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American Morning

Enron Criminal Trial; Journalists Wounded; Miners Rescued; State of the Union; Inhalable Insulin

Aired January 30, 2006 - 09:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Good morning, I'm Miles O'Brien.
An intense assignment lands an ABC News crew in intensive care. Anchor Bob Woodruff and his cameraman, in Germany this morning, seriously wounded by a blast in Iraq yesterday. We're live in Landstuhl.

A mine accident with what appears to be a happy ending. Dozens of Canadian miners make it out safely more than 24 hours after a fire trapped them underground.

SOLEDAD O'BRIEN, CNN ANCHOR: I'm Soledad O'Brien.

Corporate corruption in the courtroom, jury selection for the trial of former Enron leaders begins today in just about half an hour. Will it be possible to find enough impartial jurors?

An award season surprise as we wait for tomorrow's Oscar nominations. A "Brokeback" breakdown at the SAG Awards. We'll tell you about it on this AMERICAN MORNING.

Good morning. Welcome, everybody. Lots to get to this morning.

Let's begin, in fact, with Enron. One of the biggest financial scandals in U.S. history now coming full circle in a Houston courtroom. Jury selection begins this morning in about 30 minutes or so. It is, of course, the trial of former Enron Chair Ken Lay and former CEO Jeff Skilling. They are accused of bilking stockholders and employees out of billions of dollars.

Chris Huntington is live for us outside the courtroom in Houston this morning.

Hey, Chris, good morning.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Good morning, Soledad.

Obviously, this is a huge case for the government, have been working for this for more than four years. But it's perhaps an even bigger deal for those former Enron employees and shareholders that you mentioned who got burned by the company. For them, the beginning of this trial offers something of an emotional payback.

(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): Angie Chappell lost her job and her life savings when Enron imploded more than four years ago.

ANGIE CHAPPELL, FORMER ENRON EMPLOYEE: It was my retirement. It was my kids' college fund, you know. I put a lot of money into my 401(k). It made a big impact on all of us. I mean, we lived a very comfortable life, and then we didn't.

HUNTINGTON: Chappell and her family are still trying to work their way out of that financial hole. And she blames the two Enron executives about to go on trial for running her family's future into the ground.

CHAPPELL: Jeff Skilling and Ken Lay have so much more than the rest of the Enron employees. While they were telling us to buy stock, they were selling theirs.

HUNTINGTON: Ken Lay insists he is innocent.

KEN LAY, FORMER ENRON CHAIRMAN: We're going to have a long trial and a tough trial, but we're going to be fine.

HUNTINGTON: Last month, Lay said the government had falsely charged him with misleading investors and regulators about Enron's financial problems.

LAY: Most of what was and is still being said, heard or read was and still is, either grossly exaggerated, distorted or just flat false.

HUNTINGTON: Lay's main defense will be that he was out of the loop when Chief Executive Jeff Skilling and Chief Financial Officer Andrew Fastow created improper off-the-book deals to hide Enron's debt and pump up its appearance of profitability. Fastow has pleaded guilty to two counts and is expected to be the government's key witness against Lay and Skilling, who also insists he is innocent.

JEFFREY SKILLING, FORMER ENRON CHIEF EXECUTIVE OFFICER: And I have no knowledge of any -- and had no knowledge of any wrongdoing.

HUNTINGTON: Sharon Watkins, the former Enron Vice President, who blew the whistle when she correctly warned that the company would "implode in a wave of accounting scandal," is also likely to testify.

SHARON WATKINS, FORM ENRON VICE PRESIDENT: I certainly would like to see Jeff Skilling charged, because I think he's the one that drove us over the cliff. Ken Lay, you know, idiot or criminal, those are his two choices, neither one is very positive.

HUNTINGTON: Another former Enron employee agrees.

CHAPPELL: Jeff Skilling and Ken Lay, if they're guilty of anything, it's of not knowing what their company was up to, but they're responsible for it. They're responsible for whatever goes on. And they should pay the price.

(END VIDEOTAPE) HUNTINGTON: Now in terms of paying the price, Angie Chappell, and the other more than 20,000 former Enron employees who collectively lost more than a billion dollars in their retirement funds, have not seen any payback yet, not one cent -- Soledad.

S. O'BRIEN: And it might be a long time before they do. Chris, let me ask you a quick question, the judge has said he wants a jury in place in a day, day and a half. Is that going to be possible?

HUNTINGTON: Yes. Well, Judge Sim Lake is an aggressive judge. He doesn't like trials that ramble on. He's going to push for that.

But all the lawyers we have spoken to, Soledad, say that's a tall order in a case of this magnitude. With a jury coming from Houston, everybody in this town either worked for Enron, knew somebody that worked for Enron, maybe lost money on Enron. So it's going to be a tall order to get that jury seated in a day, or even a day and a half, which is what the judge is asking for -- Soledad.

S. O'BRIEN: Yes, I guess we'll know in a day or a day and a half.

Chris Huntington for us this morning, thank you -- Miles.

M. O'BRIEN: An explosion in Iraq sends a pair of ABC newsmen to the hospital. ABC anchor Bob Woodruff and cameraman Doug Vogt now getting treatment at the U.S. military hospital in Germany. A doctor there says they have very significant injuries. Woodruff and Vogt injured yesterday by a roadside bomb. After initial treatment in Iraq, they were flown to the Landstuhl Medical Center in Germany.

And that's where we find CNN's Chris Burns.

Chris, what do we know about their condition?

CHRIS BURNS, CNN CORRESPONDENT: Well, Miles, a good indication that significant injuries is that how they arrived here. When they flew in from Iraq, they were brought in intubated and also under heavy sedation and sent to the ICU, intensive care unit, here to undergo further testing to see how much more surgery they will need. At least one of them might have to have surgery here to clean up his wounds a bit more. They're undergoing CAT scans and other tests to see exactly how bad these injuries are.

Their families are arriving today, as well as an ABC News executive. They will, of course, be watching very closely to see how those tests come out -- Miles.

M. O'BRIEN: Chris, the fact that they are at this military facility, how unusual is that?

BURNS: It is very unusual for civilians to be allowed here at the Landstuhl Medical Center. It is the biggest, outside of the U.S., U.S. military hospital. It has received thousands of American troops from Iraq, from Afghanistan. And every once in a while, you will see a civilian come through here, a former hostage, for example, Woodruff and Vogt.

I, myself, came through here during the 1999 Kosovo conflict with double pneumonia, almost close to death when they brought me back here. Medevaced me with a C-130. And thanks to them, I'm still alive -- Miles.

M. O'BRIEN: So you can personally attest to the level of care you received there?

BURNS: Absolutely. It's very intense. They watch you very closely. A lot of -- just a battery of doctors who are watching you, and the care is very, very good, very high tech. And that is why they are in good hands right now.

M. O'BRIEN: Chris Burns at Landstuhl, under better circumstances for him, at least, this time, thank you very much -- Soledad.

BURNS: Thank you.

S. O'BRIEN: Gosh, it's good to hear that they are in good hands. We're going to continue to follow that story, of course.

We have got new developments, too, to tell you about this morning in that mine fire that trapped 72 workers in a Saskatchewan potash mine. Just a little while ago, we learned that almost all those miners have now been brought to the surface. The miner -- mine, rather, is in Esterhazy. It's about 125 Miles from the North Dakota border.

Sarah Galashan with Canadian TV has details for us on what happened.

(BEGIN VIDEOTAPE)

SARAH GALASHAN, CTV-TV REPORTER (on camera): Twenty-four hours ago no one knew what to make of the situation here. They had lost contact with 32 of the workers beneath the mine -- beneath the surface, and there were 70 down there in total. The mine had filled with smoke. There was a fire. Several teams of rescue workers have to go down.

And when they finally did locate the 32 that lost contact with the surface, well, what a relief. There was relief on both sides, both the rescuers and the miners who were still down there for several hours but are now starting to make their way to the surface. We're seeing them come out. They are smiling, they are waving, exhausted but thrilled to be back above ground.

Sarah Galashan, CTV News, Esterhazy, Saskatchewan.

(END VIDEOTAPE)

S. O'BRIEN: Sarah Galashan, of course of Canadian television, thanks for that report.

We got other stories making news this morning. Carol has got a look at those. Let's go right to the newsroom.

Carol, good morning again.

CAROL COSTELLO, CNN ANCHOR: Good morning, Soledad. And good morning to all of you.

President Bush is putting the finishing touches on tomorrow's State of the Union Address. In just about an hour, he's set to discuss the speech with his Cabinet. President is expected to acknowledge it's been a challenging year, but aides say the address will be positive overall.

Well they huffed and they puffed but in the end it doesn't look like anyone will be blown down. The effort to filibuster Samuel Alito's nomination to the Supreme Court looks like a bust. At least that's what Republicans and some Democrats say. A Senate vote to confirm Alito is scheduled for tomorrow.

Secretary of State Condoleezza Rice is in London this morning for talks on Mideast peace prospects. Secretary Rice arrived in London last night. She is set to meet later today with the Afghan President Hamid Karzai. Also on the agenda, Iran's nuclear program and of course the Palestinian elections.

Some twists and turns on the road to Oscar. At last night's SAG Awards, the darling so far of the award's season, not "Brokeback Mountain." Actually, it's not that, because it was snubbed in all categories.

The top winner is an interesting mix. Reese Witherspoon took the lead actress award for "Walk the Line." Philip Seymour Hoffman won lead actor for "Capote." For best ensemble packs (ph), equivalent of best movie, the film "Crash" was at the top of the heap.

And poor Tom Cruise, he's among those vying for an award nobody wants and that would be a Razzie. The prizes for the worst in Hollywood are announced the day before the Academy Awards. Cruise earned three Razzie nominations as worst actor for "War of the Worlds" and in a brand new category for most tiresome tabloid target. I could think of a lot of people up for that award.

S. O'BRIEN: I know. Really, I thought Paris was going to walk away with it this year.

COSTELLO: Or Jessica Simpson.

S. O'BRIEN: Paris Hilton. Yes. There's so many.

COSTELLO: It's like enough.

S. O'BRIEN: There's so many.

All right. Carol, thank you.

M. O'BRIEN: There are so many choices. Yes. S. O'BRIEN: There really are.

M. O'BRIEN: Let's get the forecast now.

Chad Myers at the CNN Center with that.

Hello -- Chad.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Miles.

(WEATHER REPORT)

Back to you.

M. O'BRIEN: Thank you -- Chad.

MYERS: Sure.

M. O'BRIEN: Coming up on the program, if you or someone you care about has diabetes, you want to stay tuned, you may be able to leave the needles behind. We'll inject you with the facts.

S. O'BRIEN: Plus, tomorrow's State of the Union Address. President Bush down in the polls, what does he have to say to turn things around? We're going to take a look this morning.

First, though, which two U.S. presidents never gave a State of the Union Address? We'll have the answer right after this break. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Before the break, we asked you which two U.S. presidents never gave a State of the Union Address? The answer, William Henry Harrison never gave one because he died just 32 days after his inauguration. And neither did James Garfield. He died at the hands of an assassin just 199 days into his term as president.

President Bush is preparing to deliver his fifth State of the Union Address. The speech on Tuesday comes at a pivotal time in his second term.

David Gergen is with Harvard's Kennedy School of Government. He's advised four presidents. He's in Boston this morning.

Nice to see you, as always, David, thanks for talking with us.

DAVID GERGEN, FMR. PRESIDENTIAL ADVISER: Good morning -- Soledad.

S. O'BRIEN: Let's start with the numbers. Shall we go right to the polls.

GERGEN: Sure.

S. O'BRIEN: If you take a look at the polls. Let's throw them up on the screen, if we can, a CNN/"USA Today" showing an approval rating of 43 percent. The dates January 20 to 21 and they are all about the same date. CBS is 42 percent. "L.A. Times," Bloomberg 43 percent. Fox News, Opinion Dynamics 41 percent. These are bitterly low numbers. How do these numbers affect what we're going to hear tomorrow?

GERGEN: They certainly affect the climate in which this speech will be received. The president comes into this address with the lowest numbers of any post war president at this point in his time, other than Richard Nixon. So these numbers are low. He's coming off the worst year of his presidency.

And to a significant degree, Soledad, he's lost control of the agenda. There are many, many events happening around him. Whether it's Iraq, with a Bob Woodruff wounding reminding us all of how much peril there is for American soldiers and others, with Iran coming up, with the Katrina aftermath being investigated by Congress, with the eavesdropping, you keep going. And people insisting now that, even his own party, that he released data about how many White House officials met with Mr. Abramoff and when.

You given all this, this is the toughest environment this president has faced coming into a State of the Union. I doubt he can turn it all around in one address. He can improve things, he can refrain things but he will not be able to turn around his presidency in one address.

S. O'BRIEN: What do you think he has got to focus on in his speech?

GERGEN: I think he has to calibrate this very carefully. The White House is saying it's going to be a very optimistic speech. Americans are not feeling very optimistic right now. Despite the strength of the economy, most people are feeling pressed. And despite the president's upbeat view toward Iraq, most people are feeling it's not going well.

So I think the danger is that he overstates his optimism, that he's not in touch with these underlying currents. I think he has got to be very empathic in this speech toward people's feelings in the country and then try to gradually convince them there are ways to improve things, follow me. That's the roll of leadership.

I will say this on the president's behalf, I think, in fairness, he seems to be -- have found more of an energetic positive voice in the last few weeks. People around him report that he's much more in a groove. They've been impressed by that. So he comes in with an inner strength that may really help him.

And to say on the Alito nomination where he has done very well, he's going to come off a victory tomorrow in the United States Senate. That will bolster him tomorrow.

But most importantly, I think that he sees this now as a comeback campaign. And we all know that you should never write this fellow off. He's a much better politician than people often think. He's having trouble with you know his policies, but he's a good politician.

S. O'BRIEN: You mentioned a moment ago the war in Iraq, and you also mentioned the Bob Woodruff wounding, along with his cameraman.

GERGEN: Yes.

S. O'BRIEN: How much -- I mean is the word albatross too heavy handed to use here? Because, I mean to some degree, you can't be upbeat. And we've heard that word from the White House when you -- in the face of the evening news anchor from ABC being severely wounded. That's going to be a tough sell, isn't it?

GERGEN: Yes, it is, Soledad. And that's why I think he's got to catch the mood right. This is not -- you can be in the White House and get into a bubble there and not see that people are grieving or they're deeply troubled.

You know the surveys that are coming out are not -- reflecting not only a low number for him but a real sense the country is going in the wrong direction. And he's lost an awful lot of independents who feel that its administration is out of touch with sort of their inner feelings. And I think regaining that psychological advantage is tough.

But going back to Bob Woodruff, you know this is -- was a dramatic incident in which, not only the journalistic community, but the whole country and the world can see just how dangerous it still is. He was out with the Iraqis, after all, and it turns out they are in a lightly armored military unit. They weren't well protected. And it shows just how random and how deadly the violence can be there. And we're all help for Bob Woodruff and the cameraman, ABC's sake, they come back.

But I think all of us now come into this with a much soberer -- you know the weekend has been very sobering for a lot of us who, you know, who know Bob Woodruff and care about him and the cameraman, and care about Iraq. I think this has been a real reminder just how extraordinarily volatile and dangerous Iraq remains after all this time.

S. O'BRIEN: I think you've said it exactly right. First of all, our good wishes to the family members of both men, obviously, but also it's hard to hear the good news about Iraq and then hear these -- you know clearly the violence there. We've had reporters come on our air, David, and say it's much worse than when they were first there. I mean, and it seems to them to be getting worse and getting more random and getting more violent. That's going to be a tough sell for the president

David...

GERGEN: It's a tough sell. And I...

S. O'BRIEN: Go ahead.

GERGEN: Thank you -- Soledad. S. O'BRIEN: Sorry.

GERGEN: I think the next few months are going to be -- on the ground in Iraq are going to be extraordinarily important, and much more important than the speech, frankly. It's important to have the speech. This is a moment that we need to hear the president. But you know the real question is what happens on the ground in Iraq in the next few months?

S. O'BRIEN: I think you're right.

All right, David Gergen, as always, David, thanks. Always appreciate it.

GERGEN: Thank you, Soledad. OK. Bye.

S. O'BRIEN: Miles.

M. O'BRIEN: Still to come, the follies of FEMA do not seem to end. Why did the agency turn down help from inside the government? It might have saved some lives. We'll try to get some answers for you.

And take a deep breath, it may all -- be all that some diabetics need to do to keep their blood sugar regulated. So who will get to throw the needles away? "House Call" next on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: "House Call" time, a new tool for the more than 20 million Americans living with diabetes. The FDA, the Food and Drug Administration, has approved an inhalable form of insulin. It's called Exubera.

Dr. Francine Kaufman is with Children's Hospital in Los Angeles. Up early for us this morning. Her group took part in the clinical trials for the inhaler. She joins us from there.

Good to have you with us, Dr. Kaufman. Who is this for?

DR. FRANCINE KAUFMAN, CHILDREN'S HOSP. LOS ANGELES: Well, this is for people with diabetes, both Type 1 and Type 2 patients. And it's for those who need to take insulin. And it's another tool in our ever-expanding tool chest of how to manage this disease effectively.

M. O'BRIEN: All right, so how do you know if this is right for you?

KAUFMAN: Well, first, you discuss it with your healthcare provider. But if you are on insulin and you need insulin around the time of your meal, this is a good way to potentially take that insulin rather than with an injection or with an insulin pump. And I'm hoping that this will enable people who are a little reluctant to start insulin, those with Type 2 diabetes, to go ahead and start that medication earlier.

M. O'BRIEN: So this is, generally speaking, people with a milder case of diabetes, would that be accurate to say?

KAUFMAN: Well, no, actually those who have Type 2 diabetes who need to go on insulin are a little bit more advanced in their disease process and many of them are very reluctant because they don't want to take an injection. And we're hoping this might help them. And, in addition, the patients with Type 1 diabetes who must take insulin. This is going to be another way for them to potentially take that medication that they must take every day to save their lives.

M. O'BRIEN: Now Exubera does not mean an end to testing your blood, you know pricking your skin and getting a blood test to see how your blood is doing, right?

KAUFMAN: Miles, you're so right. This is part of a really comprehensive management scheme that involves testing your blood; taking your medication and looking at your nutrition plan and your activity and managing those blood sugar levels so that you can avoid the long-term complications of this disease.

M. O'BRIEN: All right, here's the potential downside to all of this. If it becomes that easy to use, insulin, that is, will this encourage people to put less emphasis on a good diet?

KAUFMAN: I don't think so. I think when somebody is taking insulin they are aware of how important that medication is, how they really must match what they are doing, what they are eating, their activity level. And I think, hopefully, they will be even more vigilant once they are taking the inhaled insulin.

M. O'BRIEN: Yes. Now we were talking last week about some school systems that no longer have nurses available to kids. I imagine this is -- this could be a great thing for youngsters, especially?

KAUFMAN: We're certainly hoping for that. I am actually a pediatric endocrinologist. And it is something that's very difficult for a number of our children. And many of them, and many more every year must take insulin at lunchtime and there's just not a nurse around to do that. So maybe this inhaled insulin will be an easier way for them to do what they need to do to manage their disease.

M. O'BRIEN: Why did it take so long? What was the breakthrough that made this possible?

KAUFMAN: Well, the lungs are a good way to inhale medication. And you know the FDA is very vigilant in protecting our patients across the country. And it just took time to get data, and particularly long-term data, to be sure of its safety.

M. O'BRIEN: All right, it's big news.

Dr. Francine Kaufman, thanks for the insight. She's from Children's Hospital in Los Angeles.

KAUFMAN: Thank you very much.

M. O'BRIEN: Soledad.

S. O'BRIEN: Coming up this morning, Andy is "Minding Your Business." He's going to tell you how to get even more free money with your tax refund. Plus, "A.M. Pop" runs down all the big winners at last night's SAG Awards, including the movie that upstaged "Brokeback Mountain." We'll tell you what that is ahead on AMERICAN MORNING. We're back in a moment.

(COMMERCIAL BREAK)

M. O'BRIEN: It's opening bell time on Wall Street or very close to being so. Dow Jones industrial average opens trading at 10,907. That's up 97 points at Friday's close. And here comes the bell. There you go. You feel better now?

S. O'BRIEN: Why are they clapping before the bell? I just thought (ph).

M. O'BRIEN: To encourage the bell to ring. Apparently if you don't applaud beforehand, the bell says, you know, I'm not ringing for you.

S. O'BRIEN: No, see, I disagree. I think the bell rings no matter what on time each...

M. O'BRIEN: You do?

S. O'BRIEN: That's just me. I've never been asked...

M. O'BRIEN: For whom the bell tolls.

S. O'BRIEN: I've never been asked to ring the opening bell.

Welcome back, everybody. Lots to get to this morning.

M. O'BRIEN: Well we should do that some morning, we should have a live remote from down there and...

S. O'BRIEN: We're working.

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