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PAULA ZAHN NOW

Federal Air Marshals Kill Airline Passenger in Miami; Is United States Making Progress Rebuilding Iraq?; Fake Diploma Rings and Potential Terrorists

Aired December 7, 2005 - 20:00   ET

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


PAULA ZAHN, CNN ANCHOR: And good evening, everyone. We really appreciate your joining us tonight.
We are continuing with CNN's coverage of today's big story, the terror scare that ended in a deadly confrontation at Miami International Airport, where federal air marshals today shot and killed an airline passenger.

The investigation is under way right now. We are still learning new details, it seems, just about every minute. Here's exactly what we know right now.

The dead man is 44-year-old Rigoberto Alpizar. He flew to Miami from Ecuador. This afternoon, as he was getting on to an American Airlines jet to Orlando, authorities say Alpizar said he had a bomb in his backpack. Federal air marshals were on the plane. We don't know how many. The feds won't confirm that.

But the shooting, they did confirm, happened in the jetway, the walkway between the plane and the terminal, after Alpizar refused to put his backpack down. Authorities say he approached the air marshals in an aggressive manner.

Later, investigators took the baggage off the plane. An explosives team blew Alpizar's luggage on the tarmac. However, authorities now say there was no bomb.

Our reporters have been on the story all afternoon.

Deborah Feyerick here in New York has been gathering all the information she can about Alpizar. And, in Washington, homeland security correspondent Jeanne Meserve has been working her sources as well.

But we get started tonight with John Zarrella, who joins us from the airport in Miami with the latest details.

John, what do you got?

JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Paula, we can tell you that the airplane, Flight 924, which was bound for Orlando is, still on the ground here. According to the American Airlines Web site, it is listed now as canceled.

The investigation, as you mentioned ongoing now, far from over -- the FBI is involved in the investigation, looking into Mr. Alpizar, as well as the Metro Dade Police Department. They are, of course, handling the shooting.

About two hours ago, federal, local and state officials held a news briefing here and discussed what happened that led to the shooting and what happened after it was over.

(BEGIN VIDEO CLIP)

JAMES BAUER, FEDERAL AIR MARSHAL SERVICE: The plane was cleared of all passengers. And the thing -- the possessions that were in the deceased's possession have been examined by Miami-Dade Police Department bomb squad and have been cleared. There were no explosives involved that we -- that we are aware of, at least on this plane.

(END VIDEO CLIP)

ZARRELLA: Now the police, the Metro Dade bomb squad, used what is called disrupters. And the FBI did confirm to us that the three pieces of luggage that were saved here at the airport did belong to Rigoberto Alpizar -- Paula.

ZAHN: John, I know you have had the opportunity to talk to some people on board that flight. How did they describe how this came down?

ZARRELLA: Well, it's interesting.

Some of the people that we talked with said they heard nothing at all. They did not realize what was going on. There were other people that said that, at one point, they were told, quick, get off the plane; you need to disembark. A flight attendant came down to someone, checking the lavatories, to make sure people were not in the lavatories, telling people to begin to get off the plane.

From everything we can -- we can gather, though, at least one person heard three shots fired. But, at this news briefing tonight, Paula, authorities would not confirm the number of shots that were fired in the effort to subdue Rigoberto Alpizar -- Paula.

ZAHN: In fact, there was an awful lot -- an awful lot of questions left unanswered at that briefing.

John Zarrella, thanks so much.

We will try to get some of them answered in this hour tonight.

Now, what exactly are we learning about the man who was killed, Rigoberto Alpizar?

Deborah Feyerick has been looking into that part of the story. She joins me now.

Now, Deborah, one of the most confusing things tonight is that there is so much conflicting information tonight about whether Alpizar suffered from bipolar disorder, and that is what might have led him to act strangely. But even family members are contradicting each other, aren't they?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, absolutely.

An affiliate of CNN spoke to his mother-in-law. She says that, yes, Rigoberto Alpizar does suffer from bipolar disorder. However, a brother-in-law who we spoke to said, no, as far as he knew, there was no mental illness.

But let me tell you what we have learned. Rigoberto Alpizar is 44 years old. He is a U.S. citizen. He arrived in America in around 1986 from Costa Rica. He lives in the Orlando area. He and his wife, Anne, have no children. But his brother-in-law tells CNN that Alpizar works for the Home Depot. Now, a spokesman for that company has yet to confirm that for us.

But the reason Alpizar was traveling, his brother-in-law tells us that, the day after Thanksgiving, he and his wife went down to South America to help her uncle, who's there working as a volunteer dentist. Authorities say Alpizar flew back today on a plane from Quito, Ecuador. He was catching a flight to Orlando, Florida, and that's when he was shot.

Now, the local police department has no criminal record on Mr. Alpizar, nor has it ever responded to any disturbances at his residence. We did call an address listed as the Alpizar home. A woman there, her voice very shaky, said that she was trying to get in touch with her daughter, and then she politely hung up. And that's what we know so far -- Paula.

ZAHN: Deborah Feyerick, thank you so much for that update.

And joining me now on the telephone from Daytona Beach, Florida, is someone who has know Rigoberto Alpizar for 10 years. Janice Tweedie says Alpizar and his wife are neighbors of theirs in Lakeland, Florida.

Thanks so much for joining us tonight. Janice, can you hear me?

JANICE TWEEDIE, NEIGHBORHOOD OF RIGOBERTO ALPIZAR: Yes, I can.

ZAHN: So, first of all, your reaction to what happened earlier today?

TWEEDIE: I was shocked, because he's always been such a kind, considerate man, and he has always been very friendly and helpful and very calm. And I have never seen any erratic behavior from him at all.

ZAHN: Well, frankly, we're finding some of those reports confusing, because some of the witnesses on board described a man who was erratic, a man who was waving his arms before he got off the airplane, saying strange things -- family members contradicting each other, a brother-in-law saying he does have -- or had mental illness, his own mother-in-law saying no.

Did you ever seen any evidence of anything a bit odd? TWEEDIE: No, I haven't.

And he seemed very physically fit. He would be jogging and he did his own lawn work. And, in fact, after the Hurricane Charley, he offered to give me electricity from his generator or help me in any way after the hurricane. It was the kind of neighbor that everyone would like to have.

ZAHN: And I understand you think he did an awful lot of nice things for others as well.

TWEEDIE: Yes.

ZAHN: Describe some of those things that you witnessed.

TWEEDIE: He just seemed very friendly and helpful to people around the neighborhood.

I just -- it was mainly after the hurricanes that he came over and offered to help out, a very pleasant person, he and his wife both. It's just a -- tragic situation for everyone concerned.

I'm glad we have air marshals. I just returned from Germany. And I realize we have to have the safety, and it's just tragic. I feel that, possibly, he needed medication.

ZAHN: Janice Tweedie, that is some -- something that other folks have talked about today. And we will learn more about that as the hours drag on here. Thank you so much for -- for joining us tonight.

Now we're going to move on to some of the specific on the official version -- version, that is -- of what happened today in Miami.

Homeland Security correspondent Jeanne Meserve joins me now.

For those of us who watched that news conference a little bit earlier tonight, there -- there were big holes in -- in the information flow. What can you tell us to help us better understand the timeline here?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, let me tell you, first of all, that a federal official describes the air marshals involved in this event as experienced and says one of them spoke Spanish.

Authorities do not have all the facts at this point, so an investigation will be launched involving the Federal Air Marshal Service, the FBI and the Miami-Dade police. They will, of course, be talking to the air marshals, to the passengers, and to the flight crew.

But federal officials say preliminary information indicates that the air marshals were doing what they had been trained to do and were following protocols. A spokesman for the Federal Law Enforcement Officers Association, or FLEOA, which says it has 1,400 air marshals as members, tells me that all federal officers are trained on an escalating-use-of-force model, and that, if an individual is not complying with a lawful command to stop, and if there is a belief that the officers or those around the officers are in imminent danger, the officers are taught to stop the threat.

They are not taught to shoot at an arm or a leg, but at the center of mass. The FLEOA spokesman says, as far as he knows, there is no special protocol for dealing with a person with mental illness. Of course, we don't know if mental illness was a factor here.

And a Homeland Security official points out that, even if someone is mentally ill, they can still pose a threat. This is the first time since 9/11 that an air marshal has used a firearm in the line of duty. A Homeland Security official says the air marshals involved in this incident are likely to be placed on administrative leave until the investigation completed -- Paula.

ZAHN: Jeanne, can you help clear up some of the confusion tonight of exactly what transpired from the point where witnesses said he got up from his seat, with his wife chasing him down an aisle, saying, he's off his medicine; he's sick?

MESERVE: That is not the account once heard from federal officials.

What federal officials have told me is that this individual got on to this flight, and there were indications that he made that he had a bomb in his carry-on -- carry-on bag. One federal official told me that he fled the fight -- flight , but a later -- but, later, another federal official, a spokesman for the FAMS, said that the federal air marshals in fact asked him to leave the flight. He did get off.

Then they asked him to get down on the ground, and he did not comply with their request, although it was made repeatedly. And he reached into his bag. At that point in time, according to the federal air marshal spokesman, they felt there was a threat, and they fired two or three shots, according to them.

ZAHN: And can we confirm tonight that those federal air marshals identified themselves in some way?

MESERVE: Yes.

We heard in that press conference from Miami that -- that they did come out; they revealed themselves as federal air marshals to this individual.

ZAHN: Jeanne, if you wouldn't mind standing by, we're going to come back to you a little bit later on in the show tonight, because you had a very unique and close-up look at what it takes to become a federal air marshal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Police officer! Drop the gun!

UNIDENTIFIED MALE: Good, good, good.

UNIDENTIFIED MALE: I'll help, I'll help.

UNIDENTIFIED MALE: Sit down!

(END VIDEO CLIP)

ZAHN: So, their job is to keep you safe without letting you or the bad guys even know they are around. Would you have what it takes?

And, a little bit later on, a startling admission from the president -- Iraq's reconstruction isn't going as smoothly as he had hoped. So, what does he plan to do now?

Plus, a disturbing look at how any potential terrorist could get into this country -- and it isn't that hard. Why hasn't this loophole been closed?

(COMMERCIAL BREAK)

ZAHN: We are following the developing story out of Miami tonight, the killing of an airline passenger by federal air marshals.

Authorities say the man said he had a bomb and failed to follow the marshals' commands, and then they shot him.

Now, we have heard again and again from officials today that the air marshals did exactly what they were trained to do. They perceived a threat and acted to stop it.

But is that training on target?

Homeland Security correspondent Jeanne Meserve is back with me now, because she got an inside look at exactly how those air marshals are trained.

What did you find out?

MESERVE: Paula, We spent two days with the federal air marshals last February, getting a closer look at who they are, what they do and how they respond to threats.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Police officer! Drop the gun!

UNIDENTIFIED MALE: Good, good, good.

UNIDENTIFIED MALE: I'll help! I'll help!

UNIDENTIFIED MALE: Sit down!

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): On a mock aircraft, Tom practices for the day he hopes will never come, the day when he, a federal air marshal, has to deal with a terrorist. TOM, FEDERAL AIR MARSHAL: Let me say this. Nobody wants to use a fireman on board an aircraft. It's not going to be a good day for anybody. There's a lot of downside to it. But if that's what's needed, that's what you do.

MESERVE: Because he works undercover, we cannot show you his face or tell you his full name.

TOM: I'm a federal air marshal. I need you to turn around and put your hands behind your back.

UNIDENTIFIED MALE: I'm not going to do anything like that.

TOM: Put your hands behind your back.

MESERVE: He once worked for the Secret Service, but his life, like so many others, was changed on 9/11.

TOM: The question runs through your head, you know, what could I have done had I been one of the aircraft?

MESERVE: Though he may look like any other traveler, Tom carries a loaded .357 magnum. At Washington's Dulles Airport, he boards his JetBlue flight to Fort Lauderdale before other passengers to search for weapons and explosives and to meet and brief the flight crew.

TOM: There are no specific threats against this airline or any others at this time.

MESERVE: Though air marshals never fly without at least one partner, as passengers board, Tom scans for potential allies.

TOM: I just size people up. And I -- I guess, in a nutshell, I'm looking for help, worst-case scenario, who I think I can count on. You look for a face, and what you see in that, in the eyes. And I'm looking for, perhaps, military uniform. I'm looking for things of that nature, somebody with a military haircut, possibly, maybe somebody with an NYPD T-shirt on.

MESERVE: He is also on the lookout for terrorists.

TOM: We're looking for any suspicious behavior, anybody who is acting irregular, abnormal.

MESERVE: Tom notices, a restroom right next to the cockpit has been occupied an unusually long time. At Tom's suggestion, a flight attendant knocks. A man comes out. Tom goes in to see if weapons, or explosives have been hidden. He finds nothing.

Tom has never arrested a suspected terrorist, but wonders if he has seen them rehearsing.

TOM: Certainly, yes, there's been times where I have -- I have been uncomfortable, had a not-so-comfortable feeling, and wondered if it was perhaps a test run. And that's rare, very rare. There's a tremendous amount of monotony in this. And it's much like "Groundhog Day."

MESERVE: He can read, but music, movies and sleep are forbidden. Even conversation is limited.

TOM: And, very often, we -- we need to come up with cover stories of what we do. And, sometimes, I will think of the most boring job I can think of, with the hope that they won't pursue it with any more questions, you know? A lot of times, I say, I'm an accountant, but then you run the danger of that person being an accountant.

MESERVE: This is Tom's life, airborne 80 hours a month.

Critics say air marshals can be picked out because of their dress code and early boarding. Tom doesn't completely disagree. While he can dress like other passengers, he admits that boarding is a problem.

TOM: Walking down that gangplank before everyone else, it lets many people know who you are, that you're special; you're different.

MESERVE: Though their exact number is classified, there are not enough air marshals for the 27,000 flights made every day by U.S. carriers, so they pick their flights.

(on camera): This Airbus A-320 is the exact type of aircraft an air marshal might be on. It's pretty big, carries a lot of fuel, and it's flying in and out of New York, a known terrorist target.

(voice-over): At the air marshals command center, where deployment decisions are made, the latest intelligence is factored in. John Novak runs the operation.

JOHN NOVAK, AIR MARSHALS COMMAND CENTER: We have no credible evidence that threats or surveillance activity or suspicious activity is occurring, but we have no information, credible information, to suggest that it's not.

MESERVE: The operation center relays intelligence directly to air marshals via wireless devices, but they do not work in the air, a real problem if a crisis erupts, admits Thomas Quinn, the director of the federal air marshal program.

THOMAS QUINN, DIRECTOR, FEDERAL AIR MARSHAL SERVICE: We to this day communicate through the flight deck of the aircraft. So, there is a means of communication, but it's not as rapid or robust as we would like.

MESERVE: The operations center has secure communications with the North American Aerospace Defense Command in Colorado. NORAD can scramble jets in an emergency, though Tom feels he and other air marshals can handle things on their own.

TOM: God forbid something happens. We're going to solve that. We're going to have the solution up there. And they're -- and they're not going to have to call upon the F-16s to bring that plane down. MESERVE: It is hard to know if air marshals are as effective as Tom believes. Whether it's because the presence of air marshals has been a deterrent to terrorists or because of other layers of security, there hasn't been a hijacking since 9/11.

(END VIDEOTAPE)

ZAHN: Jeanne Meserve reporting.

Jeanne, I want to bring in two security specialists now, CNN security analyst Clark Kent Ervin, who is the former inspector general with Homeland Security, and Rafi Ron, former chief of security for the Israeli Airport Authority. He was also an air marshal for Israel's El-Al Airlines, and is now the CEO of New Age Security Solutions.

Great to have all of you on board tonight.

So, Clark, it -- it is not crystal clear exactly what transpired today, but we do know that a man is dead, that no explosives were found on him or on his luggage. So, what went wrong?

CLARK KENT ERVIN, CNN SECURITY ANALYST: Well, we don't know, really, Paula, whether anything went wrong.

And, of course, there are going to be exhaustive investigations, federal, state and local, and there should be. But I must say, based on what we know, if the facts are as we think they are, it seems to me that the air marshals did exactly the right thing. They -- this fellow said that he had a bomb. He ignored their instructions thereafter.

There was a report that he actually went into his bag, which purportedly contained a bomb. And then there was a report that he lunged at the officers. We don't know whether that's true. But, if that is true, it seems to me the air marshals did the right thing by using deadly force, particularly in this post-9/11 environment we live in today.

ZAHN: Rafi, you worked as an air marshal, as we described a little bit earlier on, in Israel. You had to make split-second decisions. Was there any alternative for these air marshals today, other than using deadly force?

RAFI RON, CEO, NEW AGE SECURITY SOLUTIONS: Well, there aren't too many alternatives, especially in the case when the threat is the use of an explosive device, because, unlike in the case of using a firearm, which is a continuous situation, the use of an explosive device is to cause the maximum immediate damage. And the only way to stop it is by responding to it, or responding to the threat by drastic action.

ZAHN: So, shooting an arm, shooting a leg alone isn't going to make any difference in that kind of situation?

RON: I'm afraid not. ZAHN: Clark, we mentioned that you were an inspector general of the Homeland Security Department. And I read -- want to read a part of the very damning report that you issued about the air marshal program, where you wrote that the standards were too lax, that some air marshals tested positive for alcohol or drugs while on duty, that they lost their weapons, and falsified information.

Are you confident that those issues have been cleared up?

ERVIN: Well, I would like to say that I am confident, Paula, but I'm not.

You are quite right. We issued that report in August of 2004. We also found, I should mention, that there were real problems with the backgrounds of certain air marshals, including problems with failing to get a gun permit, and, yet, a particular air marshal was allowed to fly. So, TSA has promised to have implemented the recommendations we made. I hope that's the case.

But, during the course of the investigation to follow, I hope that that will be among the issues that are looked at.

ZAHN: And, Jeanne, how much do air marshals know about passengers before they get on board?

MESERVE: Well, in many cases, they don't know as much as they would like.

There is, of course, an intelligence apparatus here. They get briefings early in the day. I'm sure they would be alerted if there was any passenger that raised particularly -- particular alarm bells. And, as you heard in my report, they do their personal assessment. They watch people in the boarding area. They watch people coming on to the flight. They do a look-see to figure out who they might be able to trust and who they might not.

ZAHN: And, Rafi, when you are trying to figure out who you trust and who to not, you have to make some immediate judgments, sometimes, about one's mental health.

Conflicting reports tonight about any preexisting mental condition this victim may have had -- one family member saying he was bipolar. Is that -- any assessment that you could quickly make like that on the spot?

RON: No, I'm afraid that a lot of it is based on the ability of the air marshal to identify the behavior correctly.

But I think that the -- that this type of behavior that was described today in the media was serious enough for the air marshal to act the way he did. And I think that, if he had to consider in that fragment of a second the possibility that this is a real terrorist, with the result that an explosion will occur in a couple of minutes he will cause, and the other option, which is using deadly force in order to prevent it, I think that, in that fragment of a second, he did the best he could, and there was no option for him to properly identify the individual as someone who suffers from a mental condition.

ZAHN: Finally tonight, Clark, if you were still the acting inspector general of the Homeland Security Department, how much second-guessing would there be tonight, and what exactly would you want to know?

ERVIN: Well, I think there should be a full investigation.

I think there should be second-guessing. This is a very serious incident. There's been a loss of life here. It's a novel incident. As you pointed out at the top of the broadcast, this is the first time this has happened. And, so, there should be an investigation.

But I would confirm that the facts are as we think they are. And, if they are, then we would have to express, of course, our condolences and our sympathies to the Alpizar family. But I think, in the end, we would have to conclude that the air marshal or air marshals in question did exactly the right thing.

ZAHN: Clark Kent Ervin, Rafi Ron, thank you so much for your perspectives.

Jeanne Meserve, thank you for your thorough report tonight.

In a minute, we're going to focus on another major story, one that President Bush says is vital to our success in the war on terrorism. Are we making progress in rebuilding Iraq?

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The terrorists and Saddamists have been able to slow progress. But they haven't been able to stop it.

REP. JOHN MURTHA (D), PENNSYLVANIA: He said there's progress now. I'm -- I'm showing you that I don't see the kind of progress he sees.

(END VIDEO CLIP)

ZAHN: The debate is back at a full-boil -- just ahead, the facts and the political fighting over our country's next steps in Iraq.

And, a little bit later on, is a quick way to an easy diploma also helping would-be terrorists sneak into the U.S.? This one is going to have you scratching your head.

(COMMERCIAL BREAK)

ZAHN: The fatal shooting at the Miami Airport overshadowed what would have been today's top story. The president insisting that reconstruction in Iraq is making progress, even though it hasn't gone as smoothly as he had hoped for. That concession came during the second in a series of four presidential speeches designed to answer his critics and shore up support for his Iraq policy. Last week, the president insisted that he cannot set a deadline to withdraw U.S. troops. With more on the topic of today's speech to the Council on Foreign Relations, here's White House correspondent Dana Bash.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): This time the president's focus was post-Saddam reconstruction. He told Americans soured by daily images of violence Iraq is taking significant strides toward recovery.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It doesn't always make the headlines in the evening news, but it's real. And it's important. And it is unmistakable to those who see it close-up.

BASH: His big examples, two cities where bloody battles are now replaced by what he called tangible progress because of lessons learned the hard way.

In Mosul, he talked of an increasingly stable government, upgraded roads, bridges and schools. And in Najaf, 90 miles south of Baghdad, the president touted new businesses, markets, pilgrims returning to holy sites.

Experts agree there is progress, but also still significant economic paralysis and frustration, especially in Baghdad.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: What's happening in Najaf and Mosul is not really representative of overall Iraqi trends right now. And so I think the president gave a slightly too rosy picture.

BUSH: Like most of Iraq, the reconstruction in Najaf is preceded with fits and starts since liberation.

BASH: The president did concede kidnappings, armed gangs and terrorism are causing what he called uneven advances, forcing a change in tactics to address urgent visible needs like sewer lines and city roads first, instead of large-scale repairs.

BUSH: Reconstruction has not always gone as well as we had hoped.

BASH: Like last week's speech about the military effort, the more sober assessment of the challenges now stand in stark contrast to the administration's pre-war optimism.

PAUL WOLFOWITZ, FMR. DEPUTY DEFENSE SECRETARY: We're dealing with a country that can really finance its own reconstruction, and relatively soon.

BASH: Instead, Congress has approved $250 billion of American taxpayer money for Iraq including nearly $21 billion for reconstruction, a fair amount of, the White House concedes, lost to corruption. (END VIDEOTAPE)

BASH: And because of that corruption and other things, the U.S. ambassador to Iraq said today to CNN that there have been mistakes made in Iraq. Now that word, mistakes, does not flow easily from the president's lips. As you know, Paula, yet he used it today when he was quoting somebody else and that was Democratic Senator Joe Lieberman who recently said that mistakes had been made in Iraq. But he also said that Americans should not rush troops home. On both counts, Mr. Bush said, the senator is right.

ZAHN: Is there any evidence, Dana, so far that these speeches are helping shore up the president's dismal approval ratings?

BASH: It's a little bit early to tell. There is a new "New York Times"/CBS News poll out tonight and it will be in the morning papers, that does show the president's poll numbers, overall ratings up a little bit. Up about five points, in addition, Iraq numbers as well.

But the White House understands that this is really about leading up to the elections on December 15th and they really don't expect a lot of change until then or certainly sometime after that. They are trying to use this particular period of time to try to build the momentum in terms of the poll numbers, Paula.

ZAHN: Dana Bash, thanks so much for the update, appreciate it. And joining me now, the ranking Democrat on the Senate Armed Services Committee, Senator Carl Levin of Michigan. Good to see you, Sir, thanks so much for joining us.

SEN. CARL LEVIN (D), MICHIGAN: Good to see you, Paula.

ZAHN: So I know you're familiar with what the president had to say, citing progress in Iraq on a bunch of different fronts, including education, the economy, the upcoming election in a week. Do you acknowledge that progress is being made, maybe not at the pace you'd like it to be made, but it is being made?

LEVIN: It's very spotty. I think overall though the picture is bleak. The electricity production is still below the pre-war level. Oil production still below pre-war level, unemployment over 25 percent, mainly young men who have become the source of a lot of the insurgency.

You know, you just saw a picture of the dollars that are being spent by American taxpayers, $250 billion. What the president has not acknowledged is really the miserable success or lack thereof, more accurately, in terms of getting the people -- the other countries who make commitments to contribute to the reconstruction, to follow through with those commitments.

I think less than 10 percent of that money has actually been forthcoming and I think it's about a year. So it's very, very spotty and overall, I'd say it's pretty bleak in terms of economic reconstruction. ZAHN: The president also saying with 160,000 American troops on the ground, when you have folks, particularly, I think he was referring to Democrats, saying, asking for a specific timetable for a withdrawal that ultimately endangers the American people. Your reaction to that?

LEVIN: I think we have to have the conditions for what I would call a phased reduction of troops, but more importantly, most important of all is a four-month period that's going to come up right after these elections, Paula.

And the president has not done what is essential to be done here, which is to tell the Iraqis, that unless during that four-month period that they've given themselves to consider amendments to their constitution in order to bring in the disaffected group, which are the Sunni Arabs. Unless they take advantage of that four-month period and come up with the changes in their constitution so that they can indeed have unity in dealing with the insurgency, that all of the military power in the world is not going to defeat that insurgency. It has to be a political settlement.

The president today acknowledged by the way, that many of the security forces in Iraq have been infiltrated. The reason for those infiltrations is that you got one major part of Iraq that is totally disaffected and that is fueling the insurgency.

There's got to be a political solution and that's one of the things that 79 senators on a bipartisan basis and a resolution calling for changes in policy in Iraq, 79 senators said that this president, this administration should notify the Iraqis that they need to make the political compromises which are essential in order to bring about the unity to defeat that insurgency.

ZAHN: Finally tonight, Senator, I want to close with a comment by the head of the Democratic National Committee that is receiving a lot of tension and a lot of criticism. Let's listen to what Howard Dean said a little bit earlier this week together.

(BEGIN AUDIO CLIP)

HOWARD DEAN, DNC CHAIRMAN: I wish the president had paid more attention to the history of Iraq before we'd gotten in there. The idea that we're going to win this war is an idea that unfortunately is just plain wrong.

(END AUDIO CLIP)

ZAHN: Do you agree with Howard Dean, that we're not going to win this war?

LEVIN: I think that there's a chance of success. It will not be a total success, but there's a chance at least of partial success in this war, providing the Iraqis put their political house in order.

And if they don't, we should tell them that we're going to have to consider a timetable to get out of there. There's no other alternative because, again, without their politically coming together, the military will not succeed.

ZAHN: Senator Carl Levin, thank you so much for joining us tonight. Appreciate it.

And before the end of the hour, we're going to take you back to Miami and the continuing investigation into today's fatal shooting of a passenger by federal air marshals. We'll keep gunning in new information.

But next, a disturbing CNN security watch report about a potential loophole that could help a would-be terrorist get into the United States pretty easily.

(COMMERCIAL BREAK)

ZAHN: Today's tragic events in Miami remind us all of the efforts made and the billions spent to beef up security since September 11. But as we continue our CNN "Security Watch," we are about to show you an alarming gap that virtually puts out the welcome mat for potential terrorists.

And all it takes is a credit card and a few clicks of a computer mouse. Here's investigative correspondent Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): This is Abu Salsabil Hassan Omar's Master of Science degree in chemistry from Rochville University.

Who is Omar? The federal government says he's an explosives and chemical weapons expert for the terrorist group al Qaeda.

So how did this alleged terrorist with a five million dollar bounty on his head earn a Masters in Chemistry from this American university?

well, we earned it for him with $500 and an Internet connection. And the United States district attorney in Spokane, Washington, says there could be thousands of potential terrorists who have done what we just did.

JIM MCDEVITT, U.S. ATTORNEY, E. DISTRICT, WASHINGTON: This is a concern to us because this is one, not the only one, but one of many kinds of documents or kinds of things you can use to, you know, gain credibility, build up your portfolio and maybe gain access into the country.

GRIFFIN: This past October, McDevitt and federal agents broke up what they allege could be one of the largest diploma mills in the country. They say a couple living in this home outside Spokane, Washington, ran the operation, which awarded thousands of fake degrees from legitimate sounding schools: St. Regis University, James Monroe University and several others.

The diplomas, like the one we bought, Abu Salsabil Hassan Omar, all look real. Some coming with full transcripts and certificates of accreditation from what looks like a government agency.

According to the U.S. attorney, anyone could log on and buy what appears to be an advanced degree. It sounded like just another scam, until McDevit found out that almost half the bogus degree were being purchased overseas and mostly from so-called students in Saudi Arabia.

MCDEVITT: Terrorists, and let's say al Qaeda, who has proven themselves to be very, very patient, very, very intelligent, and are willing to go to great lengths to gain entry or to do harm to the country.

GRIFFIN: There is no evidence a bogus diploma has been used by a potential terrorist to gain access to this country, but McDevitt fears it is possible.

H1b visas can be issued to anyone who is highly skilled and can get a job in the U.S. McDevit is concerned a phony degree could be the first step for someone in a terrorist sleeper cell.

And to prove how troublesome the problem is, secret service agents did what we did, bought their own degree for a perfect terrorist candidate, although theirs was fictional.

Muhammad Syed was the applicant. No formal education but years of chemical training and chemical engineering with the Syrian army. The Secret Service even added to Syed's application that he needed a degree quickly so he could find employment and obtain an hb1 visa, allowing him to stay in the U.S.

In less than a month, the imaginary Syrian army expert was notified James Monroe University was awarding him three advanced degrees in engineering and chemistry. All for $1277.

GRIFFIN (on camera): What is surprising is just how this potential hole in homeland security was discovered. It turns out the fake university selling fake degrees were done in by a real physics professor from the fully accredited University of Illinois, who was conducting more of his own investigation than a research project.

GEORGE GOLLIN, PROFESSOR, UNIVERSITY OF ILLINOIS: What happened was we were getting so much spam on university computers that it was actually interfering with day-to-day operations.

GRIFFIN: Professor George Gollin didn't like all those computer e-mails and pop-up adds offering his students prestigious degrees from legitimate sounding colleges so one day he called one of those phone numbers.

GOLLIN: There was an answering machine there, not a real person, and I left my contact information so I could take the head off of some telemarketer when the person called back. But someone called me a few days later and gave me a sales pitch.

GRIFFIN: Gollin was intrigued. He has spent years gaining his advanced education the hard way and the thought of pop-up adds offering an easy way out was more than a little annoying. So he began to dig in.

What he found was a network of universities wrapped around the St. Regis name.

GOLLIN: This was actually a large business. It's a couple hundred million a year, and that this is not just a small isolated kind of thing that's going on.

GRIFFIN: He thought it was all just a big scam. Then this native New Yorker began to think about something else. 9/11.

GOLLIN: This is really scaring me because I had tended to think of diploma mills as more of a consumer protection problem and seeing that this was a much better developed organization with a wider spread infrastructure with much broader practices, aims, alarmed me.

GRIFFIN (voice-over): With his information, the U.S. Attorney's Office and the Secret Service launched a multi-state investigation. Eight people have been indicted so far. All have pleaded not guilty. And the U.S. attorney in Spokane says one ring that pumped out thousands and thousands of fake diplomas a year is shut down.

The problem is there are plenty more diploma mills on the web, willing to graduate anyone with a credit card.

Remember the degree we bought from Rocheville University for a wanted terrorist? We tried to find Rocheville, sent e-mails to the site and got an automated response telling us, "Our student counselor," would contact us soon. It never happened.

The diploma itself was mailed from the United Arab Emirates. Rocheville related Web sites and emails have links to Karachi, Pakistan, Sarasota, Florida, a web hosting site in Atlanta, and a web billing address in this largely abandoned building in Dover, Delaware.

We couldn't find evidence of Rocheville University at any of these locations.

(on camera): This is as close as we have come to finding Rocheville University. Its domain name is registered to Mr. Joseph Lee in this apartment building outside of Boston. Suite 401.

The problem is, nobody we could find ever heard of the university, ever heard of Joseph Lee, and the manager says there's not even a suite by that number.

(voice-over): As far as we know, Rocheville is still out there, still willing to award degrees to anyone willing to pay, even a suspected al Qaeda bomb maker named Omar.

Drew Griffin, CNN, Malden, Massachusetts.

(END VIDEOTAPE)

ZAHN: And as if that's not enough, Drew tells us his suspected terrorist managed to graduate cum laude from Rocheville University with top honors and a B-plus in an ethics course all for an additional $30.

Moving up on the top of the hour. "LARRY KING LIVE" starts then at 9:00 straight up. Who is going to join you?

LARRY KING, CNN ANCHOR: A couple of former presidents. George Bush and Bill Clinton will be aboard from New Orleans. Then we'll have members of the Johnny Cash family, Tommy, his brother, John, his only child, and Colleen, the daughter of June Carter Cash, and an old friend of the Cashes, Jane Seymour.

That's all ahead at the top of the hour. The presidents will lead things off.

ZAHN: Have you seen "Walk the Line" Larry?

KING: Twice. Loved it.

ZAHN: I loved it, too. I wonder what his family think. Will you ask that for me tonight?

KING: I will ask it.

ZAHN: I appreciate it. I'll be watching.

ZAHN: There is a lot of new information coming in about today's top story out of Miami. In just a minute, we're going to take you back to the airport there for the very latest on the fatal shooting of a passenger by federal air marshals.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BAUER: At approximately 2:10 this afternoon, American Airlines flight 924 was boarding at gate D-42. It was in the boarding process. An individual later, tentatively identified as Rigoberto Alpizar, age 44, was boarding that aircraft as well.

At some point he uttered threatening words that included, a sense to the effect that he had a bomb. There were federal air marshals on board the aircraft that came out of their cover, confronted him, and he remained noncompliant with their instructions.

As he was attempting to evade them, his actions caused the FAMS to fire shots and in fact, he is deceased.

(END VIDEO CLIP)

ZAHN: That was Special Agent James Bauer in a news conference held just hours ago. He was trying to describe the events that led to today's fatal shooting of an American Airlines passenger by federal air marshals in Miami.

We have been following this developing story all night long. Let's turn to John Zarrella, who joins us from Miami with the very latest. John? ZARRELLA: Paula, bit by bit, little pieces are emerging, new details. Sources have told us just a little while ago that one of the things that made air marshals suspicious was that Alpizar was wearing a backpack, as we know, but he was wearing that backpack around his front, as well as he had a fanny pack with him. Again, details coming out very slowly, but new details emerging every hour, including details from passenger, some of who say they saw nothing. Others who say they heard shots.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: She said that heard three gunshots and then everyone was running -- like everyone was going crazy. They got up and started running. And she went to go get me because I was in the restroom and she went in there and she was like, "there's an emergency, hurry up and get out."

So then I got out and we just ran the other way where everyone was going. And then from there, that's whenever everybody was like running the other way. The police came and everything. And from what I heard was that they captured the man, but they shot him and that he's dead.

(END VIDEO CLIP)

ZARRELLA: Now sources are also telling us that the plane, the American Airlines flight 924 is not going anywhere this evening. That, in fact, it is being held here in Miami as evidence. Paula?

ZAHN: John, at this hour, is it any clearer whether in fact Mr. Alpizar had a mental disorder? One family member saying he was bipolar. His brother-in-law or his mother-in-law saying that wasn't so.

ZARRELLA: No, not at all clear. Have not gotten to the bottom of that at all and federal officials here are still steering away from any comment on what his mental health may or may not have been. Paula?

ZAHN: And at one point, it wasn't clear to us whether the federal air marshals had identified themselves. That was, in fact, confirmed at this latest news conference, right?

ZARRELLA: That's correct. At the news briefing it was confirmed that they did confront him and identify themselves after they heard the utterances of there may be -- that he may have had a bomb on him.

ZAHN: Well, I know you're going to continue to work this story around the clock. John Zarrella, thank you for bringing those late- breaking details.

And we want to thank you all for joining us tonight as we covered this story. Tomorrow a story you need to see if you're doing any holiday shopping. I suspect some of you out there could be doing just that. Someone brushing up against you may be picking your pocket. We're going to show you the tricks of the trade and how to avoid becoming a pick pocket next victim. Thanks for joining us tonight. "LARRY KING LIVE" is coming up next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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