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Marines Killed; Jihad in Iraq; Patriot Act Push; North Korean Weapons; Doing Business in China; Tropical Storm Arlene

Aired June 10, 2005 - 18:00   ET


CHRISTINE ROMANS, CNN ANCHOR: Good evening, everybody.
Tonight, Tropical Storm Arlene charges toward the Florida coast. Governor Jeb Bush declares a state of emergency. We'll have a live report.

President Bush and South Korea President Roh present a united front on North Korea. But is South Korea trying to appease the north? A special report.

And a Vietnam veteran prepares to go to war in Iraq 36 years after flying combat missions against the North Vietnamese.

The war in Iraq and the rising number of U.S. casualties is our top story. Five U.S. Marines have been killed in a single insurgent attack in western Iraq. Twenty-four American troops have been killed in Iraq so far this month. That follows last month's death toll of 80 Americans, the highest since January.

Senior Pentagon Correspondent Jamie McIntyre has our report -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Christine, this latest incident happened again in the volatile Anbar province of Iraq, where most of the insurgent activity is centered. According to a statement released today by the U.S. military, five U.S. Marines were killed when their vehicle was hilt by an explosive device while they were on a combat patrol. Very few other details were provided, but it comes again at a time when the death toll continues to mount in Iraq.

So far, as you said, in June, there have been 24 deaths just in the first nine days. So no letup in the violence there.

This came also as more Iraqis were found dead along the border with Syria. And there are reports in Iraq that the government there is trying to open lines of communications with some of the leaders of the insurgents. But at this point the violence shows no sign of letting up -- Christine.

ROMANS: Jamie, tell us about the deaths of two other American troops in Iraq. Insurgents originally blamed for those deaths, but now the military has launched a criminal investigation.

MCINTYRE: That's right. It looked initially as if a mortar or rocket attack had exploded inside what's called Forward Operating Base Danger near Tikrit, north of Baghdad. But upon further examination, investigators determined that it wasn't consistent with a mortar. It looked more like a weapon that's used routinely by the U.S. military.

So the theories are that perhaps somebody intentionally detonated this weapon in what's sometimes called fragging, an intentional effort to kill officers, and in this case, two officers. The company commander and the company's operations officer were killed.

They're also looking into the possibility that it could have been an accident. They don't think that's likely. Or possibly an infiltrator insurgent got in somehow and set off this device.

But the investigator is just getting under way. They do say they believe a crime was committed, and it doesn't look like at this point it was either an accident or hostile fire.

ROMANS: Jamie McIntyre at the Pentagon. Thank you, Jamie.

On average, at least two American troops are killed in Iraq every day. More than 350 troops have been killed this year. 1,690 American troops have been killed since the war in Iraq began two years ago.

Military officials say only a small number of the insurgents and terrorists in Iraq are non--Iraqis, but those foreigners are carrying out nearly all the suicide attacks. One Islamist Web site has posted the names of nearly 400 foreigners who have been killed in Iraq.

Jennifer Eccleston reports from Baghdad.


JENNIFER ECCLESTON, CNN CORRESPONDENT (voice-over): This tape is an insurgent testimonial. Abdul Rahman Saleh al-Rahemi (ph) came to Iraq to die in the jihad. "I came here to fight against the infidels, the invaders of Iraq," he says.

His target, a police station in Karbala, one of four suicide car bomb attacks that day. The act forever marking him a martyr.

Stories like al-Rahemi's (ph) are extolled on Web sites run by radical Islamists, where Iraq martyrdom is hailed as an inspiration for a new generation of terrorists. In fact, recent independent studies on Iraqi insurgents say the face of the vast majority of suicide bombers is indeed from outside Iraq.

PETER BERGEN, CNN TERRORISM ANALYST: Most of these suicide bombings have been done by foreigners. Many of them are Saudis. You know, there's also been some indications that there are even a number of Europeans that have tried to have been involved in suicide attacks.

ECCLESTON: In one count, of the 154 suicide bomber death notices posted on Islamic Web sites since August, 61 percent were Saudi and just 25 percent were Kuwaiti, Syrian and Iraqi, many believe connected to the terror network of Abu Musab al-Zarqawi, the Jordanian-born leader of al Qaeda in Iraq. But pinpointing a precise number of foreign jihadists is an ongoing challenge to U.S. and Iraqi officials. The military's rough estimate is anywhere from five to 10 percent of the insurgency.

One senior American military official provided CNN with a nationality snapshot of fighters captured during Baghdad anti- insurgency push Operation Lightning. Of the 1,000 people netted, 50 were non-Iraqis, most from Sudan, Syria and Saudi Arabia.

Failed suicide attackers like Saudi Ahmed Abdullah Ashayah (ph) provide the best intelligence to coalition forces. An unabashed jihadist, Ashayah (ph) said his first task as an insurgent was to deliver a gasoline tanker truck in central Baghdad. He says he didn't know it was a bomb.

Ashayah (ph) cooperated with authorities, handed over names of foreign insurgents, but insisted the majority of anti-coalition fighters were Iraqi.

(on camera): Still, terror analysts maintain that the number of non-Iraqi fighters is disproportionate to their impact. They're believed to conduct the bloodiest attacks, work hardest to incite sectarian violence, and that makes them a deadly percentage of the Iraqi insurgency.

Jennifer Eccleston, CNN, Baghdad.


ROMANS: Insurgents are believed to have killed a number of foreign contractors when they attacked a supply convoy in Iraq earlier this week. The convoy was ambushed on a highway west of Baghdad. A number of trucks and SUVs were destroyed.

Video from the scene showed the bodies of at least seven man. The tape also showed an identity card issued by a British security company. The security company today said the fate of its employees is unclear.

Radical Islamists in Afghanistan have also been stepping up their attacks against American troops. Insurgents today killed an American soldier in an ambush in southeast Afghanistan. Three other soldiers were wounded. Seven insurgents were killed. About a dozen American troops have been killed in Afghanistan since March.

A suspected radical Islamist terrorist arrested in this country made his first court appearance today. He's one of five people accused of planning terrorist attacks in the United States.

Hamid Hayat appeared in federal district court in Sacramento California, for a detention hearing. The judge denied bail. His father was ordered held without bond in an earlier court appearance.

President Bush today said renewing the Patriot Act is critical to preventing another terrorist attack in this country. He demanded that Congress immediately renew parts of the Patriot Act that are set to expire. The president made the comments as he toured the new state- of-the-art Counterterrorism Center outside Washington.

David Ensor reports.


DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): The president got a first-hand look at the new National Counterterrorism Center in Virginia, a state-of-the-art intelligence facility designed to fuse information from the CIA, FBI, Homeland Security and elsewhere where into one in order to stop terrorists. It was set up after the 9/11 attacks showed that federal agencies were withholding key intelligence from each other.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I appreciate the fact that here you pool your expertise and your computer systems, all aimed at shining the spotlight on enemies who think they can hide in the shadows of the world.

ENSOR: The president used the occasion to lobby Congress to extend expiring provisions of the Patriot Act, a post 9/11 law permitting wider U.S. government access to intrusively collected information on citizens in order to try to stop terrorists.

BUSH: For the sake of our national security, the United States Congress needs to renew all the provisions of the Patriot Act. And this time Congress needs to make those provisions permanent.

ENSOR: Bush cited a number of cases, including the Lackawanna six, where he said the Patriot Act had been key it putting would-be terrorists behind bars.

The president's appearance came as a report from the Department of Justice inspector general outlined five opportunities missed by the FBI and other agencies to stop two of the 911 hijackers. The report gave fuel to critics who questioned whether the FBI is doing a good job of taking on the domestic counterterrorism intelligence task on top of its law enforcement duties. Some charge the new analysts are still seen by FBI agents as second-class citizens.

JOHN GANNON, FMR. DIRECTOR, NATIONAL INTELLIGENCE COUNCIL: I still continue to believe within FBI, if you are not an agent, you are furniture.

MAUREEN BAGINSKI, FBI INTELLIGENCE DIRECTORATE: I don't think that's fair. And what I have seen since I have been here, actually, is analysts pulled into every core operational discussion, and in many cases, leading those operational discussions.


ENSOR: There has not been a major terrorist attack on this country since 9/11, and that's something the administration can point to as it argues that everything possible is being done. But senior intelligence officials repeatedly warn it is not a question of whether there will be another attack, it's only a question of when -- Christine. ROMANS: David Ensor. Thanks, David.

Later in the broadcast, former CIA director James Woolsey will join me to talk about the simmering tensions between our intelligence agencies.

Plus, has Syria drawn up a hit list of Lebanese politicians for assassinations? We'll have that report.

And President Bush and South Korean President Roh present a united front on North Korea, but critics say South Korea is simply trying to appease the north.


ROMANS: President Bush and the South Korean president today tried to present a united front against North Korea's nuclear challenge. President Bush and President Roh agreed that North Korea must return to six-country nuclear talks, but there were indications they disagreed on some issues.

Dana Bash reports.


DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): In the Oval Office with South Korea's president, a show of unity to paper over differences on an urgent goal, ridding North Korea of nuclear weapons.

BUSH: The president and I both agree that six-party talks are essential to saying to Mr. Kim Jong-il that -- that he ought to give up his weapons.

BASH: President Roh said disputes between their countries on how to approach Pyongyang are overblown, but amid the carefully-scripted harmony some candor.

ROH MOO-HYUN, SOUTH KOREAN PRESIDENT (through translator): To be sure, there are one or two minor issues, but I am also quite certain that we will be able to work them out very smoothly through dialogue.

BASH: North Korea has refused to negotiate for a year. All the while, U.S. officials fear, advancing its nuclear program. Though Pyongyang signaled earlier in the week it is ready to come back to the table, no date has been set, and the enigmatic regime is yet again sending mixed signals.

Ahead of this meeting, North Korea's official newspaper called the U.S. policy hostile and a stumbling block towards settlement. The president refuses to offer new inducements, but does have a year-old offer on the table for energy and security only if Pyongyang halts all nuclear development first.

BUSH: And that plan is still there, and it's full of inducements. BASH: Mr. Bush will not deal one on one with North Korea. Instead, calling joint pressure from neighbors more effective. But South Korea and China, both key players in the six-party talks, have softened their policies toward North Korea and wish the Bush White House would be more open to compromise.

WENDY SHERMAN, FMR. NORTH KOREAN NEGOTIATOR: The South Koreans are frustrated. They, after all, are the country that shares a border with North Korea. Pyongyang and the DMZ, actually, where North Korean troops are forward deployed, a million, we think, North Korean troops, are really only 30 kilometers from Seoul.


BASH: That's probably why South Korea is weary of U.S. threats that may rattle its mysterious neighbor, like threatening sanctions at the United Nations if diplomacy doesn't work soon -- Christine.

ROMANS: Dana Bash at the White House. Thank you, Dana.

BASH: Thank you.

ROMANS: Critics of South Korea say President Roh is trying appease North Korea. The South Korean government has taken a much more conciliatory approach, even though hundreds of thousands of North Korean troops are massing along the border.

Mike Chinoy reports.


MIKE CHINOY, CNN CORRESPONDENT (voice-over): The U.S. and South Korea have been allies for more than half a century, ties forged in blood during the Korean War, sustained by the presence of 32,000 American troops in South Korea today. But as the crisis over North Korea's nuclear weapons program intensifies, the alliance is in trouble. The South Koreans sharply at odds with the Bush administration over Washington's hard line towards Pyongyang.

KENNETH LIEBERTHAL, BROOKINGS INSTITUTION: They've become increasingly worried that this administration's real goal is regime change in North Korea. And that's a goal that they don't share. And it's one that they want to cut off.

CHINOY: With Seoul within easy range of North Korean artillery, and likely to bear the brunt of any upheaval should North Korea collapse, the South Koreans don't want to see an increase in tension on the peninsula, especially as many in Seoul don't believe the United States has made a serious attempt to negotiate an end to the nuclear crisis and six-nation talks in Beijing.

THOMAS HUBBARD, FMR. U.S. AMBASSADOR TO SOUTH KOREA: South Korea want us to make every effort to achieve success in the six-party talks, want us to genuinely test North Korea's intentions before going on to other options. CHINOY: And President Roh Moo-hyun's government has made clear it won't go along with calls to bring the issue before the U.N. Security Council.

HAN SUNG JOO, FMR. SOUTH KOREAN FOREIGN MINISTER: The republic of Korea is much less -- they are willing to rely on pressure or sanctions if it comes to that.

CHINOY: The Roh and Bush administrations have also differed over just how the U.S. troops in South Korea might respond to collapse or disorder inside North Korea. And there's been anxiety in the south over Bush administration plans to reconfigure the deployment of the U.S. forces in South Korea and throughout the Asia-Pacific region.

In Washington, meanwhile, some have voiced concern that President Roh is tilting away from the alliance and towards a more neutral posture. The shift, in part, a response to a generational change in South Korea, a more youthful population with no personal memories of the Korean War, much less hostile towards the regime and Pyongyang. Trends that raise broader questions about the future of relationship that has been central to peace and stability in Asia for decades.

Mike Chinoy, CNN, Hong Kong.


ROMANS: Another major foreign policy challenge for this country is Syria. The United States says Syria has failed to stop insurgents and terrorists from crossing into Iraq. And now a senior U.S. official has accused Syria of drawing up a hit list of Lebanese politicians for assassination.

In February, former Lebanese Prime Minister Rafik Hariri was assassinated in a huge bomb explosion in Beirut. Syria immediately denied any involvement. President Bush today said Syria must withdraw all its intelligence agents from Lebanon.


BUSH: Our message to Syria -- and it's not just the message of the United States, the United Nations has said the same thing -- is that in order for Lebanon to be free, is for Syria to not only remove their military, but to remove intelligence officers as well.


ROMANS: Tonight, the Syrian government denied that any Syrian intelligence agents were still in Lebanon.

Coming up, back in action for one American who fought in the Vietnam War more than 30 years ago. How this Maryland grandfather is serving his country once again, next.

And a killer storm is headed for the Gulf Coast of the United States. One governor has already declared a state of emergency. We'll have the latest on where and when Arlene will hit. Stay with us.


ROMANS: Tonight, one American who flew Army helicopters in the Vietnam War is preparing to risk his life again to serve his country. The Maryland grandfather could soon be headed for Iraq.

Barbara Starr has his remarkable story.


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Trooper 1st Class Ray Johnson pilots helicopters for the Maryland State Police.

CW05 RAY JOHNSON, MARYLAND ARMY NATIONAL GUARD: I would say about 90 percent of our missions our medivacked.

STARR: Thirty-six years ago as an Army lieutenant he flew helicopters in Vietnam. Some of the most dangerous work, dropping off Special Forces teams and then often getting the wounded out of the line of fire.

Now 57, this grandfather of five expects to be sent to Iraq because Trooper Johnson is also Chief Warrant Officer Johnson of the Maryland Army National Guard. And helicopter pilots are needed in this war. War now no longer just a young man's business.

JOHNSON: When I was in Vietnam, I was young. I was around 20 years old.

STARR: No one is sure how many Vietnam veterans are serving in Iraq. Johnson doesn't think it's all that remarkable.

JOHNSON: You try not to think about it. Treat it like you're going to fight, and hopefully, you know, you'll come back, you know, alive and back home to your family.

STARR: Old lessons still valuable. Vietnam-era tactics are now back for helicopter pilots dealing with Iraqi insurgents on the ground, aiming small arms and shoulder-fired missiles.

JOHNSON: We can't fly high, we can't let the enemy see us, we can't slow down.

STARR: And even if he never ships out, Chief Johnson is helping win the war. Many of the young pilots he trains for the National Guard end up in Iraq.

JOHNS: And this is what you need to concentrate on, such as just landings. We need to concentrate on that just simply because of the environment. We need to concentrate heavily on night vision goggle training because we do fight at night.

STARR: This state trooper says if and when the notice comes, he will go to Iraq.

JOHNSON: I don't think I would have the conscience to say I don't want to go.

STARR: Barbara Starr, CNN.


ROMANS: Remarkable.

Our quote of the day is on the Army's failure to meet recruiting goals for a fourth straight month. The head of the Army's recruiting command said, "The issue isn't one of whether or not we will be forced into a draft. The issue is whether people will get behind and stand behind the all-volunteer force concept that's served us quite well for 32 years." That quote is from General Michael Rochelle.

Coming up, Americans living along the Gulf Coast prepare to evacuate ahead of a dangerous storm. It has already killed one person. We will have the latest on Tropical Storm Arlene ahead.

And strained relations between the United States and South Korea over North Korea's nuclear ambitions. Former CIA director James Woolsey will tell us why he believes South Korea is trying to appease the north.

And "Heroes," the story of one American Marine who earned two Purple Hearts in Iraq and nearly lost his life in the crucial battle of Falluja.

Stay with us.


ROMANS: Troubling new concerns tonight about the ability of our intelligence agencies to work together to combat radical Islamist terrorism. A newly released government report says the FBI and CIA bungled several opportunities to capture some of the September 11 hijackers before the attacks.

Earlier, I asked former CIA director James Woolsey if our intelligence agencies have made any improvements at all since September 11.


JAMES WOOLSEY, FMR. CIA DIRECTOR: I think there probably has been some improvement. Setting up the Counterterrorism Center, I think, is a definite step in the right direction. But people should remember that a lot of this miscommunication and lack of it between the FBI and the CIA, or within the FBI, or between the FBI and various other organizations, was really required by sometimes statute and sometimes by U.S. government policy enunciated by the Justice Department.

We did our very best to keep security and liberty issues completely apart so that nothing would ever interfere with the other. And as a result, we kept the -- one part of the FBI even from talking to another part of the FBI. That was done really by the Justice Department.

So people ought to I think be a little perhaps less hard on the agents in the field, some of whom made mistakes, absolutely true, both CIA and FBI. But it was the country that was asleep at the switch before 9/11.

ROMANS: Well, part of the problem as well is a lack of urgency reported in several of these criticisms of these agencies. Do you think that the urgency is there now?

WOOLSEY: I think that's here, yes. I think there's a real attention by people to getting on top of these issues. And I think it shows in the number of arrests that we've had, some done cooperatively by, say, the Pakistanis, some by other countries working with us, including work here in the United States out in Lodi, California, and so on.

I think there's a sense of urgency. I'm more worried about the fact that our infrastructure is very vulnerable and we haven't taken the steps to make it more resilient against attack. The electricity grid, for example, or toxic chemical production and delivery.

I think the law enforcement and intelligence people are picking up the ball, and there's still some sorting out to do, but I think they're moving it forward.

ROMANS: In Washington today, the South Korean president and President Bush speaking with one voice about their alliance, but there are some concerns that maybe cracks are developing a bit in that relationship. What do you think?

WOOLSEY: I think they're substantial cracks. The new generation of Koreans, age 40 or so and below, doesn't remember the Korean War and is not particularly favorably disposed towards the United States on the whole, and the political process in South Korea is beginning to reflect that.

The South Korean government has really engaged, pretty much, in what we would have called appeasement in the 1930s toward the North. And even going so far as to start talking about putting restrictions on the U.S. troops that are in South Korea, after all, to help defend South Korea.

So I think that this alliance is still there, but it's seen some rocky times. And it's partly seeing rocky times, because the North Koreans are working hard to divide us and the South Koreans. And they're being fairly clever about doing it.

ROMANS: At the same time, the United States trying to nudge North Korea back to the -- back to the table for six-party talks. Wondering -- no date. North Korean diplomats say that there will be talks, but they won't give a date. Chinese officials say maybe in weeks. Is this all a smokescreen? WOOLSEY: Basically, I think so. I think the North Koreans are doing what they've been doing for, really, decades now, which is stalling while they work on their nuclear weapons programs.

And they did this sort of thing back in '94 when the Clinton administration went along with them and signed up to an agreement to assist them with various things: energy, food, et cetera, if they would give up their nuclear weapons program. And they conducted, the North Koreans did, this classic diplomatic maneuver known as lying through their teeth. They kept going strongly on their nuclear weapons programs.

And I think that's what they're doing now. They're just stalling and throwing up smokescreens, exactly as you said.

ROMANS: And then there are reports this week, as well, that U.S. intelligence missed military build up -- signs of military build up in China over the past decade. How much do we know about what's happening there? And our intelligence there, is it good enough?

WOOLSEY: No, it's not. But at least China is the kind of conditional military adversary that the Soviet Union was, so a lot of our national security intelligence structure is designed to watch that sort of thing. And I -- I think it's not so much that we didn't pick up any of it as people were not focused on analyzing it and getting it in front of the Congress and senior level officials, decision -- decision makers, senior decision makers.

I -- I think China's been very aggressive in their military build up. I think Hu Jintao is committed to that. I wish it weren't so, but I'm afraid he's a real hardliner. And the Chinese came out with a white paper, a defense white paper in December that's chilling. It is very, very oriented toward preparing for hostilities against us in the -- in the western Pacific.

So I think we've got a real handful with China. And it's a prosperous, technically sophisticated place, steals a lot of technology from us but develops some of its own. We're going to have problems with China, I'm afraid, for the foreseeable future.

ROMANS: Former CIA director, James Woolsey. James, thanks for joining us tonight.

WOOLSEY: Good to be with you.

ROMANS: And that brings us to the subject of tonight's poll, "do you think the recent changes within the U.S. intelligence community are enough to keep us safe? Yes or no." Cast your vote at We will bring you the results later in the broadcast.

And now for our special report "Heroes," our weekly tribute to the men and women who serve in our armed forces. Tonight's hero, is Marine Lance Corporal Nathan Borquez. His helmet saved his life during the fighting last fall in Fallujah, but his wounds have ended his military service. Bill Tucker reports.


UNIDENTIFIED MALE: Lance Corporal Borquez was wounded in Iraq a couple times, gotten blown up, a couple of IED's, correct?

BILL TUCKER, CNN CORRESPONDENT (voice-over): Lance Corporal Nathan Borquez is on an unfamiliar mission: he's a visitor at his home base, Camp Pendleton, California. Although he looks well, home for Borquez is a hospital. He's been there for months, recovering and hoping for a normal life.

UNIDENTIFIED MALE: Got some real bad concussions.

TUCKER: Borquez has two purple hearts. His first brush with death came on his 20th birthday.

LANCE CPL. NATHAN BORQUEZ, U.S. MARINE CORPS: I was on a convoy, and the convoy got struck by an IED, an improvised explosive device. And I was hit in the head with some frag and knocked unconscious.

TUCKER: He came to, was checked out and sent back to work.

BORQUEZ: Dazed, headache, just not the same. It was weird. A weird experience.

TUCKER: He struggled, but did his job. A month later he was hit in the head again by another IED.

BORQUEZ: I just couldn't believe it happened the second time. The symptoms were much worse this time. And my memory, along with my balance, was off by a lot.

TUCKER: Borquez had suffered two traumatic concussions and damage to his eardrums.

BORQUEZ: I thought I was going to shake it off. I thought it was just -- just a regular type of knock on the head.

TUCKER: He tried, again to go back to work, but this time his fellow Marines could see he wasn't right. He was sent home to recover. Borquez has been hospitalized ever since, undergoing treatment to restore his memory, his hearing and to deal with his constant vertigo.

BORQUEZ: It will take a couple -- a year or two for me to heal up and get back to normal.

TUCKER: Borquez will soon be medically retired from the Marine Corps. He says he feels better just having a chance to visit with Marines that he served with, and those of a previous generation.

UNIDENTIFIED MALE: I want to thank you. And I want to wish you well and thank your mother and father for having you back.

BORQUEZ: Thanks you, sir.

TUCKER: Bill Tucker, CNN, reporting. (END VIDEOTAPE)

ROMANS: Lance Corporal Borquez plans to go back to school when he leaves the Marines and pursue a career in criminal justice. We wish him all the best.

Coming up, the first tropical storm of the season heads for the Gulf coast. A governor declares a state of emergency. We will have the latest where and when Arlene will hit.

And red Star rising: China is going to great lengths to lure American companies into using its cheap labor, putting American jobs at risk. We'll have a special report from Shanghai. Stay with us.


ROMANS: Tonight the U.S. trade deficit has widened to it's fourth highest level ever. The Commerce Department reports that from March to April, the U.S. deficit rose just over six percent to nearly $57 billion, much of that increase was due to the surge in oil imports.

The nation's politically sensitive trade gap with China widened 14 percent to nearly $15 billion. So far this year, the U.S. deficit is on track to surpass last year's record of $618 billion. In just the last four years, the U.S. trade deficit has increased a remarkable 220 percent.

Tonight, "Red Star Rising," China is relentlessly using its cheap labor to lure American companies into its factories. And with labor costs some 90 percent lower in China, that cheap labor is too attractive for many American companies to resist. Eunice Yoon reports from Shanghai, China.


EUNICE YOON, CNN CORRESPONDENT (voice-over): Despite escalating trade tensions between the U.S. and China, Californian t-shirt maker Michael White is here ready to do business.

White along with 100 buyers, including Fruit of the Loom and Warnico (ph) has been on a two week grand tour of Chinese trade shows and textile factories. They're looking to outsource everything here, from yarn and fabrics to coats.

MICHAEL WHITE, CO-OWNER, SUNDOG INTERNATIONAL: I'm very impressed so far with the welcoming of China and they're hospitality.

YOON (voice-over): White's company, Sundog, supplies knit apparel to top brands like Nike. For 23 years, the firm has made specialty cotton garments solely in the U.S. and Mexico. But higher costs are driving White and his peers to are consider sourcing here. They say employing a U.S. worker costs up to $17 an hour -- in China, just over 50 cents.

FRANK S. YUAN, CHAIRMAN & CEO, ASAP SHOW: China is going to be the production center of the world. It's like a train that has already left the station, no one can stop it now.

YOON: Until now, White has been reluctant to buy from China, worried about the cultural gap and long travel time from the U.S. But importing goods from China costs roughly half the price of shipping product from Los Angeles to Hawaii.

WHITE: It's very impressive. I mean, I have been through the L.A. Port in California, and I think the technology here is a little bit better than theirs.

YOON: Quotas and tariffs aren't scaring off these buyers, either.

(on camera): Even so, trade with China is a very sensitive issue. Many of those same business executives said they wouldn't talk to us on camera.

(voice-over) Showing just how difficult it is to juggle political pressure with economic necessity. Yet as the tour winds down, White knows what his priority is.

WHITE: It's not a matter of if, it's a matter of when. Whether it's finished garments, or fabric, or a combination of both, I will source in China. Eunice Yoon, CNN, Shanghai.


ROMANS: Coming up next, Tropical Storm Arlene targets the Gulf Coast. One person has already been killed. Forecasters say the storm could strengthen to a hurricane. We'll have the latest.

And threats like Tropical Storm Arlene, landslides, earthquakes, are just part of the normal way of life in some parts of this country. We'll have a special report on the most dangerous places to live, next.


ROMANS: Florida Governor Jeb Bush has declared a state of emergency, as Tropical Storm Arlene barrels toward the south-eastern United States. The storm has winds of up to 65 miles an hour. Forecasters believe Arlene will strengthen into a hurricane before hitting the United States, sometime tomorrow.

These pictures from space show an amazing view of the storm from above. For more on Arlene, John Zarrella joins us from Haulover Beach, in Florida.

JOHN ZARRELLA, CNN CORRESPONDENT: Hi Christina. We're actually on -- in Haulover Beach and that's in Miami-Dade county, on the north end of Miami-Dade county. And for the first time today, I can see a little bit of the sun, to the west of me, peering through.

It's the first break we've had in the weather, all day. It has been raining here, squalls, wind; the surf is beginning to come back in again. The tide had been out earlier today, but the tide coming back in now, and the wave action is, certainly, going to pick up as we move into the evening hours. And there is still some of the squall lines to move through here.

And we are several hundred miles away from Arlene, but yet, we're getting this kind of weather. In fact, the storm has already become a deadly storm. Early this morning, some women were down on South Beach in the water. One woman got in trouble with the rip currents, another woman tried to get her out -- both were trapped in the ripped currents.

It took 20 minutes for Miami Beach Fire Rescue to get them out of the water. By the time they did, the woman who initially got in trouble, her lungs were filled with water and she was pronounced dead. So, Arlene, at least indirectly, responsible for one death already.

Life guards have had a terribly difficult time keeping people out of the water. In fact, dozens of surfers are still in the water here. The lifeguards have closed up for the night, so all those folks are now on their own out there.

And of course, Christine, you know, it's early in hurricane season, only about a week and a half into it, so an early reminder for people to go ahead and start getting ready. Because all of the predictions are for this to be another very, very active season, just as it was last year. Of course, there's no way of predicting how many storms are going to hit, or where they're going to hit.

But this one is likely to hit the panhandle area, which was hit so hard by hurricane Ivan, last year. And those folks up there are still trying to dig out from that storm. Blue tarps on the roofs there and debris still in many spots in the Pensacola area -- Panama City.

So. this is going to just add insult to injury, and bring more misery to those folks there -- Christine.

ROMANS: All right, John Zarrella, Hauler Beach, in Florida.

Thanks, John.

"ANDERSON COOPER 360" will have the very latest on Tropical Storm Arlene, coming up at the top of the hour.

Tonight in our series of special reports, "Living Dangerously," we look at some of the fastest growing communities in the United States; many also happen to be the most unsafe places to live.


ROMANS (voice-over): These are some of the most beautiful places to live, but living here is living dangerously. From California, to north Carolina, and Florida, which was hit by four hurricanes, and one tropical storm, just last year, killing 31 people.

MARK MONMONIER, SYRACUSE UNIVERSITY, MAXWELL SCHOOL: People tend to emphasize the attractions of an area. They tend to not want to think about some of the hazards, all that much. Areas that are high, tend to be prone to landslides. Areas that are rugged, also are rugged, at least in part, because of past seismic activity.

ROMANS: And in the middle of the country, flat open plains breed tornadoes like this won which tore through Kansas just this week.

Last year saw a record 1,800 tornadoes, in this country. Disasters like these are deadly and expensive. According to FEMA, California's north ridge earthquake is one of the costliest natural disasters on record: almost $7 billion.

While hurricanes cost less, they tend to occur more frequently. Yet people continue to move in and rebuild.

MONMONIER: Something has to be done, I think, about our National Flood Insurance Program, which in some ways, is part of the problem of these hazards also being manufactured hazards.

ROMANS: As the 2005 hurricane season begins, it's a yearly reminder of the true cost of living in the most desirable locations.

RICK KNABB, NATIONAL HURRICANE CENTER: What we have done is, issue a seasonal forecast for the Atlantic basin that indicates a fairly high confidence that we are going to have an above-average number of hurricanes and tropical storms forming during 2005 hurricane season.


ROMANS: Well, for more on the risks of living in popular, beautiful, yet dangerous places, I am joined by Mark Monmonier. He is the author of, "Cartographies of Danger: Mapping Hazards in America." He's also a professor of geography at Syracuse University.

Welcome to the program.

MONMONIER: Hi, Christine. How are you?

ROMANS: I'm fine, you know, but I watch these folks down in the southeast watching tropical storm Arlene come up, and I think, you look at Pensacola, in particular, that people still in temporary housing from last year, and they are still at Pensacola Beach.

What is it about our beautiful beaches, and mountains, and plains, that make people keep coming back, even if they know they are in the path of disaster?

MONMONIER: Well, people like to hear the sound of like pounding surf.

They like to be able to look at water and watch shore birds. In some sore places, they like to be up in a high location, where they can get an excellent view of gorge-like vistas. They also like to live in forests, and by and large, people tend to like to live in areas that look very good. Areas that look very good, tend to be high, which would be prone to landslides -- remote forested areas prone to wild-land fire. Some of the areas that are high, are such because of mountain building; seismic activity. Volcanoes would be nearby as well.

If you go to relatively low ares, you have floodplains, the Mississippi floodplain, floodplains of smaller rivers. Well, you can have boats for outdoor recreation, and if you go to the seacoast, you have lots of other attractions, such as we're seeing down in Florida now. You also have hazards.

ROMANS: Let me ask you -- let me ask you quickly about Laguna Beach, because that landslide on June 1st -- 21 homes destroyed. There had been a similar slide there only 20 or 30 years ago, yet people continued to build on those hills. You point out among the most dangerous places to live is just about anywhere in California.

MONMONIER: Just about anywhere in California. California, obviously is a very big place, but you have a smorgasbord of hazards there -- seismic, volcanic. You have tsunamis, you also have urban riots. Lots of different things going on there. Certainly of course, landslides, as we saw in Laguna Beach, and also in Southern -- and also in Southern California.

ROMANS: And people...

MONMONIER: As we saw last year, wildland fire.

ROMANS: And people are just consistently undaunted. What about, you point out about insurance, for example, I mean, if you get insurance to cover some of your loss, then maybe you are even more inclined to build someplace where maybe you shouldn't.

MONMONIER: That's right. Well, this is especially problematic for coastal areas. People can take out flood insurance. They can build a house relatively close to the shoreline. You can have a hurricane come along, a storm surge can bring wave action up to their front door. Their house can be knocked over, and then they will go back and build a year later, and you will have another storm come on in two, three, or four years after that.

ROMANS: You point out some other risks as well, some cities that are becoming very populated like San Diego and Phoenix, a lot of young people there, you say there's a higher risk of crime. Tell me a little bit about that trend.

MONMONIER: Well, these areas are very attractive. They are bringing in, oh, a lot of migrants. I am not talking about people from south of the border, but basically people from the rest of the U.S., who see opportunities there but they don't have skills. So they aren't employed, and -- or they don't have roots, or they don't have friends, and some of them turn to crime.

Plus, these are relatively warm areas, which would allow for year-round house breaking, which is something that we generally don't have in Minnesota and upstate New York.

ROMANS: Is there any place that's safe, I guess? MONMONIER: Absolutely not. Now, there are some places that are a lot safer than other places, but there's no place that's totally safe.

ROMANS: All right, you take your risks wherever you live. Mark Monmonier, thank you so much for joining us.

MONMONIER: Thank you, Christine.

ROMANS: Still ahead: The results of tonight's poll and a preview of what's ahead Monday.


ROMANS: And now the results of tonight's poll: 96 percent of you think the recent changes within the U.S. intelligence community are not enough to keep us safe.

Joining me now from "DOLANS UNSCRIPTED," which airs at 10:00 a.m. tomorrow morning on CNN, Ken and Daria Dolan. Welcome to the program.


KEN DOLAN, CO-HOST, "DOLANS UNSCRIPTED": Hi, Christine. I wasn't aware that everybody was in pink, so I wanted to get a -- (INAUDIBLE) just make sure you get this right, and we got the color scale to fix it.


K. DOLAN: We got it. OK. I wanted to just check.


ROMANS: Yeah, all right. Just checking. Let's move on to the corporate crime trials. There have been so many of them. Two now for Tyco, Dennis Kozlowski, still no verdict there, and there have been some setbacks for the prosecution. How do you guys rank how this is going to for the government?

K. DOLAN: Well, I think it's going very badly for the government. I think one of the problems you have, Christine, and I think it's very, very difficult to get a jury of your peers. The problem you have with Tyco, you've got -- the first trial cost $12 million.

ROMANS: Twelve million.

K. DOLAN: Twelve million bucks with an M.

ROMANS: And ended how?

K. DOLAN: Zero.

ROMANS: Right. K. DOLAN: Well, depends on which side you are on. Good for some others. There are 40 -- there are 12,000 pages -- 12,000 pages of transcript. There were 48 -- there were 48 witnesses and 32 charges. Glazed over.

ROMANS: The jury couldn't do it.

D. DOLAN: And the problem is, I mean, these are very technical trials. It takes a long time to hear them to lay out all the evidence, and the only people that would have time to commit to a jury for that length of time probably don't have the background to understand what's being said. So what does the prosecution do? It sets up a prosecution of this is a rich guy with a $6,000 shower curtain.

ROMANS: That didn't work the first time with Tyco.

K. DOLAN: That did not work the first time.

D. DOLAN: No, but how else do you try and get to the jury?

ROMANS: The prosecution is really in a tough spot here, because in the beginning, people were screaming for heads to roll after the...

K. DOLAN: Anybody's head.

ROMANS: And then now people are saying, well, the prosecution rushed in, they didn't have their cases ready, otherwise they would be getting these convictions.

K. DOLAN: You are absolutely right, Christine, and yet when you look (ph) at it from the jurors' standpoint, Christine, if it takes the government two or three years to mount a case, let's get all the information we can, because then we're going to be ready, we are going to try this thing and we're going to get a conviction. So it's going to take you two or three years, 50, 60, 100 lawyers, and you are going to explain it to me, some person -- I am not being disrespective of the jury -- I'm sitting there saying, what are they talking about? You're going to do that in two or three months after it took you three years of details? No.

ROMANS: Meanwhile, Citigroup giving up $2 billion for its role in the Enron scandal. It doesn't admit nor deny any guilt, as they never do.

D. DOLAN: Never do. Never do.

ROMANS: Is that going to the best we get maybe in the fight on corporate crimes, the money in the coffers?

D. DOLAN: Well, yeah, you are getting some of that.


D. DOLAN: It's just in the Citigroup problem, this is their third major settlement. And one of the reasons they gave up that $2 billion is because while Enron was going down, they were still helping it to raise money in the way of bonds.

K. DOLAN: And who loses again? Shareholders. $2 billion has to come from someplace. Could it be dividends or stuff like that?

ROMANS: And how much (INAUDIBLE) from WorldCom, 2.6 billion?

K. DOLAN: Exactly right.

ROMANS: Yeah, so they have coughed up a lot of money, but that is a big company.

K. DOLAN: And a big litigation fund that they keep in reserve for this type of opportunities.

ROMANS: Bottom line, I guess, are we winning the fight of corporate corruption?

K. DOLAN: We don't seem to be.

D. DOLAN: No, and we are not going to, because if we don't get some real convictions here, not the acquittal like we saw with (INAUDIBLE)...

K. DOLAN: Or mistrials, which is effectively a victory.

D. DOLAN: Or mistrials. Or, you know, the case of Tyco, where the jurors are now saying, do we have to convict on -- come up with a decision on everything -- we are just going to encourage the next generation to do it all over again.

K. DOLAN: And just complicate the heck out of it.

ROMANS: (INAUDIBLE) talk about it tomorrow morning, "DOLANS UNSCRIPTED," 10:00 a.m., Ken and Daria right here on CNN. Thank you. And thanks for being with us tonight.

Please join us Monday. For all of us here, good night from New York. "ANDERSON COOPER 360" starts right now -- Anderson.

ANDERSON COOPER, HOST, "ANDERSON COOPER 360": Hey, thanks, Christine.



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