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American Morning

Tsunami Disaster; 'CNN Security Watch'; '2004: The Last Word'

Aired December 30, 2004 - 07:30   ET

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

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


HEIDI COLLINS, CNN ANCHOR: Welcome back to AMERICAN MORNING, everybody. It's just about half past the hour now. I'm Heidi Collins in for Soledad O'Brien.
RICK SANCHEZ, CNN ANCHOR: And I'm Rick Sanchez in for Bill Hemmer.

And here is what we know as the information continues to come in this morning on the tsunami disaster. Eighty thousand people confirmed dead. Sumatra, closest to the epicenter of Sunday's earthquake, has been widely devastated. A geologist reports that 75 percent of its coastline is broken beneath the sea. And just moments ago, one of our own correspondents says that could be 60 to 70 miles of shoreline like that, that you're looking at in that video.

The loss of infrastructure there and in other hardest-hit areas is keeping aid from reaching five million survivors in need of food and water and shelter, and in danger of death from disease.

A dozen Americans are known dead. But the State Department is overwhelmed by phone calls thus far. Three thousand Americans are still unaccounted for.

COLLINS: Five days after the tsunamis hit, uncertainty continues to haunt the countries hardest hit. Nearly all of the buildings along Sri Lanka's southern coastline have been damaged or completely swept to sea, including hundreds of thousands of homes. Countless survivors face an unknown future, many of them children.

CNN's senior medical correspondent, Dr. Sanjay Gupta, has more now from Sri Lanka.

(BEGIN VIDEOTAPE)

SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): Here are the consequences of a tsunami: A Buddhist temple suddenly turned to orphanage, and hundreds of new, nameless faces, vulnerable looks that only children can give.

(on camera): We're obviously surrounded by a lot of children here.

UNIDENTIFIED MALE: Yes.

GUPTA: All displaced by the tsunami?

UNIDENTIFIED MALE: Yes, after the past three days, they have been here.

GUPTA (voice over): Hard to believe they can smile. Some are still painfully shy, and most, for the time being anyway, oblivious to just how much their future has changed.

(on camera): How many displaced have there been as a result of the tsunami?

DR. THUSHARA RAMASINGHE, VOLUNTEER, SARVODAYA RELIEF: We don't have the correct figures yet, but should be children and the women.

GUPTA (voice-over): More than a million, at least, and many of these families from some of the most deprived areas of the country, now more deprived than ever.

(on camera): What do you do for them here?

RAMASINGHE: Actually, now, what happens is here, we supply the food and the medicine and whatever the basic facilities they need at the moment.

GUPTA (voice-over): At a time when care and relief arrive in cargo planes, no amount of aid can ever give them back their parents.

But still, here's where the story gets a little hopeful.

RAMASINGHE: (UNINTELLIGIBLE) any children under 10 years who are without their parents, just let us know, and we are willing to take care of them, but for -- and we will plan their future.

GUPTA (on camera): You can really tell how bad something is in the country by how the kids are doing, can't you?

RAMASINGHE: These are the vulnerable groups, and these are the future of the country, right?

GUPTA: Right.

(voice-over): And so, by that measure, Sri Lanka is doing better than you might expect.

Dr. Sanjay Gupta, CNN, Sri Lanka.

(END VIDEOTAPE)

COLLINS: Those little faces. Sri Lanka has reported more than 1.5 million people have been forced to leave their homes as the result of the tsunamis.

SANCHEZ: Those who survived the devastation in Southeast Asia now relate stories, both tragic and, in some cases, inspiring as well. One family had prepared for the very worst, but now they're telling of relief they felt on hearing a loved one is among the survivors. CNN talked with Pat and Bert van Strander (ph), whose son, Nick, was able to make it out alive. Well, we are having a problem bringing that report to you. A little bit of an audio problem. I'm sure you were able to tell. We'll see if we can bring it back for you later. Again, Nick van Strander (ph) also managed to escape the World Trade Center. That's what may be most interesting about this story. He was also involved in the story back on the World Trade Center on 9/11 -- Heidi.

COLLINS: And we're going to continue to bring you stories of survival. Real important right now, I think.

But in the meantime, we're going to get another check of the headlines. Carol Costello is here next to us now.

Good morning.

CAROL COSTELLO, CNN ANCHOR: Good morning to you. And good morning to all of you.

"Now in the News."

The woman accused of strangling a pregnant woman and snatching her baby is back in a Missouri courtroom today. Lisa Montgomery is scheduled for a detention hearing before a federal judge in just a few hours. Federal prosecutors have charged the 36-year-old Montgomery with kidnapping resulting in death.

In Saudi Arabia, police are looking for suspects after two explosions ripped through the capital city of Riyadh. Yesterday's blasts killed at least two militants and wounded several people. There is word of a third explosion in the area more than an hour later, but a Saudi official denies that report.

Back here in the States, a "CNN Security Watch." Officials are looking into mysterious laser beams directed at commercial jetliners. An official says six airliners in the past four days have had their cockpits illuminated by lasers. The incidents apparently happened as the planes approached landing. No one was hurt as a result, but just last month federal officials expressed concerns that terrorists may try to use lasers to bring down flights.

And a high alert out in New York City ahead of this weekend's big ball drop. The NYPD is beefing up security in Times Square and the surrounding area for the New Year's Eve festivities. Event organizers anticipate more than 750,000 people to attend, among them Secretary of State Colin Powell.

(WEATHER REPORT)

COLLINS: One of the airlines walloped over the holiday weekend by glitches will try to make it up to its passengers this weekend. Andy is going to tell us what they're doing.

SANCHEZ: Also ahead, a "CNN Security Watch," chilling new details on what terrorists may be planning for a possible attack on the United States. We're going to talk to a former top official in the Homeland Security Department about this new manual found, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: And welcome you back.

The FBI and Homeland Security have sent out a new intelligence bulletin to the nation's police agencies all over the country. It describes in detail al Qaeda's surveillance activities inside the United States that were find in a manual. In this morning's "CNN Security Watch," a look at what these new directives could possibly mean.

And joining us to help better understand this bulletin is Richard Falkenroth. He's the former deputy adviser to the president of the United States, and he's good enough to join us now.

Mr. Falkenroth, thanks for being with us.

RICHARD FALKENROTH, FMR. DEPUTY ADVISOR TO PRESIDENT: Good morning.

SANCHEZ: Listen, before we start on that, I have to ask you this, because we've been running these reports. In fact, our viewers may have seen them for the last couple of weeks now about these lasers and reports that lasers are being used, perhaps, to try and divert or affect pilots when they're bringing planes in. What do you make of this? And how serious should the American people be taking this?

FALKENROTH: Well, these are mysterious. The reports go back quite a ways. I remember hearing about them in intelligence briefings at least a year ago, if not before. And we really don't know what they are. They're the subject of a continuing investigation. There is always the possibility that it is part of some sort of terrorist plot. It would be a pretty sophisticated terrorist plot if so. More likely, it's probably kids or criminality or I'm not sure.

SANCHEZ: I was just going to ask you, because, you know, it seems like every man in America has gotten one of these new lasers that they use to hang pictures to make sure that they're straight. And could something like that or as simple as that be used for something like this, as you said, children or people just playing with them?

FALKENROTH: I'm not sure.

SANCHEZ: Yes.

FALKENROTH: I mean, it would have to be a pretty powerful laser to get up through the atmosphere into the cockpit of an airplane.

SANCHEZ: All right, let's move on then to this manual. Who are the targets in this manual? Do we have any definitive sense of what they're going after that we need to know now that maybe we didn't know before?

FALKENROTH: Well, the manual was seized in the summer in Pakistan, and it was basically a training text for al Qaeda terrorists and other operatives. And it was used for al Qaeda to help get its people ready to carry out attacks against the United States. And it provides quite detailed information about how to carry out surveillance of a building in the United States, or anywhere for that matter.

SANCHEZ: In fact, they have very specific information. They talk about the security guards, when the security guards go to lunch, what color the security guards' uniforms are. I mean, that sounds like they've got somebody on the ground looking at this stuff.

FALKENROTH: Well, we know they had people on the ground prior to 9/11, looking at our security systems for the airports, for example, and that they have cased our buildings in some of the major financial sectors. So, yes, they have had people and they may have people still today in America doing these activities.

SANCHEZ: Well, should we be somewhat alarmed by that? I mean, if they have here counting the lunch schedule of a security guard, doesn't that mean they could use those same people to try and hit us again?

FALKENROTH: Possibly. Two points. First, we don't know that they have anyone here today doing this. If we did, the FBI would identify them and arrest them. And there was nothing in the bulletin released by the government last night suggesting that there was information that people were carrying out these activities right now.

But secondly, often the people who would carry out the surveillance in an operation like this are not the ones who would actually carry out the attack. And they use different sets of people for the two different functions.

So, we shouldn't assume that a person carrying out surveillance would be the same one used in an attack.

SANCHEZ: What do you do about something like this? You have this information in your position. Can you go out and try and find some of the people that they may have been using to conduct the surveillance, for example?

FALKENROTH: Oh, absolutely. That was the first priority when the information was seized in July. When you seize a document like this manual or any of the CD-ROMs or anything else that they seize, the first priority is to go through it very quickly to see if there's any information that can be used for subsequent investigations or information relating to impending attacks. That was done in the summer.

Then the agencies have more time. They go through the material very methodically, and they put together these reports of what they've found that are sort of background information. And that's really what I think this advisory is from the FBI and DHS. This is a research paper on how al Qaeda operates for America's police agencies.

SANCHEZ: We're out of time. But just to be clear. Are you saying that the people who were being used have already been arrested, there have been arrests here in the United States as a result of this manual from Pakistan?

FALKENROTH: No, no, not to my knowledge. There have been no arrests in the United States as a result of this manual. The arrests occurred in Pakistan in the summer.

SANCHEZ: OK. All right, I misunderstood you then. Richard Falkenroth, Homeland Security Department, we thank you, sir, for taking time to talk to us.

FALKENROTH: Thank you.

SANCHEZ: Heidi.

COLLINS: Got caught up in all of those airline delays this weekend? Well, employees at one of the carriers affected are making a big sacrifice now to make sure it doesn't happen again. We'll tell you about it coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: We welcome you back.

It's time to get a preview of the markets. And also will workers at US Air step up to the plate and try and help their struggling airline? They're being asked to do a lot. Andy Serwer is joining us now "Minding Your Business."

ANDY SERWER, "FORTUNE" MAGAZINE: Indeed, Rick, stepping up is the theme of the day, it seems.

Let's talk about the markets. Yesterday a bit of a downer, especially for the Dow, which was down 25 points in yesterday's session as we wind up trading for the year. In fact, the Nikkei is done for the year. That's the Japanese index. Because of the way the calendar works. The market is up 7.6 percent for the year.

The Dow was down yesterday in particular because of Boeing, which had some problems trying to figure out whether Japan -- China, excuse me, is going to be ordering more planes from them. Also the violence in Saudi Arabia is weighing on the markets as well. The futures are flat this morning.

As far as US Air goes, Rick, yesterday we reported that it was asking its employees to volunteer to work, to work without pay, for this upcoming New Year's weekend to make sure -- this will be in Philadelphia, in its troubled Philadelphia hub -- to ensure that it wouldn't have a re-run of the problems it had over Christmas weekend, where they had to cancel 400 flights and they lost 10,000 pieces of luggage.

Now, US Air is saying this morning that hundreds of employees have answered the call. And I guess really, you know, if you've worked for the company for a while, Rick...

SANCHEZ: Yes.

SERWER: ... as you pointed out before we came on air, you know, this might be something you want to do. It's either, you know, help out or the company goes down, right?

(CROSSTALK)

SANCHEZ: It depends how they ask, too, doesn't it?

SERWER: No. The company is bankrupt. The company is in bankruptcy. It's not employee-owned. But these are people who just feel the obligation. It's sort of like one of those mini-camps for a pro football team, you know, voluntary, but you've got to really show up.

SANCHEZ: Yes.

SERWER: You know? It kind of reminds me of that.

SANCHEZ: But doesn't it depend in a large part on how they ask?

COLLINS: I don't know. It depends on if it's a holiday weekend, I think.

SERWER: It depends on what your plans are.

COLLINS: Yes, right.

SANCHEZ: Thanks, Andy.

SERWER: You're welcome.

COLLINS: We're going to check in with Toure now and the "Question of the Day," talking about a New Year's resolution.

TOURE, CNN POP CULTURE CORRESPONDENT: Yes, yes. New Year's resolutions for all of us. As the year draws to a close, there's an apocalyptic feel in the air, because there are so many serious problems in the world. Iraq remains chaotic and moving unsteadily toward elections, shepherded by soldiers without sufficient armor. Worldwide terrorism remains a constant fear. Bin Laden continues to taunt us through the media. Homeland security remains porous.

Our question: What should America's New Year's resolution be for 2005? Some interesting answers.

Marty from -- it doesn't say where, echoing a lot of sentiment we got yesterday: "Take care of Americans first. Take care of the hungry, the jobless and those without adequate health care." Interesting.

James from Palestine, Texas: "I believe Americans need to get on their knees and seek God's guidance while there is still time. Why can't our children read the Bible in school, but they can in prison?"

He sounds like he thinks the apocalypse is coming! And Johnny from New Orleans: "There's nothing more dignified than humbly looking back at your mistakes. America should acknowledge to the world community its mistakes in Iraq and diligently try to mend the foreign policy wounds this administration has created."

Interesting. Interesting. See, our viewers are smart.

SANCHEZ: Yes. They certainly have opinions.

TOURE: That's what I love.

SERWER: It was a mixed bag, though. I mean, some just turn to prayer.

TOURE: Yes.

SERWER: Some world aid, right?

SANCHEZ: Some were doing it all right and some were doing it all wrong.

SERWER: Yes.

TOURE: Yes.

COLLINS: All right, Toure, thanks so much for that.

TOURE: Thank you.

COLLINS: Meanwhile, our tsunami coverage continues. One California couple's harrowing tale of survival at sea. They saw the whole tsunami disaster happen while they were underwater. You'll meet them ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: And welcome back to AMERICAN MORNING. I'm Rick Sanchez.

If you happen to be counting down in the Eastern United States, there's just a bit more than 40 hours remaining in 2004. Time for day four of our series, "The Last Word."

Today, we take a look back at some of the year's most shocking moments, from the tragic to the outrageous to the just plain dumb.

(BEGIN VIDEOTAPE)

JOE KLEIN, "TIME" MAGAZINE COLUMNIST: This year from beginning to end, there was a shocking series of images from Janet Jackson's breast at the Super Bowl, to the contractors, the American contractors who were burnt to a cinder and beaten in Falluja, to men kissing men on the steps of San Francisco City Hall, to Abu Ghraib, to any given car or truck bomb in Iraq, to the "Monday Night Football" incident with Nicolette Sheridan. TOURE: You want a shocking moment? I remember watching the Super Bowl. I ended up being alone that day. And when Janet's breast popped out, I was, like, 'What? Wait! What just happened right there?' And I'm thinking, 'Surely they had to know because it was all, like, on cue, on time, and the camera pulled out just right.' And it was like 'What?" And it was just like national befuddlement for, like, an hour. Like, wait, did that really happen?

ANDREA PEYSER, "N.Y. POST" COLUMNIST: People were literally outraged by that. They just felt, like, how dare you bring this into my home without my permission? And, you know, she had to eat humble pie, the network did. You know, her career took a bit of a slap for it.

CARLOS WATSON, CNN POLITICAL ANALYST: Howard Dean started off the year having raised more money than any other Democrat to that point. And traditionally, the person who by January 1 had raised the most money usually went on to win the nomination. And that obviously didn't happen. And he went down in a scream.

PEYSER: And people were saying, well, I don't care. He can scream all he wants. But nobody wanted to vote for him after that (UNINTELLIGIBLE).

JIM MCGREEVEY, FMR. NEW JERSEY GOVERNOR: Let me be clear, I accept total and full responsibility for my actions.

PEYSER: I mean, people in the know might have suspected, but I didn't have any idea. The next thing we know the governor of New Jersey, Jim McGreevey, is standing at a press conference next to his wife and his parents and saying very proudly, I'm a gay American.

MCGREEVEY: And so my truth is that I am a gay American.

PEYSER: His wife, I swear, she looked like she was going to die on the spot. And I can't blame her.

BETTY CORTIMA, "LATINA" MAGAZINE: One of the big shockers of the year was when Fidel Castro fell flat on his face at a rally in Cuba, which prompted everybody here, especially in the Cuban community in Miami, to wonder did he fall? Did he break his leg? Did he have a heart attack? Is he about to die? I mean, Fidel sneezes and everybody in Miami, you know, sniffles.

KLEIN: The most important thing that happened this year in Iraq was the Abu Ghraib scandal, the torture of scandal. That will have an impact on America's image in the world for 10 maybe 20 years. It may have been a defining moment. It was a disaster. And to this day, no high-ranking individual in the Bush administration has paid a price for it.

DEROY MURDOCK, SCRIPPS-HOWARD COLUMNIST: This is a war. This is the war on terror. This is not the luncheon on terror or the seminar on terror or the cocktail party on terror. These people are not just trying, these people have killed about 1,200 of our boys and girls in Iraq. And we need to lean on these people, get the information out of them so that they and their colleagues do not kill more American civilians.

JOSH ELLIOTT, "SPORTS ILLUSTRATED" What we'll take away from this is the general course in society has seeped into sports. You're talking about something that's being viewed by kids especially, impressionable kids, kids that might want to grow up to be an NBA player. And what they may take away from this is I can do whatever I want because I am a pampered millionaire athlete. And we've held fast this idea that our sports would merely entertain them. And I think with the brawl in Detroit we've seen that that is no longer the case.

BILL MURRAY, ACTOR, "THE LIFE AQUATIC": This fellow in the Ukraine being poisoned, I think that's just an amazing thing. I mean, the idea that a political opponent, I mean, it slurs, you know, mistruths. But poisoning, that's a level I've never gotten to. And it's the most amazing mind-bending kind of thing that's happened that I've witnessed this year.

(END VIDEOTAPE)

SANCHEZ: And we're going to bring you these. Tomorrow, for example, in our closing segment, we go from the last word in 2004 to the next word in 2005. What's left over from the old year that we'll be dealing with in the new, the carry-overs? And we'll have some New Year's predictions for you as well.

Heidi -- back to you.

COLLINS: More on the tsunami coverage straight ahead. Just how bad is the devastation? How entire towns and villages vaporized by the waves? Some stunning pictures ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

RICK SANCHEZ, CNN ANCHOR: Utter devastation. Ahead, the first look at the hardest-hit areas shows that the tsunami almost left nothing behind. The coastline itself washed away.

Bogged down. The money and trained relief workers are available ahead. The U.N. point man on what's holding them up.

And trapped beneath the tsunami. Ahead, a tale of divers pulled deeper and deeper into the water, now safe and back home on this 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 30, 2004 - 07:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Welcome back to AMERICAN MORNING, everybody. It's just about half past the hour now. I'm Heidi Collins in for Soledad O'Brien.
RICK SANCHEZ, CNN ANCHOR: And I'm Rick Sanchez in for Bill Hemmer.

And here is what we know as the information continues to come in this morning on the tsunami disaster. Eighty thousand people confirmed dead. Sumatra, closest to the epicenter of Sunday's earthquake, has been widely devastated. A geologist reports that 75 percent of its coastline is broken beneath the sea. And just moments ago, one of our own correspondents says that could be 60 to 70 miles of shoreline like that, that you're looking at in that video.

The loss of infrastructure there and in other hardest-hit areas is keeping aid from reaching five million survivors in need of food and water and shelter, and in danger of death from disease.

A dozen Americans are known dead. But the State Department is overwhelmed by phone calls thus far. Three thousand Americans are still unaccounted for.

COLLINS: Five days after the tsunamis hit, uncertainty continues to haunt the countries hardest hit. Nearly all of the buildings along Sri Lanka's southern coastline have been damaged or completely swept to sea, including hundreds of thousands of homes. Countless survivors face an unknown future, many of them children.

CNN's senior medical correspondent, Dr. Sanjay Gupta, has more now from Sri Lanka.

(BEGIN VIDEOTAPE)

SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT (voice-over): Here are the consequences of a tsunami: A Buddhist temple suddenly turned to orphanage, and hundreds of new, nameless faces, vulnerable looks that only children can give.

(on camera): We're obviously surrounded by a lot of children here.

UNIDENTIFIED MALE: Yes.

GUPTA: All displaced by the tsunami?

UNIDENTIFIED MALE: Yes, after the past three days, they have been here.

GUPTA (voice over): Hard to believe they can smile. Some are still painfully shy, and most, for the time being anyway, oblivious to just how much their future has changed.

(on camera): How many displaced have there been as a result of the tsunami?

DR. THUSHARA RAMASINGHE, VOLUNTEER, SARVODAYA RELIEF: We don't have the correct figures yet, but should be children and the women.

GUPTA (voice-over): More than a million, at least, and many of these families from some of the most deprived areas of the country, now more deprived than ever.

(on camera): What do you do for them here?

RAMASINGHE: Actually, now, what happens is here, we supply the food and the medicine and whatever the basic facilities they need at the moment.

GUPTA (voice-over): At a time when care and relief arrive in cargo planes, no amount of aid can ever give them back their parents.

But still, here's where the story gets a little hopeful.

RAMASINGHE: (UNINTELLIGIBLE) any children under 10 years who are without their parents, just let us know, and we are willing to take care of them, but for -- and we will plan their future.

GUPTA (on camera): You can really tell how bad something is in the country by how the kids are doing, can't you?

RAMASINGHE: These are the vulnerable groups, and these are the future of the country, right?

GUPTA: Right.

(voice-over): And so, by that measure, Sri Lanka is doing better than you might expect.

Dr. Sanjay Gupta, CNN, Sri Lanka.

(END VIDEOTAPE)

COLLINS: Those little faces. Sri Lanka has reported more than 1.5 million people have been forced to leave their homes as the result of the tsunamis.

SANCHEZ: Those who survived the devastation in Southeast Asia now relate stories, both tragic and, in some cases, inspiring as well. One family had prepared for the very worst, but now they're telling of relief they felt on hearing a loved one is among the survivors. CNN talked with Pat and Bert van Strander (ph), whose son, Nick, was able to make it out alive. Well, we are having a problem bringing that report to you. A little bit of an audio problem. I'm sure you were able to tell. We'll see if we can bring it back for you later. Again, Nick van Strander (ph) also managed to escape the World Trade Center. That's what may be most interesting about this story. He was also involved in the story back on the World Trade Center on 9/11 -- Heidi.

COLLINS: And we're going to continue to bring you stories of survival. Real important right now, I think.

But in the meantime, we're going to get another check of the headlines. Carol Costello is here next to us now.

Good morning.

CAROL COSTELLO, CNN ANCHOR: Good morning to you. And good morning to all of you.

"Now in the News."

The woman accused of strangling a pregnant woman and snatching her baby is back in a Missouri courtroom today. Lisa Montgomery is scheduled for a detention hearing before a federal judge in just a few hours. Federal prosecutors have charged the 36-year-old Montgomery with kidnapping resulting in death.

In Saudi Arabia, police are looking for suspects after two explosions ripped through the capital city of Riyadh. Yesterday's blasts killed at least two militants and wounded several people. There is word of a third explosion in the area more than an hour later, but a Saudi official denies that report.

Back here in the States, a "CNN Security Watch." Officials are looking into mysterious laser beams directed at commercial jetliners. An official says six airliners in the past four days have had their cockpits illuminated by lasers. The incidents apparently happened as the planes approached landing. No one was hurt as a result, but just last month federal officials expressed concerns that terrorists may try to use lasers to bring down flights.

And a high alert out in New York City ahead of this weekend's big ball drop. The NYPD is beefing up security in Times Square and the surrounding area for the New Year's Eve festivities. Event organizers anticipate more than 750,000 people to attend, among them Secretary of State Colin Powell.

(WEATHER REPORT)

COLLINS: One of the airlines walloped over the holiday weekend by glitches will try to make it up to its passengers this weekend. Andy is going to tell us what they're doing.

SANCHEZ: Also ahead, a "CNN Security Watch," chilling new details on what terrorists may be planning for a possible attack on the United States. We're going to talk to a former top official in the Homeland Security Department about this new manual found, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: And welcome you back.

The FBI and Homeland Security have sent out a new intelligence bulletin to the nation's police agencies all over the country. It describes in detail al Qaeda's surveillance activities inside the United States that were find in a manual. In this morning's "CNN Security Watch," a look at what these new directives could possibly mean.

And joining us to help better understand this bulletin is Richard Falkenroth. He's the former deputy adviser to the president of the United States, and he's good enough to join us now.

Mr. Falkenroth, thanks for being with us.

RICHARD FALKENROTH, FMR. DEPUTY ADVISOR TO PRESIDENT: Good morning.

SANCHEZ: Listen, before we start on that, I have to ask you this, because we've been running these reports. In fact, our viewers may have seen them for the last couple of weeks now about these lasers and reports that lasers are being used, perhaps, to try and divert or affect pilots when they're bringing planes in. What do you make of this? And how serious should the American people be taking this?

FALKENROTH: Well, these are mysterious. The reports go back quite a ways. I remember hearing about them in intelligence briefings at least a year ago, if not before. And we really don't know what they are. They're the subject of a continuing investigation. There is always the possibility that it is part of some sort of terrorist plot. It would be a pretty sophisticated terrorist plot if so. More likely, it's probably kids or criminality or I'm not sure.

SANCHEZ: I was just going to ask you, because, you know, it seems like every man in America has gotten one of these new lasers that they use to hang pictures to make sure that they're straight. And could something like that or as simple as that be used for something like this, as you said, children or people just playing with them?

FALKENROTH: I'm not sure.

SANCHEZ: Yes.

FALKENROTH: I mean, it would have to be a pretty powerful laser to get up through the atmosphere into the cockpit of an airplane.

SANCHEZ: All right, let's move on then to this manual. Who are the targets in this manual? Do we have any definitive sense of what they're going after that we need to know now that maybe we didn't know before?

FALKENROTH: Well, the manual was seized in the summer in Pakistan, and it was basically a training text for al Qaeda terrorists and other operatives. And it was used for al Qaeda to help get its people ready to carry out attacks against the United States. And it provides quite detailed information about how to carry out surveillance of a building in the United States, or anywhere for that matter.

SANCHEZ: In fact, they have very specific information. They talk about the security guards, when the security guards go to lunch, what color the security guards' uniforms are. I mean, that sounds like they've got somebody on the ground looking at this stuff.

FALKENROTH: Well, we know they had people on the ground prior to 9/11, looking at our security systems for the airports, for example, and that they have cased our buildings in some of the major financial sectors. So, yes, they have had people and they may have people still today in America doing these activities.

SANCHEZ: Well, should we be somewhat alarmed by that? I mean, if they have here counting the lunch schedule of a security guard, doesn't that mean they could use those same people to try and hit us again?

FALKENROTH: Possibly. Two points. First, we don't know that they have anyone here today doing this. If we did, the FBI would identify them and arrest them. And there was nothing in the bulletin released by the government last night suggesting that there was information that people were carrying out these activities right now.

But secondly, often the people who would carry out the surveillance in an operation like this are not the ones who would actually carry out the attack. And they use different sets of people for the two different functions.

So, we shouldn't assume that a person carrying out surveillance would be the same one used in an attack.

SANCHEZ: What do you do about something like this? You have this information in your position. Can you go out and try and find some of the people that they may have been using to conduct the surveillance, for example?

FALKENROTH: Oh, absolutely. That was the first priority when the information was seized in July. When you seize a document like this manual or any of the CD-ROMs or anything else that they seize, the first priority is to go through it very quickly to see if there's any information that can be used for subsequent investigations or information relating to impending attacks. That was done in the summer.

Then the agencies have more time. They go through the material very methodically, and they put together these reports of what they've found that are sort of background information. And that's really what I think this advisory is from the FBI and DHS. This is a research paper on how al Qaeda operates for America's police agencies.

SANCHEZ: We're out of time. But just to be clear. Are you saying that the people who were being used have already been arrested, there have been arrests here in the United States as a result of this manual from Pakistan?

FALKENROTH: No, no, not to my knowledge. There have been no arrests in the United States as a result of this manual. The arrests occurred in Pakistan in the summer.

SANCHEZ: OK. All right, I misunderstood you then. Richard Falkenroth, Homeland Security Department, we thank you, sir, for taking time to talk to us.

FALKENROTH: Thank you.

SANCHEZ: Heidi.

COLLINS: Got caught up in all of those airline delays this weekend? Well, employees at one of the carriers affected are making a big sacrifice now to make sure it doesn't happen again. We'll tell you about it coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: We welcome you back.

It's time to get a preview of the markets. And also will workers at US Air step up to the plate and try and help their struggling airline? They're being asked to do a lot. Andy Serwer is joining us now "Minding Your Business."

ANDY SERWER, "FORTUNE" MAGAZINE: Indeed, Rick, stepping up is the theme of the day, it seems.

Let's talk about the markets. Yesterday a bit of a downer, especially for the Dow, which was down 25 points in yesterday's session as we wind up trading for the year. In fact, the Nikkei is done for the year. That's the Japanese index. Because of the way the calendar works. The market is up 7.6 percent for the year.

The Dow was down yesterday in particular because of Boeing, which had some problems trying to figure out whether Japan -- China, excuse me, is going to be ordering more planes from them. Also the violence in Saudi Arabia is weighing on the markets as well. The futures are flat this morning.

As far as US Air goes, Rick, yesterday we reported that it was asking its employees to volunteer to work, to work without pay, for this upcoming New Year's weekend to make sure -- this will be in Philadelphia, in its troubled Philadelphia hub -- to ensure that it wouldn't have a re-run of the problems it had over Christmas weekend, where they had to cancel 400 flights and they lost 10,000 pieces of luggage.

Now, US Air is saying this morning that hundreds of employees have answered the call. And I guess really, you know, if you've worked for the company for a while, Rick...

SANCHEZ: Yes.

SERWER: ... as you pointed out before we came on air, you know, this might be something you want to do. It's either, you know, help out or the company goes down, right?

(CROSSTALK)

SANCHEZ: It depends how they ask, too, doesn't it?

SERWER: No. The company is bankrupt. The company is in bankruptcy. It's not employee-owned. But these are people who just feel the obligation. It's sort of like one of those mini-camps for a pro football team, you know, voluntary, but you've got to really show up.

SANCHEZ: Yes.

SERWER: You know? It kind of reminds me of that.

SANCHEZ: But doesn't it depend in a large part on how they ask?

COLLINS: I don't know. It depends on if it's a holiday weekend, I think.

SERWER: It depends on what your plans are.

COLLINS: Yes, right.

SANCHEZ: Thanks, Andy.

SERWER: You're welcome.

COLLINS: We're going to check in with Toure now and the "Question of the Day," talking about a New Year's resolution.

TOURE, CNN POP CULTURE CORRESPONDENT: Yes, yes. New Year's resolutions for all of us. As the year draws to a close, there's an apocalyptic feel in the air, because there are so many serious problems in the world. Iraq remains chaotic and moving unsteadily toward elections, shepherded by soldiers without sufficient armor. Worldwide terrorism remains a constant fear. Bin Laden continues to taunt us through the media. Homeland security remains porous.

Our question: What should America's New Year's resolution be for 2005? Some interesting answers.

Marty from -- it doesn't say where, echoing a lot of sentiment we got yesterday: "Take care of Americans first. Take care of the hungry, the jobless and those without adequate health care." Interesting.

James from Palestine, Texas: "I believe Americans need to get on their knees and seek God's guidance while there is still time. Why can't our children read the Bible in school, but they can in prison?"

He sounds like he thinks the apocalypse is coming! And Johnny from New Orleans: "There's nothing more dignified than humbly looking back at your mistakes. America should acknowledge to the world community its mistakes in Iraq and diligently try to mend the foreign policy wounds this administration has created."

Interesting. Interesting. See, our viewers are smart.

SANCHEZ: Yes. They certainly have opinions.

TOURE: That's what I love.

SERWER: It was a mixed bag, though. I mean, some just turn to prayer.

TOURE: Yes.

SERWER: Some world aid, right?

SANCHEZ: Some were doing it all right and some were doing it all wrong.

SERWER: Yes.

TOURE: Yes.

COLLINS: All right, Toure, thanks so much for that.

TOURE: Thank you.

COLLINS: Meanwhile, our tsunami coverage continues. One California couple's harrowing tale of survival at sea. They saw the whole tsunami disaster happen while they were underwater. You'll meet them ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

SANCHEZ: And welcome back to AMERICAN MORNING. I'm Rick Sanchez.

If you happen to be counting down in the Eastern United States, there's just a bit more than 40 hours remaining in 2004. Time for day four of our series, "The Last Word."

Today, we take a look back at some of the year's most shocking moments, from the tragic to the outrageous to the just plain dumb.

(BEGIN VIDEOTAPE)

JOE KLEIN, "TIME" MAGAZINE COLUMNIST: This year from beginning to end, there was a shocking series of images from Janet Jackson's breast at the Super Bowl, to the contractors, the American contractors who were burnt to a cinder and beaten in Falluja, to men kissing men on the steps of San Francisco City Hall, to Abu Ghraib, to any given car or truck bomb in Iraq, to the "Monday Night Football" incident with Nicolette Sheridan. TOURE: You want a shocking moment? I remember watching the Super Bowl. I ended up being alone that day. And when Janet's breast popped out, I was, like, 'What? Wait! What just happened right there?' And I'm thinking, 'Surely they had to know because it was all, like, on cue, on time, and the camera pulled out just right.' And it was like 'What?" And it was just like national befuddlement for, like, an hour. Like, wait, did that really happen?

ANDREA PEYSER, "N.Y. POST" COLUMNIST: People were literally outraged by that. They just felt, like, how dare you bring this into my home without my permission? And, you know, she had to eat humble pie, the network did. You know, her career took a bit of a slap for it.

CARLOS WATSON, CNN POLITICAL ANALYST: Howard Dean started off the year having raised more money than any other Democrat to that point. And traditionally, the person who by January 1 had raised the most money usually went on to win the nomination. And that obviously didn't happen. And he went down in a scream.

PEYSER: And people were saying, well, I don't care. He can scream all he wants. But nobody wanted to vote for him after that (UNINTELLIGIBLE).

JIM MCGREEVEY, FMR. NEW JERSEY GOVERNOR: Let me be clear, I accept total and full responsibility for my actions.

PEYSER: I mean, people in the know might have suspected, but I didn't have any idea. The next thing we know the governor of New Jersey, Jim McGreevey, is standing at a press conference next to his wife and his parents and saying very proudly, I'm a gay American.

MCGREEVEY: And so my truth is that I am a gay American.

PEYSER: His wife, I swear, she looked like she was going to die on the spot. And I can't blame her.

BETTY CORTIMA, "LATINA" MAGAZINE: One of the big shockers of the year was when Fidel Castro fell flat on his face at a rally in Cuba, which prompted everybody here, especially in the Cuban community in Miami, to wonder did he fall? Did he break his leg? Did he have a heart attack? Is he about to die? I mean, Fidel sneezes and everybody in Miami, you know, sniffles.

KLEIN: The most important thing that happened this year in Iraq was the Abu Ghraib scandal, the torture of scandal. That will have an impact on America's image in the world for 10 maybe 20 years. It may have been a defining moment. It was a disaster. And to this day, no high-ranking individual in the Bush administration has paid a price for it.

DEROY MURDOCK, SCRIPPS-HOWARD COLUMNIST: This is a war. This is the war on terror. This is not the luncheon on terror or the seminar on terror or the cocktail party on terror. These people are not just trying, these people have killed about 1,200 of our boys and girls in Iraq. And we need to lean on these people, get the information out of them so that they and their colleagues do not kill more American civilians.

JOSH ELLIOTT, "SPORTS ILLUSTRATED" What we'll take away from this is the general course in society has seeped into sports. You're talking about something that's being viewed by kids especially, impressionable kids, kids that might want to grow up to be an NBA player. And what they may take away from this is I can do whatever I want because I am a pampered millionaire athlete. And we've held fast this idea that our sports would merely entertain them. And I think with the brawl in Detroit we've seen that that is no longer the case.

BILL MURRAY, ACTOR, "THE LIFE AQUATIC": This fellow in the Ukraine being poisoned, I think that's just an amazing thing. I mean, the idea that a political opponent, I mean, it slurs, you know, mistruths. But poisoning, that's a level I've never gotten to. And it's the most amazing mind-bending kind of thing that's happened that I've witnessed this year.

(END VIDEOTAPE)

SANCHEZ: And we're going to bring you these. Tomorrow, for example, in our closing segment, we go from the last word in 2004 to the next word in 2005. What's left over from the old year that we'll be dealing with in the new, the carry-overs? And we'll have some New Year's predictions for you as well.

Heidi -- back to you.

COLLINS: More on the tsunami coverage straight ahead. Just how bad is the devastation? How entire towns and villages vaporized by the waves? Some stunning pictures ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

RICK SANCHEZ, CNN ANCHOR: Utter devastation. Ahead, the first look at the hardest-hit areas shows that the tsunami almost left nothing behind. The coastline itself washed away.

Bogged down. The money and trained relief workers are available ahead. The U.N. point man on what's holding them up.

And trapped beneath the tsunami. Ahead, a tale of divers pulled deeper and deeper into the water, now safe and back home on this AMERICAN MORNING.

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