkansas: "Open all the borders. They're coming in anyway. We're spending money hand-over-fist to keep them out, and it's not working. Put the border guards to work on incoming shipping."

And Leslie in Norfolk writes: "Everybody should be deported back to where they came from. Let's see, Jack, you're from Nevada?"

SERWER: Well, what would happen if they opened all the borders? I mean, you know...

CAFFERTY: I don't know.

SERWER: I don't know if more people would come in.

(CROSSTALK)

M. O'BRIEN: Not much would change.

SERWER: I don't think it would, because I think everyone who wants to get in -- a lot of people want to get in this country and ultimately do. I mean, it takes a long time.

CAFFERTY: Well, there's a huge hypocrisy. Corporate America wants these people here.

SERWER: Right.

CAFFERTY: They work cheap. You don't have to pay of benefits for them. It causes corporate profits to rise, which means stock prices go up. I mean, hello. We're not in Afghanistan here.

SERWER: Yes (UNINTELLIGIBLE).

S. O'BRIEN: And if they didn't have driver's licenses, it would be much of a bigger problem for the workers than for the employers.

SERWER: All of the lawn care the people are doing. CAFFERTY: The problem is...

SERWER: Restaurant workers.

CAFFERTY: ... we don't know who the hell is in the country. That's the problem. I mean, I think there are two issues. One is whether or not we let people come in here to work. Maybe we do. I don't know. But shouldn't we ought to know who they are and where they're from and why they're here? We don't have a clue.

S. O'BRIEN: Tomorrow's "Question of the Day," I think.

CAFFERTY: Will you say "ouch" again tomorrow?

S. O'BRIEN: Anytime you want me to say ouch.

SERWER: Maybe later in this program.

S. O'BRIEN: They're playing the music, and they're playing it loud. You know what that means.

SERWER: Yes. Ouch!

S. O'BRIEN: Time to go. In a moment, today's top stories, including suspicions of ecoterrorism. What or who was behind that massive blaze in Maryland? We're going to talk with an investigator ahead on AMERICAN MORNING.

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