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American Morning

American Hostage In Iraq; New Orleans Rebuilding Funding; Survivor Winner In Prison

Aired January 26, 2006 - 07:30   ET

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

CAROL COSTELLO, CNN CORRESPONDENT: Final hostage in that standoff with a gunman in a bank has been released. The gunman in custody now following the release of the hostage. He had initially taken eight hostages Wednesday night. Lieutenant Keith Douglas talked about how the hostage situation ended peacefully.
(BEGIN VIDEO CLIP)

LIEUTENANT KEITH DOUGLAS: It wasn't an exchange. An opportunity presented itself and S.W.A.T. members were able to retrieve the hostage and the suspect had no more negotiating bargaining tools with.

(END VIDEO CLIP)

COSTELLO: All this began after bank workers alerted police when the gunmen walked in and demanded money.

After hearing the news of a deadly crash, a family member of one of the victims had a heart attack and died. Seven children died Wednesday when a truck rear-ended a car near Gainesville, Florida. A school bus that had stopped to let children out was also hit. Most of the victims related to one another.

A stolen laptop could mean lots of trouble for thousands. Ameriprise Financial says it has notified 226,000 people that their names and other personal information was in that laptop. The computer was taken in November outside of Minneapolis. The FTC says nearly 10 million people every year fall victim to identity theft.

More now on those angry passengers aboard the "Queen Mary II." First, the cruise line nixed three islands from the tour. Now the passengers may be missing their flights home. The ship is due in Rio de Janeiro tomorrow morning and that is 22 hours behind schedule. The ship got into trouble because of a broken propeller. No matter. At least 250 passengers say they now plan to sue and some are threatening to remain on board.

And the universe getting a little less lonely. Scientists have discovered the most earth-like planet ever spotted outside our solar system. Don't pack your bags yet, though. The new planet is 25,000 light years away and it's believed the surface temperature is more than 360 degrees below zero. And, of course, scientists say that's way too cold for anything to live on it, but they say the techniques used to discover the planet may someday lead to the discovery of life in the cosmos.

Let's check on the life in Atlanta in the form of Chad Myers.

(WEATHER REPORT)

SOLEDAD O'BRIEN: In Iraq, the U.S. military releasing 419 detainees, including five women. The U.S. says it has nothing to do with the kidnaping of American journalist Jill Carroll. It could, though, conceivably help since the kidnapers are demanding the release of all female Iraqi prisoners. Joining us this morning from Washington to talk about Jill Carroll's abduction is Jackie Spinner. She's a "Washington Post" correspondent who's reported from Iraq. She's a friend of Jill Carroll's as well. And also barely escaped kidnaping herself.

Jackie, thanks for talking with us.

We should mention, Jackie, that your book is called "Tell Them I Didn't Cry."

Let's start with Jill first. No word really of any import. Is that a hopeful sign for you and other friends and family members or does that make you more worried?

SPINNER: Well, you know, Iraq is a situation where there's really no play book, there's no rules. You know, we're all speculating at this point about what this means. You know, I'm hopeful, obviously, that no news is good news. And I talked to Baghdad this morning, our folks in our bureau there, and they seem to be quite pleased that they haven't heard anything. And we're just all waiting and praying, I think.

SOLEDAD O'BRIEN: How about this news of these detainees, including the five female detainees being released today? It was one of, as you well know, the conditions of Jill's release.

SPINNER: Well, you know, the military has said that there are five women among these 400 some detainees that are going to be released. There are routine releases of detainees in Baghdad. I've certainly covered a number of them myself, personally, from Abu Ghraib Prison. And we don't know, you know, what the connection really is between the release and Jill's captivity. The U.S. government has always said that it doesn't negotiate with insurgents. They don't want to go down that road because it just encourages more kidnapings. And I don't think we'll really ever know probably exactly what the connection was.

SOLEDAD O'BRIEN: When I spoke to Jill's mother not long ago, she was very grateful for the long list of supporters, many people obviously in this country, but also many people in the Middle East have come out to add their voice to say Jill needs to be released right now. It's really unprecedented, isn't it?

SPINNER: It really is. And, you know, it's remarkable. And I think it really speaks to the kind of reporter that Jill is. You know, that all of these groups have gotten behind her because, when they look at her body of work, you know, they see somebody who's fair, who takes pains to talk to people who may be disenfranchised in other ways and, you know, really, as I said, speaks to the kind of reporter that Jill is.

SOLEDAD O'BRIEN: You tell the story of an attempted your own attempted kidnaping in your book called "Tell Them I Didn't Cry," which I guess was sort of named because that's how you wanted to be remembered if, in fact, something terrible happened to you in Iraq. You were saved by two marines who sort of just happened to intervene.

SPINNER: That's correct. I mean, I was so fortunate and blessed that in my situation, the marines saw that what was happening. They were shouting "American down" from the guard tower where they saw what was going on and they came running out. And, you know, I was able to get back inside the prison safely where I had spent the night and ultimately returned to our bureau in Baghdad. I was so fortunate.

SOLEDAD O'BRIEN: And ultimately returned to work in Iraq. It was very important for you that you keep working and telling the story from there. You know it's interesting, whenever we see pictures of Jill, she seems to me, at least, to be so calm in those -- you know, that grainy videotape that we have. It's just -- she seems incredibly calm. And then I talked to her mom and I sort of realized where she gets it from. What do you think she's thinking about right now?

SPINNER: Well, I hope she's holding onto, you know, all of these thoughts and prayers that are sending her way. You know, it's so painful for me just as a colleague and a friend to watch her in these video, and I can only imagine what her family is going through. But, you know, she looks sad more than anything. I mean, that's really what I take away from these videos. She doesn't look scared, she looks sad. This is a woman who loves this country. And, you know, gave up a lot and sacrificed so much to be there to report what was going on. And to be in this predicament has got to, as I said, really sadden her.

SOLEDAD O'BRIEN: I bet it does. Jackie Spinner, a "Washington Post" correspondent. Thank you for talking with us, Jackie.

SPINNER: Thank you, Soledad.

SOLEDAD O'BRIEN: Again her book is called "Tell Them I Didn't Cry."

Miles.

MILES O'BRIEN: Want to buy some former swampland in Louisiana? Apparently Uncle Sam does. We're talking about Plaquemine's Parish now, just south of New Orleans. Last night the Army Corps of Engineers gave folks there a very clear message, they want some of their land. They need it to build heartier, higher levees. Some are good with that so long as they get a fair price, but the government is only willing to pay what the land is worth now, not the pre-Katrina value, and therein lies the rub.

Speaking of rubs, while we're on this subject, there is another fly in the ointment for New Orleans property owners. A plan champion by a Republican congressman from Louisiana to create a federal agency chartered to buy out home owners hammered by Katrina now appears dead. The White House is balking at the $30 billion price tag and the open- ended nature of the proposal. Joining us now is New Orleans native Walter Isaacson. He's part of the Louisiana Recovery Authority. She's also the guy we once called boss around here.

Walter, good to have you back with us.

WALTER ISAACSON, LOUISIANA RECOVERY AUTHORITY: Good to talk to you, Miles.

MILES O'BRIEN: When last we talked about this proposal, you and members of the authority had the sense that there was a lot of support for it, both sides of the aisle. What happened?

ISAACSON: Well, I don't think it's a matter of price. You could certainly put a cap on whatever costs it would be. We'd work with any price range. What we need in Louisiana is a borrowing authority, besides some of the money that we can raise ourselves and use from our congressional appropriations, so that we can borrow money, binding authority, to be able to buy back property where it's unsafe for people to build but they've spent their life savings on that property, and redevelop it either as parkland or industrial land and maybe, you know, do it in a prudent and wise way that doesn't waste taxpayer dollars. It was a good plan and I don't know why it got knocked down because certainly we could have set some financial caps on it and worked with anybody who wanted to do that.

MILES O'BRIEN: And the analogy would be sort of like the guaranteed trust which occurred after the savings and loan fallout. In other words, create an agency to kind of make things whole and do it in a coordinated way. Now the concern on the flipside is, if you allow it to go without this, you have what they're calling it the jack-o'-lantern effect. Explain that. What will happen if you don't have this sort of authority there?

ISAACSON: In certain neighborhoods that are not particularly safe and you don't want one or two houses rebuilding upon a block and the rest of the houses being abandoned. That's just an unsafe way to live. When we said after the hurricane we were going to have a prudent and safe plan, we said we were going to try to get people to move to slightly higher, drier parts of New Orleans. But to do that, you cannot take people's land away from them. You have to say, we'll compensate you some and that way you can buy in a safer place. We were only looking for 60 percent of the pre-Katrina value to be the compensation so that it was -- we were all going to make some sacrifices here.

MILES O'BRIEN: Now the administration is saying really the focus should be on the folks without flood insurance only. What's the matter with that logic?

ISAACSON: Well, look. I mean our problem is not taking the 20,000 homeowners who lived on higher ground and didn't buy flood insurance to give them flood insurance compensation. That would be nice to do, but that doesn't begin to get to the magnitude of the problem. And the White House is not being absolutely sincere on this for months. People in the White House who really understand this problem said, you don't want to just throw money at the uninsured. Don't use your money that way. That's a moral hazard.

So we didn't say, let's just throw our money at the people who live on the higher ground and didn't buy flood insurance because they were told they didn't need it. That's not the way to solve a problem. That helps only 20,000 owner occupied homeowners. It doesn't help build a safer city, which is what the president says he wants us to do.

MILES O'BRIEN: All right. Next door in Mississippi, Governor Haley Barbour says he's fine with $5 billion in block grants. Said it's going to work just fine there. What's different there? Why is it OK for Mississippi, not good for Louisiana?

ISAACSON: Well, I think if we had the same proportional money that Mississippi had, we'd be fine. We'd be golden in many ways. I think you had, you know, more than 220,000 homes destroyed in Louisiana. That's, you know, four -- three or four times as much as in Mississippi. So if we had $11 billion or $12 billion, I think we'd be in pretty good shape. But what would be particularly nice is to have some borrowing authority so we could do a smart redevelopment of New Orleans and, in the end, not cost the taxpayer as much.

MILES O'BRIEN: All right. Is there a little politics involved in this, do you think?

ISAACSON: I don't get it. Miles, I really don't get it. It's a good, smart, frugal, Republican plan that had come up with, and I don't see why you don't want to do it this way instead of just throwing money at people who lived on slightly higher ground and didn't buy insurance. So I can't figure it out.

MILES O'BRIEN: Walter Isaacson, thanks for your time. We'll try to figure it out as time goes on.

ISAACSON: Thanks, Miles.

MILES O'BRIEN: Soledad.

SOLEDAD O'BRIEN: Andy's "Minding Your Business" ahead. What's he got coming up?

ANDY SERWER, CNN CORRESPONDENT: Soledad, Wal-Mart sells toys and hardware and garden supplies. But are we ready for Wal-Mart the bank, and Wal-Mart the music store? We'll explain coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: I think she was on opera singer. Started as an opera singer.

MILES O'BRIEN: No. From Long Island? An opera singer from Long Island?

SOLEDAD O'BRIEN: Opera singer from -- that's how she trained professionally, Pat Benatar, before she got into a little rock and roll.

SERWER: And hell (ph) is for children (ph).

SOLEDAD O'BRIEN: Stop mocking me. Yes.

MILES O'BRIEN: I am not mocking you. She is your . . .

SOLEDAD O'BRIEN: My girl from my hometown. Yes, there you go.

MILES O'BRIEN: Where is she now? Do we know?

SOLEDAD O'BRIEN: I don't know.

MILES O'BRIEN: All right, we'll check in into that.

Meanwhile, we know where you are.

SERWER: (INAUDIBLE).

MILES O'BRIEN: Alan Greenspan, he's . . .

SERWER: Still making waves.

MILES O'BRIEN: Sill -- wherever he goes, whenever he speaks.

SERWER: Yes.

MILES O'BRIEN: No one knows what he says, but it's a big deal, right?

SERWER: Yes. No, he's writing stuff. You know, he's looking to step down probably sometime next week. But this is a memo that went to Congress concerning companies trying to get into the banking business. Specifically, this would concern Wal-Mart because Wal-Mart is trying to get a bank charter going in Utah. They say they've got 140 million credit card transactions a month. They want to do the work in-house. They say they don't want to set up bank branches but they want to be able to do this so they need a bank charter.

And Alan Greenspan says this is a very bad idea. And he says that other companies that have been trying to do this, basically taking advantage of a loophole, setting up what are known as industrial loan corporations, saying it's a bad idea because it's outside of regulation by the FDIC and other regulatory bodies. So still weighing in and affecting Wal-Mart. It will be interesting to see if they get this done, if Wal-Mart gets the bank charter or not.

Meanwhile, another Wal-Mart story to tell you about. They're always in the news. Wal-Mart has an exclusive deal with Garth Brooks and other musicians where by it's going to bypass record companies. There's Garth, looking good. And basically what's going on here is Wal-Mart's going to be distributing Garth Brooks' music exclusively.

Now they have a new DVD/CD set that's for sale for $25, which is a pretty good deal. But because Garth Brooks owns his own catalogue, he's able to make a deal with Wal-Mart, where Wal-Mart would be the sole distributor. When other retailers run out of his product, you will only be able to get Garth Brooks music at a Wal-Mart. A pretty interesting thing.

SOLEDAD O'BRIEN: Why does that help him? I mean, why wouldn't he want his music everywhere? Why wouldn't he want everything . . .

MILES O'BRIEN: He's getting a bigger take, right?

SERWER: Yes, he'll get a bigger cut and Wal-Mart says -- Wal- Mart's the biggest music retailer anyway, so -- especially for country music.

MILES O'BRIEN: Interesting.

SOLEDAD O'BRIEN: All right. Andy, thanks.

SERWER: You're welcome.

SOLEDAD O'BRIEN: Ahead this morning, no immunity idol to save Richard Hatch this time around. The first ever "Survivor" champion is in jail for cheating on his taxes. We're going to talk to his lawyer about how he's taking that news.

And later, he might be a prince. He's facing some tough duty though. Is Prince Harry headed to Iraq? A look at that later on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: British Parliamentarian George Galloway can get rid of that red leotard he was wearing the other day after the relief of many. I think it's fair to say those of us here as well. He's been voted off of Britain's "Big Brother" house. We've all seen the antics inside of the house. First you had the red leotards, sort of ill-fitting, and this little scene here with the kitty cat -- pretending to be a kitty cat drinking milk out of the hands of an actress. When he left the house, believe it or not, somebody showed him all the headlines that he had made while he was inside and his reaction was this. "Oh, dear." Not so good.

Richard Hatch, one of televisions first reality stars, behind bars this morning for not paying his taxes on "Survivor" winnings. Now he might need to put his infamous survival instincts to use in the role of federal prisoner.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Did you ever in a million years think this would ever happen.

RICHARD HATCH: Can you - who could have planned? Bizarre, isn't it?

SOLEDAD O'BRIEN, (voice over): Good times for Richard Hatch in the summer of 2000 after becoming the first winner of the CBS reality show "Survivor." UNIDENTIFIED MALE: Congratulations, Rich.

SOLEDAD O'BRIEN: Fast forward to real reality. Not a lush, remote island, but a stark federal courtroom in Rhode Island, where a jury convicted Hatch of income tax evasion for failing to report his $1 million payday and more than $300,000 earned from a Boston radio station.

DOUGLAS BRICKER, IRS SPECIAL AGENT: This conviction reflects the Internal Revenue Services commitment to enforce the tax laws of the United States.

SOLEDAD O'BRIEN: Hatch was cleared of seven other charges, including bank fraud, mail fraud and wire fraud. Hatch's defense during the two-week trial? He's "the world's worst bookkeeper." The jury didn't buy it. After the verdict, Hatch was handcuffed and taken into custody. The judge agreed with the prosecution's claim that Hatch posed a significant flight risk.

LEE VILKER, ASST. U.S. ATTORNEY: He has significant assets in a foreign country. He married in a foreign country and his spouse is a non U.S. national who's visa expires. And those were some of the (INAUDIBLE) factors, in addition to some issues with Mr. Hatch's passport.

(END VIDEOTAPE)

SOLEDAD O'BRIEN: Richard Hatch is going to remain behind bars until his sentencing, which is scheduled for April 28th. His attorney, John MacDonald, represented Richard Hatch at trial. He joins us from Boston this morning.

Nice to see you, Mr. MacDonald. Thanks for talking with us.

JOHN MACDONALD, ATTORNEY FOR RICHARD HATCH: Good morning, Soledad.

SOLEDAD O'BRIEN: Have you spoken to your client since the verdict came down?

MACDONALD: Yes, I have.

SOLEDAD O'BRIEN: And how's he taking it?

MACDONALD: He is taking it -- well, under the circumstances, extremely well. This has been a three-year ordeal or Rich and he is glad that it's coming to a close.

SOLEDAD O'BRIEN: Explain to me what your position was in court. I mean we heard Richard Hatch say, you know, I'm a terrible bookkeeper. And I think lot of people's response to that would be, oh, come on. I mean, kind of a public win, don't you think? What was your strategy going into the courtroom to think that the jurors would buy that?

MACDONALD: Well, we had to fight a two-front war here. On the one hand, this jury had to be shown that Rich Hatch committed no fraud when it came to setting up his own personal charity, Horizon Bound. We were success in doing that. Seven of the 10 counts were rejected by the jury. In terms of the other three tax counts, Rich told his side of the story and that's all he wanted from day one was his day in court and he certainly got that.

SOLEDAD O'BRIEN: And his side of the story was that, not only is he a bad keeper of his accounts, that he actually thought CBS was going to pay his taxes. How could he possibly believe that? I understand that the contract that all the "Survivor" participants signed specifically says that they're not going to pay your taxes. Is that right?

MACDONALD: Well, the contract itself was not worded properly. There were portions of the contract where it was up to CBS to withhold taxes. There were discussions with CBS individuals indicating that they would pay the tax. There were discussions with other contestants, his accountant, and ultimately documents received and reviewed from the IRS which led Rich to believe he did not have to pay the tax on the $1 million.

SOLEDAD O'BRIEN: Well, the jury . . .

MACDONALD: He ultimately filed -- certainly.

SOLEDAD O'BRIEN: Forgive me for stepping on you there. The jury, obviously, at the end of the day, disagreed. There was a plea agreement on the table. Why didn't he take the plea?

MACDONALD: Because he was not guilty and he wanted his day in court. And he rejected a two-count plea agreement. He ultimately had to face a ten-count indictment and he faced that. And seven of those counts were thrown out by the jury.

SOLEDAD O'BRIEN: He face 13 years, you know, on the high end, the outside, 13 years in prison and a $600,000 fine. Realistically, what do you think you're going to get when you go to the sentencing?

MACDONALD: Well, at the beginning of the trial, he faced 73 years in jail. And, ultimately, the court will affect a guideline range. That range currently is approximately 33 to 41 months. We will do everything possible to convince the judge to downward depart from that range.

SOLEDAD O'BRIEN: John MacDonald, attorney for Richard Hatch. Thank you for talking with us, Mr. MacDonald. Appreciate it.

MACDONALD: My pleasure.

MILES O'BRIEN: Coming up, you may be a royal, but you're in the army now. Her majesty must be all a twitter as her grandson, Lieutenant (ph) Harry, readies for duty in Iraq. From palace to pup tent ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: Good morning. I'm Soledad O'Brien.

A stunning development to tell you about in the Middle East this morning. The militant group Hamas claims victory in the Palestinian elections. What will that do to the peace process. We're live in the West Bank with the very latest.

MILES O'BRIEN: I'm Miles O'Brien.

A hostage walks a few feet for a camel, giving police the break they needed. Hostages free and safe, suspects wearing cuffs, facing charges. We'll take you there for the latest.

SOLEDAD O'BRIEN: And a horrible crash kills seven children. Police want to know exactly how it happened. We've got a live report just ahead on this AMERICAN MORNING.

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