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CNN Live At Daybreak

Indictments in the CIA Leak Case?; World Series Wrap-Up

Aired October 26, 2005 - 06:00   ET

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

CAROL COSTELLO, CNN ANCHOR: It is Wednesday, October 26.
Hints and allegations, or trouble behind closed doors? More reports surface in the CIA leak case that could be quite damaging for some of the president's men.

Celebrations in the streets as Iraqis pass a new constitution. But not everyone is happy. Could this incite more violence?

And patience is running out in New Orleans. Residents say more must be done to address the city's crumbling levees.

ANNOUNCER: From the Time Warner Center in New York, this is DAYBREAK with Carol Costello.

COSTELLO: And good morning to you.

We'll have more on those stories in just a moment.

Also ahead, some comments from the Air Force head -- the Air Force head football coach are raising eyebrows, comments from that guy.

And if you're up this early, you probably didn't see the White Sox move one step closer to the World Series title. We'll talk more about that in a moment. It went 14 innings.

But first, now in the news, stepped up violence in the Middle East this morning. A rocket was fired from Gaza into southern Israel. It hit a college, but caused no injuries. In response, Israeli aircraft fired on fields that Palestinian militants use as launch sites.

There is word of a deal between the U.S. and Japan this morning. The two have agreed on where to relocate a U.S. military base on Okinawa. Debate over where it should go had held back a plan to realign U.S. troops in Japan.

Thousands of people still without power in the Northeast this morning after a storm brought high winds, rain, and, believe it or not, even snow. The storm is fending of the remnants of hurricane Wilma.

To the Forecast Center now and Jacqui -- good morning.

JACQUI JERAS, CNN METEOROLOGIST: Good morning, Carol.

Good morning, everybody.

Still some of that snow out there and some of the rain across parts of the Northeast. But improvements are on the way. There you can see all the cloud cover associated with that and check out, what was Wilma went booking on up ahead of that storm system.

A little bit of that tropical moisture did mix into the Northeast, but this is not a direct impact from Wilma. There you can see the showers along the I-95 corridor. And you can see this becoming less widespread. Still some light snow showers across the Adirondacks, up into the White Mountains, also, wound then into northern parts of Maine. Snowing in Caribou there this morning.

How much snow did you get? Well, Randolph, New Hampshire saw 14 inches, nearly a foot. And Norwich, New York; Sylvania, Pennsylvania; had nearly a foot. And Zion had about six-and-a-half inches of snowfall.

There are still some winter weather advisories and winter storm warnings that will remain in effect. A lot of these expiring about 10:00, 11:00 this morning. So watch for things to get better later on in the day.

(WEATHER REPORT)

COSTELLO: There is also that political storm in Washington to talk about this morning.

The federal grand jury investigating the leak of a CIA operative's name meets today. Will anything come of it?

Let's get details on that from our national correspondent, Bob Franken.

He's outside the federal courthouse in Washington.

Are you there for good reason -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, I hope so, because it's cold here, too.

You know, actually, this is a story about what we don't know. We don't know that there will be indictments today, although there's a strong presumption that they're going to come either today or Friday, when the grand jury is scheduled to meet, because grand jury's term runs out.

Now, the special prosecutor, Patrick Fitzgerald, could ask for an extension. But the consensus is he won't do that. This is an investigation that's been going on for nearly two years.

What we do know is that there has been a lot of focus on two particular principals in the White House -- Karl Rove, who has been with President Bush through his entire political career, is his top political adviser, he's the deputy White House chief of staff. His name has come up, we do know, in the reports about conversations he's had with reporters.

The other one is I. Lewis "Scooter" Libby. He is the vice president's chief of staff. We do know that there has been discussion about him. We also know that the prosecutor, the special prosecutor, has even tried to look at a possible role of Vice President Cheney.

What we also have discerned, we and the variety of lawyers involved in watching this case, that there seem to be three avenues -- the violation of the law itself, that the prosecutor is looking to see if anybody violated a rule -- it's a law, actually -- that would not allow those without knowingly unveil the identity of a CIA undercover operative. The key word there is knowingly.

But we're also told from the lawyers that there has been an exploration of whether there were false statements, some sort of obstruction of justice, perjury, that type of thing.

And, also, the prosecutor looking into whether there was a variety of acts that would violate conspiracy laws.

All of that is still in the unknown. We don't know if the prosecutor is going to act. We don't know when he's going to act. But the betting is it could well come today -- Carol.

COSTELLO: I hope so.

So then you are standing out there for a reason. Plus it'll just be good to have this all over and done with, especially for the Bush administration.

FRANKEN: That's for sure.

The Bush administration has very aggressively tried to put the image that this is something that, as the president calls it, chatter, background noise. But it is very loud chatter, very loud background noise. And try as they can, they can't get rid of the impression, at least, that this is a distraction at the White House.

COSTELLO: Bob Franken look at this federal courthouse in Washington this morning.

At issue in the CIA leak probe is the Intelligence Identities Protection Act. What's that? Well, they're trying to decide whether top administration officials violated it. It was enacted in 1982 to prohibit officials from revealing the names of spies. The Act makes it a federal crime to divulge the identity of an undercover CIA agent. Conviction of violating the Act carries penalties of 10 years in prison and a $50,000 fine for each offense.

Americans seem to be equally divided over whether the CIA leak really is a crime, though. A CNN/"USA Today"/Gallup poll found 39 percent say it was illegal to reveal the identity of a CIA agent's name, in this case, Valerie Plame; and an equal number who said it was, at best, unethical. And subsequently the poll found that people's opinions of the ethical standards of Bush administration officials have dropped significantly since 2002. So most Americans think it's unethical, but perhaps not illegal.

So, will there be indictments of administration officials? We're going to talk to someone who's got his ears on the ground in Washington, besides Bob Franken. And that's just 20 minutes away.

Hurricane Wilma continues to threaten the Northeast, but back down in Florida they're still dealing with the aftermath of the storm. People in and around Miami waited in long lines for hours just for something to drink. Some said they were angry about delays in water and food distribution, from Fort Lauderdale on the East Coast to Naples on the west.

At least five deaths are being blamed on the storm. Most of those were caused by debris tossed around by strong winds. Cleanup efforts continue in places hid hardest by Wilma. Downed trees and power lines dominate both coasts of the state. Early estimates put the cost of damage at between $6 billion and $10 billion.

And as many as six million people lost power as a result of the storm. Thousands of utility workers are trying to restore power in the affected parts of the state. Miami's airport did reopen for very limited business. The damaged airport was able to receive one incoming flight yesterday. Just one. But more flights are expected today. The airports in Fort Lauderdale and West Palm Beach are still closed this morning.

Thousands of tourists are finally getting out of Cancun, Mexico. But just as many are still waiting for help. Oh, and they're angry. About 22,000 are still stuck there. Some of the stranded American tourists say they're upset with the lack of help from the federal government here in the United States.

It's been nearly a week since hurricane Wilma battered the resort hotels along the coast.

(BEGIN VIDEO CLIP)

KELLI MICHEL, STRANDED IN CANCUN, MEXICO: In terms of accommodations and comfort, it's very uncomfortable and it's very hot. We -- my family, there are six of us. And we slept in a stairwell for three nights. I slept on the stairs and had a little fan to fan my children when the temperature was almost 100 degrees inside.

(END VIDEO CLIP)

COSTELLO: The State Department says it's trying to help. One official says they've been working on transportation and supplies for the roughly 2,500 Americans still in that region.

Three more deaths in Iraq bring the U.S. military death toll to 2,000. The chief U.S. military spokesman in Iraq blasted media coverage for focusing on that figure.

Senator John McCain appeared to concur, as the Senate, which approved going to war, paused to honor and praise the troops for their sacrifice.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: All Americans regret and view with great sadness and sorrow the deaths of American fighting men and women. And obviously 2,000 is a benchmark and it gives those who are critics of the war an opportunity to criticize.

I would hope that the sacrifice made by young Americans would not be used for political reasons.

(END VIDEO CLIP)

COSTELLO: Oh, but of course they are.

War protesters, though, careful to say the 2,000 dead should not be played for political advantage. But come on.

Anti-war activist Cindy Sheehan and other war opponents symbolically died on the sidewalk in front of the White House. Sheehan hopes another 2,000 activists will join her as she stages a similar protest throughout the week. Peace activists have organized war protests from New York to Hawaii all this week.

Vice President Dick Cheney is leading the fight against a Senate- approved ban on torturing detainees in U.S. custody. A provision added to the defense spending bill would ban the use of cruel, inhuman or degrading treatment or punishment of anyone in U.S. custody. It was approved nearly unanimously.

A White House proposal would allow the president to exempt undercover agents from the ban, though.

Senator John McCain, who spearheaded the torture ban, says the White House would basically allow the CIA to engage in torture.

Still to come this hour on DAYBREAK, patience is wearing thing for New Orleans' residents who want changes to the city's levee system.

Also, the coach of the Air Force football team made some comments about minority athletes, and, boy, there are some people not happy about them.

And in "Business Buzz," McDonald's is changing its packaging to let you know what's really in your food.

But first, here's a look at what else is making news this Wednesday.

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COSTELLO: Most of you probably didn't see the end of last night's World Series game. It ended less than four hours ago, after 14 long innings. That makes it the longest game in World Series history. The Houston Astros squandered an early lead and plenty of winning opportunities. And now the Chicago White Sox are just one game away from a championship.

CNN Radio's Ed McCarthy was at the game, so he's probably a little bit tired. But of course we woke him up anyway -- good morning, Ed.

ED MCCARTHY, CNN RADIO: Good morning, Carol.

Well, you are correct. We got here, well, it was 3:30 Eastern time when we got back to the hotel room this morning. But, you know, what a ball game. As you mentioned, the previous longest Series game at four hours, 51 minutes. And the Yankees then beat the Mets in 12 innings in 2000.

This game matching the longest by innings. That was the one with the Red Sox against the Brooklyn Dodgers in 1914. So, you know, if you went by this thing pitch by pitch, you'd find out there were 482 pitches, 245 by the White Sox and 237 by the Astros. The fans were just exhausted when they left.

COSTELLO: Were there any fans left in the stadium after 14 innings? Because, you know, what, the Astros stranded 15 men on base. They had to be getting a little frustrated.

MCCARTHY: Well, they were frustrated. And it was clearly in their eyes, the dejected looks on their faces as they left. Many of them did leave early, but a lot of them hung in there.

And I asked the question, the tough question, do you think the Astros can come back now? And most of them said no, they didn't believe it, that they would be able to. But they'll be out in force again tonight and, you know, ready to go.

They had that big controversy last night over whether the roof should be open or closed. The Astros wanted it closed because they wanted more crowd noise. But major league baseball said no, we're not going to do that. We're going to go by your guidelines, which mean that if it's 80 degrees or above, then we will open the roof. It was actually -- or close the roof, rather. It was actually a beautiful, beautiful night at Minute Maid Park.

COSTELLO: Yes, but I thought that was kind of weak. The commissioner said we couldn't think of any way that the weather would cause the roof to close, so no.

MCCARTHY: Well...

COSTELLO: But, still, shouldn't it be left up to the individual teams about how they want to run their stadiums?

MCCARTHY: Well, that was the argument, the big argument. But major league baseball and the commissioner kind of explained it to say that, you know, they were actually going according to what Houston has set up for the course of the season, as far as weather conditions. So -- and weather parameters.

So therefore they decided to kind of bow out of it a little bit -- the controversy lasted all day long -- and say well, this is what the Astros want to do, usually, throughout the course of the year, so we're going to go with this and we'll leave it open.

COSTELLO: All right, Ed, well, we'll let you get back to sleep. And hopefully you'll join us again tomorrow, because it could all be over then.

Ed McCarthy.

MCCARTHY: Thank you, Carol.

COSTELLO: Thanks.

The Air Force Academy's long time football coach is raising some eyebrows thanks to some racially tinged comments. Fisher DeBerry told reporters there is a reason for the Falcons' slumping performance. He says it's partly because his school does not have as many African- American players as rival schools.

(BEGIN VIDEO CLIP)

FISHER DEBERRY, AIR FORCE ACADEMY COACH: Afro-American kids can run very, very well. That doesn't mean that Caucasian kids and other dissents can't run, but it's very obvious to me that they run extremely well.

I just want to improve speed. We need to find speed as much as anything. But the black athlete seems to have, you know, statistically, program, program, program, you know, seems to have an edge as far as the speed is concerned.

(END VIDEO CLIP)

COSTELLO: Can someone give him Jimmy the Greek's phone number? Academy officials say they're aware of the coach's remarks and they are investigating.

Still to come, what's in that Big Mac? Soon you'll have it right in front of you.

A new report is criticizing alleged hiring practices at some Wal- Marts. Carrie Lee will have more on that for us in a moment.

But first, it's time to say oh, good morning, Chicago.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WALTER UPDEGRAVE, SENIOR EDITOR, "MONEY": When purchasing a car, one of the first things to keep in mind is that you don't want to put so much money into it that it takes away money that you should be using to meet other financial obligations. The key things that you want to be thinking about are how much of your budget do you want to allocate to car payments. And that's usually 8 to 10 percent. And then what interest rate are you going to get on that loan?

There are costs other than just the monthly payment when you buy a car. For example, there's gas, there's maintenance, there's insurance. So when you're thinking of buying a car you want to look at the total cost, not just the monthly payment for the loan.

COSTELLO: It's time for a little "Business Buzz."

Want to know how many calories are in that Big Mac? Maybe not, but you will soon be able to find out just by looking at the wrapper. McDonald's says that next year it will start including nutritional information about its menu items right on the packaging.

The B.P. Oil Company is sitting pretty. It reports third quarter earnings up 34 percent. And if you won any shares, you'll be happy to know B.P. rose $0.31 a share.

And just so you know, the price for a gallon of unleaded regular gas is now about $2.60 a gallon. That's up 28 percent from a year ago.

Wal-Mart is in the hot seat once again. This time it's under fire for some allegedly shady tactics to hold down health care costs.

Carrie Lee joins us with the story -- this is just astounding.

CARRIE LEE, CNN CORRESPONDENT: It is. And it's kind of ironic, because it comes two days after Wal-Mart announced reduced health care coverage plans for some of its workers. So now they're having to contend with this.

What's happening is an internal memo was reportedly sent to Wal- Mart's board suggesting a number of ways to cut health care and benefit costs. And they don't all seem to be on the up and up.

Now, the "New York Times" has gotten its hands on this memo. Some of the proposals include hiring more part-time workers. OK. And discouraging unhealthy people from seeking jobs. The memo, reportedly from the retailer's head of benefits, also recommends cutting 401K contributions and wooing younger, healthier workers with education benefits.

Now, the paper says a pressure group connected with labor unions originally obtained this memo.

So, how do you discourage unhealthy job applicants? Well, it reportedly suggests Wal-Mart arrange for all jobs to include some philosophical activity, just as gathering carts from the parking lot.

Now, for its part, Wal-Mart, just two days ago, as I said, did announce a new low cost health plan for all workers. Wal-Mart has also called on Congress to consider raising the minimum wage. So...

COSTELLO: But only for healthy people. LEE: Exactly. So they are trying to do some good things. But clearly, Carol, some damage control here. Make it clear that this is attributed to the "New York Times" at this point. But it is a challenge because benefits, health care going up for everyone. But they're trying to deal with this and now we know exactly how.

COSTELLO: I don't know, you always wonder what, you know, if you're healthy when Wal-Mart hires you and then you become unhealthy, what happens then? Do they try to push you out?

LEE: Well...

COSTELLO: I mean by this policy, you would sense that that would be so, although I don't know that.

LEE: If you have insurance in the first place. Two stats here. Less than 45 percent of Wal-Mart workers even have health insurance. Only 46 percent of the children of Wal-Mart's U.S. employees, or over 1.3 million, 46 percent are uninsured or on Medicaid. So about half insured, half not.

COSTELLO: It's not like Wal-Mart's, I know Wal-Mart's not doing as well as it did, but it's by no means doing poorly.

LEE: No, it is not doing as well as it did a few years ago and troubles like this certainly don't encourage people to go and want to shop there so.

COSTELLO: A quick look at the futures?

LEE: The futures looking up today. We did see a little bit of selling yesterday. Amazon.com in focus. Disappointing results last night. The stock lost ground. We'll see what it does today.

We'll also get a weekly crude oil inventories report, and that could give us some oil direction.

COSTELLO: Thanks, Carrie.

LEE: OK.

COSTELLO: President Bush will be addressing the Economic Club in Washington this afternoon, presumably to talk about the economy.

CNN will bring that to you live at 1:00 Eastern on CNN's "LIVE FROM" with Kyra Phillips.

In Washington, it's the big question everyone is talking about -- will the grand jury investigating the leak of a CIA operative's identity issue indictments today against any top White House officials?

Our guest knows what's going on on the ground in D.C.

He's editor-at-large at the "Washingtonian" magazine.

Garrick Graff joins us live now.

Good morning, Garrick.

GARRETT GRAFF, "WASHINGTONIAN" MAGAZINE: Good morning.

Thanks for having me.

COSTELLO: OK, so what are you hearing, behind-the-scenes, that is?

GRAFF: Well, right now it's still all speculation. We may see indictments as early as today. We may not know until the end of the week. The reports this morning are that the FBI have spent the last couple of days running around Washington trying to establish that Valerie Plame, the CIA operative whose name sort of was leaked in 2003 and started this entire thing, whether, in fact, it was widely known that she was a cover operative or not, and whether she was employed by the -- whether it was widely known whether she worked for the CIA.

COSTELLO: Well, the interesting thing is, is that the Bush administration is seemingly moving on. I mean you see Karl Rove appearing with the president again. He certainly doesn't seem to be hiding anymore. So it seems as if they want to put this behind them.

Do they know something that we don't?

GRAFF: Well, they can't really put this behind them right now until we have some better idea of where this investigation is going. I mean, the chief adviser to the vice president, "Scooter" Libby, and the chief adviser to the president, Karl Rove, are both involved in this, or at least rumored to be involved in this, and may face indictment later this week.

COSTELLO: You know, the thing about this is, you know, it's not unusual fallout politicians to kind of like steer leaks in the right direction.

So this isn't something that's so unusual in Washington, is it?

GRAFF: No. This investigation has been very interesting to watch, though, because the investigator -- the special investigator, Patrick Fitzgerald, has not -- has been -- has played these cards very close to his chest. He has kept a tight leash on the investigation. No one really knows where it's going. No one really knows who is a subject or a target of this investigation. And hence it's very hard for either side to play this to their advantage right now.

COSTELLO: So besides "Scooter" Libby and Karl Rove, we've heard Dick Cheney's name mentioned, you know, in grand jury testimony.

Are there any other surprises that may come out of this investigation that we don't know about now?

GRAFF: I would be very surprised if there weren't surprises. But we really don't have any idea. This could end very peacefully. It could end with just a final report. It could end with an indictment or two. Or it could be a very far ranging indictment that wraps up a lot of people in the upper levels of the administration.

COSTELLO: Garrett Graff from the "Washingtonian," joining us live this morning.

Thank you.

GRAFF: Thank you.

COSTELLO: Still to come on DAYBREAK, some Iraqis are celebrating the new constitution. Some are not. We'll talk to one of the critics in the next half hour.

And frustration turns to anger. New Orleans' residents want to know what's going to happen to the city's levees.

You're watching DAYBREAK for Wednesday.

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