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President to Reiterate State of the Union Topics Today in Nashville; Enron Criminal Trial; Interview With Congressman Bobby Jindal

Aired February 01, 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: The speech is now history, but the president is still hammering home some of the themes. Headed to Nashville to do just that today. We'll tell you about his trip.
Fierce clashes in the West Bank. Israeli police battle settlers over their illegal homes.

And a heated exchange over a heating crisis. This political fight takes on a whole new meaning in the country, not the state, of Georgia.

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

M. O'BRIEN: Good morning. Welcome to a split edition of AMERICAN MORNING. I'm Miles O'Brien in New York.

SOLEDAD O'BRIEN, CNN ANCHOR: And I'm Soledad O'Brien in our nation's capital, Washington, D.C.

President Bush had the (INAUDIBLE) last night to hit all of the high points, Iraq, the economy, Social Security among others. Now, he's taking the message on the road to Nashville, and that's where we find AMERICAN MORNING's Bob Franken live this morning.

Hey, Bob, good morning.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning.

He's coming to Nashville after his speech last night in which he talked about health care reform that he's suggesting. Nashville calls itself the health care capital of the United States. There are close to 300 health care services companies here that serve the nation and the world.

He's also coming for political reasons. When he entered the chambers, you probably noticed last night that the majority leader, Bill Frist of Nashville, was right behind him. Frist is retiring from the Senate. The president will bring him along when he comes here.

The president is very mindful of the fact that this is a state that that seat could be lost to the Democrats. So, Frist will be here. The president choosing Tennessee and Nashville, even though Nashville is a Democratic city.

However, out here in Opryland, like in the rest of the nation, the reaction to the president is decidedly mixed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think a lot of his policies that he has initiated has helped us to have some maybe better economic times, too, despite what some of the critics say.

UNIDENTIFIED MALE: Although he is a nice guy, but he tends to dodge (INAUDIBLE) and make it nice, but there's no outcrop (ph). My measure is outcrop (ph). I mean, there is no outcrop (ph) on whatever he has tried from Iraq to the economy.

(END VIDEO CLIP)

FRANKEN: And, Soledad, the president will be speaking at the new auditorium of the Grand Ole Opry -- Soledad.

S. O'BRIEN: And who is he speaking to, Bob?

FRANKEN: Well, interesting, there have been several stories about this. It's a carefully-selected house. The Chamber of Commerce here got about 400 tickets. It's an auditorium that holds about 3,200 people. So, what you will not find in the audience is anybody who is going to be heckling him.

S. O'BRIEN: It's probably good for his speech. All right, Bob Franken for us this morning. Thanks, Bob, as always.

Let's get right back to Miles in New York.

M. O'BRIEN: Thanks, Soledad.

In Houston, the prosecution at the Enron trial will start calling witnesses today. The jury will hear a tale of crime and corruption at the core and at the top of the failed energy trading company.

Chris Huntington is live in Houston this morning with a preview for us.

Good morning, Chris.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Miles, good morning.

Today begins the trial in earnest. We had the opening statements yesterday, definitely entertaining and a good road map, hopefully, for the jury to follow.

But what we'll start hearing from today are many of Ken Lay and Jeff Skilling's former colleagues who have provided formidable stories.

(BEGIN VIDEOTAPE)

HUNTINGTON (voice over): Ken Lay and Jeff Skilling will be hit with the first wave today of what federal prosecutors promise will be a flood of damaging testimony from several former Enron executives who have pleaded guilty and cut deals with the government.

Prosecutor John Houston told jurors the government will rely heavily on Andrew Fastow. He's Enron's former chief financial officer who pleaded guilty to securities fraud in order to avoid trial and limit his time in jail. He's expected to tell the jury that Lay and Skilling deliberately deceived the public about Enron.

JACOB ZAMANSKY, SECURITIES LAWYER: The prosecution has to show that these men lied to investors. They sold their stock when they knew the company was crumbling so they could get out. And that that would show the motive, the greed and the fraud that took place at Enron.

HUNTINGTON: Skilling's defense attorney, Dan Petrocelli (ph), and Lay's lawyer, Mike Ramsey (ph), insists they will aggressively attack the credibility of any witness who plea bargains with the government.

TOM AJAMIE, SECURITIES LAWYER: One of the best defensive strategies is to pound really hard on any witness who testifies, just cut a deal with the government, because that witness has got every incentive to say whatever it takes to stay out of jail.

HUNTINGTON: That defense strategy could hit a snag with the government calls Sherron Watkins. She's the former Enron vice president who blew the whistle on Skilling and Fastow, but she's never been charged with a crime, and therefore never had to plea bargain.

AJAMIE: I think she's going to be crucial, because she knew what was going on. She warned Lay. And then he kept giving bullish reports to the public.

(END VIDEOTAPE)

HUNTINGTON: Now, we're not going to hear from Sherron Watkins probably for at least a few weeks, maybe even longer.

Today, the government is going to roll out the head of Enron's -- former head of Enron's broadband services. This was the big Internet Go-Go (ph) division at Enron. Ken Rice is his name. And he, of course, did plead guilty and has a deal with the government.

Also, the head of investor relations. These guys know an awful lot about how the company was managed, and they'll just begin the firestorm against Ken Lay and Jeff Skilling -- Miles.

M. O'BRIEN: Chris Huntington in Houston. Thank you very much.

Carol Costello in the newsroom. Good morning, Carol.

CAROL COSTELLO, CNN ANCHOR: Good morning, Miles. Good morning to all of you.

I have a developing story to tell you about out of the Middle East. Israeli soldiers in riot gear are trying to evacuate a settlement in the West Bank. Take a look. Israel's supreme court says this is illegal. But as you can see, they're running into serious resistance. The settlers are fighting back against the soldiers, pelting them with rocks and paint. They're setting up barricades, lighting fires. Nine settlers' homes are built on Palestinian land and are going to be demolished. We will continue to follow this story and bring you the latest developments.

Saddam Hussein, a no-show at his trial this morning. We just got these pictures in to CNN, so let's take a look. Hussein and his lawyers boycotting the proceedings. They want the new chief judge to step down, claiming he is biased.

In the meantime, just hours before the trial started, a suicide bomb went off in eastern Baghdad. Iraqi police are sealing off sections of the city. The bomber killed at least three people and wounded more than 60 others.

We could learn today about plans for funeral arrangements for Coretta Scott King. A hearse carrying the body of Mrs. King arrived near Atlanta this morning. We just got these pictures in as well. These came in to us just in the past hour. Mrs. King was last seen in public last month at an event in Atlanta marking Martin Luther King Day celebrations. The widow of the slain civil rights leader died Monday at a hospital in Mexico. She was 78 years old. In his State of the Union speech, President Bush remembered Mrs. King as a courageous woman who carried on a noble dream.

Federal investigators are arriving in Morgantown, North Carolina, to look into whether any danger remains after a massive explosion at a chemical plant there. Fourteen people were hurt, at least a dozen of those seriously. Now, investigators are trying to find out what caused Tuesday's explosion and if any hazardous chemicals contaminated the air and water. In the meantime, nearby residents have been warned to stay inside and keep their windows closed.

At the Federal Reserve, a changing of the guard and a change in interest rates. Fed chair Alan Greenspan, celebrating his last day -- look, he smiled -- but not before overseeing a hike in interest rates to 4.5 percent. That's the highest in almost five years. Former Fed Governor Ben Bernanke will be sworn in later today as Greenspan's replacement.

And in Georgia, the country, not the state, they've got a real Donnybrook. Take a look, members of the Tbilisi city council arguing over a heating crisis when things got a little hot. Fists were flying. Chairs waved around. And a whole lot of pushing and shoving was going on. Tempers have been on a hair trigger in Georgia since a mysterious explosion a week-and-a-half ago shut down a crucial natural gas pipeline, leaving millions in that very cold country without heat. So tempers flared, and they manifested themselves in this -- Miles.

M. O'BRIEN: You know, you can't blame them. It's been the coldest winter in memory there. Chad Myers, we've been talking about -- focused a lot about Moscow, but the caucuses (ph) have been just as cold.

CHAD MYERS, CNN METEOROLOGIST: Absolutely. You know, it's been just that we talk about arctic express sometimes coming down to the United States. The polar express has been coming into Siberia. The Siberian express never made it over here. All of the cold air that could have been down in America has really poured over into Asia. Europe, Asia, even into India, the coldest winter on record.

(WEATHER REPORT)

S. O'BRIEN: Coming up this morning, it was one of the worst disasters in U.S. history. But Hurricane Katrina only got a few sentences at the end of the State of the Union address. We'll take a look at how that is playing along the Gulf Coast this morning.

Then later, Senator Joe Biden will join us live. He says the U.S. military is stretched thin in Iraq. What's his take on the president's pledge to stay the course? That's ahead on AMERICAN MORNING. We're back in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. TIM KAINE (D), VIRGINIA: Our federal government should serve the American people. But that mission is frustrated by this administration's poor choices and bad management. Families in the Gulf Coast see that as they wait to rebuild their lives. Americans who lose their jobs see that as they look to rebuild their careers. And our soldiers in Iraq see that as they try to rebuild the nation.

(END VIDEO CLIP)

S. O'BRIEN: That's the governor of Virginia delivering the other side of the story last night in the Democratic response to the State of the Union speech. Governor Tim Kaine mentioning families on the Gulf Coast who are still rebuilding after Hurricane Katrina.

As for President Bush, he spoke for 51 minutes last night. It wasn't until four minutes before the end of the speech that he even mentioned anything about rebuilding New Orleans. Even then, he spoke for less than a minute about that. He didn't propose any new money or any new aid.

Louisiana Congressman Bobby Jindal is joining us this morning by phone.

Congressman, nice to talk to you. Thanks for being with us this morning.

I'm afraid I might know the answer to this question. What did you think of this speech?

REP. BOBBY JINDAL (R), LOUISIANA: Well, thank you for having me.

You know, I was certainly glad to hear him say that we need to address the challenges that existed before the hurricane, that this will be more than temporary relief. But obviously I was disappointed that he didn't talk more explicitly about housing, about levees, about economic development.

We had a lot of momentum going through the end of the last calendar year with some significant federal assistance. But I think it would have been great to hear the president talk about these three specific priorities. I'm still hopeful he'll use the next couple of weeks when they write out their domestic priorities to come back and talk more about the Gulf Coast.

S. O'BRIEN: Let's listen to a little bit of what he did say in a very small chunk of time. I think it was something like 52 seconds where he talked about the Gulf Coast. Here's what the president had to say, Bobby.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In New Orleans and in other places, many of our fellow citizens have felt excluded from the promise of our country. The answer is not only temporary relief, but schools that teach every child and job skills that bring upward mobility and more opportunities to own a home and start a business. As we recover from the disaster, let us also work for the day when all Americans are protected by justice, equal in hope and rich in opportunity.

(END VIDEO CLIP)

S. O'BRIEN: Schools, job skills, opportunity, education. Anything wrong with that list?

JINDAL: I think those were exactly the right things to say. It reminded me of his Jackson Square speech. I think he made some great dramatic (ph) points. (INAUDIBLE) two very specific policy decisions that could help to prove those words will be turned into action on the Gulf Coast. For example, the corps is asking for $600 million to improve the levees right now. Right now that Chairman Powell (ph) has talked about housing. We need to make sure we help tens of thousands of homeowners whose homes were destroyed by the levees, destroyed by federal policies.

So, it was great principles. I absolutely agree that here's a chance to rebuild in a way that is better than what was there before when it comes to education and job opportunities. But we've got now -- now time is not on our side. We've got to make some quick and urgent decisions to follow that up and prove those words to be true.

S. O'BRIEN: Let me take just one moment, Congressman, to ask you a final quick question about these health care, health savings accounts the president mentioned last night. You worked for Health and Human Services. What do you think of these accounts?

JINDAL: I think it's a great part of the solution to health care. I think giving individuals more control over their health care spending, trying to moderate cost increases. Alone, it's not the whole answer. I think it's part of the answer. The president talked about cracking down on frivolous lawsuits. I think that's another small part of the answer, an important part. So, I think it's a good step forward. It's not the entire solution, but it's a good step forward.

S. O'BRIEN: Louisiana Congressman Bobby Jindal, who represents the 1st District in Louisiana, including Washington and Orleans and Jefferson and St. Charles and several others as well. Thanks for talking with us, congressman. Appreciate your time this morning.

And let's get to Miles.

M. O'BRIEN: Thank you, Soledad.

Andy Serwer is here this morning. He's "Minding Your Business."

Hello, Andy.

ANDY SERWER, "FORTUNE" MAGAZINE: Miles, nice to see you.

Guess which giant American company is set to come out of bankruptcy today? We'll find out how friendly the skies are for United Airlines, coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Andy Serwer is sitting right beside me. Coming up in just a moment, we'll talk about some things, like bankrupt airlines.

SERWER: Yes.

M. O'BRIEN: But first, let's go to Carol Costello in the newsroom.

Carol, good morning.

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

President Bush is calling on the United States to break its addiction to Middle Eastern oil. During last night's State of the Union address, the president called for a national effort to develop new sources of energy.

(BEGIN VIDEO CLIP)

BUSH: Keeping America competitive requires affordable energy. And here, we have a serious problem. America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addition is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper and more reliable alternative energy sources. And we are on the threshold of incredible advances.

(END VIDEO CLIP)

COSTELLO: The president has another chance to push his ideas today. He's set to give a speech at the Grand Ole Opry House in Nashville.

A bit of controversy right before the president began speaking, antiwar protester Cindy Sheehan was thrown out of the gallery because she was wearing an antiwar t-shirt. Well, this morning on her Web site, she's threatening a lawsuit. A group supporting Sheehan gathered outside the Capitol. Sheehan was charged with unlawful conduct for that t-shirt, and she was released. And, as I said, she's apparently looking into that lawsuit, claiming her First Amendment right to free speech was violated.

This is what she wrote on her Web site: "It is time to take our freedoms and our country back. I don't want to live in a country that prohibits any person, whether he/she has paid the ultimate price for that country, from wearing, saying, writing or telephoning any negative statements about the government."

We'll keep you posted.

Israel is tightening its purse strings. Israel doesn't want money going to Hamas, which won last week's parliamentary election. Israel gives the Palestinian Authority millions of dollars each month from taxes and custom payments. Well, this month's $45 million are on hold. Israeli officials say the payments are -- quote -- "under review."

The Kama Sutra, oh, such a sexy name, but now it is associated with a nasty worm. The Kama Sutra computer virus poses as a pornographic e-mail. Infected PCs will be in danger this Friday when the worm is expected to become active and destroy files. Microsoft says it's working on de-worming software, but that won't be ready until after Friday. So, hey, good luck, and I guess don't look at porn on the Web.

MYERS: Great advice, Carol.

COSTELLO: I know. What can you do?

(WEATHER REPORT)

M. O'BRIEN: I guess a lot of folks are deciding not to go to work today. No porn on the Web. They can't -- why bother, right?

All right, let's talk about United. United has had about three years of rough flying. And now, at long last...

SERWER: Yes.

M. O'BRIEN: ... even though they've kind of proven it's a pretty good business model to fly in bankruptcy...

SERWER: Yes.

M. O'BRIEN: ... they come out of it. What for?

SERWER: Well, they're supposed to come out of it eventually, Miles. That's what for. One thousand, one hundred and fifty days United Airlines has been in bankruptcy. It's a record, the longest bankruptcy in U.S. history. It was December 9, 2002 when they filed for chapter 11, the largest airline bankruptcy ever. That is also saying something, because a lot of these carriers have been in chapter 11. And they're cutting billions of dollars of costs.

The airline, when it comes out of bankruptcy, which is set to happen today, will be smaller. It will still be the number two carrier. Thirty percent fewer employees though, 58,000. Twenty percent fewer planes, 460 planes. And its operating costs will be lower.

But here's the wrinkle. It does not appear as if this airline will be making money. Why? Because the cost of oil is at $68 a barrel. And analysts suggest that the carrier's plan had been for oil to be at $50 a barrel.

Well, that's just not happening. And it's going to make the operating environment very, very difficult. Delta and Northwest are still in chapter 11.

And one final note here, Miles. The airline will not be trading under its old ticker, the familiar UAL. The new ticker symbol, and it's supposed to start trading tomorrow, will be UAUA, which is a little different.

M. O'BRIEN: UAUA. Any particular reason?

SERWER: United Airlines, United Airlines. It's twice as nice as we were before, or something like that.

M. O'BRIEN: The Mary Hartman, Mary Hartman thing. I mean...

SERWER: Yes. New York, New York.

M. O'BRIEN: Whatever. All right.

SERWER: Yes, that's it.

M. O'BRIEN: Thank you very much, Andy Serwer, for that.

SERWER: You're welcome.

S. O'BRIEN: Coming up this morning, guys, President Bush pledged to stay the course in Iraq last night. So how are the Democrats responding? We're going to talk to one who has been highly critical of the president's war strategy. Senator Joe Biden joins us live just ahead on AMERICAN MORNING. We're back in a moment.

(COMMERCIAL BREAK)

M. O'BRIEN: As always, we invite you to check out our Web site, CNN.com, for the latest on this morning's top stories. Check it all day for that matter. Of course, our top story this morning, reaction to the State of the Union speech. Mr. President, an oil man formerly, says the U.S. needs to kick its dependence on oil and look at some alternatives. One of the more popular items, Cindy Sheehan, whose son was killed in Iraq, arrested as she attempted to attend the State of the Union address, the guest of a congressman. She wore a t-shirt which said, according to her blog, "2,245 dead. How many more?" She was ushered out by Capitol police, arrested for unlawful conduct. A lot of people are wondering why that is unlawful in this country with its First Amendment rights.

If you're about to head out for the door for work, for school, you can stay in touch with CNN and AMERICAN MORNING by logging on to CNN.com. And, of course, we always invite you to check out pipeline, where you can watch live commercial-free news updates, feeds of our packages from reporters, all for a small monthly fee. It's at CNN.com/pipeline.

As we approach the top of the hour, let's check the forecast.

(WEATHER REPORT)

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

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