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American Morning

Life Or Death?; Enron Criminal Trial; Online Child Predators

Aired April 06, 2006 - 07:30   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: That's a beautiful shot. Good morning. Welcome back, everybody. Lots to talk about this morning.
Remember the testimony we saw the other day, Justin Berry, the young man who was really -- he's a class president. He talked about how his parents were not uninvolved parents in his life and still he was able to basically have a company where he was, you know, the victim of child predators online. This morning we're going to talk about what parents can do to make sure they're protecting their kids. You know, step one I think is take that computer right out of a bedroom, keep it right in the living room. That will save a lot of, you know, certainly a lot of agony and angst down the road. But we're going to talk to an Internet safety expert about other things that parents can do.

MILES O'BRIEN, CNN ANCHOR: Yes. If your kid asks you for a web cam, probably should say no to that.

SOLEDAD O'BRIEN: Yes.

MILES O'BRIEN: That would be another one.

SOLEDAD O'BRIEN: Yes.

MILES O'BRIEN: Anyway.

SOLEDAD O'BRIEN: There's a bunch of common sense things that people actually do not do each and every day. We'll talk about that.

MILES O'BRIEN: Carol Costello watching headlines.

Good morning, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Good morning, Miles.

Good morning to all of you.

A top aid to Iraq's al Qaeda leader, Abu Musab al-Zarqawi, now in custody. The suspect, Muhammed Ubaydi, also known as Abu Iman (ph), was captured in March. The military held off on the announcement until DNA testing could positively identify him. He's accused of terrorism, including last year's kidnapping of an Italian journalist.

President Bush heading to Charlotte, North Carolina, today. He'll talk about the Iraq War and U.S. foreign policy. The speech is another chance for the president to step up pressure on Iraqi leaders. It's been months since Iraq had elections and there's still no unified government.

Acting Israeli Prime Minister Ehud Olmert is one step closer to officially taking over for the still comatose Ariel Sharon. Olmert met with Israel's president earlier today. He's been given the green light to form a new government. He has a month to put it all together.

A split decision in the Vioxx trials. One man getting $4.5 million, the other just $45. Jurors decided that Vioxx had played a role in one man's heart attack but was not a factor in others. The jury is back in court today to decide if Merck should also face punitive damages.

And they like to spend it but most teens really don't know much about money. Big surprise there, huh? A new survey released by the Federal Reserve shows that most high school seniors know very little about finance and economics. Only about a third knew the difference between a pension and Social Security or a 401(k). But, you know, when you're 17, who worries about that, Miles?

MILES O'BRIEN: Yes, you know, give them time. Give them a little bit of time. I'm still trying to figure out what a pension is. I haven't seen one all my career, so how would I know.

COSTELLO: I haven't either. That's true.

MILES O'BRIEN: Yes, exactly. All right, Carol Costello, thank you very much.

The Zacarias Moussaoui trial enters another phase today. The jury has already weighed in and said he is eligible for the death penalty. That really was the big hurdle in all of this. The question now is and the decision is very much black and white for the jury, life in prison without parole or the death penalty for Zacarias Moussaoui, the admitted al Qaeda conspirator, a man who says he was part of the 9/11 plot.

It will be very emotional. Today we'll hear -- the first witness will be former New York Mayor Rudy Giuliani, but ultimately we'll hear from many of the family members who suffered losses on that day. And among the items that will be introduced into evidence, the cockpit voice recordings from the United Airlines Flight 93 that crashed in Shanksville, Pennsylvania, after the passengers basically took control of the airplane from the hijackers. Dramatic and emotional times and difficult times for family members. Carie Lemack lost her mother, Judy Larock (ph) on 9/11. She was aboard American Flight 11. She's been watching the trial on closed circuit TV in Boston with some other 9/11 family members.

Carie, good to have you with us.

What has this been like watching this trial so far?

CARIE LEMACK, LOST MOTHER ON 9/11: It's been very difficult. And I have to say, after seeing Monday's verdict, it was very disappointing. A lot of us wanted to see Zacarias Moussaoui put away in jail, thrown in jail, had the key thrown away, let him rot there because we did not want to have to go through the emotional testimony that we're going to have for the next few weeks.

MILES O'BRIEN: Really? It would have been preferable just to throw him in jail? I mean it would be certainly understandable if many family members said, you know, he deserves the death penalty.

LEMACK: And some do. But, for a lot of us, we don't feel that way. Obviously everyone's going to have their own opinion and I respect all of them. But for my family and other families in Boston, we've talked about it and said, you know what, we don't want to give Zacarias Moussaoui what he wants, which is to become a martyr. And he also wants a stage to rant and rave about his anti-American sentiments. And that's exactly what we're about to go give him.

And another thing. We didn't want the attention to be on this al Qaeda wannabe. He was so incapable that al Qaeda gave him a one-way ticket out of a country. We would rather the attention be on the victims, on their lives, and also what we can do to make this country safer.

MILES O'BRIEN: So you don't oppose this on any sort of deep- seated philosophical opposition of the death penalty. You just feel like your -- the government, in this case, is playing right into Moussaoui's hands?

LEMACK: Exactly. That's exactly right.

MILES O'BRIEN: Let's talk about what it's going to be like, for example, hearing the cockpit voice recorder. Will you go and be there on the day that they play those tapes of the recordings of the cockpit voice recorder? Which I hear are just gut wrenching, as you might suspect, as these passengers stormed into the cockpit and ended up bringing that plane down.

LEMACK: Well, I don't know is the answer. I'm going to go today and watch the opening statements and we're going to see. But I can tell you one thing, it is very difficult, but we hope that the aviation security evidence that was withheld from the earlier part of the trial is released. And that's just not just the United 93 cockpit voice recorder. We want all of the evidence about what happened on the planes to come out because for some families like my own that is pursuing litigation against the airlines, we have not had access to that evidence. Zacarias Moussaoui has had access. A confessed terrorist has access. But the families of the victims have not been able to find out exactly what happened on those planes.

MILES O'BRIEN: Well, you know, the excuse has been, it's been part of a criminal proceeding. Once this is over I guess you have a pretty strong claim for getting ahold of that evidence.

LEMACK: Well, I don't want to have to wait anymore. It's been four and a half years. And we don't know -- if they don't show that evidence in court this week, which it sounds like they might not, we're never going to get access to it unless we have to go to a judge and sue for it. And we shouldn't have to go through that. If Zacarias Moussaoui gets it, why should we?

MILES O'BRIEN: You're going to listen to Giuliani today. What kind of light do you think he'll shed on all of this?

LEMACK: Well, I'm sure he'll make it very emotional and very dramatic. I was there when he testified in front of the 9/11 Commission. But he didn't answer a lot of questions in front of that commission. Remember, he was mayor who made the decision not to give walkie talkies that worked to the fire department and the police department. So he has a lot of questions to answer. But I think today he probably won't be doing that. He'll just be talking about the drama of the day, the emotions of the day and setting the stage for the families who will come after him.

MILES O'BRIEN: Final thought. You weren't there in person. On the one hand, I wonder if you wanted to be there in person? Secondly, what is it like just seeing this man's face there and seeing the way he has handled himself in that courtroom?

LEMACK: It's a bit surreal. Honestly, Miles, to think that this is our lives four and a half years later, it still feels like a dream every day or maybe a nightmare I should say. And it still is that way. You know one widow leaned over to me when we looked at Moussaoui after the verdict and said, whose life sentence is this anyway, is it his or ours? Because now that he's eligible for the death penalty, and we have to assume he's going to get the death penalty, we're going to be subject to appeal after appeal after appeal and it's very difficult to know that this is going to go on for some time. And again, his name is going to be in the media and not that of our loved ones or that of national security, national safety.

MILES O'BRIEN: Carie Lemack, we won't forget your loved one.

LEMACK: Thank you.

MILES O'BRIEN: Thank you for being with us.

LEMACK: Thanks, Miles.

MILES O'BRIEN: Soledad.

SOLEDAD O'BRIEN: Let's take you to Houston now and the main event at the Enron trial. The company's former CEO, Jeffrey Skilling, takes the stand this morning in his own defense. CNN's Chris Huntington is live outside the courthouse in Houston.

Hey, Chris, good morning.

CHRIS HUNTINGTON, CNN CORRESPONDENT: Good morning, Soledad.

Well, Jeffrey Skilling will undoubtedly at least begin telling the story, the same story that he has told to Congress, to the Securities and Exchange Commission and even to our own Larry King. Of course now he gets to tell the jury.

(BEGIN VIDEOTAPE) HUNTINGTON, (voice over): Jeff Skilling has a reputation for intelligence, arrogance and a short fuse for those who disagree with him. He showed those traits in spades when he went before Congress in early 2002.

JEFFREY SKILLING, FORMER ENRON CEO: I have nothing to hide.

UNIDENTIFIED MALE: You are saying . . .

SKILLING: Will you give me time.

UNIDENTIFIED MALE: Sharon Watkins is not telling the truth? Are you telling me that today?

SKILLING: This is serious stuff, sir.

HUNTINGTON: And throughout that testimony, Skilling never backed down from lawmakers who suggested he fudged Enron's accounting or that he lied to investors about the company's condition.

SKILLING: I did not believe the company was in financial peril and I have no knowledge of any -- and had no knowledge of any wrong doing by its employees.

HUNTINGTON: Skilling also flatly denied what has become one of the government's central criminal charges, that he and former CFO Andrew Fastow made illegal side agreements to protect off the book partnerships that Enron used to hide losses.

REP. BILLY TAUZIN, (R) LOUISIANA: Did you, in fact, have an agreement, a handshake deal, with Mr. Fastow?

SKILLING: Absolutely not. Mr. Chairman, there was no handshake deal between myself and Mr. Fastow, period.

HUNTINGTON: Skilling, who has an MBA from Harvard, is widely credited with transforming Enron from a nuts and bolts gas pipeline business to an Internet-driven energy power broker. He had a particular talent for aggressive accounting, something he poked fun at in this office skit.

SKILLING: Hypothetical future value accounting.

UNIDENTIFIED FEMALE: Wow.

SKILLING: If we do that, we can add a kazillin (ph) dollars to the bottom line.

HUNTINGTON: Skilling will likely tell the jury that Enron's accounting, aggressive as it may have been, was approved by its board, outside lawyers and accountants. But Skilling may be vulnerable for selling hundreds of millions of dollars of Enron stock, which he told the SEC he did because of the 9/11 attacks.

JOHN COFFEE, COLUMBIA LAW SCHOOL: It appears that Mr. Skilling tried to sell before 9/11 and used that as a justification. Once you can present to the jury that Mr. Skilling was making inconsistent statements, it can go very seriously to his credibility.

HUNTINGTON: Yesterday stilling remained confident.

UNIDENTIFIED MALE: Are you looking forward to tomorrow?

SKILLING: Yes.

(END VIDEOTAPE)

HUNTINGTON: Now another core feature of Jeff Skilling's story that we're likely to hear him tell the jury is that Enron collapsed because of a crisis in confidence in the financial markets. What he kept calling a run on the bank. Listen for that. That is almost certain to be where he starts his testimony.

By the way, that testimony may not begin until after lunch. There's one more witness on the stand that the lawyers have to get through.

Soledad.

SOLEDAD O'BRIEN: Chris, Jeff Skilling has a reputation as being an arrogant guy, frankly. Do you think that that's going to impact how the jurors perceive him and his credibility, too?

HUNTINGTON: That is no question something that Jeff Skilling and his lawyers have been preparing for. They do not want him to get up there and act like a dictator chief executive officer. He needs to be humble. He also needs to ride that fine line of humility and confidence. He needs to tell his story and stick to it. Of course, the federal prosecutors, when they get their chance to cross examine him, are going to try to get him to come unhinged. Maybe even go for the full-on Jack Nicholson, you know, "Few Good Men" situation. I mean that would be a victory for the prosecution if they can get to Skilling's emotions somehow.

SOLEDAD O'BRIEN: Yes, the old, you can't handle the truth, right?

HUNTINGTON: Yes.

SOLEDAD O'BRIEN: All right. Well, we'll all be watch that. Thanks, Chris. Appreciate it.

Miles.

MILES O'BRIEN: Some rare severe weather to tell you about in Israel. A huge tornado tore off roof tiles, snapped power lines and flipped at least two cars. The twister touched down in Western Galilee on Wednesday. Tornadoes said to be rare in that region. Some 75 people were hurt. None seriously, however.

Tornadoes could be hitting the Midwest today. Not as unusual there, unfortunately, especially this year. We've had already a wild year.

What's going on, Chad?

(WEATHER REPORT)

MILES O'BRIEN: Andy Serwer has dropped in.

ANDY SERWER, CNN CORRESPONDENT: I have.

MILES O'BRIEN: Where once sat Soledad, here's Andy. Poof, just like that.

SERWER: Parachuted in.

MILES O'BRIEN: Just parachuted in.

SERWER: Yes, that's it.

MILES O'BRIEN: What's going on, Andy.

SERWER: A radical notion, Miles, for one company's board of directors. Only pay them if they perform. We'll tell you which company that is coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN: Wow, Billy Dee Williams is 69-years-old?

SERWER: You can't tell because of the shades.

SOLEDAD O'BRIEN: He's such a handsome man, isn't he?

MILES O'BRIEN: He's hiding behind those Foster Grants, though.

SERWER: I couldn't see who that was. You know, I mean I had to read the little thing because he's incognito.

SOLEDAD O'BRIEN: Happy birthday to all of them.

Board of directors. If you remember -- if you're on the board of directors, you can make some serious cash.

SERWER: Yes, hundreds of thousands of dollars, Soledad. And the thing is that people complain about is, they make all this money but there's no downside. In other words, the company goes down the tubes, they still get paid. They should be responsible for how the company performs. Now Coca-Cola is revealing a radical new plan -- I think it's safe to call it radical -- whereby directors will only get paid if the Coca-Cola Company performs. If it's earnings reach a certain threshold.

Here's how it works. Coke directors would get units worth $175,000 this year that would be payable in 2009 only if Coke's earnings grow at admittedly a modest 8 percent per year. So not exactly to the moon, Alice. So, you know, maybe it's kind of a lay-up anyway, right?

MILES O'BRIEN: They should probably do this for CEOs. SERWER: Yes.

MILES O'BRIEN: You know what I mean?

SERWER: That would be applaudable as well.

SOLEDAD O'BRIEN: Yes. Maybe more than the board of directors.

SERWER: Right.

SOLEDAD O'BRIEN: Because I would imagine that you've got people on the board who could go to other companies, be on their boards.

SERWER: Right.

SOLEDAD O'BRIEN: You're trying to attract smart, good people. And the money is sort of to bring them in.

SERWER: That's true.

Interesting also, Soledad, is that critics are attacking this plan, at least mildly, saying it would make the company and the directors focus on short-term goals to achieve that 8 percent per year profit increase. So, you know, it's sort of the damned if they do, damned if they don't here a little bit.

SOLEDAD O'BRIEN: But that's an interesting point, too, you know?

SERWER: It is. And it's something that's going to get played out.

SOLEDAD O'BRIEN: You want them to do anything to get their money.

SERWER: I mean this whole corporate governance issue is huge and it's going to continue going. And companies need to experiment and try thing like this I think.

MILES O'BRIEN: Sure.

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

SERWER: Thank you.

MILES O'BRIEN: All right. That's the Coke side of life, right? Is that what it is? Yes, the Coke side of life.

SERWER: That's a new one.

MILES O'BRIEN: Yes.

SOLEDAD O'BRIEN: Two weeks away. Two weeks away, we have to pay our taxes. Just two weeks.

MILES O'BRIEN: No, it's less than that, isn't it.

SERWER: For Miles it's month and months.

SOLEDAD O'BRIEN: Are you nervous?

MILES O'BRIEN: Yes, I am.

SOLEDAD O'BRIEN: Yes.

MILES O'BRIEN: I think that we get the 18th because don't we file on . . .

SOLEDAD O'BRIEN: No, 17th.

SERWER: Seventeenth is the Monday.

SOLEDAD O'BRIEN: Monday is the 17th.

MILES O'BRIEN: Yes, but Monday is a holiday where we file.

SERWER: In Massachusetts, Patriots Day.

MILES O'BRIEN: Yes. We get till Tuesday.

SOLEDAD O'BRIEN: Oh. You file in Massachusetts?

SERWER: I think everyone in the Northeast does.

MILES O'BRIEN: Don't we file -- yes, we all file in Massachusetts.

SOLEDAD O'BRIEN: Oh, I see, so it's Patriots Day in Massachusetts. So, yes, I guess technically the 18th. About two weeks. Slightly . . .

SERWER: That's just for people in the Northeast.

MILES O'BRIEN: I'm going for every day I can get, girl.

SOLEDAD O'BRIEN: Really? And you spend as much energy as do you figuring out when you have to file to . . .

SERWER: You know, Miles, just do your taxes, OK.

SOLEDAD O'BRIEN: Do the taxes.

SERWER: Do your taxes.

MILES O'BRIEN: Should I deduct my home?

SOLEDAD O'BRIEN: Yes, that's actually -- lots of people don't deduct their home. We're going to talk about that in our special series "AM Tax Guide" and also have some tips on how you can get the most out of your deductions.

And coming up next, we're going to talk to an Internet security expert. Tell us what we can do to protect our kids from online predators. Those stories are ahead this morning. Stay with us. (COMMERCIAL BREAK)

SOLEDAD O'BRIEN: On Capitol Hill, a pretty shocking look at the sexual exploitation of children on the web. Today a House panel is going to hear from federal investigators about online child predators.

MILES O'BRIEN: Now earlier this week the same committee heard a teenager describe being drawn into selling pornographic images of himself from a web cam that was set up at his home. Joining us from Las Vegas with what parents need to know about all this, because we certainly have a lot of questions this morning, is Parry Aftab of wiredsafety.org.

Parry, good to have you with us.

PARRY AFTAB, WIREDSAFETY.ORG: Good morning, Miles and Soledad.

SOLEDAD O'BRIEN: Hey, nice to see you again, Parry.

Let me ask you -- you know, you testified right after Justin Berry testified and, boy, I thought his testimony was absolutely gut wrenching. Let's play a little bit of what he had to say that I think struck fear into the hearts of parents everywhere.

(BEGIN VIDEO CLIP)

JUSTIN BERRY: I was an honor student and I was class president. My mom had used all the latest child protective software. She checked what was happening in my room.

(END VIDEO CLIP)

SOLEDAD O'BRIEN: I feel, Parry, like his message is, well, you know what, no matter how hard and how they try and how involved parents are, you really can't protect them. I mean that's almost the take-away from his message, is it not?

AFTAB: Well, it is, Soledad. But Justin's case is very atypical. There are a lot of kids who are caught in the world of sexual predators but it is still a very unusual case that he got involved in the way he did for as long as he did.

MILES O'BRIEN: You know, Soledad was talking yesterday, and we have a rule at our house that the computers are used in common areas so kids don't use them in their rooms.

SOLEDAD O'BRIEN: That's advise from Parry for about, what, 10 years ago. I mean literally we had . . .

MILES O'BRIEN: And we've been listening to you, Parry. And I think that's probably the single most important thing you can do. Because, you know what, they're always sort of under supervision at that time, you know, in that case. They're not going to be getting too far afield, or so I hope.

AFTAB: Well, yes, except that's an old tip, as Soledad know. Unless you're going to keep their cell phones and XBox Live 360s and a lot of these handheld and other devices in a central location, too, we have to rely a lot more on the filter between our kids ears. That means education is more important than anything. Talking to them, being involved, debriefing them and, in some cases, some technology that will help you stay ahead of the game.

SOLEDAD O'BRIEN: All right, let's walk through your tips, Parry, because I think these are really good and really helpful for parents. First, you say be involved. And I think, overall, you know, across the whole parents spectrum, be involved is a good one. And then also keep the computer in a central location. We kind of talked about the two of those.

But you also say no child needs a web cam. Why not?

AFTAB: You know the kids don't need a web cam. Their friends know what they look like and no one else needs to. Now with sites like myspace and facebook (ph) and a lot of the others, these kids are posting a lot of images of themselves out there and giving like too much information to people who don't need it.

MILES O'BRIEN: What about this? Taking an inventory. You know I think we get so many gadgets in the house . . .

SOLEDAD O'BRIEN: Right, as you mentioned the Xbox, all those things.

MILES O'BRIEN: And you mentioned all those other things, it's easy to forget some of the ways they could become connected and get in trouble.

AFTAB: Or never know them in the first place. We buy a lot of technology, we don't know what it does. A lot of parents don't know that Xbox Live 306 is voice-over-internet phone. So we need to look at what we've got if we're going to start making some choices.

SOLEDAD O'BRIEN: You say you've got to sort of focus on those things for the content, the contact and the commercialism. What do you mean by that, Parry?

AFTAB: Well, this is our new tip, Soledad. This is where we're going now. It's called the three Cs. Any time you buy a new technology, there's a new feature, something you're using on interactive technology. Does it have content? Can you see stuff or can you share stuff? Photos, information about your kids, porn. Can kids communicate with others? Can others communicate with your kids? Text messages, instant messaging, web cams. And will it cost you money or can you spend money on it? Once you take it down to those three basics, parents don't need me on television to tell them what to do. They understand what to do. And we've got to make it easy for parents because there's way too much these days for them to know as much as we need them to memorize.

SOLEDAD O'BRIEN: Yes, it is. It's a ton of -- I mean you really have to be very technologically savvy to some degree. And usually parents aren't and the kids are much more so. Is there a classic definition of a child who is really the picture of a classic victim here?

AFTAB: Yes, well there is. There are profiles of victims. Eleven and a half to 15 generally. But know that about a third of the cases are boy victims and about two-thirds are girls. They may be loaners. They may be spending a great deal of time on the computers without friends in real life. That's one thing to look for. You may have seen a change in behavior. There may be secretive phone calls and things on their cell phone. But know that the high-risk kids are also the ones who drive too fast, drink too much and are looking for the thrills. So both ends of the spectrum.

MILES O'BRIEN: Both ends. And I guess parents really have to get away from their denial on this too because I think, in some cases, we don't want to deal with these things.

AFTAB: You know, they're caught like deer in the headlights right now. And a lot of the parents have been saying, not my kid, until they see them on myspace. They need to recognize, all of their kids are the ones who are involved here.

SOLEDAD O'BRIEN: And you can check your child's profile. I mean you should really look at what your kid is putting out there online. Parry Aftab is an Internet security expert. And again, we've been talking about this, well, going on way more than 10 years now.

AFTAB: Ten years.

SOLEDAD O'BRIEN: Thanks, Parry. Appreciate it.

AFTAB: Thanks. And there's a new cell phone Disney just came out with that launches in June that's going to make it easier to stay in touch with your kids they're doing on the cell phone too. We'll talk to you about it later on when I can.

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

AFTAB: Thanks.

MILES O'BRIEN: Thanks, Parry.

SOLEDAD O'BRIEN: A short break. We're back in just a moment.

(COMMERCIAL BREAK)

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning.

I'm Soledad O'Brien.

MILES O'BRIEN, CNN ANCHOR: And I'm Miles O'Brien.

Good morning to you.

New developments in that Duke rape case. DNA results could be released as early as today. But one lacrosse player has already been suspended over a very disturbing e-mail. S. O'BRIEN: Also, was it racial profiling or proper police work? The Capitol Hill confrontation involving Congresswoman Cynthia McKinney now heads to a grand jury.

M. O'BRIEN: Internet safety and your kids -- ahead, we're going to learn what's being done to track down those online predators.

S. O'BRIEN: And victims of Sunday's tornadoes now face another round of big storms. We've got a severe weather forecast for you in just a few moments.

M. O'BRIEN: Also, are you getting what's coming to you? Our special tax guide series checks your deductions.

That's ahead on this AMERICAN MORNING.

Capitol Hill is the site of a couple of stand-offs today. A showdown over immigration reform expected in the Senate, while a grand jury begins hearing testimony on Congresswoman Cynthia McKinney's confrontation with a police officer.

CNN's Andrea Koppel live from Capitol Hill this morning.

Let's start with Cynthia McKinney -- Andrea.

Are any of her colleagues coming to her defense?

I haven't seen much of that yet.

ANDREA KOPPEL, CNN CORRESPONDENT: No, very few, Miles.

Perhaps what's most striking is that the leadership in the House, Nancy Pelosi and Steny Hoyer have actually distanced themselves from Congresswoman McKinney.

Remember, this all stems from an incident last week in which Congresswoman McKinney, a Democrat of Georgia, was coming into the Capitol. She wasn't wearing the pin that identifies her as a lawmaker. She went around the metal detector, which you can do if you're a lawmaker, but Capitol police didn't recognize her.

She says it was a case of racial profiling. When the officer tried to stop her, she says it was inappropriate touching, according to a lawyer. Capitol police say she actually struck them.

Now, CNN has learned that today a grand jury here in D.C. is going to hear from witnesses, two congressional House staffers who say that they saw what happened. And perhaps there could be some kind of ruling from the grand jury as soon as next week -- Miles.

M. O'BRIEN: Let's move on and talk about immigration reform.

We've got a spring break coming up. Whether they'll be any sort of concrete action by the Senate before then is anybody's guess. But this is a new attempt at a compromise out there.

Why don't you tell us a little bit about that.

KOPPEL: Sure.

This is Senators Mel Martinez of Florida and Chuck Hagel of Nebraska, two Republicans who have been trying to break this stalemate here, mostly among conservative Republicans, who didn't want to support the legislation that's now on the floor that's supposed to be voted on in a test vote, a procedural test vote, later this morning.

And so Martinez and Hagel have come up with a proposal which would break the number of approximately 11 to 12 million illegal immigrants who are in this country into roughly three categories.

Those who have been here for less than two years, since January of 2004, would have to leave the United States.

Those who have been here between two -- roughly two to five years, from 2001 to 2004, would have to leave the country, but they would be allowed to return, probably under a temporary worker program. They'd have to apply for a visa.

And then the third category would be those who have been here five years or longer. They would have to meet all kinds of requirements that were laid out in the legislation that's on the floor that's known as the McCain-Kennedy Bill. They would have to, for instance, pay a $2,000 fine. They'd have to pay back taxes and they'd have to learn English, things of that nature. But they'd be allowed to stay in the United States, sort of this path to citizenship, what many of the critics call amnesty -- Miles.

M. O'BRIEN: Well, it will be interesting to see if Democrats go for this one.

KOPPEL: It will. You know, and I did talk to one senior Democratic staffer who said that it's 500 pages long, this Martinez- Hagel compromise. And the details are as -- he said the devil is in the details. There's -- this is such a complicated issue, they've been -- had staffers working on it through the night. And it really is unclear whether or not Democrats are going to support it.

M. O'BRIEN: Andrea Koppel on Capitol Hill, thank you very much.

Coming up in just a few moments, we're going to talk to the Senate majority leader, Bill Frist, about the new proposal and where this is all headed.

Will there be any concrete action on immigration reform before they head off to break for a couple of weeks -- Soledad.

S. O'BRIEN: Some new developments to tell you about in the Duke University rape case.

DNA results could come as early as today, meaning we might know very soon if one or more lacrosse players are going to be facing any charges. CNN's Jason Carroll has more now on the flurry of activity in this case, including a very disturbing e-mail from one of the players, allegedly.

(BEGIN VIDEO TAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): Duke University is reeling from new developments in the alleged rape involving the school's lacrosse team. Duke's lacrosse team's coach, Mike Pressler, submitted his resignation, effective immediately. This, after the court released information from a sealed warrant which graphically detailed a threatening e-mail allegedly sent by Ryan McFadyen, one of Pressler's players.

It was sent the same night of the alleged sexual assault.

It reads: "Tomorrow night after tonight's show, I've decided to have some strippers over to edens 2c. All are welcome. However, there will be no nudity. I plan on killing the [BLANK] as soon as they walk in and proceeding to cut their skin off while [BLANK] in my Duke-issue Spandex."

(on camera): The e-mail was sent at 1:58 a.m. just about a half an hour after the alleged victim in this case, an exotic dancer, called police saying three lacrosse players raped and shouted racial slurs at her during a party she was hired to perform at, at the team members' off campus home.

(voice-over): The university's president, Richard Broadhead, called the e-mail "sickening and repulsive."

Broadhead canceled the men's lacrosse season and Ryan McFadyen, who's 19 years old, has been suspended.

No one answered the door at McFadyen's parents' home in Mendham, New Jersey.

His attorney released a statement saying: "While the language of the e-mail is vile, the e-mail itself is perfectly consistent with the boy's unequivocal assertion that no sexual assault took place that evening."

The team does have a history of trouble. More than a dozen players have previous minor offenses, mostly for underage drinking.

(VIDEO CLIP OF DUKE STUDENTS)

CARROLL: The university's critics have been speaking out, saying given the team's past, school administrators have not been tough enough on the team or the coaches in the wake of the rape allegations.

In a recent interview, Duke's president asked for patience as the facts unfold.

RICHARD BROADHEAD, PRESIDENT, DUKE UNIVERSITY: All the ingredients of humanity are present on campus. You know, a university can't hope to be a place that never has unpleasant or stressful or deeply troubling episodes. All it can hope is that if and when such things happen, which, god forbid, that they be dealt with in a way that gives everybody some further element of education.

CARROLL: No one has been charged in connection with the case.

In the meantime, Duke's president continues to urge anyone with information to come forward.

Jason Carroll, CNN, New York.

(END VIDEO TAPE)

S. O'BRIEN: Jason's report first aired on "PAULA ZAHN NOW," which you can catch weeknights at 8:00 p.m. Eastern.

Other stories are making news.

Carol has got that.

She's in the newsroom -- hey, Carol.

CAROL COSTELLO, CNN ANCHOR: Good morning, Soledad.

Good morning to all of you.

In Alexandria, Virginia, things get underway again in the next hour, in the second phase of the Zacarias Moussaoui trial. A jury found Moussaoui eligible for the death penalty. Some family members of the victims of the September 11th attacks say they would rather see him spend the rest of his life in prison.

Carie Lemack spoke out earlier.

She lost her mother in the attacks.

(BEGIN VIDEO CLIP)

CARIE LEMACK: We didn't want the attention to be on this al Qaeda wannabe. He was so incapable that al Qaeda gave him a one way ticket out of a country. We would rather the attention be on the victims and their lives, and also on what we can do to make this country safer.

(END VIDEO CLIP)

COSTELLO: Former New York City Mayor Rudy Giuliani is expected to testify today and next week recordings from Flight 93 will be played in the courtroom.

Another big fish has been caught. Mohammed Obeidi, also known as Abu Ayman, is accused of committing terrorist acts. Obeidi worked under the chief of staff of intelligence in the former Saddam Hussein regime and has strong ties to the terror leader, Abu Musab al-Zarqawi. Obeidi is also considered the prime suspect in the kidnapping of an Italian journalist last year. A shrine in the holy city of Najaf was the scene of violence today in Iraq. At least nine people were killed in the car bomb attack near the Imam Ali Shrine. Nearly two dozen others are hurt. A citywide curfew now in place.

Italy says it has stopped two planned terror attacks. The country's interior minister says the intended targets were a church in Bologna and a subway system in Milan. Authorities say six suspects were rounded up. Two were arrested and they're still looking for one more suspect with links to this apparent plot.

And honk if you like music. Composer Stephen Montague is rehearsing for a concerto he wrote using car horns.

Let's listen for just a moment. It's beautiful, isn't it? It'll play before an audience at the University of Houston this weekend. That sounds like a blast.

That was almost as bad as one of yours -- Miles.

M. O'BRIEN: I like those cars. You see that? That looked like an old Lincoln there with that paint job. Did you see that?

COSTELLO: Yes, I did.

M. O'BRIEN: OK.

All right, anyway, thank you, Carol.

COSTELLO: Sure.

M. O'BRIEN: Today could be another severe weather day. As a matter of fact, it's already shaping up that way.

The last time we checked -- Chad, there were, what, 3,000 lightning strikes that you had already counted in that one part of the world?

CHAD MYERS, CNN METEOROLOGIST: Yes, still, right here, from this storm right here, Miles, all the way from north of Des Moines all the way to about Peoria, Springfield, that area right there had almost 2,600 lightning strikes in the hour.

Coming down a little bit -- I was just checking to see -- we always look to see if the lightning strikes are going up or coming down, because we know whether the storms are getting stronger or weaker. They're coming down for now, but the sun is going to come out here. There are some showers, but the sun is going to be out here and the real risk of severe weather is Omaha, Lincoln, Kansas City, St. Joe, right on down to Wichita.

But the entire area from almost South Dakota down into almost Dallas, that's under the gun for severe weather today.

(WEATHER REPORT) M. O'BRIEN: This week, Congress is investigating online child exploitation. And coming up, the chief of the FBI's cyber crimes section will be joining us live. He'll talk about the challenges of tracking down online predators.

S. O'BRIEN: Also this morning, we're talking with Senator Bill Frist about the latest compromise on immigration reform. We should say proposed compromise. Does it have a shot at succeeding?

M. O'BRIEN: And we will continue our special series, "A.M. Tax Guide." Today, we're going to look at some deductions people forget about. But if you watch, you won't forget about it.

Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: All eyes on the Senate today, as immigration reform reaches the floor. A key vote expected on one proposal that would pave the way to citizenship for illegals currently in the U.S. well yet another proposal gets some debate, a guest worker program that essentially rewards illegals who have been here longer.

Joining me live from Capitol Hill is the Senate majority leader, Bill Frist.

Senator Frist, good morning to you.

SEN. BILL FRIST (R-TN), SENATE MAJORITY LEADER: Miles, it's good to be with you.

M. O'BRIEN: First of all, let's talk about the McCain-Kennedy proposal, which some have called amnesty, some would call guest worker, whatever you want to call it.

FRIST: Right. Right.

M. O'BRIEN: Is that -- is that, in essence, dead in the Senate, do you think?

FRIST: Yes, it is, because whether you call it amnesty or not, the reason that most people don't like it is that for the 11 million people who are here illegally, it gives them a special path to citizenship. And most people call that amnesty.

So I think that it is dead. But we'll have a vote in just a few hours here on the floor. It will not get 60 votes, though.

M. O'BRIEN: OK, so you -- that's -- that's going to be taken care of. And then on we go into this latest compromise proposal. It's called Hagel-Martinez, named after the senators that are part of this, kind of a three-tiered approach. Let's run through it very clear, if we could, for folks, try to make it as clear as possible.

If you've been here less than two years, you leave. Very simple.

FRIST: You get deported. That's right.

M. O'BRIEN: That's straightforward, right?

FRIST: You're deported. Less than two years, you're deported.

M. O'BRIEN: Gone.

All right, then -- I mean who's going to round them up? Who -- what -- there's no incentive for them to come forward, that's the first issue that would come to mind.

FRIST: Yes. We can come back to that, but the big thing is to have comprehensive reform and that's why work site enforcement, interior enforcement is very important, that stops employers from hiring illegal people. Once we say they're illegal, if they get hired, employers are going to get punished aggressively.

M. O'BRIEN: All right, so there's...

FRIST: That's why you have to have a comprehensive bill.

M. O'BRIEN: So you dry up the jobs, essentially. Now, let's go to...

FRIST: That's exactly right.

M. O'BRIEN: Let's go to the second tier.

FRIST: Right.

M. O'BRIEN: This is two to five years.

FRIST: Right.

M. O'BRIEN: And in this case, there -- they have to leave briefly...

FRIST: Yes, this would -- yes...

M. O'BRIEN: ... and then get re-admitted.

What's the point of that?

FRIST: Well, first of all, the point of the amendment is that the 12 million people, it's not a monolithic group. It is impractical, it is impossible, a little bit for the reasons you've said -- how would you enforce it -- to send everybody home.

So once you say it's not a monolithic group, you start saying well, how do you deal with it?

Less than two years, send people home. Two to five years, you do require them to go home. They can reapply for a temporary worker program and come back into the country. And greater than five years -- and what you're basically assuming is that if you've been here for five, 10 or 15 years, you're more likely to be assimilated into society -- but greater than five years, you can stay here for five years and then an additional six years, a total of 11 years. You have to meet certain criteria -- learn English, make sure you pay all taxes, have a job for six of those years -- and then you can earn a path to citizenship.

And that's, in essence, this compromise or this alternative amendment on the floor of the Senate.

M. O'BRIEN: All right, the concern is, though, the concern is, for people who would call it amnesty or whatever you want to call it, is that these -- these people are breaking the law and, in essence, you're rewarding people who break the law. Whether you've been breaking the law for five years, 10 years or even one year, you're still breaking the law.

FRIST: Yes.

M. O'BRIEN: So you're making a difference based on the amount of time they've been breaking the law and I suspect some purists would say that that's -- that's not fair.

FRIST: Well, that's right. And that's where, you know, a lot of people said, basically, initially, in this argument -- and the debate has matured and America has become engaged. Our elected representatives have become engaged and recognize this is a real problem. It's got to be solved. It's not a Democrat problem, it's not a Republican. We've got -- problem. We've got to come together and solve it.

The first thing is to realize there's not a monolithic group. And then you say well, how do you treat people appropriately? And because 40 percent of the people have been here greater than 10 years -- of those 12 million -- 40 percent less than -- than -- than five years, people said well, it is more likely that people who have been here, who have been working five or six years here, who have been here for 10 years, are more likely to be assimilated. They still have to go through a probationary period for 11 years before they are eligible for citizenship and have to meet criteria that are laid out in the bill.

M. O'BRIEN: All right, we've done our best to simplify this, but it's still -- this is a complicated bill.

FRIST: That's right. It is.

M. O'BRIEN: I think it's got about a 500 page bill and this is just getting cooked up. I know that senators are just trying to get up to speed on this. Time is a wasting here. You're about to go on your spring break.

Is it possible all this debate, all this discussion, all these protests in the street will lead to nothing in the way of legislation?

FRIST: No. It's not going to lead to anything, because what we have done -- and that's why I've driven hard, as leader in the Senate. Last October I said I'm going to take a bill to the floor of the Senate, I want the Judiciary Committee to generate a bipartisan bill. They did that. We took it to the floor last week. We've had good debate, good amendment and yes, the other side of the aisle has slow walked the amendment process, won't give Jon Kyl a vote on a very common sense amendment. And I complain about that.

But the important thing is that we pull together to address this problem. We've spent now a week-and-a-half full-time debate. We've had good proposals. The Democrats have slow walked the amendment process, which has disappointed me, but today we'll vote on McCain- Kennedy. It won't have the votes. Tomorrow, or maybe late tonight, we'll vote on this new alternative approach, the Hagel-Martinez approach. And then we'll also vote on a border security interior enforcement bill that's under my name. It is an incomplete bill but does address the border security and interior enforcement.

M. O'BRIEN: But senator...

FRIST: We'll do all that over the next 24 hours and then we'll have to see where we are. We're going to have to fix this problem. Three million people coming across this border illegally every year, growing at 25 percent, you know, that's a national security risk. We're going to address it. This is the first major cut. I don't know if we're going to complete it in the next 48 hours or not.

M. O'BRIEN: Because no matter what you end up with, you still have that House bill, which is way out there, saying that, basically, all these people who are illegally in the country become felons.

FRIST: Yes. Yes...

M. O'BRIEN: How are you going to reconcile this?

FRIST: Well, I think the one thing that we have done -- because the Senate, over a period of two weeks, has shown it's not where the House is. I'm going to -- I'm generalizing a little bit. But I think the Senate -- I know the Senate right now does not believe -- if you had to say there's any kind of consensus -- that these are felons. And our -- our -- our -- our commitment to comprehensive reform, of looking at all three legs of the stool -- border security, work site enforcement, comprehensive immigration reform, including the 12 million workers, shows that our -- our approach is more complete looking at both the magnet attracting illegal workers as well as the border keeping them out at the very beginning.

So our approach is different. No longer will there be confusion between the Senate approach and the House approach.

M. O'BRIEN: You've got a lot of work to do before vacation.

Good luck, senator.

FRIST: Good to be with you.

Thank you.

M. O'BRIEN: Majority Leader Bill Frist. Thanks for being with us -- Soledad.

S. O'BRIEN: Ahead this morning, our "A.M. Tax Guide" is going to come up in just a few moments. We're going to tell you how you can get the most out of your deductions.

And then later in our health series for people in their 30s, 40s and 50s, we'll tell you what you can do now -- listen up, Miles -- what you can do now to avoid cosmetic surgery when you get older.

M. O'BRIEN: How do you know I haven't already had it?

S. O'BRIEN: That's ahead.

Stay with us.

M. O'BRIEN: You can tell by looking at me, right?

(COMMERCIAL BREAK)

(BEGIN AUDIO CLIP)

THE BEATLES: Because I'm the tax man. Yes, I'm the tax man.

(END AUDIO CLIP)

S. O'BRIEN: No, I'm not the tax man. We're going to give you advice before you see the tax man.

This morning, the second part of our AMERICAN MORNING "Tax Guide," getting the most out of your tax deductions.

This morning, everybody, it seems, has an opinion.

Listen.

(BEGIN VIDEO CLIP FROM "THE COLBERT REPORT," COURTESY COMEDY CENTRAL)

STEPHEN COLBERT, HOST: Business expenses are also Deductible. For instance, I'm deducting my Ferrari because I have my best ideas at 200 miles per hour.

Now, a lot of people would say these tax tips I'm giving are only useful if you're extremely wealthy, which is my last hint -- be extremely wealthy. All kinds of breaks for guys like that.

(END VIDEO CLIP)

S. O'BRIEN: Stephen Colbert, be extremely wealthy.

How do you know you're getting what's coming due to you?

This morning, we talk to Beverly Goodman from "Smartmoney" magazine.

Let's talk about some deductions outside of being extremely wealthy. What a good tip. We're not going to cover that one.

BEVERLY GOODMAN, "SMARTMONEY" MAGAZINE: That was a pretty good one.

S. O'BRIEN: It's a good one, though. You've got to say that.

I was surprised to read that many people, lots of people, a million people forget to deduct their mortgage.

GOODMAN: It's amazing. A government study found that every year, more than a million people do not deduct the interest on their mortgage.

S. O'BRIEN: Why?

GOODMAN: I think they get flustered. People procrastinate and I think a lot of first time homeowners who maybe haven't, you know, itemized their deductions in the past, just -- just overlook it. But the government ends up getting close to half a billion dollars that they shouldn't really get because of that.

S. O'BRIEN: So I guess that's -- that's tip number one.

GOODMAN: Yes.

S. O'BRIEN: Don't forget that one. That's a biggie.

GOODMAN: Exactly.

S. O'BRIEN: I mean that's a lot of money.

GOODMAN: Exactly.

S. O'BRIEN: You can deduct a million dollars?

GOODMAN: Up to, the interest on a million dollar loan, yes.

S. O'BRIEN: Oh, that's a very biggie.

OK, this year lots of natural disasters, really, for last year to talk about.

What can you deduct if you've been the victim of a natural disaster? Not just Hurricane Katrina, but any?

GOODMAN: Right. You can deduct any loss that you have that exceeds 10 percent of your income. And what's more, you can actually take that deduction on your 2004 tax return. It's a lot easier for most people to just sort of slide that deduction onto a return that they've already done. And, also, as a way -- part of the way the IRS processes that, you'll get your money back a lot faster than if you wait for 2005.

S. O'BRIEN: Hurricane Katrina victims have a special allowance this year.

GOODMAN: Exactly. That 10 percent floor is waived. You can deduct the entire loss that's Katrina-related.

S. O'BRIEN: Oh, gosh, that's good news.

GOODMAN: Yes, it is.

S. O'BRIEN: God knows they really need it.

GOODMAN: Yes.

S. O'BRIEN: Finally, your kids pay off for you, only once a year. I'm kidding. Just kidding. Your children do pay off for you, of course, because you can deduct them, essentially, for credit.

GOODMAN: Exactly. You get deductions for every dependent. If you have kids under 17, you can also get a tax credit up to $1,000. It's just like a coupon to pay your taxes. And if you pay for dependent care, you can deduct that, also. There may be a credit involved. And...

S. O'BRIEN: Dependent care meaning maybe you and an elderly parent or...

GOODMAN: Exactly.

S. O'BRIEN: ... someone who is not...

GOODMAN: It could be a child.

S. O'BRIEN: ... who is not a child.

GOODMAN: It could be a child or it could be an elderly parent that you are taking care of.

S. O'BRIEN: You can also deduct, to some degree, your children's education costs.

How much can you deduct?

GOODMAN: There are a lot of different education breaks. There are credits like the Hope Credit and the Lifetime Credit. The Hope Credit is up to $1,500 that you can wipe out taxes with. The Lifetime Learning Credit is about $1,000. But you also can take a deduction for the interest on a student loan.

S. O'BRIEN: So only -- so you're talking about college students who really get that deduction.

GOODMAN: It's mostly college students, yes.

S. O'BRIEN: Is it a red flag if you're doing business deductions?

GOODMAN: The IRS does...

S. O'BRIEN: I mean you're talking about audits...

GOODMAN: Yes.

S. O'BRIEN: ... I would have to think that that's...

GOODMAN: The IRS does take a closer look at it, but you really need to just take whatever deductions you're entitled to. I mean...

S. O'BRIEN: So what are you entitled to for your business deductions?

GOODMAN: Well, if you have a side business, you can deduct pretty much anything that's related to that side business. It could be a home office, but it also could be subscriptions that you need, a computer that you need. But you can only deduct the portion of all of those items that are used for your business. So if it's...

S. O'BRIEN: So if you have a computer that you use half the time for your business and half the time for fun...

GOODMAN: You can deduct 50 percent of the cost of the computer and 50 percent of your cable modem and 50 percent of, you know, the -- any printers or sort of ancillary (UNINTELLIGIBLE)...

S. O'BRIEN: How do you possibly keep track of that? I mean isn't it kind of a guess?

GOODMAN: It is kind of a guess and the IRS knows it's kind of a guess.

S. O'BRIEN: Back to the red flag issue, isn't it?

GOODMAN: Exactly. Exactly.

S. O'BRIEN: Interesting.

Well, lots more to talk about, as well.

We're going to continue our series tomorrow.

Beverly Goodman with "Smartmoney" magazine, thanks for talking with us.

GOODMAN: Thank you.

S. O'BRIEN: Have you done your taxes already?

GOODMAN: I have. I got my refund already.

S. O'BRIEN: She got her refund already!

Good for you. I'm so happy for you. Really.

You can go to our Web site, too, if you want more tax tips for 2006. It's cnn.com/am.

Tomorrow, as I mentioned, the final part of our series, how you can put your refund money to good use. I've got some good ideas for that -- Miles.

M. O'BRIEN: That's the easy one, isn't it?

That is the easy one.

S. O'BRIEN: Yes.

M. O'BRIEN: Since you've done your taxes already, a little help for me, maybe?

Is that possible?

Could you?

No?

S. O'BRIEN: Yes, she's not buying it.

GOODMAN: A little.

S. O'BRIEN: She's not even (UNINTELLIGIBLE)...

M. O'BRIEN: No?

S. O'BRIEN: You need -- the tips, that was your help.

M. O'BRIEN: All right.

Moving on -- I'll get them done this week, I promise.

Congress -- there's not much left in the week, though, is there?

Congresswoman Cynthia McKinney's case is now headed to a grand jury. Should she face charges for her run-in with Capitol Hill police? We'll talk to one of her former colleagues in Congress about that.

Plus, we'll give you a closer look at the challenges of tracking down online predators. The chief of the FBI's cyber crime section will join us live.

That's coming up on AMERICAN MORNING.

(COMMERCIAL BREAK)

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