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American Morning

State of the Union; Opening Statements Begin Toda in Enron Trial; Welcome to the Future

Aired January 31, 2006 - 06:30   ET

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

MILES O'BRIEN, CNN ANCHOR: Cameras catch the end of a police chase in Saint Louis. Did police overstep their bounds, however? An investigation is under way.
What do you want to hear from the president tonight? Are health care and alternatives to foreign oil on your mind? Well, apparently not on the president's. We've got a preview.

And it's a big trial, historic really, but it took just one day to find a jury in the Enron case. Now the moment thousands of Enron stockholders and former employees have been waiting for. The big Enron trial begins.

ANNOUNCER: You're watching AMERICAN MORNING with Soledad O'Brien and Miles O'Brien.

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. Welcome, everybody. Lots to get to.

We'll start with the president. A big challenge ahead from him tonight, the State of the Union address. He's got to overcome his own low approval numbers to get Congress to follow any major new proposals that he's going to make.

Let's get right to Dana Bash. She's at the White House this morning, taking a look ahead at what we're going to hear tonight.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Tonight, the president goes before the nation at a time when more than 6 in 10 Americans think the country is headed in the wrong direction and gotten worse since he's been in office. The White House knows politically, especially for their party this election year, they have got to take on that pessimism head on.

So, he will talk specifically about the country's challenges and successes. A White House official says that the president is going to talk about kitchen table issues, things like health care and the soaring costs there, have some proposals on that front, and also gas prices. Talk about energy and the need to move forward in terms of alternative energy.

In addition, the president will talk about America's leadership in the world, will talk about maintaining the competitive edge economically and have some proposals there, but also on the national security front.

One senior official said the president will make the case it is crucial to stay engaged around the world, whether it comes to Iraq or Iran. As the senior official put it, the president will say when America leads, America wins.

Dana Bash, CNN, the White House.

(END VIDEOTAPE)

S. O'BRIEN: Later on AMERICAN MORNING, we're going to talk to White House counselor Dan Bartlett, as well as the Senate majority and minority leaders. CNN's coverage of the president's State of the Union speech begins tonight at 7:00 p.m. Eastern Time, 4:00 p.m. Pacific Time, Wolf Blitzer, Paula Zahn, in a special edition of "THE SITUATION ROOM" -- Miles.

M. O'BRIEN: The jury is picked. The stage is set. And the trial of the men at the top of the house of cars that was Enron is about to get started.

Ali Velshi is in Houston.

(BEGIN VIDEOTAPE)

ALI VELSHI, CNN CORRESPONDENT: Opening statements get under way here at the federal court in Houston in just a few hours.

Now, this is being called the corporate trial of the century. It's the case against former Enron Chairman Ken Lay and former Enron CEO Jeff Skilling.

Now, for their part the defendants say what was going on at Enron was complicated accounting. It wasn't necessarily illegal. And if it was, they didn't know it was illegal.

The government is going to prove that this wasn't about accounting. This was about making the world think that Enron was financially strong when these two guys knew it was sinking. They kept it strong so that they could sell their stock in the company and make millions doing it.

Enron went bankrupt four years ago. This trial is expected to take at least four months. Opening statements come today. Evidence starts tomorrow.

In front of the federal court in Houston, I'm Ali Velshi, CNN.

(END VIDEOTAPE)

M. O'BRIEN: All right, thank you very much, Ali.

What appears to be, we hope, is good news for that ABC News team. Carol Costello has some details for us -- Carol.

CAROL COSTELLO, CNN ANCHOR: I do. We're keeping a close eye on a plane at Ramstein Air Base in Germany. ABC News anchor Bob Woodruff and photographer Doug Vogt are set to be transferred to the United States this morning. They've been getting treatment at a U.S. military hospital in Landstuhl, Germany. Both suffered head injuries after their vehicle was hit by a roadside bomb in Iraq.

A new terror tape from Osama bin Laden's right hand man, Ayman al-Zawahiri, shown in a three-and-a-half minute video that aired on the Arab network al-Jazeera. He appears defiant and says he's alive and well. It's his first message since a U.S. missile strike in Pakistan earlier this month targeting him and other members of al Qaeda. Al-Zawahiri calls President Bush the butcher of Washington, and he threatens new attacks.

A developing story out of Southern California this morning. A former postal worker goes on a shooting rampage at a mail facility. She is now dead. At least three others were killed and another person critically wounded. It happened last night. We're waiting to hear more from authorities. A news conference is expected shortly.

A police chase in Saint Louis under close scrutiny, too, after being caught on tape. You can see the cops here punching and kicking the suspect after a chase. An investigation is now under way to see whether the officers used excessive force. The suspect is now out of the hospital. We don't know the extent of his injuries.

The Oscar goes to who knows? But at least we'll hear who is in the running. Oscar nominations are set to be announced in just about two hours. "Brokeback Mountain" leads the pack of possible nominees. The tragic love story is expected to lasso several nominations. But don't count out the movie "Crash." It won the Screen Actors Guild Award this past weekend. We will carry the Oscar nominations live. That comes your way around 8:30 a.m. Eastern.

And Senator Sam Brownback says he meant no offense to homosexuals when he used the word "fruits." The Kansas Republican is facing some fallout after a recent interview with "Rolling Stone." In it, he criticizes countries like Sweden that allows same-sex unions, saying -- quote -- "You'll know them by their fruits." Some gay and lesbian groups are outraged by these comments. Brownback says the quote was taken from the Bible, and that he never, never makes jokes about such sensitive issues.

And there is a rush to adopt a 2-month-old baby in Brazil after she was allegedly dumped by her mother. Keep your eyes on this video. Here it is. You won't believe it, this baby being taken out of a plastic bag. The bag was seen floating in a lake some 200 miles north of Rio de Janeiro. The rescue was shown on Brazilian television. The baby's mother has now been arrested. She claims she gave the baby to a group of homeless people, because she didn't have enough money to raise her. Now, as we just told you, people want to adopt this baby. They're getting hundreds of calls. We will keep an eye on this story and let you know the outcome.

Wow! What a cute baby.

S. O'BRIEN: She's so cute, isn't she? And they say... COSTELLO: And a fighter.

S. O'BRIEN: And they say she's doing great. She was born two months premature, but was in the hospital all the time, you know, and has recovered and is health and fine, considering that she was wrapped in a bag, which I guess had a wood piece stuck to it. And it was that wood piece that kept the bag afloat on the lake. People thought it was a cat or something trapped inside. They got it with a stick, pulled it in. The baby...

M. O'BRIEN: (INAUDIBLE).

S. O'BRIEN: That's such a cute baby. You know what?

M. O'BRIEN: Bring her home.

S. O'BRIEN: I see every baby I want to bring home, literally. Look at that cute baby.

M. O'BRIEN: Look at that sweet baby, yes, yes.

S. O'BRIEN: Other people are ahead of me, but I'd love (INAUDIBLE). Stop me, Chad. Stop me. Good morning.

CHAD MYERS, CNN METEOROLOGIST: We need you on the set. We don't need you taking more time off. We need you right here.

(WEATHER REPORT)

S. O'BRIEN: Ahead this morning, low approval ratings for the president. It's an election year as well. Lots on the line from the president's speech tonight. So what can we expect to hear at the State of the Union address? We're going to talk to one of his top advisers in our 7:00 hour.

M. O'BRIEN: And next, every second counts when an emergency sends you to the hospital. But some amazing new technology could give any hospital in the world a head start on your treatments. Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Imagine an emergency room where a doctor could scan a critically-ill patient in an instant and know his or her entire medical history. It's an idea that could save lives. It also could get under your skin. Welcome to the future.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: My name is Denise Alkies (ph). I'm 52 years old. I was in the back of what we call a gypsy cab. I remember headlights coming towards me, and in five seconds my whole life changed.

Before my accident, I traveled, I shopped, I had a glorious life. I don't travel as much as I used to. I'm pretty much homebound. This is my pouch. This is my little lifeline. In case I have a seizure, everything I need is in here. The problem is there needs to be something more than this, because not everyone would know to look inside of this packet for my information.

What would help me is that there was some way that wherever I went in the world that whatever medical facility I went to, a doctor could access my medical records and know how to treat me in case of a crisis.

M. O'BRIEN: Like two million other Americans, Denise is an epileptic. When a seizure strikes suddenly, the doctors in the ER need answers -- and fast.

Now, imagine a device that could tell them all they need to know about any medical condition you have in a matter of minutes at any hospital anywhere in the world. Sound farfetched? It's closer than you think.

UNIDENTIFIED MALE: On a typical day, patients come in with heart attacks, strokes, major trauma, cancer patients in septic shock. You name it, we have it.

M. O'BRIEN: What might improve the odds for some of those patients at New Jersey's Hackensack University Medical Center is this: That tiny chip Dr. Joseph Feldman (ph), head of the hospital's trauma unit, holds in his hand. It's a radio frequency identification, or RFID, tag. The same technology used to tag animals to help reunite a pet with its owner.

RFID has now won Food and Drug Administration approval for use in humans.

UNIDENTIFIED MALE: RFID technology is very attractive to emergency departments. It enables people to quickly identity not only who the person is, but what their medical history is. And what would normally take hours sometimes, can take a matter of minutes.

M. O'BRIEN (voice over): How does it work? With a wave of a wand, the doctor reads a unique ID number, then logs on to a central database to quickly access your medical history, surgical history, any medications you take, your allergies and blood type, even an emergency contact.

So far, fewer than 100 patients are wearing an RFID medical chip in the U.S., and its $200 cost is not covered by insurance yet. But 65 American hospitals have agreed to implement the technology, and the company that makes the chip expects that number to grow to 200 by the end of the year.

UNIDENTIFIED FEMALE: If I had the chip, I could travel all over the world. That would give me the freedom of living a live without bounds.

(END VIDEOTAPE)

M. O'BRIEN: Now, the chip will be implanted in the upper part of your right arm. And it's just a number on the chip. It doesn't actually have your medical data on there. It has to be compared and that number has to be entered into a secure database. So a hacker couldn't randomly scan you and see your files -- Soledad.

S. O'BRIEN: That's kind of an interesting concept, isn't it?

M. O'BRIEN: Yes.

S. O'BRIEN: It's fascinating. Miles, thanks.

We've got some news to get to at this moment. We're getting an update now on the number of people who have died in this shooting at the post office, a mail sorting facility, a 24-hour mail sorting facility in Goleta, California. The Santa Barbara County Sheriff's Department, according to the Associated Press, is now updating the figure of people dead in this shooting. That number is now seven people, seven people dead in the shooting at that mail processing plant. A former postal employee, a woman, is identified as the shooter, and she is among the dead.

So some news to update on in that terrible, terrible news coming to us from Goleta in California.

Making a difficult turn to business news now, and Andy has got a look at that. What do you have coming up?

ANDY SERWER, "FORTUNE" MAGAZINE: Soledad, we all know how Americans love to eat. So why is the nation's largest food company laying off thousands of workers? That's coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

MYERS: The West Coast is looking a little bit better today, down to regional activity. If you remember, all the way from Oregon through California and Nevada and Arizona were all in the widespread flu outbreak last week. Temperatures are a little bit cooler there, maybe keeping people inside a little bit. The widespread now from Wyoming through Colorado into Texas, and the East Coast still looks like global and regional activity, except for Connecticut. You guys are now widespread flu season activity there in Connecticut. Enjoy your day.

(COMMERCIAL BREAK)

SERWER: That's the Clinton campaign music again?

S. O'BRIEN: Yes.

M. O'BRIEN: Is it?

SERWER: Right?

S. O'BRIEN: Pretty much.

M. O'BRIEN: That was it, yes. It kind of ruined a good song. SERWER: That's a partisan comment.

M. O'BRIEN: Oh, yes.

S. O'BRIEN: Kind of, yes.

M. O'BRIEN: I suppose so.

S. O'BRIEN: Do you think?

M. O'BRIEN: I just got blogged. All right.

S. O'BRIEN: About 100 million times. Business news in just a moment with Andy. First, though, a check of the headlines. Carol has got that from the newsroom.

Good morning again.

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

Iran says bringing it before the United Nations Security Council would mean the end of diplomacy. At issue, Iran's disputed nuclear program. The U.N. Security Council agreed overnight to review Iran's nuclear activity, and it could recommend possible economic sanctions. We're hearing Russia and China will soon visit Iran and urge its cooperation with the U.N. nuclear watchdog agency.

New pictures showing U.S. journalist Jill Carroll. Have you seen these? She's wearing a head scarf, and she's crying. The Arab network al-Jazeera aired the footage without the sound, but says Carroll is urging U.S. and Iraqi authorities to release all female prisoners in its custody. This is the first glimpse of Carroll since kidnappers issued a 72-hour deadline on January 17.

Upbeat. That's how White House aides describe President Bush's State of the Union address. The speech will focus on so-called kitchen table issues, including gas prices, health care costs and Social Security. CNN's coverage of the State of the Union address and the Democratic rebuttal begins in "THE SITUATION ROOM" at 7:00 p.m. Eastern.

Judge Samuel Alito could be sworn in to the U.S. Supreme Court today. A majority of the Senate supports his nomination. A final vote is set to take place in about four hours. If all goes well, he could take the oath before President Bush begins his State of the Union address.

And who do most men want to bring home to meet mom? Well, it's actress Jessica Alba. Askmen.com says the 24-year-old beauty is the top-ranking dream girlfriend. She edged out the likes of Angelina Jolie, Charlize Theron and last year's winner, model Adriana Lima.

Let's head to the forecast center.

Chad, on the cover -- or on the front page of "The Washington Post" this morning, you probably can't see it very well, but these are the cherry blossoms in northwest Washington in full bloom.

MYERS: Are they there already?

COSTELLO: Already.

MYERS: Oh, my gosh! That should not happen. That shouldn't happen until the middle of March. It might be March 2, I think, should be the peak there. Well, that tells you something about the winter we've had, doesn't it? It also tells you something about what could happen to a lot of fruit crops across the country if we get a big, big cold snap coming up here. I don't see it right now in the future.

(WEATHER REPORT)

M. O'BRIEN: Kraft slimming down. Tell us about that, Andy.

SERWER: Well, it's another big layoff announcement by a huge brand name American company. Kraft is the nation's number one food company, and they're announcing they're going to be laying off 8,000 workers over the next two years and closing 20 plants.

This is a company that owns brands that you have in your kitchen right now, I guarantee you: Post cereal, Oreos, Jello, Oscar Mayer, Maxwell House, Ritz crackers, on and on.

And what's going on here is -- well, let's check out this stock chart, because this is interesting. Eighty-five percent owned by Altria, the tobacco company spun off in 2001. And you can see the stock has gone all over the place. But basically it's gone point to point nowhere in those five years.

And interestingly, they wanted to free this company from the tobacco company, Philip Morris. Philip Morris up over 50 percent in the same time period. So, the food company has been disappointing.

What's going on here is this company is being squeezed on the low end by generic low-priced goods and on the high end by products that companies like Whole Foods. So these are kind of expensive brands in the middle these days. And that's basically a problem for this company right now. And you can see what they're going to have to do. They're going to have to scale back.

M. O'BRIEN: They're getting squeezed. It's kind of like retail in general. You've got the discount, the Wal-Marts of the world...

SERWER: Right.

M. O'BRIEN: ... and then the high end. It's tough to be in the middle, isn't it?

SERWER: And also like the supermarkets themselves. You've got Kroger and Safeway in the middle, and then you've got Wal-Mart selling tons of food on the low end and Whole Foods, again, on the high end pricing them out.

S. O'BRIEN: Can I ask you a quick question? You said Philip Morris, their stock has gone up 50 percent in the last five years?

SERWER: That's right.

S. O'BRIEN: Why is that?

SERWER: Well, that's because tobacco litigation has been winding down basically. The plaintiffs' lawyers have been losing their cases and...

S. O'BRIEN: So the withdrawal is a bad thing for the company...

SERWER: For the company.

S. O'BRIEN: ... certainly as opposed to some kind of a...

SERWER: Right. I mean, tobacco sales have been flat here in the United States or down.

M. O'BRIEN: But globally...

SERWER: Globally up still.

M. O'BRIEN: Yes.

SERWER: But it's basically that the cloud of litigation has gone away after that.

M. O'BRIEN: So to speak.

SERWER: Yes, so to speak.

M. O'BRIEN: Yes, all right.

S. O'BRIEN: All right, Andy, thank you.

SERWER: You're welcome.

M. O'BRIEN: Thank you, Andy.

S. O'BRIEN: In a minute, we're going to take a look at the day's top stories, including what President Bush has to accomplish in tonight's State of the Union address. We're going to talk to one of his top advisers, Dan Bartlett, just ahead this morning.

And later, they call themselves the women of the storm. It's really a group of ordinary women, but they are devoted to rebuilding their beloved Gulf Coast. Now, they're taking their cause to Washington, D.C. Can they get Congress to go along with them? We'll take a look at that ahead on AMERICAN MORNING. A short break. We're back in a moment.

(COMMERCIAL BREAK)

S. O'BRIEN: Be sure to check out our Web site, CNN.com, for the very latest on this morning's top stories, including this one: Tonight's State of the Union address. The president, many people are wondering what he's going to say, although we've heard the word from the White House that the message will be upbeat. We're going to have more on this, this morning on AMERICAN MORNING. But you can check it out on our Web site as well.

You also on pipeline can take a look at what we've put together in our special section on tonight's speech. You can check out the president's agenda, reaction, all the latest poll numbers, and you can watch the president's past State of the Union addresses all through CNN pipeline. Check it out at CNN.com.

A reminder: CNN, of course, is going to have coverage of the president's State of the Union address. It begins tonight at 7:00 p.m. Eastern, 4:00 p.m. Pacific Time with Wolf Blitzer, Paula Zahn, in a special edition of "THE SITUATION ROOM."

As we approach the top of the hour, let's get right to the forecast. Chad has got that.

(WEATHER REPORT)

MYERS: The next hour of AMERICAN MORNING starts right now.

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