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CNN Live Today

National Guardsmen Accused of Drug Trafficking; Oil-for-Food Indictiment; American Held Hostage in Iraq

Aired April 14, 2005 - 10:00   ET

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

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


DARYN KAGAN, CNN CO-ANCHOR: We'll get started. We have a lot happening right now in the news.
We start with some breaks news that we're following from Southern California. This is from Glendale, California. These live pictures coming to us from KTLA. Apparently sources telling us a metal object flew into a Pontiac mini van that was driving on I-5 in Glendale this morning. Two people inside that vehicle, we understand, were killed.

Police are on the scene. They're investigating and they've shut down a busy part of the freeway this morning. It's causing southbound traffic to back up for miles. The van is parked by the freeway median, as you can see. If you get a better look -- well, now it's covered up in the van. There was a large hole evident in the windshield.

What is unclear at this time is what caused that metal object to be loose and flying, and crash into the wind windshield of that mini van. Much more ahead from Southern California.

Right now, let's take a look at what else is happening now in the news.

This hour in New York, prosecutors and FBI officials will announce an indictment stemming from the United Nations' Oil-for-Food program. A Texas businessman is one of three people accused of funneling millions of dollars into the Saddam Hussein regime in exchange for selling Iraqi oil. The U.N. program was designed to fund humanitarian relief in that country.

The family of 13-year-old Sarah Michelle Lunde has released new images this morning shortly after the search resumed for the Mississippi Florida girl. A convicted sex offender has been questioned in the case and is being held on unrelated charges.

Meanwhile, joining today's search is the father of Jessica Lunsford, another Tampa area child who disappeared. She was killed. Police say a convicted sex offender led them to her body.

This hour on Capitol Hill, the House is set to pass the largest overhaul of bankruptcy laws in at least 25 years. President Bush has vowed to sign the measure, which will prevent thousands of Americans from erasing their debts by filing for bankruptcy. Critics say it unfairly targets the poor and victims of layoffs, and costly medical problem. At the bottom of the hour on Capitol Hill, career military man faces questions about national security. General Michael Hayden is president Bush's choice to help oversee the nation's spy agencies, as deputy director of National Intelligence. The Senate Select Intelligence Committee is hosting that confirmation hearing.

I'm Daryn Kagan. Good morning.

We're going to start with the latest on an American being held hostage in Iraq. An Indiana community is praying for the safe return of one of its own. Businessman Jeffrey Ake was helping rebuild Iraq when he was kidnapped earlier this week. A videotape released yesterday showed Ake surrounded by masked men. Our Keith Oppenheim is in La Porte, Indiana with reaction to the kidnapping.

Keith, hello.

KEITH OPPENHEIM, CNN CORRESPONDENT: Good morning, Daryn. And we're standing in front of the home of Jeffrey Ake, where members of his family have been gathering. Obviously, a very tough and anxious time for this family. But this family has also been getting great support from members of the community here. People who feel that Jeffrey Ake is a good man who went to Iraq to make a difference.

(BEGIN VIDEOTAPE)

Oppenheim (voice-over): In La Porte, Indiana, if you go to the Chamber of Commerce, there are photos of Jeffrey Ake. He's the picture of a confident-looking businessman, the entrepreneur shaking hands. What a contrast to these pictures released to the al Jazeera network. The video shows a man identified as Jeffrey Ake surrounded by gunmen, holding his passport, driver's license and a family photo.

JOHN DIEDRICH, FAMILY FRIEND: These people are just totally animals. You know, they're unreasonable. Jeff has a nice wife, beautiful wife, and children.

OPPENHEIM: Jeffrey Ake's wife, Liliana and other relatives are at home here in La Porte. Outside, there is an American flag hanging around the garage, a yellow ribbon around a tree. Inside, the group of friends and family do the only thing they can, wait, appearing as shadows against the windows, avoiding any contact with the media.

UNIDENTIFIED MALE: They're following the advice of the FBI and requested that they not be contacted by the press.

OPPENHEIM: People in La Porte who know Jeffrey Ake say he is a creative entrepreneur. He's the president of a small company, Equipment Express that develops systems for packaging liquid products. Since 2003, Ake had been selling equipment to the Iraqis for making bottled water and cooking oil.

LEIGH MORRIS, MAYOR, LA PORTE, INDIANA: He has the potential to be so helpful to the Iraqi people, to make that a more positive situation. And so people who are who don't want that to happen, who wants things to continue to be bad and get worse, I presume he would be a logical target, which maybe makes it all the more tragic.

OPPENHEIM: Indeed, the possible outcome of this hostage situation is overwhelming for many in La Porte.

(on camera): The idea that he could die, is that something you just don't weigh ant to allow yourself to think about?

MICHAEL SEITZ, LA PORTE CHAMBER OF COMMERCE: Exactly. I'm not going to think anything like that. I'm going to think positive. And our community is going to think positive. And we're going to, through positive thinking, we're going to bring him back, I hope.

OPPENHEIM (voice-over): They just want him home, alive, and back with his friends and family.

MORRIS: We have hope, and we have faith. And I believe that somehow, Jeff Ake will be spared.

(END VIDEOTAPE)

OPPENHEIM: Tomorrow night in La Porte, members of the community in La Porte will be expressing their hopes for Jeffrey Ake's safe return. There will be a candlelight vigil sponsored by the Rotary Club and The Greater La Porte Chamber of Commerce. Jeffrey Ake was member of both organizations.

And Daryn, this guy was clearly very integrated into his community. And that in part explains why the response here has been so strong in terms of his capture.

Back to you.

KAGAN: Really interesting guy, an entrepreneur. We're going to have a chance to learn more about how he has been a part of that community in the next hour. Thank you for that, Keith.

Well, the U.S. government does not negotiate with terrorists. We know that. But officials say they're working hard to try to secure Jeffrey Ake's release.

For more on that and other events in Iraq, let's go to Baghdad and CNN's Aneesh Raman.

ANEESH RAMAN, CNN CORRESPONDENT: Daryn, good morning. As you say, the struggle to secure Jeffrey Ake goes on here in the capital city, days after a video was aired on al Jazeera with masked militants at his side, guns pointing at his head. American hostage Jeffrey Ake called on the U.S. government to engage in dialogue with the insurgents, also for American troops to withdraw.

Secretary of State Condoleezza Rice has said that they are working as much as they can to secure his release, dealing with Iraqi authorities. We've just spoken with the embassy here in Baghdad. They tell us, as is procedure there's a hostage working group. It's comprised of about 25 people, not all of them are permanently assigned to this unit. But at the moment there's 25 of them who are, on a daily basis, coordinating efforts both here and back to the U.S. They didn't say if any -- they said actually that no claim of responsibility has still not come. No demands have been made. No ransom has been made. So clearly, the efforts still going forward to secure the release of Mr. Ake.

Now, this comes on a day of violence, Daryn, in Baghdad. Two near simultaneous car bombs detonating this morning in south central Baghdad, the target a police convoy, an Iraqi police convoy. Some 11 Iraqis were killed, upwards of 40 of them were wounded. We're told the majority of those casualties are, in fact, civilians.

And north of the capital city in the town of Kirkuk, gunmen opened fire on the Iraqi police station. Three Iraqi police officers were killed there, four other wounded -- Daryn.

KAGAN: Another topic for you there, Aneesh. I understand you had a chance to talk with the former Prime Minister Iyad Allawi on the topic of when he thinks U.S. troops might be leaving the country.

RAMAN: We did. Interim Prime Minister Iyad Allawi has been deliberately quiet as the transitional government takes hold. He gave us an exclusive interview this morning. I asked him to respond to Jalal Talabani, the president who told Wolf Blitzer recently that in about two years American troops could be gone from Iraq. Here's what he had to say.

(BEGIN VIDEO CLIP)

IYAD ALLAWI, INTERIM PRIME MINISTER, IRAQ: I think if we expedite both the institutions, the security institutions, and if there are no disruptions now in this coming government, and if the next government will build on whatever have been achieved, maybe it will take years, three years.

(END VIDEO CLIP)

RAMAN: Now, Daryn, Allawi, the country's leading secular politician also said he can concerned that this new government could see the rise in political Islam, as he called it; not wanting to be in the cabinet of any transitional government. Instead, it seems, opting to wait and run for the top post again in 2006 under Iraq's new constitution -- Daryn.

KAGAN: Thank you very much. Aneesh Raman from Baghdad.

Well, Back here in the U.S., two National Guardsmen are accused of smuggling drugs during a mission. Prosecutors say they stashed millions of dollars worth of ecstasy on their cargo plane.

CNN's Deborah Feyerick has more from New York.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (on camera): We're talking ecstasy, 290,000 pills worth up to $11 million on the street. Authorities say this wasn't the first time either. There were at least three other runs.

Now, who are these guys? Well, you've got Captain Franklin Rodriguez and Master Sergeant John Fong, both from new York city. Both are accused of using an Air Force cargo jet to fly drugs from Germany to New York. Now, they were busted yesterday and they appeared in federal court. Authorities say the two, who are with the Air National Guard, were on an official mission. They were delivering training supplies to the Republic of Georgia.

On the way back they stopped in Germany and there they allegedly went to a hotel room, and picked up boxes and bags filled with the pills. Now, Captain Rodriguez, who is the pilot, then came back on that plane. Master sergeant, who was part of the crew, unloaded the bags and the boxes into a private car belonging to the captain.

UNIDENTIFIED MALE: They were carrying these drugs with them. They were apprehended by members of our strike force, as well as the Department of Defense.

UNIDENTIFIED MALE: The investigation is continuing. We believe that there's no other military personnel involved in this ring. The investigation is continuing in Europe and in the continental U.S. at this time.

FEYERICK: Authorities say that the master sergeant told them that he was paid at least $10,000 for each of the trips. Both men face up to 20 years in prison and a maximum $1 million fine.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

KAGAN: In other news, Eric Rudolph is speaking out about his motives for a string of bombings. Rudolph's attorneys released his 11-page statement yesterday, after Rudolph pleaded guilty in two federal courts. Rudolph says the bombings in Atlanta and Birmingham, Alabama were part of a war against abortion and the government permits that. He says, quote, "Abortion is murder. And when the regime in Washington legalized, sanctioned and legitimized this practice, they forfeited their legitimacy and moral authority to govern."

Well, Rudolph bombing victim, Emily Lyons, was in the Birmingham courtroom to hear that guilty plea. Lyons is a nurse. She was severely wounded in the attack on a women's health clinic.

(BEGIN VIDEO CLIP)

EMILY LYONS, RUDOLPH BOMBING VICTIM: The crimes warranted the worst punishment the government can give. And everybody assumes that the death sentence is the worst that is offered. Whether I was there that day or not, he would have gotten a life sentence anyway. So in essence, he got away with injuries that he caused to my body and to the others in Atlanta.

(END VIDEO CLIP) KAGAN: Eric Rudolph will serve four consecutive life terms. Prosecutors agreed to that plea deal in exchange for Rudolph disclosing where he hid more than 250 pounds of dynamite.

In Florida, another missing girl and another registered sex offender are the focus of attention. Still ahead, the latest in the search for 13-year-old Sara Lunde.

Plus, a major vote on Capitol Hill could impact your financial options if you're sinking in debt. We'll explain.

And later, they beat the Braves last night. Now it's the buzz inside the Beltway. Baseball returns to our nation's capital for the first time in 34 years. We'll preview that.

Also, guess who is throwing out tonight's first pitch?

(COMMERCIAL BREAK)

KAGAN: Shocking story out of Southern California this morning. Northeast of Los Angeles, a 13-year-old Little Leaguer is under arrest for allegedly beating a friend to death with his baseball bat. The unidentified suspect had just pitched his team's first losing game of the season, when his friend started teasing him at the ball field's concession stand. Witnesses say the boy then grabbed a bat and struck Jeremy Rourke at least three times.

To Florida now, just a two-hour drive from where the tragic Jessica Lunsford story played out, a drama with some chilling similarities are unfolding. Authorities are questioning a registered sex offender in the disappearance of a 13-year-old girl.

Our national correspondent Susan Candiotti is in Ruskin with the latest developments.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (on camera): Among the 100 or so volunteers that are helping out this day, Mark Lunsford whose daughter, Jessica, was killed allegedly by a sex offender who live practically across the street from the. This happened about a month and a half ago about 100 miles from here. Mark Lunsford saying he is here to lend support to Sarah Lunde's mother, who is desperately trying to find her daughter.

UNIDENTIFIED MALE: I spoke to Mr. Lunsford, as a matter of fact. And he said he came down here to help. He asked to be hooked up with a search team. We had done that. He also said that he would be here to speak with Kelly May, if she chose to do that. I've spoken with Kelly May and she said that she is more than thrilled that Mr. Lunsford has come down to help.

CANDIOTTI: Police say one convicted sex offender of about 24 living here in the town of Ruskin, population about 8,000, has captured their attention. His name David Onstott. He was arrested Tuesday night on unrelated charges and appeared in court this day for arraignment on a charge of failing to register at least one a year in Florida, as required by Florida law.

Now, Sarah is only 13 years old. She is said to be very active in her church. She does come from a broken home. The church provided a home video of her, shot here washing a car last December. There's also a photograph of her taken on Saturday night. She was part of a church outing and friends say she had a great time when she came home.

Now, she has run away from home before but authorities say she has always returned home. And friends say it is totally out of character for her to be away this long without phoning someone.

Susan Candiotti, CNN, Ruskin, Florida.

(END VIDEOTAPE)

KAGAN: Anyone with information on the case is asked to call the Hillsborough County Sheriff's Department. The number you see on the screen 813-247-8200.

Well, you're going to want to pack lightly. Starting Monday, there's one more thing you'll have to leave behind when you board an airplane. Details straight ahead.

(COMMERCIAL BREAK)

KAGAN: As things warm up, the home selling season is cranking up with sales in some areas already red hot. There may be some extra need for caution this year.

Here with today's "Top Five Tips, The Home Edition" is CNN's personal finance editor Gerri Willis.

Hi, Ger.

GERRI WILLIS, CNN-FN PERSONAL FINANCE EDITOR: Hey, Daryn. Good to see you. First off, understand the context. The next three months are historically the year's hottest for the housing market. Last year, more than two million of the 6.7 million homes were closed on in May, June and July. Now, while experts like the folks at the National Association of Realtors believe that the market will cool slightly later this year, they still expect a fast-paced spring.

KAGAN: So what should buyers do?

WILLIS: Well, one expert we talked to said buyers will have to work harder than ever to find their dream home.

(BEGIN VIDEO CLIP)

BRAD INMAN, FOUNDER, HOMEGAIN.COM: It's out there. So you got to find an agent or a broker that can find those listings. And those don't just mean the ones in the MLS. It means for sale by owner. Look on "Craig's List." Look on eBay. And be willing to even knock on doors of people who may not be thinking about selling. But who knows? You might get lucky. It's that kind of market. We have the tightest listing market in history. (END VIDEO CLIP)

WILLIS: In fact, Brad says it's such a crazy market that if you don't have to buy now, don't. Consider waiting until the market cools off just a little bit.

KAGAN: It sounds like it's a seller's market then.

WILLIS: Oh, you bet. Definitely a seller's market, they have control of this market.

(BEGIN VIDEO CLIP)

INMAN: EBay, buyers are looking everywhere. And you need to put your listing out there. And then the other thing, right now you're in a really -- you're in the driver's seat as a seller. So don't give up much. There's plenty of buyers out there that are qualified with low rates. So don't feel like you have to discount the price or the value.

(END VIDEO CLIP)

WILLIS: So now if you believe you have big gains out there, Daryn, it's a good time to take your money off the table.

KAGAN: But there's some people that might have bought recently and now they're getting a little worried that they bought at the top of the market. What can they do?

WILLIS: I think that's a real common phenomenon out there. Sit tight. The fact is most real estate busts are short. If you're planning on staying in your home for five years, an over hyped market probably won't be much of a problem. It's unlikely though that all markets will experience price declines. Except for the most frothy markets, the worst-case scenario is typically price stagnation. That means a flat market.

For more on this and more about the market, where it's headed, tune in at 9:30 a.m. Saturday East Coast Time for "Open House." We'll also talk about settling a dispute with the homeowner's association. Plus, we're going to show you how to spruce up your entryway.

KAGAN: Ah! All good tips. Thank you so much. Good to see you, Gerri.

WILLIS: Good to see you.

KAGAN: Well, check your luggage and your shoes before heading to the airport. Starting today, one more thing that is not allowed on commercial airlines. That story and more when CNN LIVE TODAY returns.

(COMMERCIAL BREAK)

KAGAN: We're coming up on the half hour. I'm Daryn Kagan. Let's take a look at what's happening now in the news. We're expecting a news conference shortly on the indictment of an American in the Oil-for-Food scandal. David Chalmers and his Texas based company Bayoil, they face charges. Chalmers is accused of paying illegal surcharges to the Iraqi regime of Saddam Hussein. Two of Chalmers' associates, a Bulgarian and a Briton also face charges.

At least 14 people were killed today in insurgent attacks in Iraq. Eleven people died and 37 were wounded in suicide car bombings in Baghdad. The bombings targeted an Iraqi police convoy. But most of the casualties were civilians. Three police officers were killed in Kirkuk when gunmen shot at a police station.

Leave your lighter at home. Starting today, airline passengers will no longer be able to carry lighters on board commercial airplanes. A law already on the books bans lighters in checked baggage. Matches will still be allowed in the cabin although, of course, smoking something not.

The space shuttle Discovery is taking a tanking test this morning. Discovery is being filled with a half million gallons of fuel. NASA managers want to check on upgrades ordered after the 2003 Columbia disaster. Discovery's mission to the International Space Station is scheduled about a month from now.

We're learning more this hour about a possible Texas connection to the United Nations' tainted Oil-for-Food program in Iraq. A Texas businessman is being indicted in an alleged scheme to pay Saddam Hussein millions in kickbacks to sell Iraqi oil.

Our senior U.N. correspondent Richard Roth joins me from the U.N.

Good morning, Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Good morning, Daryn. Yes, the Oil-for-Food web continues to spread. In a matter of minutes, David Kelley, the U.S. attorney for the Southern District of New York is going to unveil indictments.

What is significant? This is the first indictment against a native American, an American citizen; David Chalmers the head of Bayoil, a Texas based company. Others are also going to be indicted. Chalmers was arrested, according to sources, earlier today. And he'll face an appearance later today in a Houston court.

The indictment is going to show, according to prosecutors that Chalmers was a participant in illegal surcharges with the government of Iraq, led at the time led by Saddam Hussein. This Oil-for-Food program was set up in about 1997, involving $64 billion. Much of the humanitarian aid, Daryn, did get to the people of Iraq, but companies, businessmen, others allegedly profited through schemes, kickbacks, arranged through the Iraqi government. This would have been out of bounds from the U.N.-authorized program.

Bayoil was a participant in the deal with the United Nations in Iraq, that it was known, they were totally allowed to do that and purchase oil in exchange for humanitarian goods getting in. However, kickbacks and surcharges certainly not allowed. We've not been able to reach anyone with any comment from David Chalmers and Bayoil so far -- Daryn.

KAGAN: Richard, we'll look forward to learning more when the news conference begins.

Thank you, Richard Roth.

In today's CNN Security Watch, airport screeners have a new item to confiscate, cigarette lighters. Beginning today, you will not be allowed to carry those onto commercial flights in the U.S., either in your pocket or in your luggage.

CNN's Kareen Wynter is at Washington's Reagan International Airport with more on this.

Kareen, good morning.

KAREEN WYNTER, CNN CORRESPONDENT: Good morning to you, Daryn.

The Transportation Security Administration wanted to make sure the public wasn't caught off guard, so for the last several weeks they've been posting signs in airports across the country like this one, alerting passengers of this new change.

Now, the simple message here from the TSA is to leave the lighters at home, otherwise, you'll have to hand them over at the security checkpoint. The government says that they've been assessing recent cases involving fires in the cabins of planes and decided to take action.

(BEGIN VIDEOTAPE)

WYNTER (voice-over): It was close calls like this one that got the attention of federal authorities, the shoe bomber incident in 2001. Richard Reid, a passenger on a flight from Paris to Miami, tried to ignite explosives stuffed in his shoe. He was subsequently sentenced to life in prison.

Congress has since worked to get lighters added to the federal government's list of prohibited items.

MARK HATFIELD, TSA SPOKESMAN: That's a potential tool that a terrorist or an evil doer could use to light a fuse, to light an incendiary device, create a fire on board the aircraft. And so we're following the direction of Congress.

WYNTER: The Transportation Security Administration recently posted these signs alerting the public to the new law, which takes effect today. Lighters are allowed inside the airport, but you can't take them beyond the security checkpoint. You can, however, take up to four match books onto a plane.

Flemming Hansen thinks that's inconsistent.

FLEMMING HANSEN, OPPOSES LIGHTER BAN: It's kind of a problem. I mean, you know, you can say the same thing about a match book, you know what I mean? You can still light a match.

WYNTER: But other passengers support this added layer of security.

JACKIE OSBORN, SUPPORTS LIGHTER BAN: We have a possibility of having people in our midst that we're not aware of with certain items that can be very detrimental.

WYNTER: The TSA says it's considering banning matches, but that would be difficult to enforce since they're not easily detectable.

(END VIDEOTAPE)

WYNTER: Lighters, however, are easily detectable by X-ray machines. The new law affects not only travelers, but also businesses. Vendors located beyond the security checkpoint are also required to follow this new law, Daryn, and not sell these flammable items -- Daryn.

KAGAN: So no lighter, but you can bring matches.

WYNTER: And that's the argument right now, because you can always light a match on a plane and do the same amount of damage as a lighter would. The government's response to that is that they're assessing new ways to detect matches. They're not easily detectable, so how can you enforce something that you can't detect. It's also looking for more input from the public.

HEMMER: Interesting, Kareen Wynter in D.C., thank you for that.

We are piecing together a developing story here. We are waiting for a news conference, a nationwide fugitive hunting mission. It's called Operation Falcon. It's now wrapped up with more than 10,000 wanted suspects now in custody. The week-long roundup includes dozens of accused murderers. A news conference is scheduled with attorney general Alberto Gonzales this afternoon at 2:00 eastern. We will be sure to bring that to you live.

So what kind of law-enforcement person chooses to plunge into the lion's den to retrieve violent bad guys? We check in with CNN's America Bureau, Kelli Arena taking us on a secretive group of fugitive hunters with the U.S. Marshals Office.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN CORRESPONDENT (voice-over): It's 4:00 a.m., on a biting cold Chicago morning, a good time to catch bad guys off guard. These fugitive hunters are among the best in the business, and CNN got a rare front-row view.

UNIDENTIFIED MALE: The first place we're going, guys, we're going to hit two houses at once.

ARENA: These men and women arrest as many as 500 violent offenders a month, drug dealers, bank robbers and worse. This morning, they're after a prisoner who escaped from a work-release program.

For now, this neighborhood is quiet, chances for a fight drop off dramatically if the bad guys are woken out of a sound sleep. Still, going into someone's home without knowing what's inside is dangerous work. U.S. Marshal John Ambrose brings along a little extra help.

UNIDENTIFIED MALE: I got tools, tools coming up.

UNIDENTIFIED MALE: Open the door now, or I'm breaking it down!

UNIDENTIFIED MALE: Now, man, or it's coming down.

UNIDENTIFIED FEMALE: What?

UNIDENTIFIED FEMALE: Right now!

UNIDENTIFIED FEMALE: Get back there. On on the ground!

UNIDENTIFIED FEMALE: You get on the ground, man, like I told you.

ARENA: The tip that led them there is hours old, but it's stale; they missed their man.

UNIDENTIFIED MALE: Nobody knows nothing. I'm shocked.

ARENA: That's Ed Farrell. He's fast tracked a marshal for already eight years, and already one of just 18 inspectors nationwide. Part of his job is to get some dirt from people on the scene and to work informants.

ED FARRELL, U.S. MARSHAL: We're in the information business, and it comes down to people skills. If you're going to be successful at this job, you got to have people skills.

UNIDENTIFIED MALE: They got him.

ARENA: His buddy John Ambrose says you either have what it takes, or you don't. It's in his blood. Born and raised on the south side of Chicago, Ambrose comes from a long line of police officers.

UNIDENTIFIED MALE: Who's got the bag?

ARENA: His dad was an award-winning cop, that is until he and nine others were convicted of taking money from drug dealers to look the other way. He died of a heart attack a year into his sentence. Ambrose and a lot of others say his dad was wrongly accused. Still, Ambrose serves the government with a vengeance, the same government that imprisoned his father.

JOHN AMBROSE, U.S. MARSHAL: Sometimes when I get frustrated, take that extra second or two to think about something or look at a cases or you know, as corny as it may sound, I feel like he's nudging me in a direction or opens my eyes to something.

UNIDENTIFIED MALE: Just in the event he was able to get out... ARENA: The team is juiced about another target, an alleged child rapist. As they get close to the scene, they're briefed by another marshal.

UNIDENTIFIED MALE: He's been molesting his stepdaughter since she was about four or five and raping her since she was about eight. The reason they found out, she just got pregnant.

ARENA: The fugitive is staying with family, including his little niece.

UNIDENTIFIED MALE: Police, come to the door.

UNIDENTIFIED MALE: Open up the door. Open the door right now. That's it. Open the door right now. Get on the ground.

UNIDENTIFIED MALE: Get on the ground!

ARENA: It's the kind of case that gets under everyone's skin.

SHANNON METZGER, U.S. MARSHAL: It really is mind boggling that people would keep a child in a house and they know what he's wanted for. It's a shame.

ARENA: Shannon Metzger is the only female marshal permanently assigned to a regional fugitive task force in the country, and the mother of a 3-year-old girl. She's a former West Pointer and track star who should never be underestimated.

METZGER: You know, when I'm covering the back of a house and the guy jumps out, chances are he isn't going to take pity on me because I'm a female. He's going to maybe even, you know, take me on harder because he thinks he can, and when he does, he's in for a rude awakening.

ARENA: This team does nothing but hunt fugitives, 24-7. They're available to help the 10 state and local agencies who contribute members of the force. The work is rewarding and draining.

SARA DEWALT, ILLINOIS DEPT. OF CORRECTIONS: But I got you for doing nothing.

What the (EXPLETIVE DELETED) you coming home late for? What's so important that you can't get home on time?

ARENA: Sara Dewalt is a corrections officer assigned to the task force. With 34 years under her belt, she says she's tough, but fair. Some time ago, she helped this woman with a parole violation so she wouldn't go back to jail, so she could stay home and raise her kids.

DEWALT: You had a chance to stay out here and raise your children, not your mother raise your children. Them your babies. You raise them!

ARENA: There's no time for emotion. The hunt never ends. They want to pay a call to an alleged drug dealer accused of selling crack to undercover officers.

UNIDENTIFIED MALE: Police, open the door. You don't open the door, it's coming down. This is your last chance to take the door.

ARENA: This time they get their man and several thousand dollars in cash.

UNIDENTIFIED MALE: That's dope money right there.

UNIDENTIFIED MALE: I'm not guilty.

ARENA: A lot of work goes into a night like this, but these guys make it look easy. Task force leader Jeff Shank says that's the way it should be.

UNIDENTIFIED MALE: Our closure rate is 92 percent. So the odds are, if we're going to look for you, you're going to jail. You might as well just give yourself up.

ARENA: By the time most other citizens are on the way to work, the Great Lakes regional task force is just about wrapping up for the day.

Kelli Arena, CNN America Bureau, Chicago.

(END VIDEOTAPE)

KAGAN: Stay tuned to CNN for the most reliable news about your security.

W returns to Washington. We're not talking about a trip for President Bush. The W is for the Washington Nationals. Live picture there from RFK stadium. Baseball returning to the nation's capital. We'll take you live to the ballpark for a preview. Looks like a beautiful day for baseball in the nation's capital.

And Miller Brewing has won a round against its archrival Budweiser. That story and a check of your financial markets next on CNN LIVE TODAY.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

KAGAN: How much more are you paying for gas? The Energy Department says oil prices are up 35 percent over last year. Now, three states, California, Florida and New York, plan to spend millions of dollars testing automobiled powered by hydrogen fuel cells. It burns cleaner than oil, however "USA Today" reports it will be 15 years before most of us could afford any hydrogen-powered car.

And now for our daily look at gas prices, the average national price of a gallon of regular unleaded? More than $2.25 a gallon. Down by the way, just a little bit from yesterday, according to fuelcostcalculator.com.

Chris Huntington joining me now from New York with the story behind the headline. We'll take anything, even a few cents -- Chris

CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, Daryn, indeed, the price is dipping a bit. That's largely because the price of crude oil has come down very, very sharply in the last week. You might call this, in a sense, the calm after the storm.

The question is, is this going to lull American motorists back to their good old habits of driving big cars, driving fast and so on? We'll have to wait and see how that plays out. The latest figures, as you just mentioned. These are from AAA's very, very good Web site fuelcostcalculator.com, showing that, indeed, the national average back down to $2.25. I'm sure it's higher in most urban centers where you are, most likely. And certainly on the West Coast.

Here's a map of average regional prices across the United States. As is always the case, the West Coast paying the most. Hawaii, the highest state average right now, at $2.51. New Jersey, back on the East Coast, $2.07. Statewide, again, though, most of the prices you're going to see, particularly in the urban areas, are going to be higher.

As I mentinoed, though, the steep drop in crude oil is what's behind the most recent decline in the prices at the pump. There's generally about a ten day to two week time lag. So you're going to see prices probably come -- continue to decline just a little bit, as these prices in the crude oil pits continue to decline. Right now crude oil trading around $50 a barrel. The last time it closed below $50 a barrel was back in mid-February. So we are approaching two- month lows for the price of crude oil. That's good news.

But really, the long-term trend, Daryn, is up, up, up. And certainly you can see this reflected in the fact that the oil companies are doing very nicely in this time of inflated crude and gasoline prices. Exxon Mobile, frankly the biggest company in the world, had profits last year of $25 billion, on track to earn a lot more this year. CEO Lee Raymond (ph) just revealed recently his pay package, $38 million this year in cash and stocks. So things doing pretty well for those big oil companies.

KAGAN: Yes, so he's not worrying about where he fills up. He can afford whatever he wants in that department. Hey Chris, what's the lag time between the price of crude on the world market and our gas pumps?

HUNTINGTON: Well, as I mentioned, Daryn, in the trading pits, which is -- we can get into a whole lesson on the difference between the price that we quote in the trading pits and what is actually the world price. But the price in the trading pits, about a two-week time delay before you see that price activity in the trading pits then reflected at the pumps. So, for instance, the price of, the falling price of crude oil that we're seeing this week will still have another couple weeks to play out at the pump.

So you could likely see gasoline prices decline over the next ten days to two weeks. This is in keeping with the normal pattern of things. But the energy department is still holding to its prediction that overall for the month of May, the average price across the nation for unleaded regular will be $2.35. So don't be surprised if crude oil prices drive up again and pump prices rise again, at least through the end of May.

KAGAN: Story not over yet. Chris, thank you.

We're standing by for a news conference out of New York City. We're expecting an announcement of an indictment of the American businessman. Looks like things might start -- well, we're going to give them a chance to get situated. This is in the Oil-for-Food scandal out of the United Nations. We'll bring you the latest as they make that announcement.

In fact, we'll do that now. Let's go live to New York City.

(JOINED IN PROGRESS)

DAVID KELLEY, U.S. ATTORNEY: All set? Good morning. I'm David Kelley, the United States attorney for the southern district of New York. I have with me today, standing behind me, John Klochlan, who's the acting assistant director in charge of the New York office of the FBI. I also have behind me assistant United States attorney Edward O'Callahan, (ph), Steven Miller, Michael Farbiage (ph) and their supervisor, Robert Buehler (ph). And also with us today is supervisory agents from the FBI, Rich Carnowitz (ph), Dan Berry (ph), Nick Penagakos (ph) and Megan Miller (ph).

A few short months ago, the attorney general announced the first chapter in our criminal investigation of the corruption of the United Nations' Oil-for-Food program. The attorney general emphasized then that it was a continuing investigation and there would be more to come. In fulfilling the attorney general's promise, today we announce two more pieces in the Oil-for-Food puzzle, first with the indictment and arrest this morning in Houston of the principle and associates of Bayoil USA, Inc., an oil trader that played a pivotal role in efforts to fix the price of oil that was traded and sold under the auspices of the Oil-for-Food program, and facilitated the payment of illegal surcharges on the oil to the Saddam Hussein regime.

The second piece in today's announcement is the unsealing of charges against South Korean Kung Tsung Park (ph) for conspiring to act as the unregistered agent on behalf of the Hussein regime and the negotiation here in the United States of the terms for the Oil-for- Food program.

Let me first address the charges arising out of Bayoil's role in the Oil-for-Food program. Iraqi oil could be purchased in the first instance, only by people or entities that had been granted or allocated the right to buy Iraqi oil by the government of Iraq. These allocations of oil were typically purchased from the recipients by all companies or brokers at a price that included the price that was set by the United Nations oil overseers, plus a commission paid to the allocation holder and/or its broker.

One of the ways in which the Oil-for-Food program was corrupted by the Iraqi regime was their requirement that recipients of allocations of oil had to pay a secret surcharge to the Iraqi government. These secret payments, which were required from sometime in about the middle of 2000 through March of 2003 were not made to the United Nations monitored bank account from which humanitarian goods could be purchased for the Iraqi people, instead these secret payments were illegal kickbacks made in violation of the U.N. sanctions and United States criminal law to front companies and bank accounts designated and controlled by the Iraqi regime. In order to cover their illegal surcharge obligations to the government of Iraq, the recipients of the oil allocations were forced to demand higher commissions from purchasers of those allocations.

Now what the defendants are alleged to have done to further this scheme is three-fold. First, the thefts at Bayoil, led my David Chalmers and assisted by Irving Dionsciev (ph) paid inflation commissions to allocation holders or oil-industry brokers, knowing and intending that a portion of these commission payments were earmarked for the kickbacks to the Hussein regime.

By doing this, the defendants were essentially (INAUDIBLE) that otherwise would have been deposited into the Oil-for-Food escrow account, from which humanitarian aid to the Iraqi people was to be paid.

Second, instead of funneling aid to the needy, as the program was intended to do, the defendants facilitated the funneling of the money from the surcharges to front companies that were designated by the Hussein regime.

The third aspect of the defendant's conduct relates to oil price fixing. In order to conceal the inflation caused by the hidden surcharges, it was necessary to artificially deflate the price of the oil. The price for the oil sold under the Oil-for-Food program known as the official selling price, or by the initials OSP, was recalibrated regularly by a group of oil overseers at the United Nations. The defendants Chalmers, Dioneciev and Irving conspired with Iraqi officials to keep the OSP down. Some of the ways they did this was to generate fraudulent pricing information, and that information would artificially inflate the cost of doing business under the Oil- for-Food program. This information was then disseminated to the allocation holders, who would complete the circle by transmitting that fraudulent pricing data to the Iraqi officials in Baghdad, who were negotiating the OSP with the U.N. overseers. The defendants backed this up by also transmitting similar fraudulent information directly to the U.N. oil overseers.

Now, the conduct of these three defendants, individual defendants, has resulted in the filing of three sets of charges. First, wire fraud and wire-fraud conspiracy charges for their defrauding of the Oil-for-Food program and essentially the people of Iraq. These charges carry up to 40 years in prison. The defendants also are charged with engaging in prohibitive financial transactions with a country supporting international terrorism, namely, and obviously, Iraq. That carries a term of imprisonment of 10 years, and third, the defendants are charged with violating the International Emergency Economic Powers Act, which, by executive order of the president, prohibits financial transactions with the Iraqi regime. Conviction carries up to 12 years in prison.

We are also filing a forfeiture notice, seeking some $100 million in funds representing the value of the oil that was purchased by these defendants. Chalmers and Dioneciev were arrested this morning in Houston where they live, will be presented in federal court in Houston later today, and will appear here for arraignment before Judge Chin (ph) next Monday at 10:00 in the United States courthouse.

As for Irving, we intend to be filing a provisional arrest warrant for his apprehension and arrest in the United Kingdom.

Now let me turn to the complaint that has been filed against Kung Sung Park. Like Sumir Vincent (ph) some months ago, Park is charged with conspiring to serve as an agent of the Iraqi government in negotiations with United Nations officials that led to the implementation of the Oil-for-Food program. Prior to undertaking his work on behalf of the Iraqi government, Park did not provide to the attorney general of the United States notification of his relationship with the Iraqi regime, as was required by federal law.

As we allege in the complaint, Park and Sumir Vincent agreed to work together on behalf of the government of Iraq to promote a program under which Iraq could sell some of its oil, despite the international economic sanctions that had been imposed on Iraq following its 1990 invasion of Kuwait. Under their agreement, the agreement between Vincent and Park, Vincent was to serve as the intermediary to the former U.S. government officials, who had access to current U.S. government officials, while Park's role was to serve as the intermediary to United Nations officials.

Following through on this plan, park arranged meetings, it's alleged, both here in New York and in Geneva, Switzerland that were attended here in New York by a United Nations official, as well as Vincent, and in Geneva by the same United Nations official and two members of the Iraqi government.

After these initial meetings, Park and Vincent continued to negotiate with high-ranking United Nations officials regarding the terms and conditions of a potential Oil-for-Food agreement between Iraq and the United Nations, and Vincent continued to apprise the former U.S. government officials about the progress being made in these negotiations with the United Nations officials. And part of the result of these negotiations with the Security Council, the United Nations adopted the Oil-for-Food resolution in April 1995.

For his work, it's alleged that Park received at least $2 million from the government of Iraq. A large portion of the payments to Park allegedly were in the form of cash that was delivered by means of diplomatic pouches to representatives of the government of Iraq here in Manhattan. This was designated for Park's ultimate benefit.

We also allege that Park, Vincent and the representatives of the government of Iraq understood some of the money park received from the government of Iraq would be used by Park to, quote, "take care of" one of the United Nations officials with whom park negotiated. Now while he may call himself a lobbyist, as a professional, acting covertly on United States soil on behalf of a foreign government without notifying the U.S. government is not legal lobbying. Likewise, conspiring to pay a bribe on behalf of a foreign government as a registered agent or not is not lawful.

If convicted of the charge in the complaint, Park faces a maximum sentence of five years in prison. Park remains at large, and is believed to be at home in his home country of South Korea.

Now before taking any request, I'm going to turn the podium over to acting assistant director in charge of the FBI, John Klochan.

JOHN KLOCHAN, ACTING ASSISTANT DIR. IN CHARGE OF, N.Y., FBI: Exactly 10 years ago to the day, the Security Council of the United Nations adopted resolution 986. It authorized a limited waiver of the severe economic sanctions that had been imposed on the government of Iraq five years earlier in response to Iraq's 1990 invasion of Kuwait.

Resolution 986 created the U.N.'s Oil-for-Food program, under which Iraqi oil could be sold through the U.N. Member states provided the proceeds of thus such sales were used by Iraq to purchase humanitarian aid.

And the inherent weakness of the Oil-for-Food program was that Saddam Hussein was free to award the oil contracts to his cronies and his friends. This was the embodiment of the fox guarding the henhouse.

Under the nose of U.N. overseers, Saddam's people imposed a system of hidden surcharges that were actually illegal kickbacks. This proved to be a very profitable arrangement for both the Iraqi government and the Saddam cronies and loyalists who receive the purchase rights and allocations because resale (INAUDIBLE) to foreign purchasers was so lucrative. The built-in system of surcharges...

KAGAN: We've been listening in to a news conference from New York City, the announcement that an American businessman has been indicted on charges in the federal investigation of the Oil-for-Food program with Iraq.

Right now, let's take a look at what's happening "Now in the News."

That story, in fact, tops our first news brief, the U.S. businessman who has been indicted in the United Nations Oil-for-Food scandal. Federal authorities made that announcement just a few minutes ago. If you were live with us here on CNN you saw it.

The man's name is David Chalmers. He is with Texas-based Bayoil. He's accused of paying kickbacks to Saddam Hussein's regime. Details just ahead on that.

Other news today.

Law enforcement sources saying a weeklong nationwide manhunt has nabbed more than 10,000 fugitives. Those arrested under Operation Falcon include 162 accused or convicted murderers. The Justice Department holds a news conference at 2:00 p.m. Eastern to discuss the operation. See it live here on CNN.

Authorities in Los Angeles are investigating a deadly freeway incident. Two people were killed when a metal object smashed through the window of a minivan on I-5 this morning. Detectives are trying to determine whether it was an accident or someone threw that object.

Defense Secretary Rumsfeld has wrapped up his trip to Asia and the Middle East. After meeting with Pakistan's president, Rumsfeld made a brief stop in Kurdistan. The visit came less than a month after the country's former president was forced from office by a popular uprising.

It is just after 11:00 a.m. on the East Coast. For those of you joining us on the West Coast, just after 8:00 a.m.

Good morning once again. I'm Daryn Kagan, at CNN Center in Atlanta. Let's get started.

First, to Iraq.

American diplomats are working behind the scene trying to free hostage Jeffrey Ake. The Indiana businessman turned up on a videotape shown on Al-Jazeera on Wednesday. On that tape, three men with guns are seen standing over Ake.

He begs his family and friends to urge the U.S. to negotiate with his captors. The Bush administration, restating a long-held U.S. policy, says there are no negotiations going on.

Jeffrey Ake is the father of four. He went to Iraq to set up a water bottling plant near Baghdad.

CNN's Keith Oppenheim is outside Ake's home this morning in La Porte, Indiana.

OPPENHEIM: It's a beautiful day here, Daryn. And, in contrast, a very anxious one for the members of Jeffrey Ake's family. And while they are no doubt going through quite an ordeal as they wait, they are, at the same time, getting a great deal of support from the community.

Jeffrey Ake is a businessman, a well-known businessman here. His company, Equipment Express, develops systems for packaging liquid products. And he was in Iraq marketing his machinery to provide bottled water and cooking oil for Iraqi residents.

In La Porte, Ake is a member of the Rotary Club and the Greater La Porte Chamber of Commerce. He is known as an entrepreneur who encouraged the business community to step out in the international marketplace and to compete. In fact, the mayor of La Porte spoke to us and said he believes Ake's forward thinking is all part of what made him courageous -- or makes him courageous -- but also perhaps vulnerable. (BEGIN VIDEO CLIP)

MAYOR LEIGH MORRIS, LA PORTE, INDIANA: He has the potential to be so helpful to the Iraqi people, to make that a more positive situation. And so people who are -- who don't want that to happen, who want things to continue to be bad and get worse, I presume he would be a logical target, which maybe makes it all the more tragic.

(END VIDEO CLIP)

OPPENHEIM: There is, as you might expect, anger and frustration that Jeffrey Ake is being held hostage. But there's also a great deal of concern for his family.

Daryn, as you were saying, he has four children. His wife, Liliana (ph), helps run the company. And she has been here waiting for word on his safe return. The local police say that the family has been in touch with the FBI, which is encouraging them not to speak to the media at this point.

There is going to be a candlelight vigil in this community tomorrow night. This is a vigil that's in part sponsored by the Rotary Club and the Chamber of Commerce, which I mentioned he is a member of. And it's really a way for this community to express their hopes for his safe return and to show this family that this community is very much behind them.

Daryn, back to you.

KAGAN: Keith Oppenheim, live from Indiana. Thank you.

Amanda Haverstick is a reporter for the "Michigan City News- Dispatch." She interviewed Jeffrey Ake about his business last year. She's also joining me this morning from La Porte, Indiana.

Amanda, good morning.

AMANDA HAVERSTICK, "MICHIGAN CITY NEWS-DISPATCH": Hi.

KAGAN: Let's find out a little bit more about the man that you interviewed last year. What were some of your first impressions of Jeffrey Ake?

HAVERSTICK: He was just a really nice, laid back man. He was really just one of the people in his plant. He was not uptight. He was a happy man. He was positive.

KAGAN: Explain the business to me a little bit better. It makes things so you can fill up plastic bottles?

HAVERSTICK: Yes. He makes the machinery that labels and caps and fills up the bottles.

KAGAN: And one of the things in the article that you wrote last year talks about his different type of managing style. He was very open and very motivating to his employees. HAVERSTICK: Yes. He had something called open book management. Everything was open to them. They could see where the company was going.

They also set weekly goals, which was really neat. They had a weekly goal. And if they met that goal that week, they got a bonus that week. It wasn't some far-off idea at the end of the year.

KAGAN: That sounds pretty motivating to a lot of people, I think.

HAVERSTICK: Yes.

KAGAN: Did he mention when you interviewed him any desire to go to Iraq?

HAVERSTICK: Come again? I couldn't hear you.

KAGAN: When you interviewed him, did he mention any desire, was that part of the company plan to go and build plant in Iraq?

HAVERSTICK: He had been to Iraq before. When I spoke to him, he had just gotten back from Nigeria. So he had pretty much traveled throughout the world with his machinery. So I think it was kind of an overall game plan to market throughout the world.

KAGAN: Interesting, this entrepreneur in small town Indiana with these big plans to take on the world.

HAVERSTICK: It is pretty remarkable. I mean, considering that he started out of his garage, and he had been able to move out and then move to an even bigger facility.

KAGAN: And what can you tell us about the impact that the situation is having on the La Porte community?

HAVERSTICK: People around here I think are pretty much in shock. They're in disbelief that something of this nature could happen here, that someone from this area could be kidnapped and held hostage in Iraq. It's just something that doesn't -- you don't foresee happening here in this community.

KAGAN: Amanda Haverstick, with the "Michigan City News- Dispatch." Thanks for sharing the insights and the background behind your article.

HAVERSTICK: Thank you.

KAGAN: Appreciate it.

Things looked like they were calming down a bit, but violence has surged in Iraq today. Two suicide car bombs exploded in rapid succession in Baghdad. A third was detonated by the U.S. military in a controlled explosion.

The blast killed 11 people and wounded another 37. An Iraqi police convoy was apparently the target.

And in the northern city of Kirkuk, gunmen attack a police station, killing three officers. The attack follows a recent bombing that killed 10 security guards in the city.

The kidnaps and killings make for dramatic, if not difficult to watch, television. And Iraqi viewers are tuning in, in droves. With more on that, here's CNN's Aneesh Raman.

(BEGIN VIDEOTAPE)

RAMAN (voice-over): This is must-see TV in Iraq, confessions of suspected insurgents broadcast nightly on a show called "Terrorism in the Hands of Justice." Brutal tales of kidnappings, beheadings and bombings have in one month on air made the program appointment television.

UNIDENTIFIED MALE (through translator): We detonated two IEDs on the police and killed six of them.

RAMAN: Confessions and confrontations, scenes like this, where victim's families meet those that killed their loved ones. Iraqis simply can't turn it off.

UNIDENTIFIED MALE (through translator): I watch every day. All of us do. I will rush home just to watch it.

RAMAN: Reality television with visceral appeal. Each confession a window into the insurgency, putting a face to the violence.

ISMAEL ZAIR, IRAQI NEWSPAPER EDITOR: Ninety-nine percent of those guys is more or less illiterate. They don't have anything to do with culture, with history, with political life.

RAMAN: The show is broadcast on al-Iraqiya, a network established by the U.S. soon after the invasion, but now in Iraqi hands. It's designed to combat perceptions that insurgents weren't arrested, that Iraqi justice did not exist. A sentiment seemingly now transformed.

UNIDENTIFIED MALE (through translator): Psychologically speaking, I like watching because they have imposed control on terrorists and are chasing them. I used to be afraid when I went out, but not anymore.

RAMAN: But one unintended consequence, bruised detainees, raising questions about prisoner treatment and forcing action from the Human Rights Ministry.

BHAKTIAR AMIN, INTERIM HUMAN RIGHTS MINISTER: We hear verbal abuses are visible. And we've not approved that.

RAMAN (on camera): Beyond potential abuse, questions are being raised as to whether these confessions are forced or, in some cases, staged. The station denies all of that, as does the Interior Ministry, whose officials are conducting and taping the interrogations.

(voice-over): To some, that may not be much of an assurance. But to many Iraqis, robust interrogations techniques are a means to an ends, a just action in a just cause.

UNIDENTIFIED MALE (through translator): Even if they torture him, are they not investigating him? That is how to extract information. They have the right to beat him, any criminal, even in developed countries.

RAMAN: It is compulsive TV. Every night at 9:00 p.m., from Baghdad to Basra, they are tuning in to see the hands of justice at work.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE)

KAGAN: Still ahead, a shocking story out of Florida. A mother accused of trying to sell her daughter for a car. And we will tell you the details.

A surprising turnaround on silicone implants. We'll tell you why one brand of implants actually won the approval of the FDA panel. That's coming up on today's "Daily Dose."

And the taxman cometh with an April surprise. Why you may not be getting back as much from Uncle Sam as you think you are.

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KAGAN: News from Capitol Hill. The House looks ready to pass an energy bill, but it would allow drilling in the Arctic National Wildlife Refuge in Arizona. That provision is likely to face a filibuster in the Senate.

And a plan to end the estate tax is headed to the Senate as well. The House voted to repeal the tax beginning in 2010. Democrats argue it's not a good idea in an era of deficits. They call it reverse Robin Hood-type of situation.

Well, let's talk taxes now. If you are scrambling to finish your tax returns, words like "minimum tax" might sound like music to your ears. But the alternative minimum tax is hitting a sour note with millions of Americans.

Joining us from Baltimore is Michael Kitces. He is director of financial planning for Pinnacle Advisory Group.

Good morning.

MICHAEL KITCES, PINNACLE ADVISORY GROUP: Good morning. It's good to be here.

KAGAN: Yes. Well, I guess for some people it's a good morning. Some people facing this alternative minimum tax, not so good.

KITCES: Well, and we are here on April 14 or so, getting ready to finish up taxes.

KAGAN: OK. Now, I've got to tell you, Michael, we've done a couple segments on this. I still don't get it. What is it?

KITCES: Well, the idea of an alternate minimum tax originally was, here's a different way to calculate your tax bill that doesn't let you take a bunch of aggressive deductions and loopholes. And that's really what it was in the first place.

KAGAN: but what has it grown into?

KITCES: What it's grown into now is, take a wide swath of regular deductions that you're used to getting when you take -- when you do your taxes. You just don't get them anymore.

KAGAN: Says who?

KITCES: They don't apply.

KAGAN: I mean, obviously, says the federal government. And I understand this affects not only a lot of people, but especially people in high-cost states like California.

KITCES: Yes. There are a couple of really common deductions that set most sort of common middle Americans across the line into AMT. And the big three that we see most often are states with high income taxes, state and local taxes. So that's places like Vermont, District of Columbia, California, Montana, places with top tax rates upwards of 8 or 9 percent.

KAGAN: And why would that trigger it?

KITCES: Essentially, that is a deduction that you get under the regular tax system that you do not get under the alternative minimum tax system.

KAGAN: Oh, OK.

KITCES: Likewise for real estate taxes. And so areas where either real estate has appreciated substantially, or just where the tax rates are very high on real estate, we see large amounts of real estate deductions potentially triggering AMT.

Again, fundamentally, the same reason, not deductible under the AMT system. And so when you calculate your income there without all these deductions, you end up with a higher tax bill.

KAGAN: And this was originally targeting super rich people who were getting out of paying their taxes. But this could hit people who make like $75,000 a year. I think if you ask most people in that pay range, they will tell you they're not super rich.

KITCES: No. And, in fact, the primarily problem is, because it's not necessarily on their radar screens, particularly as we're here on April 14, a lot of people are finishing their tax return right now and scrambling to get it filed and done by April 15. They may not even be filing the separate form you have to file for AMT just to calculate your tax.

So some of them are unfortunately going to get bad news when they file their taxes and they think they're done. And a month or two from now, they're going to get a bill from the IRS that says you miscalculated your bill, you forgot to file the AMT schedule, and that actually was an extra tax bill for you.

KAGAN: And how do you fight?

KITCES: How do you fight? Well, fundamentally, this is something that's got to change in Congress.

This is a "write your congressman" kind of problem. It is so expensive to substantively change a repeal right now, that it virtually would have to be part of a much wider spread tax reform bill, and an expensive tax reform bill, to actually bring about any substantial change. Otherwise, all we're going to see for many years to come is small changes at the margin that perhaps help a few people not be stung quite as badly. But it's not going away anytime soon. And, in fact, it's getting much worse.

We've seen projections by 2010 or so, about one in three taxpayers that earn $50,000 to $75,000 of income are affected. Three in four that earn $75,000 to $100,000. More than 90 percent that earn between $100,000 and $500,000.

KAGAN: And that can be of little comfort of people who are doing that last-second crunching and getting their taxes done. But thanks for explaining it to us a little bit better.

KITCES: Absolutely.

KAGAN: And maybe lighting the fire under some changes. Michael Kitces, thank you.

KITCES: Thank you.

KAGAN: Other news today, the most sweeping overhaul of bankruptcy law in a quarter century is nearing a final passage. The House votes today on the bill. It was approved by the Senate last month.

It will make it harder for people to wipe away their debts. Banks and credit card companies have been pushing for the legislation for years.

It would require people above a certain income level to pay back debts under a court-ordered plan. Critics of the bankruptcy bill say it will hurt people already devastated by job losses or huge medical bills.

Chris Huntington introduces us to a family who saw bankruptcy as their only option, an option they wouldn't have under the new legislation.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Greg and Brandy Denno were doing everything they could to get by until a series of uninsured medical bills drove them over the financial edge.

BRANDY DENNO, FILED FOR BANKRUPTCY: Can't even afford to take them to get a Happy Meal.

HUNTINGTON: They celebrated Valentine's Day by filing for Chapter 7 bankruptcy protection, which erased their debt of $37,000. But they would not have that option under the proposed changes to the bankruptcy law, which would impose a means test on debtors and deny Chapter 7 protection to anyone like the Dennos with pre-tax income above the median level for their state. The Dennos' lawyers say the new rules would put debtors like the Dennos in even worse shape.

GARY FISHOFF, BANKRUPTCY ATTORNEY: We're talking about tax cheats here. We're just talking about people trying to survive. They'd have to do what's called a Chapter 13 in a reorganization and pay money back over a period of five years, which obviously they don't have.

HUNTINGTON: Those in favor of the new rules point out that the majority of bankruptcy filers make less than the median and would not be affected.

UNIDENTIFIED MALE: A lot of people who are filing for bankruptcy genuinely need it. And one of the things that's good about this legislation is it preserves bankruptcy in Chapter 7 for those people.

HUNTINGTON: Still, the Dennos are not unusual, because their bankruptcy stemmed from a devastatingly common cause, uninsured family illness. In the summer of 2003, Greg, a trained auto mechanic, had just started a new job, but his health benefits would not kick in for six months.

So when son Christopher had to be hospitalized for dehydration, the Dennos were stuck with a $9,000 bill. Brandy got a nightshift job, only to take a bad fall on a wet floor. Sleep deprived and in constant pain, she kept working because Greg was getting sick.

GREG DENNO, FILED FOR BANKRUPTCY: I couldn't breathe. I was getting really dizzy. No energy. I knew something was wrong.

B. DENNO: We were actually two weeks away from getting insurance when he ended up having no choice but to go to the hospital.

HUNTINGTON: Greg had pneumonia. His left lung was down to just 2 percent capacity. But after four days on a breathing machine, he checked himself out of the hospital against doctors' orders to go back to work. The bill this sometime, nearly $14,000.

The final blow ironically came when their health insurance finally kicked in. An MRI revealed that Brandy's fall had torn a knee ligament and she had to stop working.

B. DENNO: Trust me, people don't ask for bad luck. It just happens.

HUNTINGTON: It will still be a challenge to make ends meet, but bankruptcy gives the Dennos a fresh start. And they are thankful they didn't wait any longer.

Chris Huntington, CNN, Islip Terrace, New York.

(END VIDEOTAPE)

KAGAN: There's a disturbing story out of Florida this morning. A mother is arrested after allegedly making her daughters engage in unspeakable acts.

And in California, a community is in shock this morning after a little-leaguer is accused of killing another player. Details just ahead.

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KAGAN: We're showing you a live picture from Washington D.C. Big day for baseball fans there.

It's going to be in the nation's capital, the first -- it's going to be the home opener for the new Washington Nationals. They'll be hosting the Arizona Diamondbacks.

The city's first home opener since 1971. If you're making a little baseball history, that's when the then-Senators moved to Texas and became the Rangers. If today's team looks a little familiar with the Canadian player, it's really the Montreal Expos that have been moved to the nation's capital.

And it looks like a love lovely day. And it will be a lovely night for baseball in the nation's capital.

Orelon, they're doing great. They're first place in the NLE.

ORELON SIDNEY, CNN METEOROLOGIST: Fantastic.

KAGAN: Yes.

(WEATHER REPORT)

KAGAN: All right, Orelon. Thank you.

SIDNEY: You're welcome.

KAGAN: This breaking news coming out of Salem, Oregon. The high court in that state has nullified the marriage licenses that have been issued to some 3,000 same-sex couples in Oregon. This happened last year.

The Supreme Court giving this ruling on the licenses issued last year in Multnomah County. Before that practice was stopped, the court says that it's making its announcement on its Web site, and that's where we find the news that these marriage licenses, 3,000 that were issued, have now been nullified.

On a related noted, the governor of Oregon had said he's going to back a different bill to legitimize civil unions to give gay and lesbian couples some of the rights bestowed on married couples. But for now, those marriage licenses for the same-sex couples in Oregon have been nullified.

Much more ahead. Right now a quick break.

(COMMERCIAL BREAK)

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Aired April 14, 2005 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN CO-ANCHOR: We'll get started. We have a lot happening right now in the news.
We start with some breaks news that we're following from Southern California. This is from Glendale, California. These live pictures coming to us from KTLA. Apparently sources telling us a metal object flew into a Pontiac mini van that was driving on I-5 in Glendale this morning. Two people inside that vehicle, we understand, were killed.

Police are on the scene. They're investigating and they've shut down a busy part of the freeway this morning. It's causing southbound traffic to back up for miles. The van is parked by the freeway median, as you can see. If you get a better look -- well, now it's covered up in the van. There was a large hole evident in the windshield.

What is unclear at this time is what caused that metal object to be loose and flying, and crash into the wind windshield of that mini van. Much more ahead from Southern California.

Right now, let's take a look at what else is happening now in the news.

This hour in New York, prosecutors and FBI officials will announce an indictment stemming from the United Nations' Oil-for-Food program. A Texas businessman is one of three people accused of funneling millions of dollars into the Saddam Hussein regime in exchange for selling Iraqi oil. The U.N. program was designed to fund humanitarian relief in that country.

The family of 13-year-old Sarah Michelle Lunde has released new images this morning shortly after the search resumed for the Mississippi Florida girl. A convicted sex offender has been questioned in the case and is being held on unrelated charges.

Meanwhile, joining today's search is the father of Jessica Lunsford, another Tampa area child who disappeared. She was killed. Police say a convicted sex offender led them to her body.

This hour on Capitol Hill, the House is set to pass the largest overhaul of bankruptcy laws in at least 25 years. President Bush has vowed to sign the measure, which will prevent thousands of Americans from erasing their debts by filing for bankruptcy. Critics say it unfairly targets the poor and victims of layoffs, and costly medical problem. At the bottom of the hour on Capitol Hill, career military man faces questions about national security. General Michael Hayden is president Bush's choice to help oversee the nation's spy agencies, as deputy director of National Intelligence. The Senate Select Intelligence Committee is hosting that confirmation hearing.

I'm Daryn Kagan. Good morning.

We're going to start with the latest on an American being held hostage in Iraq. An Indiana community is praying for the safe return of one of its own. Businessman Jeffrey Ake was helping rebuild Iraq when he was kidnapped earlier this week. A videotape released yesterday showed Ake surrounded by masked men. Our Keith Oppenheim is in La Porte, Indiana with reaction to the kidnapping.

Keith, hello.

KEITH OPPENHEIM, CNN CORRESPONDENT: Good morning, Daryn. And we're standing in front of the home of Jeffrey Ake, where members of his family have been gathering. Obviously, a very tough and anxious time for this family. But this family has also been getting great support from members of the community here. People who feel that Jeffrey Ake is a good man who went to Iraq to make a difference.

(BEGIN VIDEOTAPE)

Oppenheim (voice-over): In La Porte, Indiana, if you go to the Chamber of Commerce, there are photos of Jeffrey Ake. He's the picture of a confident-looking businessman, the entrepreneur shaking hands. What a contrast to these pictures released to the al Jazeera network. The video shows a man identified as Jeffrey Ake surrounded by gunmen, holding his passport, driver's license and a family photo.

JOHN DIEDRICH, FAMILY FRIEND: These people are just totally animals. You know, they're unreasonable. Jeff has a nice wife, beautiful wife, and children.

OPPENHEIM: Jeffrey Ake's wife, Liliana and other relatives are at home here in La Porte. Outside, there is an American flag hanging around the garage, a yellow ribbon around a tree. Inside, the group of friends and family do the only thing they can, wait, appearing as shadows against the windows, avoiding any contact with the media.

UNIDENTIFIED MALE: They're following the advice of the FBI and requested that they not be contacted by the press.

OPPENHEIM: People in La Porte who know Jeffrey Ake say he is a creative entrepreneur. He's the president of a small company, Equipment Express that develops systems for packaging liquid products. Since 2003, Ake had been selling equipment to the Iraqis for making bottled water and cooking oil.

LEIGH MORRIS, MAYOR, LA PORTE, INDIANA: He has the potential to be so helpful to the Iraqi people, to make that a more positive situation. And so people who are who don't want that to happen, who wants things to continue to be bad and get worse, I presume he would be a logical target, which maybe makes it all the more tragic.

OPPENHEIM: Indeed, the possible outcome of this hostage situation is overwhelming for many in La Porte.

(on camera): The idea that he could die, is that something you just don't weigh ant to allow yourself to think about?

MICHAEL SEITZ, LA PORTE CHAMBER OF COMMERCE: Exactly. I'm not going to think anything like that. I'm going to think positive. And our community is going to think positive. And we're going to, through positive thinking, we're going to bring him back, I hope.

OPPENHEIM (voice-over): They just want him home, alive, and back with his friends and family.

MORRIS: We have hope, and we have faith. And I believe that somehow, Jeff Ake will be spared.

(END VIDEOTAPE)

OPPENHEIM: Tomorrow night in La Porte, members of the community in La Porte will be expressing their hopes for Jeffrey Ake's safe return. There will be a candlelight vigil sponsored by the Rotary Club and The Greater La Porte Chamber of Commerce. Jeffrey Ake was member of both organizations.

And Daryn, this guy was clearly very integrated into his community. And that in part explains why the response here has been so strong in terms of his capture.

Back to you.

KAGAN: Really interesting guy, an entrepreneur. We're going to have a chance to learn more about how he has been a part of that community in the next hour. Thank you for that, Keith.

Well, the U.S. government does not negotiate with terrorists. We know that. But officials say they're working hard to try to secure Jeffrey Ake's release.

For more on that and other events in Iraq, let's go to Baghdad and CNN's Aneesh Raman.

ANEESH RAMAN, CNN CORRESPONDENT: Daryn, good morning. As you say, the struggle to secure Jeffrey Ake goes on here in the capital city, days after a video was aired on al Jazeera with masked militants at his side, guns pointing at his head. American hostage Jeffrey Ake called on the U.S. government to engage in dialogue with the insurgents, also for American troops to withdraw.

Secretary of State Condoleezza Rice has said that they are working as much as they can to secure his release, dealing with Iraqi authorities. We've just spoken with the embassy here in Baghdad. They tell us, as is procedure there's a hostage working group. It's comprised of about 25 people, not all of them are permanently assigned to this unit. But at the moment there's 25 of them who are, on a daily basis, coordinating efforts both here and back to the U.S. They didn't say if any -- they said actually that no claim of responsibility has still not come. No demands have been made. No ransom has been made. So clearly, the efforts still going forward to secure the release of Mr. Ake.

Now, this comes on a day of violence, Daryn, in Baghdad. Two near simultaneous car bombs detonating this morning in south central Baghdad, the target a police convoy, an Iraqi police convoy. Some 11 Iraqis were killed, upwards of 40 of them were wounded. We're told the majority of those casualties are, in fact, civilians.

And north of the capital city in the town of Kirkuk, gunmen opened fire on the Iraqi police station. Three Iraqi police officers were killed there, four other wounded -- Daryn.

KAGAN: Another topic for you there, Aneesh. I understand you had a chance to talk with the former Prime Minister Iyad Allawi on the topic of when he thinks U.S. troops might be leaving the country.

RAMAN: We did. Interim Prime Minister Iyad Allawi has been deliberately quiet as the transitional government takes hold. He gave us an exclusive interview this morning. I asked him to respond to Jalal Talabani, the president who told Wolf Blitzer recently that in about two years American troops could be gone from Iraq. Here's what he had to say.

(BEGIN VIDEO CLIP)

IYAD ALLAWI, INTERIM PRIME MINISTER, IRAQ: I think if we expedite both the institutions, the security institutions, and if there are no disruptions now in this coming government, and if the next government will build on whatever have been achieved, maybe it will take years, three years.

(END VIDEO CLIP)

RAMAN: Now, Daryn, Allawi, the country's leading secular politician also said he can concerned that this new government could see the rise in political Islam, as he called it; not wanting to be in the cabinet of any transitional government. Instead, it seems, opting to wait and run for the top post again in 2006 under Iraq's new constitution -- Daryn.

KAGAN: Thank you very much. Aneesh Raman from Baghdad.

Well, Back here in the U.S., two National Guardsmen are accused of smuggling drugs during a mission. Prosecutors say they stashed millions of dollars worth of ecstasy on their cargo plane.

CNN's Deborah Feyerick has more from New York.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (on camera): We're talking ecstasy, 290,000 pills worth up to $11 million on the street. Authorities say this wasn't the first time either. There were at least three other runs.

Now, who are these guys? Well, you've got Captain Franklin Rodriguez and Master Sergeant John Fong, both from new York city. Both are accused of using an Air Force cargo jet to fly drugs from Germany to New York. Now, they were busted yesterday and they appeared in federal court. Authorities say the two, who are with the Air National Guard, were on an official mission. They were delivering training supplies to the Republic of Georgia.

On the way back they stopped in Germany and there they allegedly went to a hotel room, and picked up boxes and bags filled with the pills. Now, Captain Rodriguez, who is the pilot, then came back on that plane. Master sergeant, who was part of the crew, unloaded the bags and the boxes into a private car belonging to the captain.

UNIDENTIFIED MALE: They were carrying these drugs with them. They were apprehended by members of our strike force, as well as the Department of Defense.

UNIDENTIFIED MALE: The investigation is continuing. We believe that there's no other military personnel involved in this ring. The investigation is continuing in Europe and in the continental U.S. at this time.

FEYERICK: Authorities say that the master sergeant told them that he was paid at least $10,000 for each of the trips. Both men face up to 20 years in prison and a maximum $1 million fine.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

KAGAN: In other news, Eric Rudolph is speaking out about his motives for a string of bombings. Rudolph's attorneys released his 11-page statement yesterday, after Rudolph pleaded guilty in two federal courts. Rudolph says the bombings in Atlanta and Birmingham, Alabama were part of a war against abortion and the government permits that. He says, quote, "Abortion is murder. And when the regime in Washington legalized, sanctioned and legitimized this practice, they forfeited their legitimacy and moral authority to govern."

Well, Rudolph bombing victim, Emily Lyons, was in the Birmingham courtroom to hear that guilty plea. Lyons is a nurse. She was severely wounded in the attack on a women's health clinic.

(BEGIN VIDEO CLIP)

EMILY LYONS, RUDOLPH BOMBING VICTIM: The crimes warranted the worst punishment the government can give. And everybody assumes that the death sentence is the worst that is offered. Whether I was there that day or not, he would have gotten a life sentence anyway. So in essence, he got away with injuries that he caused to my body and to the others in Atlanta.

(END VIDEO CLIP) KAGAN: Eric Rudolph will serve four consecutive life terms. Prosecutors agreed to that plea deal in exchange for Rudolph disclosing where he hid more than 250 pounds of dynamite.

In Florida, another missing girl and another registered sex offender are the focus of attention. Still ahead, the latest in the search for 13-year-old Sara Lunde.

Plus, a major vote on Capitol Hill could impact your financial options if you're sinking in debt. We'll explain.

And later, they beat the Braves last night. Now it's the buzz inside the Beltway. Baseball returns to our nation's capital for the first time in 34 years. We'll preview that.

Also, guess who is throwing out tonight's first pitch?

(COMMERCIAL BREAK)

KAGAN: Shocking story out of Southern California this morning. Northeast of Los Angeles, a 13-year-old Little Leaguer is under arrest for allegedly beating a friend to death with his baseball bat. The unidentified suspect had just pitched his team's first losing game of the season, when his friend started teasing him at the ball field's concession stand. Witnesses say the boy then grabbed a bat and struck Jeremy Rourke at least three times.

To Florida now, just a two-hour drive from where the tragic Jessica Lunsford story played out, a drama with some chilling similarities are unfolding. Authorities are questioning a registered sex offender in the disappearance of a 13-year-old girl.

Our national correspondent Susan Candiotti is in Ruskin with the latest developments.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (on camera): Among the 100 or so volunteers that are helping out this day, Mark Lunsford whose daughter, Jessica, was killed allegedly by a sex offender who live practically across the street from the. This happened about a month and a half ago about 100 miles from here. Mark Lunsford saying he is here to lend support to Sarah Lunde's mother, who is desperately trying to find her daughter.

UNIDENTIFIED MALE: I spoke to Mr. Lunsford, as a matter of fact. And he said he came down here to help. He asked to be hooked up with a search team. We had done that. He also said that he would be here to speak with Kelly May, if she chose to do that. I've spoken with Kelly May and she said that she is more than thrilled that Mr. Lunsford has come down to help.

CANDIOTTI: Police say one convicted sex offender of about 24 living here in the town of Ruskin, population about 8,000, has captured their attention. His name David Onstott. He was arrested Tuesday night on unrelated charges and appeared in court this day for arraignment on a charge of failing to register at least one a year in Florida, as required by Florida law.

Now, Sarah is only 13 years old. She is said to be very active in her church. She does come from a broken home. The church provided a home video of her, shot here washing a car last December. There's also a photograph of her taken on Saturday night. She was part of a church outing and friends say she had a great time when she came home.

Now, she has run away from home before but authorities say she has always returned home. And friends say it is totally out of character for her to be away this long without phoning someone.

Susan Candiotti, CNN, Ruskin, Florida.

(END VIDEOTAPE)

KAGAN: Anyone with information on the case is asked to call the Hillsborough County Sheriff's Department. The number you see on the screen 813-247-8200.

Well, you're going to want to pack lightly. Starting Monday, there's one more thing you'll have to leave behind when you board an airplane. Details straight ahead.

(COMMERCIAL BREAK)

KAGAN: As things warm up, the home selling season is cranking up with sales in some areas already red hot. There may be some extra need for caution this year.

Here with today's "Top Five Tips, The Home Edition" is CNN's personal finance editor Gerri Willis.

Hi, Ger.

GERRI WILLIS, CNN-FN PERSONAL FINANCE EDITOR: Hey, Daryn. Good to see you. First off, understand the context. The next three months are historically the year's hottest for the housing market. Last year, more than two million of the 6.7 million homes were closed on in May, June and July. Now, while experts like the folks at the National Association of Realtors believe that the market will cool slightly later this year, they still expect a fast-paced spring.

KAGAN: So what should buyers do?

WILLIS: Well, one expert we talked to said buyers will have to work harder than ever to find their dream home.

(BEGIN VIDEO CLIP)

BRAD INMAN, FOUNDER, HOMEGAIN.COM: It's out there. So you got to find an agent or a broker that can find those listings. And those don't just mean the ones in the MLS. It means for sale by owner. Look on "Craig's List." Look on eBay. And be willing to even knock on doors of people who may not be thinking about selling. But who knows? You might get lucky. It's that kind of market. We have the tightest listing market in history. (END VIDEO CLIP)

WILLIS: In fact, Brad says it's such a crazy market that if you don't have to buy now, don't. Consider waiting until the market cools off just a little bit.

KAGAN: It sounds like it's a seller's market then.

WILLIS: Oh, you bet. Definitely a seller's market, they have control of this market.

(BEGIN VIDEO CLIP)

INMAN: EBay, buyers are looking everywhere. And you need to put your listing out there. And then the other thing, right now you're in a really -- you're in the driver's seat as a seller. So don't give up much. There's plenty of buyers out there that are qualified with low rates. So don't feel like you have to discount the price or the value.

(END VIDEO CLIP)

WILLIS: So now if you believe you have big gains out there, Daryn, it's a good time to take your money off the table.

KAGAN: But there's some people that might have bought recently and now they're getting a little worried that they bought at the top of the market. What can they do?

WILLIS: I think that's a real common phenomenon out there. Sit tight. The fact is most real estate busts are short. If you're planning on staying in your home for five years, an over hyped market probably won't be much of a problem. It's unlikely though that all markets will experience price declines. Except for the most frothy markets, the worst-case scenario is typically price stagnation. That means a flat market.

For more on this and more about the market, where it's headed, tune in at 9:30 a.m. Saturday East Coast Time for "Open House." We'll also talk about settling a dispute with the homeowner's association. Plus, we're going to show you how to spruce up your entryway.

KAGAN: Ah! All good tips. Thank you so much. Good to see you, Gerri.

WILLIS: Good to see you.

KAGAN: Well, check your luggage and your shoes before heading to the airport. Starting today, one more thing that is not allowed on commercial airlines. That story and more when CNN LIVE TODAY returns.

(COMMERCIAL BREAK)

KAGAN: We're coming up on the half hour. I'm Daryn Kagan. Let's take a look at what's happening now in the news. We're expecting a news conference shortly on the indictment of an American in the Oil-for-Food scandal. David Chalmers and his Texas based company Bayoil, they face charges. Chalmers is accused of paying illegal surcharges to the Iraqi regime of Saddam Hussein. Two of Chalmers' associates, a Bulgarian and a Briton also face charges.

At least 14 people were killed today in insurgent attacks in Iraq. Eleven people died and 37 were wounded in suicide car bombings in Baghdad. The bombings targeted an Iraqi police convoy. But most of the casualties were civilians. Three police officers were killed in Kirkuk when gunmen shot at a police station.

Leave your lighter at home. Starting today, airline passengers will no longer be able to carry lighters on board commercial airplanes. A law already on the books bans lighters in checked baggage. Matches will still be allowed in the cabin although, of course, smoking something not.

The space shuttle Discovery is taking a tanking test this morning. Discovery is being filled with a half million gallons of fuel. NASA managers want to check on upgrades ordered after the 2003 Columbia disaster. Discovery's mission to the International Space Station is scheduled about a month from now.

We're learning more this hour about a possible Texas connection to the United Nations' tainted Oil-for-Food program in Iraq. A Texas businessman is being indicted in an alleged scheme to pay Saddam Hussein millions in kickbacks to sell Iraqi oil.

Our senior U.N. correspondent Richard Roth joins me from the U.N.

Good morning, Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: Good morning, Daryn. Yes, the Oil-for-Food web continues to spread. In a matter of minutes, David Kelley, the U.S. attorney for the Southern District of New York is going to unveil indictments.

What is significant? This is the first indictment against a native American, an American citizen; David Chalmers the head of Bayoil, a Texas based company. Others are also going to be indicted. Chalmers was arrested, according to sources, earlier today. And he'll face an appearance later today in a Houston court.

The indictment is going to show, according to prosecutors that Chalmers was a participant in illegal surcharges with the government of Iraq, led at the time led by Saddam Hussein. This Oil-for-Food program was set up in about 1997, involving $64 billion. Much of the humanitarian aid, Daryn, did get to the people of Iraq, but companies, businessmen, others allegedly profited through schemes, kickbacks, arranged through the Iraqi government. This would have been out of bounds from the U.N.-authorized program.

Bayoil was a participant in the deal with the United Nations in Iraq, that it was known, they were totally allowed to do that and purchase oil in exchange for humanitarian goods getting in. However, kickbacks and surcharges certainly not allowed. We've not been able to reach anyone with any comment from David Chalmers and Bayoil so far -- Daryn.

KAGAN: Richard, we'll look forward to learning more when the news conference begins.

Thank you, Richard Roth.

In today's CNN Security Watch, airport screeners have a new item to confiscate, cigarette lighters. Beginning today, you will not be allowed to carry those onto commercial flights in the U.S., either in your pocket or in your luggage.

CNN's Kareen Wynter is at Washington's Reagan International Airport with more on this.

Kareen, good morning.

KAREEN WYNTER, CNN CORRESPONDENT: Good morning to you, Daryn.

The Transportation Security Administration wanted to make sure the public wasn't caught off guard, so for the last several weeks they've been posting signs in airports across the country like this one, alerting passengers of this new change.

Now, the simple message here from the TSA is to leave the lighters at home, otherwise, you'll have to hand them over at the security checkpoint. The government says that they've been assessing recent cases involving fires in the cabins of planes and decided to take action.

(BEGIN VIDEOTAPE)

WYNTER (voice-over): It was close calls like this one that got the attention of federal authorities, the shoe bomber incident in 2001. Richard Reid, a passenger on a flight from Paris to Miami, tried to ignite explosives stuffed in his shoe. He was subsequently sentenced to life in prison.

Congress has since worked to get lighters added to the federal government's list of prohibited items.

MARK HATFIELD, TSA SPOKESMAN: That's a potential tool that a terrorist or an evil doer could use to light a fuse, to light an incendiary device, create a fire on board the aircraft. And so we're following the direction of Congress.

WYNTER: The Transportation Security Administration recently posted these signs alerting the public to the new law, which takes effect today. Lighters are allowed inside the airport, but you can't take them beyond the security checkpoint. You can, however, take up to four match books onto a plane.

Flemming Hansen thinks that's inconsistent.

FLEMMING HANSEN, OPPOSES LIGHTER BAN: It's kind of a problem. I mean, you know, you can say the same thing about a match book, you know what I mean? You can still light a match.

WYNTER: But other passengers support this added layer of security.

JACKIE OSBORN, SUPPORTS LIGHTER BAN: We have a possibility of having people in our midst that we're not aware of with certain items that can be very detrimental.

WYNTER: The TSA says it's considering banning matches, but that would be difficult to enforce since they're not easily detectable.

(END VIDEOTAPE)

WYNTER: Lighters, however, are easily detectable by X-ray machines. The new law affects not only travelers, but also businesses. Vendors located beyond the security checkpoint are also required to follow this new law, Daryn, and not sell these flammable items -- Daryn.

KAGAN: So no lighter, but you can bring matches.

WYNTER: And that's the argument right now, because you can always light a match on a plane and do the same amount of damage as a lighter would. The government's response to that is that they're assessing new ways to detect matches. They're not easily detectable, so how can you enforce something that you can't detect. It's also looking for more input from the public.

HEMMER: Interesting, Kareen Wynter in D.C., thank you for that.

We are piecing together a developing story here. We are waiting for a news conference, a nationwide fugitive hunting mission. It's called Operation Falcon. It's now wrapped up with more than 10,000 wanted suspects now in custody. The week-long roundup includes dozens of accused murderers. A news conference is scheduled with attorney general Alberto Gonzales this afternoon at 2:00 eastern. We will be sure to bring that to you live.

So what kind of law-enforcement person chooses to plunge into the lion's den to retrieve violent bad guys? We check in with CNN's America Bureau, Kelli Arena taking us on a secretive group of fugitive hunters with the U.S. Marshals Office.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN CORRESPONDENT (voice-over): It's 4:00 a.m., on a biting cold Chicago morning, a good time to catch bad guys off guard. These fugitive hunters are among the best in the business, and CNN got a rare front-row view.

UNIDENTIFIED MALE: The first place we're going, guys, we're going to hit two houses at once.

ARENA: These men and women arrest as many as 500 violent offenders a month, drug dealers, bank robbers and worse. This morning, they're after a prisoner who escaped from a work-release program.

For now, this neighborhood is quiet, chances for a fight drop off dramatically if the bad guys are woken out of a sound sleep. Still, going into someone's home without knowing what's inside is dangerous work. U.S. Marshal John Ambrose brings along a little extra help.

UNIDENTIFIED MALE: I got tools, tools coming up.

UNIDENTIFIED MALE: Open the door now, or I'm breaking it down!

UNIDENTIFIED MALE: Now, man, or it's coming down.

UNIDENTIFIED FEMALE: What?

UNIDENTIFIED FEMALE: Right now!

UNIDENTIFIED FEMALE: Get back there. On on the ground!

UNIDENTIFIED FEMALE: You get on the ground, man, like I told you.

ARENA: The tip that led them there is hours old, but it's stale; they missed their man.

UNIDENTIFIED MALE: Nobody knows nothing. I'm shocked.

ARENA: That's Ed Farrell. He's fast tracked a marshal for already eight years, and already one of just 18 inspectors nationwide. Part of his job is to get some dirt from people on the scene and to work informants.

ED FARRELL, U.S. MARSHAL: We're in the information business, and it comes down to people skills. If you're going to be successful at this job, you got to have people skills.

UNIDENTIFIED MALE: They got him.

ARENA: His buddy John Ambrose says you either have what it takes, or you don't. It's in his blood. Born and raised on the south side of Chicago, Ambrose comes from a long line of police officers.

UNIDENTIFIED MALE: Who's got the bag?

ARENA: His dad was an award-winning cop, that is until he and nine others were convicted of taking money from drug dealers to look the other way. He died of a heart attack a year into his sentence. Ambrose and a lot of others say his dad was wrongly accused. Still, Ambrose serves the government with a vengeance, the same government that imprisoned his father.

JOHN AMBROSE, U.S. MARSHAL: Sometimes when I get frustrated, take that extra second or two to think about something or look at a cases or you know, as corny as it may sound, I feel like he's nudging me in a direction or opens my eyes to something.

UNIDENTIFIED MALE: Just in the event he was able to get out... ARENA: The team is juiced about another target, an alleged child rapist. As they get close to the scene, they're briefed by another marshal.

UNIDENTIFIED MALE: He's been molesting his stepdaughter since she was about four or five and raping her since she was about eight. The reason they found out, she just got pregnant.

ARENA: The fugitive is staying with family, including his little niece.

UNIDENTIFIED MALE: Police, come to the door.

UNIDENTIFIED MALE: Open up the door. Open the door right now. That's it. Open the door right now. Get on the ground.

UNIDENTIFIED MALE: Get on the ground!

ARENA: It's the kind of case that gets under everyone's skin.

SHANNON METZGER, U.S. MARSHAL: It really is mind boggling that people would keep a child in a house and they know what he's wanted for. It's a shame.

ARENA: Shannon Metzger is the only female marshal permanently assigned to a regional fugitive task force in the country, and the mother of a 3-year-old girl. She's a former West Pointer and track star who should never be underestimated.

METZGER: You know, when I'm covering the back of a house and the guy jumps out, chances are he isn't going to take pity on me because I'm a female. He's going to maybe even, you know, take me on harder because he thinks he can, and when he does, he's in for a rude awakening.

ARENA: This team does nothing but hunt fugitives, 24-7. They're available to help the 10 state and local agencies who contribute members of the force. The work is rewarding and draining.

SARA DEWALT, ILLINOIS DEPT. OF CORRECTIONS: But I got you for doing nothing.

What the (EXPLETIVE DELETED) you coming home late for? What's so important that you can't get home on time?

ARENA: Sara Dewalt is a corrections officer assigned to the task force. With 34 years under her belt, she says she's tough, but fair. Some time ago, she helped this woman with a parole violation so she wouldn't go back to jail, so she could stay home and raise her kids.

DEWALT: You had a chance to stay out here and raise your children, not your mother raise your children. Them your babies. You raise them!

ARENA: There's no time for emotion. The hunt never ends. They want to pay a call to an alleged drug dealer accused of selling crack to undercover officers.

UNIDENTIFIED MALE: Police, open the door. You don't open the door, it's coming down. This is your last chance to take the door.

ARENA: This time they get their man and several thousand dollars in cash.

UNIDENTIFIED MALE: That's dope money right there.

UNIDENTIFIED MALE: I'm not guilty.

ARENA: A lot of work goes into a night like this, but these guys make it look easy. Task force leader Jeff Shank says that's the way it should be.

UNIDENTIFIED MALE: Our closure rate is 92 percent. So the odds are, if we're going to look for you, you're going to jail. You might as well just give yourself up.

ARENA: By the time most other citizens are on the way to work, the Great Lakes regional task force is just about wrapping up for the day.

Kelli Arena, CNN America Bureau, Chicago.

(END VIDEOTAPE)

KAGAN: Stay tuned to CNN for the most reliable news about your security.

W returns to Washington. We're not talking about a trip for President Bush. The W is for the Washington Nationals. Live picture there from RFK stadium. Baseball returning to the nation's capital. We'll take you live to the ballpark for a preview. Looks like a beautiful day for baseball in the nation's capital.

And Miller Brewing has won a round against its archrival Budweiser. That story and a check of your financial markets next on CNN LIVE TODAY.

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KAGAN: How much more are you paying for gas? The Energy Department says oil prices are up 35 percent over last year. Now, three states, California, Florida and New York, plan to spend millions of dollars testing automobiled powered by hydrogen fuel cells. It burns cleaner than oil, however "USA Today" reports it will be 15 years before most of us could afford any hydrogen-powered car.

And now for our daily look at gas prices, the average national price of a gallon of regular unleaded? More than $2.25 a gallon. Down by the way, just a little bit from yesterday, according to fuelcostcalculator.com.

Chris Huntington joining me now from New York with the story behind the headline. We'll take anything, even a few cents -- Chris

CHRIS HUNTINGTON, CNN CORRESPONDENT: Well, Daryn, indeed, the price is dipping a bit. That's largely because the price of crude oil has come down very, very sharply in the last week. You might call this, in a sense, the calm after the storm.

The question is, is this going to lull American motorists back to their good old habits of driving big cars, driving fast and so on? We'll have to wait and see how that plays out. The latest figures, as you just mentioned. These are from AAA's very, very good Web site fuelcostcalculator.com, showing that, indeed, the national average back down to $2.25. I'm sure it's higher in most urban centers where you are, most likely. And certainly on the West Coast.

Here's a map of average regional prices across the United States. As is always the case, the West Coast paying the most. Hawaii, the highest state average right now, at $2.51. New Jersey, back on the East Coast, $2.07. Statewide, again, though, most of the prices you're going to see, particularly in the urban areas, are going to be higher.

As I mentinoed, though, the steep drop in crude oil is what's behind the most recent decline in the prices at the pump. There's generally about a ten day to two week time lag. So you're going to see prices probably come -- continue to decline just a little bit, as these prices in the crude oil pits continue to decline. Right now crude oil trading around $50 a barrel. The last time it closed below $50 a barrel was back in mid-February. So we are approaching two- month lows for the price of crude oil. That's good news.

But really, the long-term trend, Daryn, is up, up, up. And certainly you can see this reflected in the fact that the oil companies are doing very nicely in this time of inflated crude and gasoline prices. Exxon Mobile, frankly the biggest company in the world, had profits last year of $25 billion, on track to earn a lot more this year. CEO Lee Raymond (ph) just revealed recently his pay package, $38 million this year in cash and stocks. So things doing pretty well for those big oil companies.

KAGAN: Yes, so he's not worrying about where he fills up. He can afford whatever he wants in that department. Hey Chris, what's the lag time between the price of crude on the world market and our gas pumps?

HUNTINGTON: Well, as I mentioned, Daryn, in the trading pits, which is -- we can get into a whole lesson on the difference between the price that we quote in the trading pits and what is actually the world price. But the price in the trading pits, about a two-week time delay before you see that price activity in the trading pits then reflected at the pumps. So, for instance, the price of, the falling price of crude oil that we're seeing this week will still have another couple weeks to play out at the pump.

So you could likely see gasoline prices decline over the next ten days to two weeks. This is in keeping with the normal pattern of things. But the energy department is still holding to its prediction that overall for the month of May, the average price across the nation for unleaded regular will be $2.35. So don't be surprised if crude oil prices drive up again and pump prices rise again, at least through the end of May.

KAGAN: Story not over yet. Chris, thank you.

We're standing by for a news conference out of New York City. We're expecting an announcement of an indictment of the American businessman. Looks like things might start -- well, we're going to give them a chance to get situated. This is in the Oil-for-Food scandal out of the United Nations. We'll bring you the latest as they make that announcement.

In fact, we'll do that now. Let's go live to New York City.

(JOINED IN PROGRESS)

DAVID KELLEY, U.S. ATTORNEY: All set? Good morning. I'm David Kelley, the United States attorney for the southern district of New York. I have with me today, standing behind me, John Klochlan, who's the acting assistant director in charge of the New York office of the FBI. I also have behind me assistant United States attorney Edward O'Callahan, (ph), Steven Miller, Michael Farbiage (ph) and their supervisor, Robert Buehler (ph). And also with us today is supervisory agents from the FBI, Rich Carnowitz (ph), Dan Berry (ph), Nick Penagakos (ph) and Megan Miller (ph).

A few short months ago, the attorney general announced the first chapter in our criminal investigation of the corruption of the United Nations' Oil-for-Food program. The attorney general emphasized then that it was a continuing investigation and there would be more to come. In fulfilling the attorney general's promise, today we announce two more pieces in the Oil-for-Food puzzle, first with the indictment and arrest this morning in Houston of the principle and associates of Bayoil USA, Inc., an oil trader that played a pivotal role in efforts to fix the price of oil that was traded and sold under the auspices of the Oil-for-Food program, and facilitated the payment of illegal surcharges on the oil to the Saddam Hussein regime.

The second piece in today's announcement is the unsealing of charges against South Korean Kung Tsung Park (ph) for conspiring to act as the unregistered agent on behalf of the Hussein regime and the negotiation here in the United States of the terms for the Oil-for- Food program.

Let me first address the charges arising out of Bayoil's role in the Oil-for-Food program. Iraqi oil could be purchased in the first instance, only by people or entities that had been granted or allocated the right to buy Iraqi oil by the government of Iraq. These allocations of oil were typically purchased from the recipients by all companies or brokers at a price that included the price that was set by the United Nations oil overseers, plus a commission paid to the allocation holder and/or its broker.

One of the ways in which the Oil-for-Food program was corrupted by the Iraqi regime was their requirement that recipients of allocations of oil had to pay a secret surcharge to the Iraqi government. These secret payments, which were required from sometime in about the middle of 2000 through March of 2003 were not made to the United Nations monitored bank account from which humanitarian goods could be purchased for the Iraqi people, instead these secret payments were illegal kickbacks made in violation of the U.N. sanctions and United States criminal law to front companies and bank accounts designated and controlled by the Iraqi regime. In order to cover their illegal surcharge obligations to the government of Iraq, the recipients of the oil allocations were forced to demand higher commissions from purchasers of those allocations.

Now what the defendants are alleged to have done to further this scheme is three-fold. First, the thefts at Bayoil, led my David Chalmers and assisted by Irving Dionsciev (ph) paid inflation commissions to allocation holders or oil-industry brokers, knowing and intending that a portion of these commission payments were earmarked for the kickbacks to the Hussein regime.

By doing this, the defendants were essentially (INAUDIBLE) that otherwise would have been deposited into the Oil-for-Food escrow account, from which humanitarian aid to the Iraqi people was to be paid.

Second, instead of funneling aid to the needy, as the program was intended to do, the defendants facilitated the funneling of the money from the surcharges to front companies that were designated by the Hussein regime.

The third aspect of the defendant's conduct relates to oil price fixing. In order to conceal the inflation caused by the hidden surcharges, it was necessary to artificially deflate the price of the oil. The price for the oil sold under the Oil-for-Food program known as the official selling price, or by the initials OSP, was recalibrated regularly by a group of oil overseers at the United Nations. The defendants Chalmers, Dioneciev and Irving conspired with Iraqi officials to keep the OSP down. Some of the ways they did this was to generate fraudulent pricing information, and that information would artificially inflate the cost of doing business under the Oil- for-Food program. This information was then disseminated to the allocation holders, who would complete the circle by transmitting that fraudulent pricing data to the Iraqi officials in Baghdad, who were negotiating the OSP with the U.N. overseers. The defendants backed this up by also transmitting similar fraudulent information directly to the U.N. oil overseers.

Now, the conduct of these three defendants, individual defendants, has resulted in the filing of three sets of charges. First, wire fraud and wire-fraud conspiracy charges for their defrauding of the Oil-for-Food program and essentially the people of Iraq. These charges carry up to 40 years in prison. The defendants also are charged with engaging in prohibitive financial transactions with a country supporting international terrorism, namely, and obviously, Iraq. That carries a term of imprisonment of 10 years, and third, the defendants are charged with violating the International Emergency Economic Powers Act, which, by executive order of the president, prohibits financial transactions with the Iraqi regime. Conviction carries up to 12 years in prison.

We are also filing a forfeiture notice, seeking some $100 million in funds representing the value of the oil that was purchased by these defendants. Chalmers and Dioneciev were arrested this morning in Houston where they live, will be presented in federal court in Houston later today, and will appear here for arraignment before Judge Chin (ph) next Monday at 10:00 in the United States courthouse.

As for Irving, we intend to be filing a provisional arrest warrant for his apprehension and arrest in the United Kingdom.

Now let me turn to the complaint that has been filed against Kung Sung Park. Like Sumir Vincent (ph) some months ago, Park is charged with conspiring to serve as an agent of the Iraqi government in negotiations with United Nations officials that led to the implementation of the Oil-for-Food program. Prior to undertaking his work on behalf of the Iraqi government, Park did not provide to the attorney general of the United States notification of his relationship with the Iraqi regime, as was required by federal law.

As we allege in the complaint, Park and Sumir Vincent agreed to work together on behalf of the government of Iraq to promote a program under which Iraq could sell some of its oil, despite the international economic sanctions that had been imposed on Iraq following its 1990 invasion of Kuwait. Under their agreement, the agreement between Vincent and Park, Vincent was to serve as the intermediary to the former U.S. government officials, who had access to current U.S. government officials, while Park's role was to serve as the intermediary to United Nations officials.

Following through on this plan, park arranged meetings, it's alleged, both here in New York and in Geneva, Switzerland that were attended here in New York by a United Nations official, as well as Vincent, and in Geneva by the same United Nations official and two members of the Iraqi government.

After these initial meetings, Park and Vincent continued to negotiate with high-ranking United Nations officials regarding the terms and conditions of a potential Oil-for-Food agreement between Iraq and the United Nations, and Vincent continued to apprise the former U.S. government officials about the progress being made in these negotiations with the United Nations officials. And part of the result of these negotiations with the Security Council, the United Nations adopted the Oil-for-Food resolution in April 1995.

For his work, it's alleged that Park received at least $2 million from the government of Iraq. A large portion of the payments to Park allegedly were in the form of cash that was delivered by means of diplomatic pouches to representatives of the government of Iraq here in Manhattan. This was designated for Park's ultimate benefit.

We also allege that Park, Vincent and the representatives of the government of Iraq understood some of the money park received from the government of Iraq would be used by Park to, quote, "take care of" one of the United Nations officials with whom park negotiated. Now while he may call himself a lobbyist, as a professional, acting covertly on United States soil on behalf of a foreign government without notifying the U.S. government is not legal lobbying. Likewise, conspiring to pay a bribe on behalf of a foreign government as a registered agent or not is not lawful.

If convicted of the charge in the complaint, Park faces a maximum sentence of five years in prison. Park remains at large, and is believed to be at home in his home country of South Korea.

Now before taking any request, I'm going to turn the podium over to acting assistant director in charge of the FBI, John Klochan.

JOHN KLOCHAN, ACTING ASSISTANT DIR. IN CHARGE OF, N.Y., FBI: Exactly 10 years ago to the day, the Security Council of the United Nations adopted resolution 986. It authorized a limited waiver of the severe economic sanctions that had been imposed on the government of Iraq five years earlier in response to Iraq's 1990 invasion of Kuwait.

Resolution 986 created the U.N.'s Oil-for-Food program, under which Iraqi oil could be sold through the U.N. Member states provided the proceeds of thus such sales were used by Iraq to purchase humanitarian aid.

And the inherent weakness of the Oil-for-Food program was that Saddam Hussein was free to award the oil contracts to his cronies and his friends. This was the embodiment of the fox guarding the henhouse.

Under the nose of U.N. overseers, Saddam's people imposed a system of hidden surcharges that were actually illegal kickbacks. This proved to be a very profitable arrangement for both the Iraqi government and the Saddam cronies and loyalists who receive the purchase rights and allocations because resale (INAUDIBLE) to foreign purchasers was so lucrative. The built-in system of surcharges...

KAGAN: We've been listening in to a news conference from New York City, the announcement that an American businessman has been indicted on charges in the federal investigation of the Oil-for-Food program with Iraq.

Right now, let's take a look at what's happening "Now in the News."

That story, in fact, tops our first news brief, the U.S. businessman who has been indicted in the United Nations Oil-for-Food scandal. Federal authorities made that announcement just a few minutes ago. If you were live with us here on CNN you saw it.

The man's name is David Chalmers. He is with Texas-based Bayoil. He's accused of paying kickbacks to Saddam Hussein's regime. Details just ahead on that.

Other news today.

Law enforcement sources saying a weeklong nationwide manhunt has nabbed more than 10,000 fugitives. Those arrested under Operation Falcon include 162 accused or convicted murderers. The Justice Department holds a news conference at 2:00 p.m. Eastern to discuss the operation. See it live here on CNN.

Authorities in Los Angeles are investigating a deadly freeway incident. Two people were killed when a metal object smashed through the window of a minivan on I-5 this morning. Detectives are trying to determine whether it was an accident or someone threw that object.

Defense Secretary Rumsfeld has wrapped up his trip to Asia and the Middle East. After meeting with Pakistan's president, Rumsfeld made a brief stop in Kurdistan. The visit came less than a month after the country's former president was forced from office by a popular uprising.

It is just after 11:00 a.m. on the East Coast. For those of you joining us on the West Coast, just after 8:00 a.m.

Good morning once again. I'm Daryn Kagan, at CNN Center in Atlanta. Let's get started.

First, to Iraq.

American diplomats are working behind the scene trying to free hostage Jeffrey Ake. The Indiana businessman turned up on a videotape shown on Al-Jazeera on Wednesday. On that tape, three men with guns are seen standing over Ake.

He begs his family and friends to urge the U.S. to negotiate with his captors. The Bush administration, restating a long-held U.S. policy, says there are no negotiations going on.

Jeffrey Ake is the father of four. He went to Iraq to set up a water bottling plant near Baghdad.

CNN's Keith Oppenheim is outside Ake's home this morning in La Porte, Indiana.

OPPENHEIM: It's a beautiful day here, Daryn. And, in contrast, a very anxious one for the members of Jeffrey Ake's family. And while they are no doubt going through quite an ordeal as they wait, they are, at the same time, getting a great deal of support from the community.

Jeffrey Ake is a businessman, a well-known businessman here. His company, Equipment Express, develops systems for packaging liquid products. And he was in Iraq marketing his machinery to provide bottled water and cooking oil for Iraqi residents.

In La Porte, Ake is a member of the Rotary Club and the Greater La Porte Chamber of Commerce. He is known as an entrepreneur who encouraged the business community to step out in the international marketplace and to compete. In fact, the mayor of La Porte spoke to us and said he believes Ake's forward thinking is all part of what made him courageous -- or makes him courageous -- but also perhaps vulnerable. (BEGIN VIDEO CLIP)

MAYOR LEIGH MORRIS, LA PORTE, INDIANA: He has the potential to be so helpful to the Iraqi people, to make that a more positive situation. And so people who are -- who don't want that to happen, who want things to continue to be bad and get worse, I presume he would be a logical target, which maybe makes it all the more tragic.

(END VIDEO CLIP)

OPPENHEIM: There is, as you might expect, anger and frustration that Jeffrey Ake is being held hostage. But there's also a great deal of concern for his family.

Daryn, as you were saying, he has four children. His wife, Liliana (ph), helps run the company. And she has been here waiting for word on his safe return. The local police say that the family has been in touch with the FBI, which is encouraging them not to speak to the media at this point.

There is going to be a candlelight vigil in this community tomorrow night. This is a vigil that's in part sponsored by the Rotary Club and the Chamber of Commerce, which I mentioned he is a member of. And it's really a way for this community to express their hopes for his safe return and to show this family that this community is very much behind them.

Daryn, back to you.

KAGAN: Keith Oppenheim, live from Indiana. Thank you.

Amanda Haverstick is a reporter for the "Michigan City News- Dispatch." She interviewed Jeffrey Ake about his business last year. She's also joining me this morning from La Porte, Indiana.

Amanda, good morning.

AMANDA HAVERSTICK, "MICHIGAN CITY NEWS-DISPATCH": Hi.

KAGAN: Let's find out a little bit more about the man that you interviewed last year. What were some of your first impressions of Jeffrey Ake?

HAVERSTICK: He was just a really nice, laid back man. He was really just one of the people in his plant. He was not uptight. He was a happy man. He was positive.

KAGAN: Explain the business to me a little bit better. It makes things so you can fill up plastic bottles?

HAVERSTICK: Yes. He makes the machinery that labels and caps and fills up the bottles.

KAGAN: And one of the things in the article that you wrote last year talks about his different type of managing style. He was very open and very motivating to his employees. HAVERSTICK: Yes. He had something called open book management. Everything was open to them. They could see where the company was going.

They also set weekly goals, which was really neat. They had a weekly goal. And if they met that goal that week, they got a bonus that week. It wasn't some far-off idea at the end of the year.

KAGAN: That sounds pretty motivating to a lot of people, I think.

HAVERSTICK: Yes.

KAGAN: Did he mention when you interviewed him any desire to go to Iraq?

HAVERSTICK: Come again? I couldn't hear you.

KAGAN: When you interviewed him, did he mention any desire, was that part of the company plan to go and build plant in Iraq?

HAVERSTICK: He had been to Iraq before. When I spoke to him, he had just gotten back from Nigeria. So he had pretty much traveled throughout the world with his machinery. So I think it was kind of an overall game plan to market throughout the world.

KAGAN: Interesting, this entrepreneur in small town Indiana with these big plans to take on the world.

HAVERSTICK: It is pretty remarkable. I mean, considering that he started out of his garage, and he had been able to move out and then move to an even bigger facility.

KAGAN: And what can you tell us about the impact that the situation is having on the La Porte community?

HAVERSTICK: People around here I think are pretty much in shock. They're in disbelief that something of this nature could happen here, that someone from this area could be kidnapped and held hostage in Iraq. It's just something that doesn't -- you don't foresee happening here in this community.

KAGAN: Amanda Haverstick, with the "Michigan City News- Dispatch." Thanks for sharing the insights and the background behind your article.

HAVERSTICK: Thank you.

KAGAN: Appreciate it.

Things looked like they were calming down a bit, but violence has surged in Iraq today. Two suicide car bombs exploded in rapid succession in Baghdad. A third was detonated by the U.S. military in a controlled explosion.

The blast killed 11 people and wounded another 37. An Iraqi police convoy was apparently the target.

And in the northern city of Kirkuk, gunmen attack a police station, killing three officers. The attack follows a recent bombing that killed 10 security guards in the city.

The kidnaps and killings make for dramatic, if not difficult to watch, television. And Iraqi viewers are tuning in, in droves. With more on that, here's CNN's Aneesh Raman.

(BEGIN VIDEOTAPE)

RAMAN (voice-over): This is must-see TV in Iraq, confessions of suspected insurgents broadcast nightly on a show called "Terrorism in the Hands of Justice." Brutal tales of kidnappings, beheadings and bombings have in one month on air made the program appointment television.

UNIDENTIFIED MALE (through translator): We detonated two IEDs on the police and killed six of them.

RAMAN: Confessions and confrontations, scenes like this, where victim's families meet those that killed their loved ones. Iraqis simply can't turn it off.

UNIDENTIFIED MALE (through translator): I watch every day. All of us do. I will rush home just to watch it.

RAMAN: Reality television with visceral appeal. Each confession a window into the insurgency, putting a face to the violence.

ISMAEL ZAIR, IRAQI NEWSPAPER EDITOR: Ninety-nine percent of those guys is more or less illiterate. They don't have anything to do with culture, with history, with political life.

RAMAN: The show is broadcast on al-Iraqiya, a network established by the U.S. soon after the invasion, but now in Iraqi hands. It's designed to combat perceptions that insurgents weren't arrested, that Iraqi justice did not exist. A sentiment seemingly now transformed.

UNIDENTIFIED MALE (through translator): Psychologically speaking, I like watching because they have imposed control on terrorists and are chasing them. I used to be afraid when I went out, but not anymore.

RAMAN: But one unintended consequence, bruised detainees, raising questions about prisoner treatment and forcing action from the Human Rights Ministry.

BHAKTIAR AMIN, INTERIM HUMAN RIGHTS MINISTER: We hear verbal abuses are visible. And we've not approved that.

RAMAN (on camera): Beyond potential abuse, questions are being raised as to whether these confessions are forced or, in some cases, staged. The station denies all of that, as does the Interior Ministry, whose officials are conducting and taping the interrogations.

(voice-over): To some, that may not be much of an assurance. But to many Iraqis, robust interrogations techniques are a means to an ends, a just action in a just cause.

UNIDENTIFIED MALE (through translator): Even if they torture him, are they not investigating him? That is how to extract information. They have the right to beat him, any criminal, even in developed countries.

RAMAN: It is compulsive TV. Every night at 9:00 p.m., from Baghdad to Basra, they are tuning in to see the hands of justice at work.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE)

KAGAN: Still ahead, a shocking story out of Florida. A mother accused of trying to sell her daughter for a car. And we will tell you the details.

A surprising turnaround on silicone implants. We'll tell you why one brand of implants actually won the approval of the FDA panel. That's coming up on today's "Daily Dose."

And the taxman cometh with an April surprise. Why you may not be getting back as much from Uncle Sam as you think you are.

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KAGAN: News from Capitol Hill. The House looks ready to pass an energy bill, but it would allow drilling in the Arctic National Wildlife Refuge in Arizona. That provision is likely to face a filibuster in the Senate.

And a plan to end the estate tax is headed to the Senate as well. The House voted to repeal the tax beginning in 2010. Democrats argue it's not a good idea in an era of deficits. They call it reverse Robin Hood-type of situation.

Well, let's talk taxes now. If you are scrambling to finish your tax returns, words like "minimum tax" might sound like music to your ears. But the alternative minimum tax is hitting a sour note with millions of Americans.

Joining us from Baltimore is Michael Kitces. He is director of financial planning for Pinnacle Advisory Group.

Good morning.

MICHAEL KITCES, PINNACLE ADVISORY GROUP: Good morning. It's good to be here.

KAGAN: Yes. Well, I guess for some people it's a good morning. Some people facing this alternative minimum tax, not so good.

KITCES: Well, and we are here on April 14 or so, getting ready to finish up taxes.

KAGAN: OK. Now, I've got to tell you, Michael, we've done a couple segments on this. I still don't get it. What is it?

KITCES: Well, the idea of an alternate minimum tax originally was, here's a different way to calculate your tax bill that doesn't let you take a bunch of aggressive deductions and loopholes. And that's really what it was in the first place.

KAGAN: but what has it grown into?

KITCES: What it's grown into now is, take a wide swath of regular deductions that you're used to getting when you take -- when you do your taxes. You just don't get them anymore.

KAGAN: Says who?

KITCES: They don't apply.

KAGAN: I mean, obviously, says the federal government. And I understand this affects not only a lot of people, but especially people in high-cost states like California.

KITCES: Yes. There are a couple of really common deductions that set most sort of common middle Americans across the line into AMT. And the big three that we see most often are states with high income taxes, state and local taxes. So that's places like Vermont, District of Columbia, California, Montana, places with top tax rates upwards of 8 or 9 percent.

KAGAN: And why would that trigger it?

KITCES: Essentially, that is a deduction that you get under the regular tax system that you do not get under the alternative minimum tax system.

KAGAN: Oh, OK.

KITCES: Likewise for real estate taxes. And so areas where either real estate has appreciated substantially, or just where the tax rates are very high on real estate, we see large amounts of real estate deductions potentially triggering AMT.

Again, fundamentally, the same reason, not deductible under the AMT system. And so when you calculate your income there without all these deductions, you end up with a higher tax bill.

KAGAN: And this was originally targeting super rich people who were getting out of paying their taxes. But this could hit people who make like $75,000 a year. I think if you ask most people in that pay range, they will tell you they're not super rich.

KITCES: No. And, in fact, the primarily problem is, because it's not necessarily on their radar screens, particularly as we're here on April 14, a lot of people are finishing their tax return right now and scrambling to get it filed and done by April 15. They may not even be filing the separate form you have to file for AMT just to calculate your tax.

So some of them are unfortunately going to get bad news when they file their taxes and they think they're done. And a month or two from now, they're going to get a bill from the IRS that says you miscalculated your bill, you forgot to file the AMT schedule, and that actually was an extra tax bill for you.

KAGAN: And how do you fight?

KITCES: How do you fight? Well, fundamentally, this is something that's got to change in Congress.

This is a "write your congressman" kind of problem. It is so expensive to substantively change a repeal right now, that it virtually would have to be part of a much wider spread tax reform bill, and an expensive tax reform bill, to actually bring about any substantial change. Otherwise, all we're going to see for many years to come is small changes at the margin that perhaps help a few people not be stung quite as badly. But it's not going away anytime soon. And, in fact, it's getting much worse.

We've seen projections by 2010 or so, about one in three taxpayers that earn $50,000 to $75,000 of income are affected. Three in four that earn $75,000 to $100,000. More than 90 percent that earn between $100,000 and $500,000.

KAGAN: And that can be of little comfort of people who are doing that last-second crunching and getting their taxes done. But thanks for explaining it to us a little bit better.

KITCES: Absolutely.

KAGAN: And maybe lighting the fire under some changes. Michael Kitces, thank you.

KITCES: Thank you.

KAGAN: Other news today, the most sweeping overhaul of bankruptcy law in a quarter century is nearing a final passage. The House votes today on the bill. It was approved by the Senate last month.

It will make it harder for people to wipe away their debts. Banks and credit card companies have been pushing for the legislation for years.

It would require people above a certain income level to pay back debts under a court-ordered plan. Critics of the bankruptcy bill say it will hurt people already devastated by job losses or huge medical bills.

Chris Huntington introduces us to a family who saw bankruptcy as their only option, an option they wouldn't have under the new legislation.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Greg and Brandy Denno were doing everything they could to get by until a series of uninsured medical bills drove them over the financial edge.

BRANDY DENNO, FILED FOR BANKRUPTCY: Can't even afford to take them to get a Happy Meal.

HUNTINGTON: They celebrated Valentine's Day by filing for Chapter 7 bankruptcy protection, which erased their debt of $37,000. But they would not have that option under the proposed changes to the bankruptcy law, which would impose a means test on debtors and deny Chapter 7 protection to anyone like the Dennos with pre-tax income above the median level for their state. The Dennos' lawyers say the new rules would put debtors like the Dennos in even worse shape.

GARY FISHOFF, BANKRUPTCY ATTORNEY: We're talking about tax cheats here. We're just talking about people trying to survive. They'd have to do what's called a Chapter 13 in a reorganization and pay money back over a period of five years, which obviously they don't have.

HUNTINGTON: Those in favor of the new rules point out that the majority of bankruptcy filers make less than the median and would not be affected.

UNIDENTIFIED MALE: A lot of people who are filing for bankruptcy genuinely need it. And one of the things that's good about this legislation is it preserves bankruptcy in Chapter 7 for those people.

HUNTINGTON: Still, the Dennos are not unusual, because their bankruptcy stemmed from a devastatingly common cause, uninsured family illness. In the summer of 2003, Greg, a trained auto mechanic, had just started a new job, but his health benefits would not kick in for six months.

So when son Christopher had to be hospitalized for dehydration, the Dennos were stuck with a $9,000 bill. Brandy got a nightshift job, only to take a bad fall on a wet floor. Sleep deprived and in constant pain, she kept working because Greg was getting sick.

GREG DENNO, FILED FOR BANKRUPTCY: I couldn't breathe. I was getting really dizzy. No energy. I knew something was wrong.

B. DENNO: We were actually two weeks away from getting insurance when he ended up having no choice but to go to the hospital.

HUNTINGTON: Greg had pneumonia. His left lung was down to just 2 percent capacity. But after four days on a breathing machine, he checked himself out of the hospital against doctors' orders to go back to work. The bill this sometime, nearly $14,000.

The final blow ironically came when their health insurance finally kicked in. An MRI revealed that Brandy's fall had torn a knee ligament and she had to stop working.

B. DENNO: Trust me, people don't ask for bad luck. It just happens.

HUNTINGTON: It will still be a challenge to make ends meet, but bankruptcy gives the Dennos a fresh start. And they are thankful they didn't wait any longer.

Chris Huntington, CNN, Islip Terrace, New York.

(END VIDEOTAPE)

KAGAN: There's a disturbing story out of Florida this morning. A mother is arrested after allegedly making her daughters engage in unspeakable acts.

And in California, a community is in shock this morning after a little-leaguer is accused of killing another player. Details just ahead.

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KAGAN: We're showing you a live picture from Washington D.C. Big day for baseball fans there.

It's going to be in the nation's capital, the first -- it's going to be the home opener for the new Washington Nationals. They'll be hosting the Arizona Diamondbacks.

The city's first home opener since 1971. If you're making a little baseball history, that's when the then-Senators moved to Texas and became the Rangers. If today's team looks a little familiar with the Canadian player, it's really the Montreal Expos that have been moved to the nation's capital.

And it looks like a love lovely day. And it will be a lovely night for baseball in the nation's capital.

Orelon, they're doing great. They're first place in the NLE.

ORELON SIDNEY, CNN METEOROLOGIST: Fantastic.

KAGAN: Yes.

(WEATHER REPORT)

KAGAN: All right, Orelon. Thank you.

SIDNEY: You're welcome.

KAGAN: This breaking news coming out of Salem, Oregon. The high court in that state has nullified the marriage licenses that have been issued to some 3,000 same-sex couples in Oregon. This happened last year.

The Supreme Court giving this ruling on the licenses issued last year in Multnomah County. Before that practice was stopped, the court says that it's making its announcement on its Web site, and that's where we find the news that these marriage licenses, 3,000 that were issued, have now been nullified.

On a related noted, the governor of Oregon had said he's going to back a different bill to legitimize civil unions to give gay and lesbian couples some of the rights bestowed on married couples. But for now, those marriage licenses for the same-sex couples in Oregon have been nullified.

Much more ahead. Right now a quick break.

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