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CNN Live At Daybreak

Leak Investigation; What Went Wrong?; Not Forgotten

Aired October 28, 2005 - 05:00   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. And the White House awaits a critical decision. A special prosecutor in the CIA leak investigation prepares to reveal what everyone wants to know, will there be criminal charges?
Plus, she was the nominee and now she's not. What went wrong with the Harriet Miers Supreme Court nomination?

Plus...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We've lost guys in our unit already before. It's not something you can do all along, though. You just, you know, take it day by day.

(END VIDEO CLIP)

COSTELLO: ... on the front lines and on edge in northern Iraq, trying to stay one step ahead of the insurgents.

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 the grand jury investigation in just a moment.

Also ahead, the third quarter brought a record profit for oil companies. That's as gas prices hit record highs. Capitalism at its finest or at its worst?

But first, "Now in the News."

Today is the day the special prosecutor in the CIA leak investigation is expected to announce results on that probe. Key White House aides Karl Rove and Lewis "Scooter" Libby could be in legal jeopardy either for allegedly revealing the name of an agency operative or lying about it.

Japan is dropping its opposition to having a nuclear-powered aircraft carrier base there. The U.S. Navy will send one of its Nimitz-class carriers to Japan beginning in 2008.

Tens of thousands took part in anti-Israel protests all across Iran today. They supported their new president's call Wednesday to "wipe Israel from the map." Governments around the world condemned the remarks. The U.S. House is expected to pass a resolution today allowing the body of civil rights icon Rosa Parks under the Capitol Rotunda. She would be the first woman allowed such an honor. The Senate passed the resolution last night. Parks died on Monday. She was 92.

Jacqui Jeras is out, Bonnie Schneider is in.

Good morning. Thanks for joining us.

BONNIE SCHNEIDER, CNN METEOROLOGIST: Sure, Carol. My pleasure.

(WEATHER REPORT)

COSTELLO: All right. Thank you, Bonnie.

SCHNEIDER: Sure.

COSTELLO: We're hoping to get some answers today in the CIA leak investigation. The grand jury hearing the case is scheduled to meet for the last time today, which could mean indictments are coming. And at least two administration insiders could face more questions.

CNN Justice Correspondent Kelli Arena has more for you.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): The president's top political adviser has been unable to escape the cameras for weeks now. Lawyers involved in the leak investigation tell CNN the special prosecutor is seriously considering a perjury charge against Karl Rove, who testified four times before the grand jury.

Former prosecutor Andrew McBride has been talking with lawyers familiar with the case.

ANDREW MCBRIDE, FMR. FEDERAL PROSECUTOR: I think right now what's happening is a very, very heated exchange between Mr. Rove's lawyers and Mr. Fitzgerald's team over whether or not Mr. Rove will be indicted for perjury and whether his last appearance before the grand jury was sufficient to correct any omission or false statement he might have made previously.

ARENA: Sources with knowledge of the investigation say the vice president's chief of staff, Scooter Libby, may also be in jeopardy for possibly making false statements. Former independent counsel Robert Ray says to bring those charges, Fitzgerald will have to prove that Rove and Libby intended to mislead investigators, a high legal bar.

ROBERT RAY, FMR. INDEPENDENT COUNSEL: It explains in part why this investigation has gone on so long. It also explains in part why he went to so much trouble to get the benefit of Judith Miller's testimony.

ARENA: Miller, "The New York Times" reporter, told the grand jury the source she went to jail to protect was Scooter Libby. Both Rove and Libby's lawyers have refused to comment on their clients' status. But both men have denied repeatedly that they leaked CIA operative Valerie Plame's name.

Even if they didn't, sources say Fitzgerald is now considering charges that have to do with Rove and Libby's alleged behavior after the investigation into the leak began. Sources with knowledge of the investigation say we'll know for sure Friday, when Fitzgerald is expected to announce his decision on whether to bring criminal charges.

(END VIDEOTAPE)

COSTELLO: That was CNN's Kelli Arena reporting.

Scooter Libby, Vice President Dick Cheney's chief of staff, may be the only one in the spotlight today. In fact, "The New York Times" is reporting that lawyers in the case expect Libby to be indicted, charged with making false statements to the grand jury. But "The Times" says the grand jury may be held over to consider charges of White House adviser Karl Rove.

Conservative activists breathed a sigh of a relief after hearing Harriet Miers withdraw her nomination to the U.S. Supreme Court. Let's see how the country at large weighs in.

A new CNN "USA-Today"-Gallup poll shows 42 percent of those surveyed say they're pleased about Miers' withdrawal. Thirty-five percent say they're disappointed. About a quarter are not sure.

As for the next nominee, the majority, 59 percent, say it is important to them that President Bush picks another woman to replace retiring justice Sandra Day O'Connor. Nearly 40 percent say it doesn't matter.

So, in any event, it's back to the drawing board for President Bush. He promises to make a new Supreme Court appointment in a timely manner. But what went wrong in the first place? How can a Republican White House blow it, especially among conservatives?

CNN White House Correspondent Dana Bash has answers.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Harriet Ellen Miers.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): On day one, the White House had Miers' talking points ready to go. The problem is they were talking up the wrong points.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Senator Harry Reid said -- made some very positive comments about Harriet Miers.

BASH: Reid, of course, is a Democrat. He and others suggested... MCCLELLAN: The president should consider someone that is not a judge.

BASH: Taking that bait, admits one senior Bush aide, was their first huge miscalculation. They underestimated conservative grassroots' hunger for a proven commodity to replace abortion rights supporter Sandra Day O'Connor.

BUSH: I know her heart.

BASH: "Trust me" didn't work. Conservative senators were as bewildered as the activists.

BROWNBACK: We're left to try and gather little pieces and shreds of evidence and do almost a CSI-type of operation.

BASH: Several Bush officials concede they were not prepared for the backlash. One top Republican close to the administration blames a White House "cocky" from a smooth John Roberts confirmation. Others say outside advisers who would have raised red flags were clued in too late.

Then efforts in damage control caused more damage. A White House call in search of support from conservative leader James Dobson unmasked what looked like a wink and a nod campaign on abortion.

DR. JAMES DOBSON, CONSERVATIVE RADIO SHOW HOST: What did Karl Rove say to me, Harriet Miers is an evangelical Christian, that she is from a very conservative church which is almost universally pro-life.

BASH: Even the president, as aid put it, got wrapped around the axle pushing personal issues hoping to win over conservatives.

BUSH: Part of Harriet Miers's life is her religion.

BASH: That backfired for Republicans looking for her resume, not religion. So they summoned Texas colleagues to talk up Miers' legal experience.

UNIDENTIFIED MALE: And I can vouch for her ability to analyze and strategize.

BASH: Aids now admit it was probably too late.

UNIDENTIFIED MALE: It's been a chaotic process.

BASH: The Republican judiciary chairman slammed Miers for sending a questionnaire without sufficient answers. And almost every courtesy call to a key senator seemed to make it worse. Reviews range from unimpressive to disastrous, leaving conservatives amazed at how the president got this one so wrong.

(on camera): Advisers tell us one key problem is that Harriet Miers never had a Harriet Miers, meaning as White House counsel she was in charge of preparing for the John Roberts confirmation, but no one inside the White House was ever really put in charge of doing the same for her.

Dana Bash, CNN, the White House.

(END VIDEOTAPE)

COSTELLO: "Across America" this morning, Esther Fielding, the mother of 16-year-old California murder suspect Scott Edgar Dyleski, has been arrested on accessory to murder charges. Dyleski is charged with the killing of Pamela Vitale, the wife of the high-profiled attorney and occasional TV commentator Daniel Horowitz.

I'm going to throw it to a break right now. We'll be back with more DAYBREAK in a minute.

(COMMERCIAL BREAK)

COSTELLO: Coming up, you've heard of the phrase "Worth more dead than alive." Celebrities like Ray Charles, or Elvis, or Bob Marley, or John Lennon, or even Marilyn Monroe are raking in the loot.

The neutral admiration society between President Bush and his White House counsel turned into a lightning rod of ridicule from the president's own supporters. We'll have more on those stories in just a minute.

But first, the international markets, let's take a look at them this morning. They're lower across the board.

Tokyo's Nikkei down 70 points. The London FTSE losing 10. The German DAX off by 24.

Oh, let's take a look at futures trading and the price of oil. It's up 31 cents a barrel at $61.40.

So it might not surprise you, given record-high gas prices, that oil companies are reporting record-high profits. You might be surprised at just how high those record profit are. Just one example for you, ExxonMobil reports a third quarter profit of $9.9 billion. That's up a whopping 75 percent over last year.

Other big oil companies are smiling, too. And -- go ahead, Bonnie.

SCHNEIDER: Oh, I was going to say, and that brings us to our "Question of the Day" for DAYBREAK.

High energy prices: gouging or smart business? Let us know what you think at DAYBREAK@CNN.com.

COSTELLO: Oh, I thought you were going to get angry, because I'm angry. Seventy-five percent profit, and we're paying, what, an average $2.53 a gallon?

SCHNEIDER: At least.

COSTELLO: It's ridiculous. SCHNEIDER: It sure is.

COSTELLO: There are gas shortages in Florida because of the hurricane. And it's, like, why can't Exxon cut us a break?

SCHNEIDER: I know. I guess somebody has to make money off of it since we're paying extra. But it could be smart business for them. I mean, someone is profiting from it. But I agree with you, the gas prices are certainly pretty high, although they were higher, I think it was last month.

COSTELLO: Yes, but so what? No, I've been mad about this for a long time. I guess some members of Congress are looking into whether the oil companies are gouging us.

And we wondered if that's what you thought this morning. I mean, you know, I understand supply and demand and the American way and businesses make profits and that's what drives the economy. But really, does there come a point when they're just gouging us?

So, high energy prices: gouging or smart business? DAYBREAK@CNN.com.

Your news, money, weather and sports. It's 5:13 Eastern. Here's what's all new this morning.

The White House is bracing for results of the CIA leak investigation today. Knowledgeable sources tell CNN the vice president's right-hand man, Lewis "Scooter" Libby, may be indicted for possibly making false statements. But there are some reports that President Bush's top adviser, Karl Rove, might escape criminal charges, at least for now.

President Bush is expected to make another nominee to the Supreme Court in a matter of days. Harriet Miers dropped out yesterday after unyielding criticism from conservatives who feared she wasn't conservative enough.

In money news, telephone mergers are making news. The FCC is poised to consider the merger of SBC Communications with AT&T, and Verizon with MCI today. The multibillion-dollar merger has got the Justice Department's stamp of approval.

In culture, the original waxwork heads of the Beatles sold for $125,000 at a London auction. Yes, the was heads. The work was used on the cover of the album "Sgt. Pepper's Lonely Hearts Club Band."

It's just kind of creepy, isn't it, to have a wax and Beatle head in your apartment?

In sports, Virginia Tech remains unbeaten. The Hokies rebounded from a 7-6 second quarter deficit against Boston College to win 30-10 last night. Virginia Tech goes 8-0 -- Bonnie.

(WEATHER REPORT)

COSTELLO: Thank you, Bonnie.

Heads up this weekend. Mars will meet us in passing. The Red Planet will pass unusually close to the Earth this weekend, if you consider 43 million miles away close.

Saturday night at 11:25 p.m. Eastern is when the two planets will be closest. Mars will appear above the horizon as a yellow twinkle in the sky, and the Hubble space telescope will be snapping pictures in case you can't tell it apart from the other little twinkling lights up in the sky.

Coming up next on DAYBREAK, Elvis earned enough for a king's ransom this year. The earning power of the king and other dead celebs just ahead.

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

(COMMERCIAL BREAK)

COSTELLO: Oh, I just want to listen to that song. It's waking me up.

Entertainment headlines for you this morning.

Model Kate Moss is out of rehab. Her talent agency says she's checked out of the Arizona facility and is looking forward to getting back to work. Several fashion houses dropped Moss from their ad campaigns after allegations of drug use surfaced earlier this year.

A possible musicians' strike could give the Rockettes a charley horse, figuratively speaking. The high kickers' traditional Radio City Christmas Show could be forced to use pre-recorded music or replacement musicians. The regular players are unhappy over new contract proposals. Performers are scheduled to begin November 10.

50 Cent is being moved away from some schools. Billboards promoting the rapper's new movie were taken down in parts of Los Angeles after community leaders complained about violent content. The ads for his movie "Get Rich or Die Tryin'" showed 50 Cent holding a microphone in one hand -- there you see it -- oh, I hope it pans the other way, but you probably already saw it. He's holding a gun in the other.

Some people say that fame is fleeting, but there are some A list celebrities that never seem to fall out of favor, even if they're dead.

CNN Entertainment Correspondent Sibila Vargas has more for you.

(BEGIN VIDEOTAPE)

(MUSIC)

SIBILA VARGAS, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Long live the king, all the way to the bank. Elvis Presley made $45 million last year and topped Forbes.com's fifth annual ranking of top earning dead celebrities.

Turns out it pays to be dead. Why is that? "SHOWBIZ TONIGHT" got the scoop from Forbes.com's media editor, Peter Kafka.

PETER KAFKA, MEDIA EDITOR, FORBES.COM: Very clever manager to figure out how to sell the same thing multiple times. They'll repackage a song and do a compilation. They'll take an old TV special and sell it to another TV network, get more money that way, or package it as a DVD. This is what you see the Elvis estate doing.

UNIDENTIFIED FEMALE: We're on our way to the store.

VARGAS: The man behind Charlie Brown, Linus, Lucy and the gang, Charles Schulz ranks No. 2. He made $35 million last year. That's not "Peanuts."

(MUSIC)

VARGAS: Not losing any money, making $22 million, John Lennon. Artist Andy Warhol came in at No. 4. He earned $16 million.

BORIS KARLOFF, ACTOR: Staring down from his cave with a sour Grinchy frown at the warm lighted windows below in their town.

VARGAS: No frowns for the creator of the Grinch. Dr. Seuss stole the fifth spot on the list, raking in $10 million.

MARLON BRANDO, ACTOR: I want my own life. I don't apologize to take care of my family and I refuse to be a fool.

VARGAS: No fool here, actor Marlon Brando put him sixth.

MARILYN MONROE, ACTRESS: Don't you know that a man being rich is like a girl being pretty?

VARGAS: And rich, this girl is. Marilyn Monroe made $8 million last year, giving her spot No. 7.

Licensing and merchandising and managing the 13 celebs on the list is big business: $186 million. Burt Roesler's company reps dead celebrities including Marilyn Monroe, James Dean, Babe Ruth and Princess Diana.

MARK ROESLER, CEO, CMG WORLDWIDE: What's very important and what's very marketable with a celebrity is that they have a very precise and simple message that they can convey, and if it's somebody like Marilyn Monroe, it's beauty and glamour. If it's somebody like James Dean, it's cool. If it's somebody like Babe Ruth, it's power.

UNIDENTIFIED MALE: Don't, Frodo!

VARGAS: Rounding out the 13, "Lord of the Rings" creator J.R.R. Tolkien; another Beatle, George Harrison; Johnny Cash coming in at No.10.; songwriter Irving Berlin, Bob Marley and Ray Charles taking the last three spots.

(END VIDEOTAPE)

COSTELLO: That was Sibila Vargas reporting. Just in case the tabloid rumors are true, Elvis' $45 million take would put him in the 14th spot on Forbes' list of living celebrities, just ahead of Elton John.

Here's what's all new in the next half-hour of DAYBREAK.

Humiliating Harriet Miers, oh the nasty things that have been said about the former Supreme Court nominee.

Plus, the financial facts on fat. We'll look at how obesity is a personal and public problem.

But first, here's a look at some of the best places to retire.

(COMMERCIAL BREAK)

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

COSTELLO: Good morning to you. Thank you for waking up with us.

Coming up in the next 30 minutes, U.S. troops expect insurgents to strike this outpost. Why? Because they do it every day, sometimes twice a day.

And later, do you feel sorry for Harriet Miers? Our Jeanne Moos does. We'll get her take ahead this hour.

But first, "Now in the News."

Tens of thousands took part in an anti-Israel protest all across Iran today. They supported their new president's call Wednesday to "wipe Israel from the map." Governments from around the world condemned those remarks.

The grand jury in the CIA leak investigation has its last scheduled session today. Afterwards, special prosecutor Patrick Fitzgerald is expected to announce a decision on charges in the case. We'll have a live report on the possibilities. That will come up -- come your way in a few minutes.

Strike up the band. Tonight the world famous New York Philharmonic combines with members of the Louisiana Orchestra for a special benefit concert. Most of the money from the sold-out show will go to help the displaced musicians from New Orleans.

Chicago White Sox fans take to the streets today. The city is hosting a ticker-tape parade for the World Series champions. You see them coming back into Chicago.

The players' caravan of trolleys and double-decker buses will snake its way through the streets of the south side.

To the forecast center and Bonnie Schneider. Good morning.

SCHNEIDER: Good morning, Carol.

(WEATHER REPORT)

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