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Baghdad Car Bombing; Road to Recovery; DeLay Indicted Again; High Court Nominee; Tour Boat Investigation; Katrina Death Toll; DeLay's Legal Woes

Aired October 04, 2005 - 07:00   ET

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

CAROL COSTELLO, CNN ANCHOR: "AMERICAN MORNING" starts right now.
SOLEDAD O'BRIEN, CNN ANCHOR: Thanks, Carol.

I'm Soledad O'Brien.

A story breaking in Baghdad this hour, a powerful explosion rocking that city. Two Iraqi soldiers killed, four others injured.

While in the western desert, U.S. troops launch a new offensive against insurgents. The latest on Operation River Gate is just ahead.

The scandal surrounding Congressman Tom DeLay is growing larger and more heated. DeLay indicted on a brand new charge by a Texas grand jury. We're live in Washington with the former leader's angry reaction.

And signs of conservative backlash over Supreme Court nominee Harriet Miers with the White House now going on the offensive, trying to convince skeptics on the right that Miers is not a stealth candidate of the middle. A live report from the White House ahead as well on this AMERICAN MORNING.

Good morning. Welcome, everybody.

Miles has the day off, but Rob is filling in for him from Lake Charles, Louisiana. We're going to get with Rob Marciano in just a few moments.

First, though, let's get right to some breaking news out of Baghdad at this hour. And in fact it's word of a car bomb explosion inside Baghdad's high-security Green Zone. So far we're told at least two people killed, four others are injured.

Aneesh Raman is live for us in the capital city.

Aneesh, good morning.

ANEESH RAMAN, CNN CORRESPONDENT: Soledad, good morning to you.

It happened in the past hour, a suicide car bomb detonating just outside that highly-fortified Green Zone, the area that houses the U.S. military, as well as key Iraqi installations. At least two Iraqi soldiers have been killed. Four others wounded. Those, of course, are initial casualty numbers. Now, meanwhile, the U.S. military today announcing that they have launched two new major offensives in the western Al Anbar Province.

The first is dubbed Operation River Gate. It is one of the largest U.S. military assaults to take place in that area to date. Some 2,500 U.S. troops, as well as 400 to 500 Iraqi security forces, essentially concentrating on the city of Haditha. That is being described as a critical crossroads of insurgent smuggling, not just weapons that are coming in, but those foreign fighters that continue to cross the Syrian border.

Also launching today, Operation Mountaineer. That is focusing on the city of Ramadi, an insurgent stronghold. Some 500 U.S. troops involved in that.

And, Soledad, the U.S. military announcing today that four U.S. troops have died in the past few days, three of them in these operations, another the result of gunshot wounds in the town of Balad -- Soledad.

O'BRIEN: A lot happening today.

All right, Aneesh, thanks a lot for that update.

We have been talking with Rob Marciano about what's happening in the wake of the hurricanes really battering the Gulf Coast.

Let's check in with him today. He's in Lake Charles, Louisiana, and, as he promised, three cities in three days.

Good morning to you -- Rob.

ROB MARCIANO, CNN METEOROLOGIST: Good morning, Soledad.

Day two of our tour of the Gulf Coast, as you mention, ravaged by not only Rita, but Hurricane Katrina. And we'll likely head farther east tomorrow to deal with still the aftermath of that hurricane over a month ago.

Yesterday we were in Port Arthur, Texas, ravaged by Rita just 12 days ago. The western eyewall coming through Port Arthur, Texas. Still in the dark there. Still dealing with flooding damage. Still dealing with residents who aren't really coming back to Port Arthur.

And we have a similar situation as we move across the Sabine River, across the border into Calcasieu Parish in southwest Louisiana and the city of Lake Charles with about 70,000 people here. Still a look-and-leave policy, meaning residents are encouraged not to stay. If you are coming back into town, you have to be self-sustainable.

Lake Charles took the brunt of the eastern eyewall. That is where the stronger winds are, the stronger storm surge, and that is where the most damage is. And we're going to get a progress report this morning -- Soledad.

O'BRIEN: Yes, they were utterly devastated. Right, Rob, we look forward to that, thanks.

In other news, Congressman Tom DeLay facing more legal troubles. Another Texas grand jury has indicted the former House majority leader once again, but this time on a money laundering charge.

Brings us right to Joe Johns. He's live for us on Capitol Hill this morning.

Hey, Joe, good morning to you. Explain what's behind the second indictment.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Soledad.

It's insurance, basically, in the event the first count gets thrown out by a judge. Travis County prosecutor Ronnie Earle has upped the ante.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Travis County prosecutor Ronnie Earle piled on a new charge against former Majority Leader Tom DeLay, money laundering, a first degree felony, on top of a prior charge of criminal conspiracy. This new and more serious charge comes after some fast-paced legal maneuvering in Austin, Texas.

Late Monday, attorneys for DeLay asked a judge to throw out the conspiracy charge, because conspiracy in this context was not yet a crime in 2002 when the alleged wrongdoing occurred. The judge has not yet responded.

DeLay tried to laugh it off, speaking with a Texas radio station.

REP. TOM DELAY (R), TEXAS: So this crime didn't even exist. And I'm sorry for laughing, this is beyond -- it's just unbelievable. I mean he's making the Keystone Cops look good.

JOHNS: DeLay's lawyers say Earle got the new money laundering indictment out of desperation.

DICK DEGUERIN, DELAY'S ATTORNEY: If this doesn't prove that the motivation behind this indictment is political, then I don't know what it is.

JOHNS: The indictments relate to a plan by Texas Republicans to first take over the State House in 2002. Earle says DeLay and his associates used corporate money, $190,000, funneled through Washington to win the Texas legislature in violation of Texas law. Back in April when I went to meet him, Earle explained his reasoning.

RONNIE EARLE, TRAVIS COUNTY DISTRICT ATTY.: I call that money laundering.

JOHNS (on camera): Why? EARLE: Well, taking the proceeds of a criminal transaction and using it for other purposes.

JOHNS (voice-over): DeLay's attorneys insist there was no money laundering because all of the financial transactions that took place were perfectly legal.

DEGUERIN: The law was followed. No law has been broken.

(END VIDEOTAPE)

JOHNS: The prosecutor's office is not conceding there was anything wrong with the first indictment. A source close to the investigation said the statute of limitations was about to run out on bringing a money laundering charge -- Soledad.

O'BRIEN: And Joe Johns at the Capitol for us.

Joe, thanks.

Well President Bush's nominee for the U.S. Supreme Court is being received with some unease by some lawmakers, and conservatives are among the skeptical.

Bob Franken is live for us at the White House this morning.

Hey, Bob, good morning to you.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning -- Soledad.

O'BRIEN: What's the White House saying about the skepticism that really they're hearing on both sides?

FRANKEN: Well, it depends who the White House is talking to. The White House, the president walking a really thin line here. On the one hand, trying to convince the conservatives that indeed, in spite of a lack of a paper trail, Harriet Miers is a trustworthy conservative. On the other hand, not trying to rile up the left too much by presenting her as so conservative that there would be this huge battle.

But as far as conservatives are concerned, some of the administration's top people are fanning out, like Vice President Cheney who spoke with the voice of the conservatives, Rush Limbaugh.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We're convinced that you indeed will find that Harriet is one of those people who believes very deeply in the Constitution and the laws as written and that she's not going to be legislating from the bench.

(END VIDEO CLIP)

FRANKEN: The vice president, at one point, told Rush Limbaugh in 10 years conservatives would be very pleased with Harriet Miers. Limbaugh replied why do conservatives have to wait 10 years?

Well, they're going to have to wait for a confirmation battle in the Senate. There are some hopes in the administration it would be done by Thanksgiving. Others who believe that is hopelessly optimistic -- Soledad.

O'BRIEN: We will see. All right. Bob Franken for us.

Thanks, Bob.

Well Dan Bartlett, the counselor to the president, joins us in just about half an hour. He's going to discuss why Mr. Bush thinks that Miers is the right person to replace Justice Sandra Day O'Connor.

Federal investigators promising to look at every single screw to find out just what caused a tour boat to capsize on an upstate New York lake. Twenty people were killed when the "Ethan Allen" sank on Sunday. And now authorities have shut down the tour boat's operator.

Susan Lisovicz is live for us this morning in Lake George. That's about 50 miles north of Albany.

Susan, good morning to you. What's the tour boat company saying today?

SUSAN LISOVICZ, CNN CORRESPONDENT: The only word so far, Soledad, that we're hearing from Shorelines Cruises is an outgoing voice-mail message on the company phone line where it says it's deeply saddened by Sunday's accident, offering its condolences to friends and families of the victims, thanking those passengers, those boaters who came to the rescue of the victims. And finally saying that it is cooperating fully with authorities.

At noon today, we will be able to hear more fully from Shoreline Cruises when it conducts its first press conference. So we'll be certainly monitoring that.

In the meantime, a very dramatic scene on Lake George yesterday, after hours of careful maneuvering, divers were able to successfully raise the "Ethan Allen" from 70 feet of water. The "Ethan Allen" obviously Exhibit A in the investigation as to what caused Sunday's sinking of the "Ethan Allen" which caused 20 people to die, another handful of people to the hospital, 27 survivors.

NTSB acting Chairman Mark Rosenker told us today why that boat is so important in this investigation.

(BEGIN VIDEO CLIP)

MARK ROSENKER, ACTING CHAIRMAN, NTSB: Today is our first opportunity to examine the vessel itself and see its seaworthiness. We're going to be able to take a look at the hull. We're going to be able to look at the engine. We're going to be able to look at the rudder. We're going to be able to look at the throttle settings. There will be a host of things we'll be looking at that will give us a good deal of information as we move through this tedious and methodical process.

(END VIDEO CLIP)

LISOVICZ: And, Soledad, the "Ethan Allen" most recently passed its latest inspection in May. So it was all cleared for its continued operations. But Shoreline Cruises not able to operate. New York State Parks Department suspending all operations because it did not adhere to regulations on Sunday that required an additional crew member, besides the captain, for a party of that size. Remember, there were 47 passengers and just one crew member, and that was the captain -- Soledad.

O'BRIEN: And, Susan, what else can you tell us about the captain? What do they know about him?

LISOVICZ: Well, actually a very important interview is going to be taking place today, and that will be with the NTSB and Mr. Rosenker, the first formal interview with Richard Paris, the captain of the "Ethan Allen," who is a retired state trooper, highly regarded among authorities here. Someone who knew the lake well and had a couple of decades of experience piloting this boat.

So, at first glance it would seem that Mr. Paris was certainly well experienced to be operating a vessel on Lake George, but something went dreadfully wrong. And obviously investigators very much want to hear what he has to say.

O'BRIEN: Yes, such a calm lake and such a beautiful day. There are so many questions in this, really, complete tragedy.

Thanks, Susan, we'll check in with you again. Appreciate it.

Let's get back to Louisiana, Lake Charles, Louisiana, where Rob Marciano is for us this morning.

Good morning.

MARCIANO: Hi, Soledad.

Still talking about Katrina after a month. And official word now out of Louisiana is that they have stopped looking for bodies, and the official death count in Louisiana, 964.

Dan Lothian is live in New Orleans this morning with more on that.

Morning -- Dan.

DAN LOTHIAN, CNN CORRESPONDENT: Good morning, Rob.

Well, indeed, you know the numbers that we had heard initially after Katrina hit were in the 10,000 range. We heard that said time and time again that by the time everything had panned out that we would find 10,000 bodies. That of course has not materialized.

As you mention, 964. It's jumped by 35 bodies since last week. The total count for all of the five states impacted by Hurricane Katrina now stands at almost 1,200. As you mention, though, state and federal authorities calling off the search for any additional bodies. They will only send out teams if they are needed.

As this city continues to recover from Hurricane Katrina, we do see some signs of progress at the Port of New Orleans. We understand that some nine ships, including four cargo ships, will be docking this week.

And also, we had a chance to visit yesterday the local flea market or French market. It reopened for the very first time. This is sort of a tourist attraction in the city. Typically you will find some 300 or so vendors out there. Only a handful of vendors showed up yesterday. But they told me it really wasn't about how many vendors showed up or how many customers came by, it was important just because they were able to reopen.

(BEGIN VIDEO CLIP)

ROGER DRYSDALE, NEW ORLEANS MERCHANT: Well it means it's coming back alive. I mean you see the life coming out of everywhere. I mean plants are growing up again and everything is surviving. And, sure, there's devastation and the like, but you know this city will come back.

(END VIDEO CLIP)

LOTHIAN: One other thing that we've seen, as well, is that a lot of the garbage is being picked up. Some 20 million tons of garbage estimated to be out there. We've seen a big difference since last week, seeing crews out there with large trucks removing a lot of the garbage, a lot of the debris, but still a long way to go -- Rob.

MARCIANO: Dan, I've got to imagine there are still some missing people. What about the family members of those victims, have they -- is there a sense of them being frustrated by the search being called off? Are they going to continue the search themselves?

LOTHIAN: We have not heard anything about that directly. In fact, officials, state officials saying that if they do get any calls from family members who are concerned about loved ones and believe that they are still out there, that they will send out these private crews to go and search for the bodies. So if anyone, obviously, has some concerns about lost family members, it appears that that will be addressed.

MARCIANO: Fair enough, Dan. Thanks very much.

Dan Lothian live for us in New Orleans this morning.

Let's go up to the CNN Weather Center. My colleague, Chad Myers, is there with the latest on what's going on weather wise.

What's happening with Stan -- Chad?

CHAD MYERS, CNN METEOROLOGIST: Rob, Stan got to 80 miles an hour overnight. It was just a little tropical depression yesterday as it came off the Yucatan Peninsula, but it blew up overnight. And you can see all the oranges in here.

And it's headed, really, for Mexico City with some very heavy rain, now not with winds that are going to be gusting over 80 miles per hour. By the time that storm gets there, it's only going to be a tropical depression. But right now at 80 miles per hour, we may even get a new update at 8:00 making it stronger than that, before it quickly makes landfall today and then rolls into the mountains.

The problem with the mountains, they're going to squeeze all of that moisture out. Every bit of moisture that's in that hurricane is going to be falling out as rain and some spots are going to get flooded.

Look at this area of cloudiness all the way from really east of the Leeward Islands. There's Puerto Rico and all the way back up into Florida. A lot of onshore flow for Florida today. Here is Palm Bay, Orlando, all the way to Port St. Lucie. A little farther to the north an awful lot of rain from Jacksonville right on up to Brunswick and even into Savannah. That's going to be the forecast for the next couple of days, all of this cloud cover coming over Florida. Right now no organization, but that's not completely out of the question.

(WEATHER REPORT)

O'BRIEN: Pretty good, especially since you've already promised a chilly weekend for us. Thanks.

MYERS: That's still on the way.

O'BRIEN: I'm holding you to that -- Chad.

MYERS: All right.

O'BRIEN: All right, Chad, thanks a lot.

MYERS: You're welcome.

O'BRIEN: Ahead this morning, we're going to talk again with Rob Marciano who's in Lake Charles, Louisiana. He was talking about Hurricanes Rita and Katrina that have devastated the Gulf Coast thriving tourism industry. He'll tell us what it's going to take to bring visitors back there.

Plus, much more on those new money laundering charge or the money laundering charge against Congressman Tom DeLay. Just how much does it hurt his political future and the Republican Party? We'll look at that up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Congressman Tom DeLay is facing new legal troubles this morning. On Monday, a Texas grand jury indicted the Republican on a money laundering charge stemming from the 2002 Texas election. DeLay already faces a conspiracy charge in a state campaign finance probe. Joining us this morning to talk about this, CNN political analyst Ron Brownstein.

Nice to see you, Ron, this morning.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Good morning -- Soledad.

O'BRIEN: So it's a new charge based on the same essential thing, those state campaign finance probe. Does the prosecutor feel that the first charge is going to problematic?

BROWNSTEIN: Well you know we haven't -- he hasn't spoken to us, and so we don't really know what exactly he's thinking.

But you know it's not unusual for prosecutors to find multiple ways to try to get at the same underlying behavior. And in this case, certainly what he has done is created a fallback position for himself in case that first conspiracy allegation doesn't hold up. And of course Mr. DeLay's lawyers are challenging that in court. He now has an alternative route to press Tom DeLay over the same underlying allegation. And that really is the key here that we're talking about the same behavior in both fronts of this indictment.

O'BRIEN: All right, here's what Tom DeLay had to say. He said "he is trying to pull the legal equivalent of a do-over, since he knows very well that the charges he brought against me are totally manufactured and illegitimate. This is an abomination of justice." Does Tom DeLay have a point that this is a redundant charge, essentially?

BROWNSTEIN: Well I don't think it's -- I don't think -- look, I'm not a lawyer and I don't even play one on TV, but it is not -- it is not the first time that a prosecutor has filed multiple charges based on the same behavior. They want to give themselves as many opportunities as they can to convince a jury that a crime was committed.

O'BRIEN: You're not a lawyer, but you are a political analyst. There have been charges, really, from the get-go from the DeLay camp that all of this is politically motivated. Do you think that when you see the second charge that it's beginning to be read that way?

BROWNSTEIN: Well you know Ronnie Earle's defenders say he prosecutes Democrats as well as Republicans. There's no doubt, though, in this case, that he is very aggressively pursuing Tom DeLay. And no politician wants to see their name in the headlines again attached to the word indictment.

I mean there's no question that this compounds the political difficulty for DeLay, if for no other reason than time is not on his side. Certainly he wants to get this resolved as quickly as possible and in a favorable way if he's going to have any chance of returning to his powerful position in the House.

O'BRIEN: Yes, well indictment is one of those words that there's no sort of positive spin on the word indictment if it's linked to your name. It's been floated, though, above Tom DeLay's head for a long time, the potential for an indictment, then finally we heard indictment. What do you think the damage is done, even if in fact it turns out that there is no kind of conviction at the end of the day?

BROWNSTEIN: Well let's talk about Washington and Texas. In Washington, the issue is how quickly can he get this behind him? He is a critical member of the Republican leadership team that has been part of the majority for the past 11 years. But no one in politics is absolutely indispensable. And the longer this goes on, the more other ambitious politicians are going to say they can't wait any more to return his position to him.

The situation in Texas is kind of fascinating. I mean, if you go back and you understand why did he do this in the first place, why did he raise money for state legislative candidates? Well he did it so that a Republican majority in the state legislature would redraw the congressional district lines in a way that made it possible for more Republicans to be elected from Texas.

The price of that, in his case, was moving some Republicans out of his district. So he has a district that's less safe than it was before this process began. Soledad, he only got 55 percent of the vote in 2004 before he was indicted. It is not inconceivable that even if he survives this, running against a former Democratic congressman in 2006, Tom DeLay could have a very rough road to reelection.

O'BRIEN: And so, potentially, he not even the question about whether he could be reelected as majority leader, really is he going to keep his seat at all is the big question?

BROWNSTEIN: He's got to do both.

O'BRIEN: All right, Ron Brownstein, always nice to see you. Thanks -- Ron.

BROWNSTEIN: Thank you.

O'BRIEN: Still ahead this morning, we're "Minding Your Business." It looks as if those big summer employee discounts caught up with two U.S. automakers. Andy is going to tell us why, coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

O'BRIEN: Sales of cars and trucks have hit the skids at two big U.S. automakers. Andy Serwer is "Minding Your Business" this morning to tell us why.

Why?

ANDY SERWER, "FORTUNE" MAGAZINE: I think it's more indirect fallout from the two hurricanes. And the reason I'm saying indirect, because the hurricanes came, hit the oil industry, that caused gas prices to rise and now American consumers are responding. Sales at GM and Ford did take a tumble in the month of September, down about 20 percent or so for both of them. GM down 24 percent. You can see here, let's take a look at this, and then Ford down 19 percent. They still sold, for instance, GM 344,000 vehicles in the month of September. I mean that's a lot of cars that these companies are selling cars and trucks.

The real proof, though, there's a couple of things going on here that really indicate gas prices had everything to do with this. Number one, sales of light trucks, and that includes SUVs, down more than those overall numbers.

O'BRIEN: No one can afford to fill them up any more.

SERWER: That's right. I mean you're looking at these big Yukons and Explorers. Explorers down over 50 percent at Ford. That's number one.

Number two, sales at Toyota and Honda were up. They had record quarters. And of course those two companies are known for having very fuel-efficient cars. Americans voting with their feet and their wallets. And GM has got to stand up and take notice.

O'BRIEN: Yes, you know people just cannot afford at look at the price is that gas is right now to fill up the cars like that.

SERWER: Right.

O'BRIEN: I mean, at some point, you 're right, someone has got to do the math on that.

SERWER: And no end in sight.

O'BRIEN: Yes. All right, Andy, thanks a lot.

SERWER: You're welcome.

O'BRIEN: Still to come this morning, presidential counselor Dan Bartlett is going to join us. We'll ask him how the White House plans to sway conservative critics of the president's new Supreme Court nominee. That's ahead on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Get the latest news every morning in your e-mail. Sign up for AMERICAN MORNING Quick News at CNN.com/am.

Still to come this morning, a closer look at what it's going to take to get the Gulf Coast's once thriving tourism business back on its feet. That's ahead. Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back, everybody. It is just about half past the hour on this AMERICAN MORNING. Miles has the day off. Coming up, controversy is building over the president's Supreme Court nominee Harriet Miers. She's got no experience as a judge, so there is no paper trail to go along with that, and that has got some conservatives a little worried. We're going to talk to a key adviser for the president about the choice.

First, though, let's say hi to Rob Marciano. He's in Lake Charles, Louisiana, this morning.

Hey, Rob, good morning.

MARCIANO: Hi, Soledad.

Day two of our three-day tour across the Gulf states that were affected by Rita and Katrina. Lake Charles, Louisiana, in Calcasieu Parish, southwest Louisiana, bearing the brunt of Hurricane Rita about 12 days ago.

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