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CNN Live At Daybreak

White House Spy?; Bomb Kills at Least 10 Near Iraq's Oil Ministry; Senate Approves Measure for Prison Treatment; Flooded Duds

Aired October 06, 2005 - 06:29   ET

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

CAROL COSTELLO, CNN ANCHOR: The alleged spy in the White House may overshadow what the president plans to say later today. President Bush is planning a major speech at 10:10 Eastern this morning to talk about the progress of the war in Iraq and its connection to the wider war on terrorism.
Suzanne Malveaux at the White House this morning.

Good morning -- Suzanne.

Suzanne. We'll get to Suzanne in just a minute.

But right now, we want to talk more about that alleged spy inside the White House. We have a report on that.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): A former U.S. Marine, who has already been arrested for stealing from FBI computers, is now being fingered for allegedly stealing classified information from White House computers.

RICHARD FALKENRATH, CNN SECURITY ANALYST: We have a number of very sensitive sources and methods, interception technologies, human agents. And it's possible that by revealing the information, he actually reveals its source. And once the source is revealed, we can lose the course.

ARENA: As first reported by ABC, and confirmed by multiple U.S. government sources for CNN, Leandro Aragoncillo allegedly misused his top secret clearance to download the information, including a dossier on the Philippine president, which he allegedly passed on to her political opposition.

Aragoncillo worked at the White House for three years, from 1999 to 2001, in the vice president's office. But it wasn't until he left to work as an analyst for the FBI that he was nabbed.

Last month, federal prosecution said Aragoncillo and an accomplice were seeking go reveal classified information to foreign nationals.

LESLIE WISER, FBI, NEWARK, NEW JERSEY: While it is disheartening to realize that a man who was hired to be an analyst in our own organization, and who was a former serviceman who swore to uphold the United States Constitution, would conduct these types of activities. The American public should be aware the FBI is ever vigilant against all threats, whether they emanate from beyond our shores or within our own borders

ARENA: In a criminal complaint, Aragoncillo was charged with giving the information to Michael Ray Aquino, a former officer with the Philippine secret police, who government sources say is expected to be indicted this week.

CHRISTOPHER CHRISTIE, U.S. ATTORNEY: I have to tell you that our view on matters like this is that there is to be no compromising the secrets of the United States.

ARENA: Aragoncillo has not been indicted. CNN is attempting to locate both his and Aquino's lawyer for comment.

(on camera): Officials tell CNN Aragoncillo is cooperating with investigators, who are trying to determine the scope of his alleged illegal activity. The White House says it's cooperating too, but would not comment on the ongoing investigation. Neither would the Justice Department.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

COSTELLO: And as I said, the president is expected to speak about the war on terrorism and Iraq and al Qaeda at 10:10 Eastern this morning.

Let's head now to Washington to check in with Suzanne Malveaux.

We're seeing a lot of the president these days -- Suzanne.

MALVEAUX: Hey, good morning, Carol. That's right.

And, of course, the big question today is whether or not we're really going to get anything new out of what the White House calls a major speech.

We don't expect that the White House or the president is going to announce any new policy initiative. It is basically going to be the same. He'll make the case, as he always has, that Iraq is the central front in the war on terror. Now is not the time to pull out U.S. troops.

What we are being told, and what may be new in this speech, is that he's going to give more detail and, what Scott McClellan said, unprecedented detail about the nature of the enemy. They're going to talk about how al Qaeda is working with this loose network of radicals, local cells, those in the Middle East who are trying to undermine the U.S. mission.

So, expect to hear perhaps some new language along those lines.

But, Carol, you know, this really comes at a critical time for the president. He has lost a great deal of support when it comes to the U.S. mission in Iraq. And, of course, the Iraqis themselves are up for a vote on their own constitution. And the president expects that there's going to be an uptick, an increase in violence as we get closer to that date.

COSTELLO: Suzanne Malveaux reporting live from Washington this morning.

And as we mentioned, CNN will bring you the president's comments at 10:10 Eastern this morning. We will cover that live for you.

Protecting prisoners in U.S. custody, why the Senate is moving to prevent another Abu Ghraib. We'll tell you what it all means when we come back.

And later, the used car market might be flooded, thanks to Katrina. But buyer beware.

But first, here's a look at what else is making news this Friday (sic).

(COMMERCIAL BREAK)

COSTELLO: This news just in to CNN right now. We have confirmed that there has been some kind of bombing near the Iraqi Oil Ministry offices. That's in the city of Baghdad. We understand that 10 Iraqi police officers have been killed, 8 wounded.

We don't know what kind of bombing it was as of yet. When we get more information on that, of course, we'll pass it along to you.

But, again, 10 Iraqi police officers killed in Baghdad this morning near the Iraqi Oil Ministry offices.

On to other news now. The Senate has approved an amendment to a Pentagon spending bill that sets standards for the treatment of prisoners in U.S. custody. And the move may mean a showdown with the White House.

The measure was sponsored by Senator John McCain. It would ban cruel, inhuman or degrading treatment or punishment, and require all U.S. troops to follow the Army Field Manual.

Here's how Senator McCain explains it.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: We are Americans, and we hold ourselves to humane standards of treatment of people no matter how evil or terrible they may be. To otherwise undermines our security, but it also undermines our greatness as a nation.

(END VIDEO CLIP)

COSTELLO: Anne Plummer is a reporter with "Congressional Quarterly." She joins us now to talk more about this.

Good morning, Anne.

ANNE PLUMMER, "CONGRESSIONAL QUARTERLY": Good morning, Carol.

And thank you for coming in.

PLUMMER: Thank you.

COSTELLO: It was an impassioned debate on the Hill about this.

PLUMMER: It was. It lasted for a couple of hours. But surprisingly enough, many Senate Republicans came to the floor and said that they supported McCain and his legislation.

COSTELLO: Yes, it passed by a wide margin in the Senate. Why now? I mean, what did John McCain say to persuade so many other Republicans to join him?

PLUMMER: Well, I think that Senate Republicans have been behind him all along. This legislation has had strong bipartisan support for a while, at least since July when he had introduced it as an amendment to separate legislation.

But it was vetoed by the White House. There were some concerns that it would be too rigid, that it would cause too many restrictions on President Bush and fighting the war on terror. And Senate Republicans, understandably, were concerned that it would interfere.

COSTELLO: Well, let's talk more about that, because the proposal sounds so simple. I mean, basically he wants to add a ban on cruel, inhuman or degrading treatment or punishment to the Army Field Manual. And he wants all U.S. troops to follow the rules in that field manual.

The White House says that will tie its hands in the war on terror. But why exactly?

PLUMMER: Well, I think what we're seeing is that the field manual, it's actually being revised by the Pentagon. We don't have something to hang our hats on to say this is exactly what's going to happen.

What McCain is proposing is that we just simply put it down on paper that we have something to show to the world that says this is how we plan to treat our detainees in the future.

I think President Bush's concern is that when we do something like that, it reduces the flexibility. We don't know what types of situations we're going to be involved in, you know, five years down the road, for example.

COSTELLO: And, of course, this was all borne of the mistreatment of prisoners at Abu Ghraib. But there is another investigation going on right now, right?

PLUMMER: I believe that there is with Guantanamo Bay, but I'm not familiar with the details on that. COSTELLO: Yes. There is the Human Rights Council is investigating allegations from an Army captain that there is abuse in other places besides Abu Ghraib. And also John McCain is investigating that. So, I guess that might be another reason why this finally passed.

The other interesting thing about this bill is it's attached to a $400 billion defense spending bill. The president, he is still threatening to veto it? And if he does, won't it be hard to do that since it's attached to this particular bill?

PLUMMER: Well, exactly. And that's something that when we were speaking with senators last night, late last night, they were saying that there's no way that the president would veto this bill. But the military has said it will run out of money by November.

So, for President Bush to veto this bill over something that has shown such popular support in the Senate, politically I don't think he could that.

COSTELLO: Anne Plummer, a reporter with the "Congressional Quarterly," joining us this morning. Thank you.

PLUMMER: Thank you.

COSTELLO: Your news, money, weather and sports. It is 6:41 Eastern. Here's what's all new this morning.

Canadian health officials say the public is not at risk after 16 nursing home residents died of a mysterious respiratory illness. Officials say the outbreak is under control, and that it is not SARS.

In money news, warehouse giant Costco says its fourth quarter profit rose 20 percent. The company's board has approved a $1 billion stock buyback plan. Costco also says its September sales were up 11 percent at stores open at least one year.

In pop culture, John Lennon's stamp collection goes on display today at the Smithsonian, but it's not like a normal collection. Lennon was known to make handwritten notes and doodles on the stamps.

And in sports, hockey is back. All 30 teams were in action last night as they dropped the puck on a new season. The NHL missed all of last season because of a labor dispute.

(WEATHER REPORT)

COSTELLO: Hurricane Katrina ruined thousands, hundreds of thousands of cars and trucks. Now the question is what to do with them and how to keep them off the used car market. We'll take a closer look when DAYBREAK returns.

(COMMERCIAL BREAK)

COSTELLO: And welcome back. It's 6:47 Eastern. Here is what will be making news today. President Bush has his own assessment of how the war in Iraq is going. And he'll lay it all out for you in a speech in just, oh, over three hours from now.

Fears about a worldwide outbreak of bird flu are drawing dozens of countries to an international conference in Washington today.

And Congress is forming a joint committee to review response to Hurricane Katrina at all levels of government. And a bipartisan Senate committee plans to forge a package of hurricane relief legislation.

The bird flu and Hurricane Katrina are among the top stories "AMERICAN MORNING" will be following as well today.

Soledad O'Brien joins us now with a preview.

Good morning.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Carol, good morning to you.

This morning, we're going to take a closer look at the growing fears of that bird flu pandemic. It's possible. Experts are worried, though, the disease could kill millions of people worldwide if it spread to humans. Are we prepared for an outbreak? We're going to check in with Health Secretary Michael Leavitt this morning.

And as we all saw in Katrina's aftermath, people along the Gulf Coast need all the help they can get. So, why has FEMA suspended that search and rescue team from Phoenix? We'll check in with mayor of that city to find out why he is angry. He's demanding an apology, too. A look into that ahead on "AMERICAN MORNING" -- Carol.

COSTELLO: All right. Thank you, Soledad.

Federal officials say it could take at least a year to clean up all of the hurricane debris. FEMA estimates that Katrina and Rita left behind 400 million cubic yards of debris in Louisiana and Mississippi.

It's hard to wrap your mind around that. I know. But take a look at the numbers: 22 million tons of various debris. I don't know how they weighed it, but they did somehow. Five million gallons of toxic waste have to be disposed of, and 350,000 cars, trucks and other vehicles destroyed also need to be disposed of.

And you saw that figure there, more than a quarter-million wrecked vehicles, many of them flooded by back-to-back hurricanes. Word is that insurance companies will declare them total losses. But will you see them on car lots anyway?

Joining us live is automotive expert Lauren Fix.

Good morning, Lauren.

LAUREN FIX, CAR EXPERT: Good morning. COSTELLO: It's just hard to believe that these cars could show up on used car lots or on eBay or on the Internet. I mean, do you have word of that yet?

FIX: Well, they are actually showing up already. What's happening is, through some of my contacts down in New Orleans and that area, they have told me that they're actually calling cars scrap right out of the box just to get them totaled.

What they're supposed to be doing with these cars is shredding them into little pieces of metallic material, sort of like the consistency of mulch, of course, once removing all of the things that can be a problem like batteries and tires and gasoline.

But what's happening is if you didn't have comprehensive insurance, these vehicles will then be stuck with the owners. And they're going to try and clean them up and get rid of them, because you've got an investment.

COSTELLO: Can you possibly clean them up to sell?

FIX: Most of them are not repairable. Those will be absolutely shredded. But when you think about 350,000-plus cars, some of those cars absolutely are going to get in the hands of people all around the country, because what happens is people buy them at lots. They're supposed to be trashed. And they end up going out to the consumer, and the consumer becomes a victim again, and so do the hurricane sufferers, who already had limited funds.

COSTELLO: You know, I saw some of these cars out in New Orleans, and some of them, even though they were under water for two-and-a-half weeks, actually look pretty good. Is it possible you can, like, start them up and drive them still?

FIX: I wouldn't do that, because what's happened is all of the water that has been soaking in is now into the engines. It's into the gasoline. It's into the interior. What you're getting is mold, rust and (INAUDIBLE).

So, if you were to buy one of these vehicles, as soon as you open the door and you can smell mold, you do not want that vehicle in any way, shape or form. You don't want to be breathing that, nor do you want your family breathing that stuff.

COSTELLO: So, let's say that the person selling the car has figured out how to get rid of the mold smell. What other signs do you look for that this car might have been under water?

FIX: Well, the first thing you can do is pretty easy, you don't even have to get your hands dirty, is you open the door and look at the dome light. If you see moisture in the dome light -- and it doesn't have to be full of water, just a few droplets -- obviously there's something right there. This is not a car that you want to purchase.

You can look underneath the dash. The brackets that hold the dashboard to the car should never be rusted. Clues that it's been repaired on the inside would be mismatched interior, things that just don't smell right when you turn on the air conditioning or the heat.

And then you can always pop the trunk and the hood and look. If you see rust on the top of the motor on the hinges of the trunk, obviously there's something wrong. This is a vehicle that you don't want.

But the problem is, is the government, it doesn't have a uniform information from state to state. So, if they trash it in Mississippi, Alabama or in Louisiana, that vehicle can still be washed and get to another state through Pennsylvania, New York and whatever. Now, New York and California have very strict rules, but vehicles are still getting in.

COSTELLO: Well, you know, the other problem is when you buy a used car, it's very difficult to get, you know, a history of the car and what it's been through.

FIX: Right. Carfax has done a great job. I know that a lot of warnings have been posted on eBay. I know autoextra.com has posted warnings on their site to please look at these lists of things before you go ahead and purchase a car.

But the thing is, Carfax has a lot of the information. But the U.S. government is trying to collect as much as they can. But what they don't have is cars that weren't covered under insurance. And those are the vehicles that are easily going to make their way back around the country.

COSTELLO: So, the final analysis, if you see a car, and you say, wow, that's a great deal, think twice.

FIX: There's a reason, right, definitely. If you're in doubt, be ready to walk away, because once you sit behind that wheel and you get to drive that vehicle, you tend to get attached to it. So, before you go and drive it, check it out and have a certified technician look at it.

COSTELLO: Thank you. Lauren Fix joining us this morning.

Now for a real feel-good story. It's about a Louisiana evacuee who finally had some good luck. And now, she's got the means to get a new home to replace the one she lost in Hurricane Katrina.

We get the story from Cheryl Fatzer of CNN affiliate KLFY in Lafayette, Louisiana.

(BEGIN VIDEOTAPE)

CHERYL FATZER, CNN AFFILIATE KLFY REPORTER (voice over): Meet Jacquelyn Sherman, one of many evacuees who was forced to leave the Crescent City to escape Katrina's wrath.

JACQUELYN SHERMAN, BIG WINNER: I don't like leaving my home. I just -- that was devastating to have to do. Get on the interstate, and everyone else is leaving their home, and we're in bumper to bumper traffic from New Orleans to Appaloosas.

FATZER: Since then, Sherman and 25 others have been staying at her sister's house in Appaloosas.

SHERMAN: We made good friends with the floor. And all of us have our own air mattress.

FATZER: While running errands on Tuesday, she made a stop that would change her life.

SHERMAN: On our way to Wal-Mart, I asked my sister, who was driving, if she felt like stopping a little while, because I am a casino fanatic. And she said, "OK." And we came in and was here about 20 minutes.

FATZER: Sherman was sitting at this machine when she struck the jackpot. She tells us she didn't even realize she had won until moments later.

SHERMAN: About five minutes after I won, I think I might have realized it. The lady next to me, who was playing, she just kept hitting me, you know, saying that I had won and how much it was. And it took about five minutes to sink in.

FATZER: Sherman won $1.6 million. Though she hasn't had time to think about what she'll do with the money, she does have an idea where she'll start.

SHERMAN: My biggest concern is a home, replacing my home and getting back to a normal lifestyle.

FATZER: When Sherman returned to his mid-city home, she says it was hard to hold back the tears. She lost everything.

Today, Sherman wears a million-dollar smile.

(END VIDEOTAPE)

COSTELLO: That's awesome, isn't it, Chad?

CHAD MYERS, CNN METEOROLOGIST: A $1.6 million smile.

COSTELLO: Oh, you're not kidding.

MYERS: Yes.

COSTELLO: I like it when she said she was a casino fanatic.

MYERS: Yes, and that she said she didn't even realize. It hadn't hit her yet.

COSTELLO: Wow!

MYERS: And then all of a sudden and then she knew the number.

COSTELLO: Good for her. But now it's time for our DAYBREAK viewers.

MYERS: A $1.6 million DAYBREAK coffee mug.

COSTELLO: We've got them.

MYERS: Because you can't buy them. So, we can put any price we want on them, right?

Here is the winner from yesterday. The questions: Name the law that bans the armed forces from police-type activity on U.S. soil. And that's the Posse Comitatus Act of 1879. And Delta flight cancellations will most likely affect passengers on what days of the week? Early morning, late-night flights Tuesday, Wednesday and Saturday.

And this mug goes to Michigan, in fact Stevensville, Michigan, to Sandy Vanderwerven. Congratulations.

Now is your chance to answer today's questions. How much of a signing bonus is Burger King offering prospective employees in New Orleans to come back to work to Burger King? And, number two, who is on the cover of the premier issue of "Men's Vogue" magazine?

You have to answer them both. Go to CNN.com/daybreak, and let us know your answers. The little link there is on the left side of the screen -- Carol.

COSTELLO: I just have a picture in my mind of you reading the new "Men's Vogue" magazine.

MYERS: Yes.

COSTELLO: It's not ringing true.

MYERS: Probably not.

COSTELLO: When we come back, we'll have more headlines for you.

(COMMERCIAL BREAK)

COSTELLO: "Now in the News."

A former Marine is suspected of stealing secrets while working inside the White House. Government sources confirmed to CNN that Leandro Aragoncillo allegedly sent classified information to people in the Philippines. He's already accused of stealing secrets while at the FBI.

Another bloody day already in Iraq. A suicide car bombing near the Iraqi Oil Ministry in Baghdad kills at least 10 and wounds 8 more. Another suicide car bomber targeting a convoy of American contractors hurts Iraqi civilians, and a U.S. soldier was killed in a roadside bombing while on patrol in northwest Baghdad.

Seven hundred firefighters in Riverside County, California, are battling a fast-moving blaze. It's forced the evacuation of several homes and burned about 6,000 acres. That fire is 70 miles east of downtown Los Angeles.

From the Time Warner center in New York, I'm Carol Costello along with Chad Myers. "AMERICAN MORNING" starts right now.

MILES O'BRIEN, CNN ANCHOR: Thank you very much, Carol. I'm Miles O'Brien.

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