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American Morning

Interview With HUD Secretary Alphonso Jackson; 'Deep Throat' Revealed; Interview With Bernard Shaw

Aired June 01, 2005 - 07:32   ET

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

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


SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back on this AMERICAN MORNING. We are celebrating CNN's 25th anniversary today.
BILL HEMMER, CNN ANCHOR: And one of the guys who really helped put CNN on the map from the very first day was Bernie Shaw. He's our guest in a few moments here. He was there when it all began. He was there for all of the big stories. This his first broadcast right here. We're going to look forward to talking to Bernie in just a couple minutes here, reflecting again today.

O'BRIEN: But first the headlines with Carol Costello.

Good morning.

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

"Now in the News."

The U.S. military is condemning a suicide bombing in southern Afghanistan, calling it an act of terrorism. A bomb went off during a funeral at a mosque in Kandahar earlier today. At least 14 people were killed, some 40 others wounded.

To Iraq now. U.S. military headquarters in Baghdad coming under fire this morning. American officials tell CNN a suicide car bomb exploded at a checkpoint near Baghdad International Airport and a base housing U.S. troops. At least 15 were hurt.

In California, the judge in the Michael Jackson trial is finalizing jury instructions. Those instructions will be read to the panel today. The jurors will learn how to weigh certain evidence in the case. Closing arguments in the trial are set for tomorrow.

The so-called runaway bride Jennifer Wilbanks, oh, is she paying up. Her lawyer has delivered a check for more than $13,000 to the city of Duluth, Georgia. The settlement covers overtime and out-of- pocket expenses the city incurred during its search for Wilbanks. She still faces criminal charges stemming from that cross-country trip. Authorities say they would not issue an arrest warrant for Wilbanks until she leaves an in-patient treatment facility. She's getting help.

And doctors in Lima, Peru, say the first surgery to separate a baby girl's legs was a true success. The baby was born with a rare defect known as mermaid syndrome. It happens in only 1 of every 70,000 births. Doctors had planned to separate the legs only up to the knees, but the procedure turned out even better than expected. They separated her legs altogether. But more surgeries to come -- Soledad.

O'BRIEN: Oh, gosh, look at how cute she is though.

COSTELLO: Yes.

O'BRIEN: Good news there that it went well. Carol, thanks.

Well, a Bush administration drive to get even more people into their own homes begins today. Homeownership is up, and prices are through the roof. But there are some serious concerns about a bubble that could burst and the way that homes are being financed.

Housing and Urban Development Secretary Alphonso Jackson is at the White House this morning.

Nice to see you, Secretary Jackson. Thanks for joining us this morning.

ALPHONSO JACKSON, HUD SECRETARY: Thank you so much, Soledad, for having me here.

O'BRIEN: It's our pleasure. Why the push to increase homeownership?

JACKSON: Well, I think it's very important that everyone has a dream, and the president believes that homeownership is stability. It creates an environment for children to live in. And, in fact, we know it does a number of things. First of all, children do 9 percent better in math, 7 percent better in English when they have a home. So, it's about stability and about making sure that America continues to thrive.

O'BRIEN: When you look at some of the statistics, 25 percent of all home buyers, for example, put no money down when they buy a home. Forty-two percent of first-time buyers, zero down payment when they're buying their first home. Do you have concerns that these are homeowners, but they actually have no financial equity in their own home?

JACKSON: No, that's really not true. They might initially buy the home with no equity, but the prices of homes in this country today are doing extremely well. So, investment in homes is an extremely important thing for this country.

And let me say this to you. Most people do not realize that wealth comes from homeownership. That's how we create wealth in this country. Secondly, from that, many people do a great deal with that wealth. They finance small businesses. They educate their children. So, clearly, homeownership in this country is the linchpin, and it has been that way for the last three or four years.

It's important to note that President Bush is the first president ever to stress the importance of homeownership in this country, because he believes that if we can put people in homes, we will see this country thrive. Think about this: We've created 75 million new homeowners in this country. But specifically, we've created 2.3 million new minority homeowners, specifically blacks and Hispanics.

O'BRIEN: There are some big concerns, though, especially when it comes to home foreclosures. I know you're familiar with this statistic. Fifty percent of foreclosures, up 50 percent between just February and March. Isn't that a sign that the efforts to push people into buying homes maybe when they're not financially ready or even capable to own a home?

JACKSON: No, that is not. We know that we've had some foreclosures in parts of the country. We do, because some parts of the country are really devastated. And that's one of the reasons that the president is talking about juxtaposing several agencies together to create an economic viability area for cities to address the needs of those people and those specific areas that are losing their homes. But on the whole, homeownership is thriving in this country. People are keeping their homes, and the foreclosure rate is much lower than people had anticipated at this point our country.

O'BRIEN: How do you protect homeowners? How do you protect them so that they can still pay their mortgage, even if they do fall ill or they have some major financial catastrophe in their lives?

JACKSON: We are really aware of that. And the president has put in motion at FHA -- that's the Federal Housing Administration -- we work with homeowners and sometimes up to nine months to make sure that we don't foreclose on their homes. And in working with them, we've been able to save almost 30 percent of those persons who possibly had a -- possibly could have lost their home.

So, we are very, very cognizant of that fact, and we will continue to work with them, because we think homeownership in this country is absolutely imperative for us to continue to stay strong.

O'BRIEN: Thank you, Secretary Alphonso Jackson joining us this morning from the Department of Housing and Urban Development. Nice to see you, sir. Appreciate it.

JACKSON: Thank you so much.

O'BRIEN: Bill.

HEMMER: Soledad, in a city that can't seem to keep a secret, Washington, D.C., did just that for more than three decades. We now know that Mark Felt, age 91, was "Deep Throat." And that opens many new questions today.

Thelma Gutierrez is talking with Felt's neighbor in Santa Rosa, California.

Thelma -- good morning there.

THELMA GUTIERREZ, CNN CORRESPONDENT: Good morning, Bill. Well, the neighbors out here told us that for years there have been rumors out here circulating that, in fact, the private, quiet man who lives in the home right behind me was, in fact, "Deep Throat."

Now, they say that those rumors surfaced after a local reporter had reported that Bob Woodward pulled into this neighborhood in a limousine and met with Mr. Felt. And, of course, people here took notice. Nonetheless, they say they are surprised and somewhat pleased that Mr. Felt finally came forward.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Hey, look at that.

GUTIERREZ (voice over): It was a curious sight. The man who was known for hiding in the shadows for three decades stepped out into the limelight and appeared to enjoy every minute of it.

UNIDENTIFIED MALE: Hey.

UNIDENTIFIED MALE: Hey.

UNIDENTIFIED MALE: We really appreciate you coming out like this.

GUTIERREZ: Leaning on his walker, Mark Felt made his belated debut as "Deep Throat" at the age of 91.

JIM BAKER, "DEEP THROAT'S" NEIGHBOR: I'm glad it's finally coming out. I think it's one of those mysteries of history that needed to do come out.

GUTIERREZ: Joan Felt, Mark's daughter, also thought it was time for her father to reveal his secret identity. She convinced him to come forth.

JOAN FELT, DAUGHTER: I think it's a great moment in American history. It's a great moment for our family.

GUTIERREZ: Joan talked her father into moving from Washington, D.C. to Santa Rosa, California, where they have lived together for the past 10 years.

FELT: He's a great man. He's so kind. He's so attentive to other people and loving. And we're all so proud of him.

GUTIERREZ: In the early '70s, Felt was the number two man in the FBI. He became the source for "Washington Post" reporters Bob Woodward and Carl Bernstein, and provided inside information that helped topple Richard Nixon.

BAKER: I think "Deep Throat" did a great service to the country at that time. I don't believe in government by secrecy. So, I believe he did a great service to the country. People who say it was a criminal act or anything, I think, are completely wrong. And I hope now that he will get some of the acclaim that I think he deserves for what he did.

GUTIERREZ: In Felt's quiet neighborhood, residents who see him take daily rides around the block say they were stunned.

WOODROW GUDERIAN, "DEEP THROAT'S" NEIGHBOR: It's kind of strange. It's like finding the Lindbergh baby right next door.

BAKER: My son always played basketball with Nick down here when they were younger. So to find out that the place that he was going to play basketball was "Deep Throat's" house was kind of amazing.

UNIDENTIFIED MALE: We won't be gone long.

(END VIDEOTAPE)

GUTIERREZ: Joan Felt said that there were many specifics that she couldn't talk about to reporters, because of an agreement that the family has with "Vanity Fair," which, of course, is the magazine that broke the story -- Bill.

HEMMER: Thelma Gutierrez in Santa Rosa, California for us -- Soledad.

O'BRIEN: Weather-wise, it is the official beginning of hurricane season.

(WEATHER REPORT)

O'BRIEN: Coming up next, we're going to celebrate our 25th anniversary with a CNN original. Former anchor Bernard Shaw joins us to share his memories of CNN's early days. And there he is.

HEMMER: First, though, to this question: The day CNN went on the air, how many people were on its staff? Three hundred, 600 or 900? The answer is coming up after a break. CNN 25, today, June 1. Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Before the break, we asked, how many staffers did CNN have when it began operations in 1980? The answer, (a), 300 reporters, editors and technicians, all based in Atlanta, and eight different bureaus, including Washington. And today, CNN employs about 4,000 people around the world. June 1, 1980, the day CNN went on the air. Take a look at this moment from day one.

(BEGIN VIDEO CLIP)

BERNARD SHAW, FORMER CNN ANCHOR: I'm Bernard Shaw in our cable news Washington bureau. Our staff is large because this news capital of the world is large, complex and ever-changing. The number one challenge is not just to tell you what and why things happen here, but to explain what developments mean to you and how they'll affect your pocketbook. And we've got the kind of professionals who care.

(END VIDEO CLIP) HEMMER: Great memories. Bernard Shaw helping to make Ted Turner's vision of the 24-hour news network a reality. And Bernie retired from CNN in 2001. Four years later, he's back with us today.

Great to see you friend.

SHAW: Good to be back. Happy birthday.

HEMMER: Happy birthday to you as well. That clip we just watched there, you're sitting at that desk. You left ABC News to come and launch this new venture that no one was really quite sure about where it was going. Did you know behind you, Bernie, that the guy was still putting the newsroom together with that hammer?

SHAW: I was quite aware of that, not only the carpenter, but the painters were off to the right and to the left, and they continued working. Sometimes they popped up in the shot.

HEMMER: What were you thinking as you sat at that desk the first day you went to air?

SHAW: I recall my stomach was tight, and I told myself, 'There's no turning back. You've walked the plank.' And my attitude was, let's make this work.

HEMMER: January of 1991, I think that's really when most people felt that CNN was really working, because that's the first time so many millions around the world paid attention.

Listen to this clip from Baghdad when you were there with John Holiman (ph) and Peter Arnett (ph) and a few others.

(BEGIN VIDEO CLIP)

SHAW: Something is happening outside. Peter Arnett (ph) joins me here. Let's describe to our viewers what we're seeing. The skies over Baghdad have been illuminated. Clearly, I've never been there, but this feels like we're in the center of hell.

(END VIDEO CLIP)

HEMMER: As we look back, Bernie, we know that that moment put CNN on the map around the world. But if CNN did not have that moment, where do you think the network would be today?

SHAW: I think CNN still would have evolved to its current status. I have quarreled with the observation that we were put on the map because of the Gulf War in '91, January. We had been on the air for a full decade. We had been reporting stories that brought us credibility, from the assassination attempt on the life of President Reagan to the missile silo, the nuclear warhead that the Air Force was looking for in the woods, to other stories. The 1985 Reagan/Gorbachev summit in Geneva, the first one, that was a monumentally important story, et cetera, et cetera.

HEMMER: Go back to China, too, Tiananmen Square a few years before the Persian Gulf War.

SHAW: Oh, yes, yes.

HEMMER: You were there with a number of CNN staffers, literally witnessing history unfold. At a time when you went there for a completely different story Tiananmen Square broke out. Watch here, and we'll talk about it, too, Bernie.

SHAW: OK.

(BEGIN VIDEO CLIP)

SHAW: In my 26 years in this business, I've never seen anything like this. The situation in Tiananmen Square is that, it is a standoff. The people are there. The troops are not there. They were ordered in. They came as far as they could get, five miles outside. They were talked to by the people, persuaded to leave. They turned around, promising never to come back.

(END VIDEO CLIP)

HEMMER: You once said the hotter the story, the cooler you stay. Why is that?

SHAW: Well, I think of myself as a surgeon in an operating room. I have a responsibility, as do all of the women and men at CNN, in reporting breaking news, to be calm, to be dispassionate, to be factual, to be accurate, to be balanced, to be fair. And television is a very cool medium.

This camera lens right here magnifies emotionalism. And the last thing people who want information need is someone emotional.

But that story in Tiananmen Square really was -- it gutted me, because I'm an American citizen. I'm a child of democracy. And to have Chinese officials march into your control room and order you off the satellite, to stop reporting live, that was very, very difficult to take. Because what the Chinese government was doing was blindfolding the world. And, of course, a couple nights later, they brought in new troops, and the slaughter began. To this day, we still do not know how many students, women and men, adults, children were slaughtered in Tiananmen Square.

HEMMER: Do you miss it at all?

SHAW: Sometimes I do. I don't miss it enough to want to come back.

HEMMER: Having too much fun with your wife, Linda, I would imagine, right?

SHAW: Yes, and our son and daughter.

HEMMER: I just want to get a quick thought here, and just about 15 seconds left.

SHAW: Sure.

HEMMER: Washington doesn't keep a very good secret. But, boy, it kept one heck of a secret with "Deep Throat" until yesterday. What's the buzz in D.C. today regarding Mark Felt, Bernie?

SHAW: Everyone is struck by the fact that we now know. Bob Woodward and "The Washington Post" kept their word with Mark Felt. We won't reveal your name until after you die. And we know that Mark Felt's family worked on him for three years, and he finally decided to come forward in "Vanity Fair." I regard the man as a patriot to the extreme. Extremely patriotic.

HEMMER: And they kept the secret older than CNN. Can you believe it? Hey, thanks, and happy anniversary to you again. It's really great to see you, Bernie.

SHAW: Thank you.

HEMMER: You got it.

SHAW: And a salute, of course, to Ted Turner.

HEMMER: Amen to that. And best to you and Linda, all right?

SHAW: Thank you.

HEMMER: Thanks, Bernie.

We'll have much more on what's happening on CNN's birthday throughout the day today; throughout the week, too. Tomorrow, a reflection on the deadliest act of terrorism on American soil, certainly the events of 9/11. We'll reflect on that tomorrow.

Also tonight, a prime-time special, "Defining Moments: 25 Stories That Touched Our Lives." We'll look back at the past quarter century, 8:00 Eastern, 5:00 on the West Coast. And there are some great and wonderful moments of history in this program later tonight -- Soledad.

O'BRIEN: All right, Bill, thanks.

Business news is ahead this morning. One automaker hopes it has an offer you can't refuse. How would you like the employee discount? Andy is "Minding Your Business." That's coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: More airline news to talk about. The world's second- largest airline is breathing a little easier after working things out with union employees. Plus, a special discount that's coming from GM. Andy Serwer is "Minding Your Business" this morning.

Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Soledad. Yes, let's talk about these transportation stories. First of all, United Airlines, we talked about this yesterday, really dodging a bullet. It went right down to the deadline at lunchtime yesterday, Central Time. But they did manage to settle with the two largest unions, the machinists and mechanics, getting an agreement in principle. Rank and file still need to vote on it, but that appears to be a done deal, getting $176 million in cost savings.

This apparently clears the way for the company to come out of bankruptcy. There is talk about them being able to do that in the fall. The company has been in chapter 11 for two-and-a-half years and lost $1.1 billion so far this year.

Speaking of other big companies with some problems, General Motors. You know, these clearing-out-of-inventory sales are nothing new. But this is kind of an unusual one here. GM has a bloated inventory of 2005 models. They are offering customers, apparently it's going to be announced today, the same discount that employees, the GM employees get, which is about a 3 percent to 4 percent discount off of the invoice price. For instance, a Silverado usually goes for 28,400, $28,417. With this discount, it will be going for $24,225.

GM has lost $1.3 billion so far this year. So, again, some -- a couple of big companies are looking to pare costs.

Also, I want to tell you, Soledad, that later in the program, to celebrate CNN's 25th anniversary from the business perspective, we'll be talking about some of the big stories of 1980 making news back then.

O'BRIEN: All right. Excellent. Andy, thanks.

SERWER: You're welcome.

O'BRIEN: Bill.

HEMMER: All right, Soledad. "Deep Throat's" identity was a mystery for more than 30 years. So why now is it public? A closer look at that's ahead here on AMERICAN MORNING. Back in a moment at the top of the hour after this.

(COMMERCIAL BREAK)

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Aired June 1, 2005 - 07:32   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back on this AMERICAN MORNING. We are celebrating CNN's 25th anniversary today.
BILL HEMMER, CNN ANCHOR: And one of the guys who really helped put CNN on the map from the very first day was Bernie Shaw. He's our guest in a few moments here. He was there when it all began. He was there for all of the big stories. This his first broadcast right here. We're going to look forward to talking to Bernie in just a couple minutes here, reflecting again today.

O'BRIEN: But first the headlines with Carol Costello.

Good morning.

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

"Now in the News."

The U.S. military is condemning a suicide bombing in southern Afghanistan, calling it an act of terrorism. A bomb went off during a funeral at a mosque in Kandahar earlier today. At least 14 people were killed, some 40 others wounded.

To Iraq now. U.S. military headquarters in Baghdad coming under fire this morning. American officials tell CNN a suicide car bomb exploded at a checkpoint near Baghdad International Airport and a base housing U.S. troops. At least 15 were hurt.

In California, the judge in the Michael Jackson trial is finalizing jury instructions. Those instructions will be read to the panel today. The jurors will learn how to weigh certain evidence in the case. Closing arguments in the trial are set for tomorrow.

The so-called runaway bride Jennifer Wilbanks, oh, is she paying up. Her lawyer has delivered a check for more than $13,000 to the city of Duluth, Georgia. The settlement covers overtime and out-of- pocket expenses the city incurred during its search for Wilbanks. She still faces criminal charges stemming from that cross-country trip. Authorities say they would not issue an arrest warrant for Wilbanks until she leaves an in-patient treatment facility. She's getting help.

And doctors in Lima, Peru, say the first surgery to separate a baby girl's legs was a true success. The baby was born with a rare defect known as mermaid syndrome. It happens in only 1 of every 70,000 births. Doctors had planned to separate the legs only up to the knees, but the procedure turned out even better than expected. They separated her legs altogether. But more surgeries to come -- Soledad.

O'BRIEN: Oh, gosh, look at how cute she is though.

COSTELLO: Yes.

O'BRIEN: Good news there that it went well. Carol, thanks.

Well, a Bush administration drive to get even more people into their own homes begins today. Homeownership is up, and prices are through the roof. But there are some serious concerns about a bubble that could burst and the way that homes are being financed.

Housing and Urban Development Secretary Alphonso Jackson is at the White House this morning.

Nice to see you, Secretary Jackson. Thanks for joining us this morning.

ALPHONSO JACKSON, HUD SECRETARY: Thank you so much, Soledad, for having me here.

O'BRIEN: It's our pleasure. Why the push to increase homeownership?

JACKSON: Well, I think it's very important that everyone has a dream, and the president believes that homeownership is stability. It creates an environment for children to live in. And, in fact, we know it does a number of things. First of all, children do 9 percent better in math, 7 percent better in English when they have a home. So, it's about stability and about making sure that America continues to thrive.

O'BRIEN: When you look at some of the statistics, 25 percent of all home buyers, for example, put no money down when they buy a home. Forty-two percent of first-time buyers, zero down payment when they're buying their first home. Do you have concerns that these are homeowners, but they actually have no financial equity in their own home?

JACKSON: No, that's really not true. They might initially buy the home with no equity, but the prices of homes in this country today are doing extremely well. So, investment in homes is an extremely important thing for this country.

And let me say this to you. Most people do not realize that wealth comes from homeownership. That's how we create wealth in this country. Secondly, from that, many people do a great deal with that wealth. They finance small businesses. They educate their children. So, clearly, homeownership in this country is the linchpin, and it has been that way for the last three or four years.

It's important to note that President Bush is the first president ever to stress the importance of homeownership in this country, because he believes that if we can put people in homes, we will see this country thrive. Think about this: We've created 75 million new homeowners in this country. But specifically, we've created 2.3 million new minority homeowners, specifically blacks and Hispanics.

O'BRIEN: There are some big concerns, though, especially when it comes to home foreclosures. I know you're familiar with this statistic. Fifty percent of foreclosures, up 50 percent between just February and March. Isn't that a sign that the efforts to push people into buying homes maybe when they're not financially ready or even capable to own a home?

JACKSON: No, that is not. We know that we've had some foreclosures in parts of the country. We do, because some parts of the country are really devastated. And that's one of the reasons that the president is talking about juxtaposing several agencies together to create an economic viability area for cities to address the needs of those people and those specific areas that are losing their homes. But on the whole, homeownership is thriving in this country. People are keeping their homes, and the foreclosure rate is much lower than people had anticipated at this point our country.

O'BRIEN: How do you protect homeowners? How do you protect them so that they can still pay their mortgage, even if they do fall ill or they have some major financial catastrophe in their lives?

JACKSON: We are really aware of that. And the president has put in motion at FHA -- that's the Federal Housing Administration -- we work with homeowners and sometimes up to nine months to make sure that we don't foreclose on their homes. And in working with them, we've been able to save almost 30 percent of those persons who possibly had a -- possibly could have lost their home.

So, we are very, very cognizant of that fact, and we will continue to work with them, because we think homeownership in this country is absolutely imperative for us to continue to stay strong.

O'BRIEN: Thank you, Secretary Alphonso Jackson joining us this morning from the Department of Housing and Urban Development. Nice to see you, sir. Appreciate it.

JACKSON: Thank you so much.

O'BRIEN: Bill.

HEMMER: Soledad, in a city that can't seem to keep a secret, Washington, D.C., did just that for more than three decades. We now know that Mark Felt, age 91, was "Deep Throat." And that opens many new questions today.

Thelma Gutierrez is talking with Felt's neighbor in Santa Rosa, California.

Thelma -- good morning there.

THELMA GUTIERREZ, CNN CORRESPONDENT: Good morning, Bill. Well, the neighbors out here told us that for years there have been rumors out here circulating that, in fact, the private, quiet man who lives in the home right behind me was, in fact, "Deep Throat."

Now, they say that those rumors surfaced after a local reporter had reported that Bob Woodward pulled into this neighborhood in a limousine and met with Mr. Felt. And, of course, people here took notice. Nonetheless, they say they are surprised and somewhat pleased that Mr. Felt finally came forward.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Hey, look at that.

GUTIERREZ (voice over): It was a curious sight. The man who was known for hiding in the shadows for three decades stepped out into the limelight and appeared to enjoy every minute of it.

UNIDENTIFIED MALE: Hey.

UNIDENTIFIED MALE: Hey.

UNIDENTIFIED MALE: We really appreciate you coming out like this.

GUTIERREZ: Leaning on his walker, Mark Felt made his belated debut as "Deep Throat" at the age of 91.

JIM BAKER, "DEEP THROAT'S" NEIGHBOR: I'm glad it's finally coming out. I think it's one of those mysteries of history that needed to do come out.

GUTIERREZ: Joan Felt, Mark's daughter, also thought it was time for her father to reveal his secret identity. She convinced him to come forth.

JOAN FELT, DAUGHTER: I think it's a great moment in American history. It's a great moment for our family.

GUTIERREZ: Joan talked her father into moving from Washington, D.C. to Santa Rosa, California, where they have lived together for the past 10 years.

FELT: He's a great man. He's so kind. He's so attentive to other people and loving. And we're all so proud of him.

GUTIERREZ: In the early '70s, Felt was the number two man in the FBI. He became the source for "Washington Post" reporters Bob Woodward and Carl Bernstein, and provided inside information that helped topple Richard Nixon.

BAKER: I think "Deep Throat" did a great service to the country at that time. I don't believe in government by secrecy. So, I believe he did a great service to the country. People who say it was a criminal act or anything, I think, are completely wrong. And I hope now that he will get some of the acclaim that I think he deserves for what he did.

GUTIERREZ: In Felt's quiet neighborhood, residents who see him take daily rides around the block say they were stunned.

WOODROW GUDERIAN, "DEEP THROAT'S" NEIGHBOR: It's kind of strange. It's like finding the Lindbergh baby right next door.

BAKER: My son always played basketball with Nick down here when they were younger. So to find out that the place that he was going to play basketball was "Deep Throat's" house was kind of amazing.

UNIDENTIFIED MALE: We won't be gone long.

(END VIDEOTAPE)

GUTIERREZ: Joan Felt said that there were many specifics that she couldn't talk about to reporters, because of an agreement that the family has with "Vanity Fair," which, of course, is the magazine that broke the story -- Bill.

HEMMER: Thelma Gutierrez in Santa Rosa, California for us -- Soledad.

O'BRIEN: Weather-wise, it is the official beginning of hurricane season.

(WEATHER REPORT)

O'BRIEN: Coming up next, we're going to celebrate our 25th anniversary with a CNN original. Former anchor Bernard Shaw joins us to share his memories of CNN's early days. And there he is.

HEMMER: First, though, to this question: The day CNN went on the air, how many people were on its staff? Three hundred, 600 or 900? The answer is coming up after a break. CNN 25, today, June 1. Back in a moment.

(COMMERCIAL BREAK)

HEMMER: Before the break, we asked, how many staffers did CNN have when it began operations in 1980? The answer, (a), 300 reporters, editors and technicians, all based in Atlanta, and eight different bureaus, including Washington. And today, CNN employs about 4,000 people around the world. June 1, 1980, the day CNN went on the air. Take a look at this moment from day one.

(BEGIN VIDEO CLIP)

BERNARD SHAW, FORMER CNN ANCHOR: I'm Bernard Shaw in our cable news Washington bureau. Our staff is large because this news capital of the world is large, complex and ever-changing. The number one challenge is not just to tell you what and why things happen here, but to explain what developments mean to you and how they'll affect your pocketbook. And we've got the kind of professionals who care.

(END VIDEO CLIP) HEMMER: Great memories. Bernard Shaw helping to make Ted Turner's vision of the 24-hour news network a reality. And Bernie retired from CNN in 2001. Four years later, he's back with us today.

Great to see you friend.

SHAW: Good to be back. Happy birthday.

HEMMER: Happy birthday to you as well. That clip we just watched there, you're sitting at that desk. You left ABC News to come and launch this new venture that no one was really quite sure about where it was going. Did you know behind you, Bernie, that the guy was still putting the newsroom together with that hammer?

SHAW: I was quite aware of that, not only the carpenter, but the painters were off to the right and to the left, and they continued working. Sometimes they popped up in the shot.

HEMMER: What were you thinking as you sat at that desk the first day you went to air?

SHAW: I recall my stomach was tight, and I told myself, 'There's no turning back. You've walked the plank.' And my attitude was, let's make this work.

HEMMER: January of 1991, I think that's really when most people felt that CNN was really working, because that's the first time so many millions around the world paid attention.

Listen to this clip from Baghdad when you were there with John Holiman (ph) and Peter Arnett (ph) and a few others.

(BEGIN VIDEO CLIP)

SHAW: Something is happening outside. Peter Arnett (ph) joins me here. Let's describe to our viewers what we're seeing. The skies over Baghdad have been illuminated. Clearly, I've never been there, but this feels like we're in the center of hell.

(END VIDEO CLIP)

HEMMER: As we look back, Bernie, we know that that moment put CNN on the map around the world. But if CNN did not have that moment, where do you think the network would be today?

SHAW: I think CNN still would have evolved to its current status. I have quarreled with the observation that we were put on the map because of the Gulf War in '91, January. We had been on the air for a full decade. We had been reporting stories that brought us credibility, from the assassination attempt on the life of President Reagan to the missile silo, the nuclear warhead that the Air Force was looking for in the woods, to other stories. The 1985 Reagan/Gorbachev summit in Geneva, the first one, that was a monumentally important story, et cetera, et cetera.

HEMMER: Go back to China, too, Tiananmen Square a few years before the Persian Gulf War.

SHAW: Oh, yes, yes.

HEMMER: You were there with a number of CNN staffers, literally witnessing history unfold. At a time when you went there for a completely different story Tiananmen Square broke out. Watch here, and we'll talk about it, too, Bernie.

SHAW: OK.

(BEGIN VIDEO CLIP)

SHAW: In my 26 years in this business, I've never seen anything like this. The situation in Tiananmen Square is that, it is a standoff. The people are there. The troops are not there. They were ordered in. They came as far as they could get, five miles outside. They were talked to by the people, persuaded to leave. They turned around, promising never to come back.

(END VIDEO CLIP)

HEMMER: You once said the hotter the story, the cooler you stay. Why is that?

SHAW: Well, I think of myself as a surgeon in an operating room. I have a responsibility, as do all of the women and men at CNN, in reporting breaking news, to be calm, to be dispassionate, to be factual, to be accurate, to be balanced, to be fair. And television is a very cool medium.

This camera lens right here magnifies emotionalism. And the last thing people who want information need is someone emotional.

But that story in Tiananmen Square really was -- it gutted me, because I'm an American citizen. I'm a child of democracy. And to have Chinese officials march into your control room and order you off the satellite, to stop reporting live, that was very, very difficult to take. Because what the Chinese government was doing was blindfolding the world. And, of course, a couple nights later, they brought in new troops, and the slaughter began. To this day, we still do not know how many students, women and men, adults, children were slaughtered in Tiananmen Square.

HEMMER: Do you miss it at all?

SHAW: Sometimes I do. I don't miss it enough to want to come back.

HEMMER: Having too much fun with your wife, Linda, I would imagine, right?

SHAW: Yes, and our son and daughter.

HEMMER: I just want to get a quick thought here, and just about 15 seconds left.

SHAW: Sure.

HEMMER: Washington doesn't keep a very good secret. But, boy, it kept one heck of a secret with "Deep Throat" until yesterday. What's the buzz in D.C. today regarding Mark Felt, Bernie?

SHAW: Everyone is struck by the fact that we now know. Bob Woodward and "The Washington Post" kept their word with Mark Felt. We won't reveal your name until after you die. And we know that Mark Felt's family worked on him for three years, and he finally decided to come forward in "Vanity Fair." I regard the man as a patriot to the extreme. Extremely patriotic.

HEMMER: And they kept the secret older than CNN. Can you believe it? Hey, thanks, and happy anniversary to you again. It's really great to see you, Bernie.

SHAW: Thank you.

HEMMER: You got it.

SHAW: And a salute, of course, to Ted Turner.

HEMMER: Amen to that. And best to you and Linda, all right?

SHAW: Thank you.

HEMMER: Thanks, Bernie.

We'll have much more on what's happening on CNN's birthday throughout the day today; throughout the week, too. Tomorrow, a reflection on the deadliest act of terrorism on American soil, certainly the events of 9/11. We'll reflect on that tomorrow.

Also tonight, a prime-time special, "Defining Moments: 25 Stories That Touched Our Lives." We'll look back at the past quarter century, 8:00 Eastern, 5:00 on the West Coast. And there are some great and wonderful moments of history in this program later tonight -- Soledad.

O'BRIEN: All right, Bill, thanks.

Business news is ahead this morning. One automaker hopes it has an offer you can't refuse. How would you like the employee discount? Andy is "Minding Your Business." That's coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: More airline news to talk about. The world's second- largest airline is breathing a little easier after working things out with union employees. Plus, a special discount that's coming from GM. Andy Serwer is "Minding Your Business" this morning.

Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Soledad. Yes, let's talk about these transportation stories. First of all, United Airlines, we talked about this yesterday, really dodging a bullet. It went right down to the deadline at lunchtime yesterday, Central Time. But they did manage to settle with the two largest unions, the machinists and mechanics, getting an agreement in principle. Rank and file still need to vote on it, but that appears to be a done deal, getting $176 million in cost savings.

This apparently clears the way for the company to come out of bankruptcy. There is talk about them being able to do that in the fall. The company has been in chapter 11 for two-and-a-half years and lost $1.1 billion so far this year.

Speaking of other big companies with some problems, General Motors. You know, these clearing-out-of-inventory sales are nothing new. But this is kind of an unusual one here. GM has a bloated inventory of 2005 models. They are offering customers, apparently it's going to be announced today, the same discount that employees, the GM employees get, which is about a 3 percent to 4 percent discount off of the invoice price. For instance, a Silverado usually goes for 28,400, $28,417. With this discount, it will be going for $24,225.

GM has lost $1.3 billion so far this year. So, again, some -- a couple of big companies are looking to pare costs.

Also, I want to tell you, Soledad, that later in the program, to celebrate CNN's 25th anniversary from the business perspective, we'll be talking about some of the big stories of 1980 making news back then.

O'BRIEN: All right. Excellent. Andy, thanks.

SERWER: You're welcome.

O'BRIEN: Bill.

HEMMER: All right, Soledad. "Deep Throat's" identity was a mystery for more than 30 years. So why now is it public? A closer look at that's ahead here on AMERICAN MORNING. Back in a moment at the top of the hour after this.

(COMMERCIAL BREAK)

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