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CNN Live At Daybreak

White House Braces for Results of CIA Leak Probe; Harriet Miers Steps Down as Supreme Court Nominee

Aired October 28, 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 Friday, October 28.
The White House braces for the results of that CIA leak probe. After a two year investigation, will today be the day criminal charges are filed?

Also, Harriet Miers steps down as Supreme Court nominee. So who might be the one to step up?

And Venezuela loves Chicago. But why?

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

COSTELLO: And good morning to you.

We have more on the CIA leak investigation in just a minute.

Also ahead, a new development in the Horowitz murder case. The suspect's mother is arrested. We'll tell you why.

And residents of the Ninth Ward go home, but is there any home left? We'll get their reactions.

But first, now in the news, thousands of Iranians march in the streets of Tehran today. They're showing their support for the president's call that Israel be wiped off the world map. Other governments have condemned the Iranian leader's remarks.

Russian investigators are trying to learn if militants who raided the City of Nalchik earlier this month planned to use civilian planes as terrorist weapons. That's according to the Interfax News Agency. Those October 13th attacks left 94 militants dead, along with at least 45 other people.

The City of Chicago turns out today for a big ticker-tape parade. The city is honoring the World Series champion White Sox. This afternoon's parade begins at 1:00 Eastern. It should be quite the celebration.

BONNIE SCHNEIDER, ATS METEOROLOGIST: Just tell her to watch me in the monitor.

COSTELLO: What?

SCHNEIDER: Sorry. COSTELLO: Say what?

SCHNEIDER: We were testing that shot.

I apologize.

COSTELLO: No problem.

Take it away, Bonnie.

(WEATHER REPORT)

COSTELLO: Today is the day. The special prosecutor in the CIA leak investigation is expected to announce his decision on whether to bring criminal charges. The "New York Times" is reporting this morning lawyers in the case expect Vice President Dick Cheney's chief of staff, Lewis "Scooter" Libby, to be indicted on charges of making false statements to the grand jury.

The "Times" also reporting people close to the case say White House Chief of Staff Karl Rove will not be indicted today, but will remain under investigation. But that would require extending the grand jury, so it may not be completely over today. I know, it's confusing business, isn't it? And today's announcement could be just the beginning of much more to come.

We toss it into the lap of national correspondent Bob Franken.

He's live in front of the federal courthouse in Washington -- OK, so Lewis "Scooter" Libby is expected to be indicted, but not for leaking the name of Valerie Plame. And the investigation will continue against Karl Rove?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, possible. Possible. You know, you are citing a "New York Times" report. There has been a buzz, and it's only a buzz, that Libby has been the sharp focus. And there has been a constant discussion about the fact that the investigation has gone beyond just whether the law against disclosing the identity of an undercover government agent was involved.

As is so often the case in politics, the focus of the investigation oftentimes ends up on an alleged cover-up and whether that cover-up, or alleged cover-up, gets into the areas of perjury, obstruction of justice, making false statements and the like. There is also the possibility of a conspiracy charge, which could involve people who didn't directly participate in any alleged crimes, but had conversations that caused those actions to be taken.

All of that under consideration. A lot of focus, we know, on the vice president's office, where "Scooter" Libby is the chief of staff.

As for Karl Rove, the "New York Times" is reporting that there will be no indictments yet, but that is not something we have been able to confirm. In addition to that, the possibility of Fitzgerald continuing could be done not with this grand jury. Some question about whether he could extend this grand jury, although the rules seem to indicate he could do it again. It's already been extended once. However, he could also rely on a new grand jury and re-present any cases down the line.

In other words, we may end the day with some answers but a lot more questions -- Carol.

COSTELLO: OK.

I'm sure you'll continue to follow this story and you'll be rooted like a tree in front of that courthouse all day.

Thank you, Bob.

By now you've heard, White House Counsel Harriet Miers has withdrawn her nomination to serve on the Supreme Court. Miers says her nomination had presented a burden for the White House.

A quick CNN/"USA Today"/Gallup poll finds 57 percent of people describing themselves as liberals are pleased with her withdrawal. Forty-two percent of conservatives say they are disappointed.

GOP strategist Jim McCarthy will join me with more on this story in just a few minutes.

A second arrest is made in the killing of a prominent California lawyer's wife. Esther Fielding, the mother of the teenaged murder suspect, is being held on suspicion of being an accessory to the murderer of Pamela Vitale. She's due in court today, a day after her son faced a judge.

CNN's Ted Rowlands has that report from Martinez, California.

(BEGIN VIDEO TAPE)

UNIDENTIFIED MALE: OK, be seated and come to order. Department six is now in session.

TED ROWLANDS, CNN CORRESPONDENT (voice-over): With his hair cut short, in court today, 16-year-old Scott Dyleski looked like an average teenaged boy. He nodded a few times as the judge read the charges against him -- first degree murder. He did not enter a plea. Dyleski is accused of killing 52-year-old Pamela Vitale, the wife of lawyer Daniel Horowitz. According to a law enforcement official close to the case, Vitale was found bludgeoned to death with a cross carved in her back.

Court documents indicate that on the night of the murder, Dyleski was with his girlfriend. A search warrant issued after the murder says Dyleski told friends he was going to her home to have sex with her. The home was searched.

And the young woman is now being represented by Gloria Allred. GLORIA ALLRED, DYLESKI'S GIRLFRIEND'S ATTORNEY: My client is a potential witness in this case and I don't think, at this time, it would be appropriate to say for whom.

ROWLANDS: Those who know Dyleski continue to wonder how he could go from Boy Scout and baseball player to accused murderer.

Mitch House and Elena Zdiadevitch say Dyleski was their baby- sitter as recently as a few weeks ago.

MITCH HOUSE, ACQUAINTANCE OF SUSPECT: And he's broken a lot of hearts, you know? Even people that cared about him like me, but didn't love him like, you know, family or anything. I mean he broke my heart.

ROWLANDS: They say Dyleski started to change after his older sister Denika was killed in this car crash in 2002. They say that's when he started dressing in dark Goth clothing.

ELENA ZDIADEVITCH, ACQUAINTANCE OF SUSPECT: He was picked on in school. He wasn't a popular kid and when he started to dress up in those black Goth like outfits, he was picked on for that, as well.

HOUSE: Well, the last time I saw him I said hello to him and he just sort of looked at me like he was totally vacant. And I thought I know he heard me, but he's just staring at me like he's never met me before.

ROWLANDS: Scott Dyleski is being held on $1 million bail. If found guilty of the charges against him, he faces 26 years to life in prison.

(on camera): Dyleski's mother, Esther Fielding, is being held tonight on $500,000 bail. She is expected to make her first court appearance as early as tomorrow. Her son, Scott Dyleski, is expected to be back in court on November 9th.

Ted Rowlands, CNN, Martinez, California.

(END VIDEO TAPE)

COSTELLO: And still to come this hour on DAYBREAK, a bus tour like no other. The painful trip residents in New Orleans Ninth Ward made to see what was left or not left of their neighborhood.

Plus, more Wilma relief efforts. Floridians will be able to get some much needed ice and water today. We'll have a live report out of Miami for you.

And pain at the pump -- how those high gas prices are translating into record profits for the oil companies. You won't believe it. We'll have that in our "Business Buzz."

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

(COMMERCIAL BREAK) COSTELLO: We're talking a lot about Harriet Miers this morning, because I know you've heard by now, the White House counsel, Harriet Miers, has withdrawn her nomination to serve on the Supreme Court. She says her nomination presented a burden for the White House.

Let's -- we want to show you these poll numbers again. This is a CNN/"USA Today"/Gallup poll. Fifty-seven percent of liberals are pleased with her withdrawal. Forty-two percent of conservatives say they are disappointed. Thirty-four percent, I think, said that they're glad that she withdrew.

GOP strategist Jim McCarthy is here now to talk more about this.

He is of McCarthy Communications and a GOP strategist.

Thanks for joining us this morning.

JIM MCCARTHY, MCCARTHY COMMUNICATIONS: Sure.

COSTELLO: Before we talk about the future, I'd like to talk about the past for just a little bit, because this was a vicious process for Harriet Miers.

MCCARTHY: Yes.

COSTELLO: Why did it become so mean-spirited?

MCCARTHY: Well, look, if you look at the last, you know, four or five Supreme Court justices who have been in the news, it's really gotten, you know, below the belt. They had a stakeout outside of Judge Rehnquist's home. They wouldn't leave Justice O'Connor alone about her ailing husband. I mean even Judge Roberts, who is now the chief justice, had his child's adoption records investigated by the "New York Times."

So in many ways I think that there's a kind of really attack mentality that's led to below the belt coverage. And the same thing happened with Miers, in many respects. I mean some of the criticism was fair-minded. But a lot of it, like about her romantic life, for instance, really was over the line and...

COSTELLO: Not just about her romantic life. I mean, you know, "Saturday Night Live" parodied her look.

MCCARTHY: Right.

COSTELLO: A lot of people complained about her eyeliner and her hairstyle.

I want to read you something we found on the Wonkette wog. And it's titled "What I'll Regret Most Now That Harriet Miers Has Withdrawn" -- "is that no senator will be able to publicly ask her what I feel is the most important question that's arisen since this whole matter began -- how does she get her hair to do that? Seriously. Is there some tiny system of levees and inclined planes stapled to her head that we just can't see?" I mean that's just mean.

MCCARTHY: Yes, that's exactly right. But the problem is no one is really confronting the folks who are doing that kind of thing and behaving in that unethical and reckless way. And I think that might even be an opportunity for the White House here. If they can really challenge and single out folks who go over the line in that way, they may be able to give this next nominee a little bit of a smoother ride. Because the public, at the end of the day, doesn't want to see or read or hear about those kinds of matters. And they recognize it for the recklessness that it is.

But, again, the White House has got to step forward and confidential confront that. And that's the real challenge for them, I think.

COSTELLO: Well, there is one Republican that came out. I'm going to quote him. His quote is in the "USA Today" today. This is from Senator George Voinovich, who's a Republican from the State of Ohio. He says: "Various groups, particularly on the Republican side, didn't give her an opportunity to share why she's qualified," which means he probably would prefer that she go to hear hearings on November 7th. He also commented about her shabby treatment.

MCCARTHY: Well, look, I mean there's two issues here -- substantive criticisms that are based on the facts on and the record. It wasn't as though the conservatives were simply making things up. They were actually pointing to real things that she had said and done. And unsubstantive or personal or over the line criticisms.

And I think what the White House ought to do is, for the next nominee, demand that any kind of criticism have to be based on real merit or substance and that personal attacks or innuendo or suggestions of, you know, reckless kinds of attacks are not going to be tolerated and that anyone who does that sort of thing, whether it's a Democratic senator or not...

COSTELLO: Well, let me interrupt you for just a second...

MCCARTHY: ... should be singled out.

COSTELLO: ... because her credentials were called into question.

MCCARTHY: Right.

COSTELLO: You know, she didn't have a lot of experience in constitutional law, frankly.

MCCARTHY: Right.

COSTELLO: And many people thought she wasn't qualified. But I heard the comment that she was un-intelligent a lot. Now, a woman who rises to prominence as an attorney, as she has, is not stupid.

Does this have anything to do with her sex? MCCARTHY: You know, I really think that that's a red herring. The notion that there was sexism involved here, I think, is just ludicrous. The president has any number of accomplished women in his administration and to raise charges of sexism in a knee-jerk fashion like that, I just think is unwarranted.

I mean, what more could you ask for than to have her appointed to the Supreme Court? She's the White House counsel. I mean, that charge, I think, is really -- it needs to be left in the past. And I hope that we can rise above it for the next nominee.

COSTELLO: Me, too, because most Americans want the president to choose another woman as the nominee and...

MCCARTHY: I'm not sure that's true. I mean, I'm not sure there's any indication of that. I think most Americans would applaud any qualified nominee based on merit. And I hope that's what happens.

You know, one thing that really has worried me about the White House's approach is that they seem too concerned or almost walking on eggshells when it comes with, you know, women's activist groups or criticism from Senator Feinstein.

Look it, Americans want an accomplished, serious, high-minded Supreme Court nominee. And I'm not sure they're as, you know, focused and hand-wringing about gender as some groups would wish them to be.

COSTELLO: All right, we'll see what happens next.

MCCARTHY: OK.

COSTELLO: Because whatever happens will be interesting.

Jim McCarthy from McCarthy Communications.

Thanks so much for joining us this morning.

MCCARTHY: It was my pleasure.

Sure.

COSTELLO: Still to come on DAYBREAK, Venezuela is celebrating the Chicago White Sox World Series win. But that's not all the country is doing for the Windy City. How about some discounted gas, courtesy of Hugo Chavez? We'll have that story.

Plus, it's not too sweet for Krispy Kreme investors. We have the "Business Buzz" just ahead.

(BEGIN VIDEO CLIP)

UNIDENTIFIED ANNOUNCER: On this education of Fortune First, Tim Bovard shares his unique connection with nature.

TIM BOVARD, MUSEUM TAXIDERMIST: I'm the museum taxidermist for the Natural History Museum of Los Angeles County. Taxidermy takes in the total preparation of animals for exhibit purposes to create the illusion of the animal being in its actual natural space or habitat, we create around that this natural environment.

Well, the thing I probably like most about my job is it deals with nature and it has a lot of variety. I work on specimens from all over the world. Animals are simple and yet they're actually complex. You want to capture the beauty. You want to capture the fluidity, to try and really capture that so the viewer gets it, so they see it and it tells a story to them.

You know, there's really nothing that's more satisfying for me.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

COSTELLO: Time now for a little "Business Buzz."

It's costing more to buy a home. That's because mortgage rates are still going up. Mortgage giant Freddie Mac says nationwide, the average for a 30-year fixed rate mortgage rose to 6.15 percent this week, and that's the highest it's been in 15 months.

Krispy Kreme donuts -- they may taste good, but boy they're trading poorly. It stock fell as much as 41 percent. It closed yesterday at $4.05. It comes after the company was removed from the Standard & Poor's Mid Cap 400 Index. Krispy Kreme says it's now looking for a new CEO.

While millions of Americans were struggling with record high gas prices over the summer, the oil companies were raking in record profits.

Were the oil companies ripping us off?

Carrie Lee joins us with more on this.

CARRIE LEE, CNN CORRESPONDENT: Well, that's a little debatable. But we do know that they were making a lot of money this quarter. Exxon Mobil out with profits for Q3 yesterday. Profits up 75 percent, to $9.92 billion in the third quarter. We're talking about July to September here. Total sales, $100.72 billion with a "B." And this is the first time a public company has ever posted quarterly sales of over $100 billion.

Now, normally a company would be raving about such outstanding results, but Exxon actually tried downplay its success...

COSTELLO: No!!!

LEE: ... in light of criticism when they came out.

COSTELLO: Really?

LEE: They didn't even really talk about the profits all that blatantly.

Now, there's concern here that oil companies are ripping off the little guy. So they did try to tone it down a bit. In its profit report, Exxon says it acted responsibly in pricing at its gas stations.

Carol is laughing here.

COSTELLO: That's so transparent.

LEE: Well, this is what they're saying.

So why are they doing so well? This is what everyone wants to know.

Well, the most important reason, basic economics -- supply and demand. Due to hurricanes, supply is tight. But demand is as strong as ever. You know, if those hurricanes wouldn't have happened, these results would have been even better.

Also, investments in production and refining when oil was back at $30 a barrel are now paying off that oil is twice as expensive.

And, finally, these companies have shareholders who do want the highest price the market will allow. So they have that responsibility.

Still, not everyone is convinced. Some Democrats in Congress are considering a windfall tax on oil company profits.

COSTELLO: Now, see that is interesting because, you know, we asked our viewers what they thought about this this morning, and does any company really need to make 75 percent profit?

LEE: Well, you know, it's capitalism, right? It's supply and demand. And I certainly see your point.

I will say, though, then, the question is where do you draw the line? Drug companies years ago were doing very well. Do you put a cap on their profits as well and then when they're not doing so well you go to another industry?

So it's certainly a complicated question and a tricky one.

But right now oil companies are really hitting it out of the park so.

COSTELLO: You know what makes me really angry is when they put those full page ads in the paper telling me how to save energy, so that I can cut my energy costs.

LEE: Well, people do, though, like our SUVs and like to do all these things, too. So perhaps it's up to now the auto industry to start to come out with new hybrid products and maybe bring some opportunity for others to bring out oil and energy conservation.

COSTELLO: It's time for the consumer to fight back, Carrie.

We'll be right back.

Stay with us.

(COMMERCIAL BREAK)

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

COSTELLO: And good morning to you.

Thank you for waking up with us.

Bonnie will have your forecast in just a minute.

Also coming up in this half hour, something other than football is going on at Miami's Orange Bowl. We'll have a live report on relief efforts in the wake of Wilma.

And partners across borders -- why is Venezuela so interested in helping the people of Chicago? We'll explain.

But first, now in the news, it is down to the wire in the CIA leak investigation. The special prosecutor, Patrick Fitzgerald, is expected to announce results of his probe today because the grand jury's term is expiring. Top White House aides could face criminal charges.

Two more U.S. soldiers have been killed in Iraq. One died from wounds received at his patrol was hit by an improvised explosive device in Baghdad. The other was killed in Ramadi, west of Baghdad.

Australian model Michelle Leslie went on trial in Indonesia today. Police say they caught her with the party drug Ecstasy. She's the latest in a string of Australians arrested on drug charges on the resort island of Bali. Leslie faces a maximum sentence of 15 years in prison.

To the Forecast Center.

Bonnie Schneider in today -- good morning.

SCHNEIDER: Good morning, Carol.

(WEATHER REPORT)

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