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American Morning

President Bush Battling Record Low Approval Numbers and High Gas Prices

Aired April 25, 2006 - 08:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: President Bush battling record low approval numbers and high gas prices. A major energy speech is coming this morning.
MILES O'BRIEN, CNN ANCHOR: A street crowded with tourists. Three synchronized bombings. Another terror attack on the Sinai Peninsula.

Anti war protesters great the secretary of state, Condoleezza Rice. More ahead on growing demonstrations in Athens, Greece.

S. O'BRIEN: And Kenneth Lay on the stand. The Enron founder blames bad press, 9/11 and a greedy executive, but says the company's collapse is not his fault.

M. O'BRIEN: And strong storms sweeping through the Midwest yet again. This seems like a spectacular image, but it's a bad sight for people in Oklahoma, of course. More on the severe weather ahead on this AMERICAN MORNING.

S. O'BRIEN: Good morning.

Welcome everybody.

I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien.

We're glad you're with us this morning.

S. O'BRIEN: And we are talking about gas prices. It's on President Bush's agenda again today, too. He -- in about two hours from now he's going to announce an investigation into price gouging. It's part of his four point energy plan.

Rising gas prices are bringing down his approval ratings, apparently. Take a look at the latest poll numbers. It shows the president now at 32 percent approval in how he's handling his job as president. That's a record low number. Nearly 70 percent of Americans say that rising gas prices are a hardship. And that's up, in fact, 11 points from April of last year.

Let's get right to Ed Henry this morning.

He's live for us at the White House -- hey, Ed, good morning to you. ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Soledad.

S. O'BRIEN: What -- do we know any details about this energy plan the president is going to unveil?

HENRY: Absolutely.

As you mentioned, Soledad, a four point plan to deal pain at the pump the president will unveil later this morning. First and foremost in this plan is the president will order not just one, but three different federal agencies to investigate the possibility of price gouging. It will be the Federal Trade Commission, as well as the Departments of Energy and Justice.

Secondly, the president will promote greater fuel efficiency to urge Americans to try to join in this cause.

Third, the president will call for boosting the gasoline supply at home. Of course, that includes the president's controversial call for opening the Alaskan National Wildlife Reserve to oil exploration, which has stalled on Capitol Hill.

And, finally, the president will encourage energy companies themselves to invest in alternative fuels. This follows on the president's speech in California on Earth Day this past weekend, where he called for more hydrogen powered cars. He wants more federal money for research and development for those cars.

the most significant part of this plan, of course, the federal investigation into alleged price gouging. The president will also fire off a letter, at least have his attorney general fire off a letter to all 50 states' attorneys general across the country, urge them to aid in this federal investigation, be on the lookout for price gouging.

Democrats note they have been calling for this action for months. They say the president is finally feeling the political heat because Republicans feel that these rising gas prices will fuel a Democratic takeover of Congress -- Soledad.

S. O'BRIEN: Let's switch gears for a moment and talk about the Fox TV Tony Snow. It looks like he's going to be the new White House press secretary, or so we're hearing.

What can you tell us about that, Ed?

HENRY: Republican sources saying it's very likely that, in fact, Tony Snow will be the man. This squares with what we've been reporting for about a week now, which is basically the new White House chief of staff, Josh Bolten, wants to move quickly to replace Scott McClellan. He believes, as do other senior officials here, in addition to Bolten, that it would be a no-brainer, that Tony Snow, in their opinion, has the gravitas to really take this job to another level and try to repair relations with the press and rebuild the president's image. The only real hurdle was Tony Snow's health. He had been battling colon cancer. We're now told he's gotten a clean bill of health. We're expecting an announcement as soon as this week -- Soledad.

S. O'BRIEN: Ed Henry at the White House for us.

Ed, thank you very much.

HENRY: Thank you.

S. O'BRIEN: CNN, of course, is going to bring you the president's energy speech live when it happens, 10:05 Eastern time this morning -- Miles.

M. O'BRIEN: Terror strikes once again on energy's Sinai Peninsula and once again a coastal resort town filled with vacationing Westerners is the target. This attack in Dahab, on the shores of the Red Sea.

CNN's Paula Hancocks has our story.

(BEGIN VIDEO TAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Broken glass litters the streets that were jammed with tourists. Bloody footprints lead away from the scene of the blasts, an eerie reminder of the carnage of the night before.

Tourists of all nationalities should be waking up to another day of their holiday. Instead, locals in the Red Sea town of Dahab are coming to terms with being the third Sinai resort to be attacked in 18 months. At least 23 dead, more than 60 others wounded.

(on camera): Now, the timing of these blasts was crucial -- 7:15 in the evening. These streets would have been crammed with tourists, Egyptian and foreigners, many of them going into the touristy shops here, the likes of this jewelry one, which looks like it hasn't been touched since just seconds after the blast.

(voice-over): Sebry Abdul Atif has been manager of the Alaska Camp Backpackers Hostel for three years. He was standing just feet away from one of the blasts. He is lucky to be alive, but believes the town is ruined.

SEBRY ABDUL ATIF, HOSTEL MANAGER: I don't think nobody will come. Even if they come, they will be scared. I have so many Egyptian guests last night. All of them run.

HANCOCKS: Dahab has always been a diver's paradise. Jason Lovett has been an instructor here for three years. He was here a year-and-a-half ago, when a bomb 65 miles north, in Taba, killed 34 and in July when a bomb 75 miles south in Sharm el Sheikh killed 67.

JASON LOVETT, DIVING INSTRUCTOR: It's not really any surprise to any of us. I mean, if you've been here long enough, you know everything else has been bombed. It was a natural progression that this was going to be the next place.

HANCOCKS: A tourists' paradise once again ripped apart by bombs.

Paula Hancocks, CNN, Dahab, Egypt.

(END VIDEO TAPE)

M. O'BRIEN: Coming up in just a few minutes, we'll talk with terrorism expert Sajjan Gohel about security in Egypt before the latest attack and a possible link to al Qaeda -- Soledad.

S. O'BRIEN: Here's a look at some of the news that's happening in America today.

A former television producer is filing a $100 million sexual harassment lawsuit against talk show host Maury Povich. Bianca Nardi alleges she was forced to expose herself for videos shown to guests of "The Maury Povich Show." Also named in the lawsuit, NBC Universal Television and three other producers.

In North Carolina, a 17-year-old high school student has been arrested. Police say he held a teacher and another student hostage for an hour yesterday. He fired a shotgun. Nobody was hit. Police say they are not exactly sure why the boy took the hostages.

A 16-year-old is charged in an alleged plot to attack his high school near Tacoma, Washington. In a search of the teenager's home, police say they found several guns, a homemade bomb. Police say he planned to kill 15 people randomly in school on Wednesday.

Police near Naples, Florida broke up a large cockfighting ring thanks to a mistaken 911 call. Nine people were arrested, 200 birds confiscated. Police came to the house after a couple of kids say they accidentally dialed 911. When they arrived, police heard the fights going on behind the home -- Miles.

M. O'BRIEN: Well, if you're a roofer and you needed some work, get yourself to Kansas. Hail the size of baseballs crashed through car windows, knocked out roof shingles. The storm also dumped heavy rain. Not only do they have holes in their houses, now they have flood the to contend with, as well.

Here's a rare look at a tornado. This comes from -- came from a news chopper over El Reno, Oklahoma. And as Chad told us just a little while ago, that is a tornado going the opposite direction. He called it a land spout, much like a water spout would be, in other words, going from the surface up to the cloud.

We can talk to him a little bit more about that -- are you there, Chad?

CHAD MYERS, CNN METEOROLOGIST: I am.

Actually, water spouts, because the water is warm, the air aloft is cold, the air goes up, it moves away from the water and then you start to get this dust devil like thing. Well, that's how this started. This is obviously well in advance of when it was a dust devil and it's clearly a tornado there. It is connected to the parent cloud up above, but they just form in different -- in different ways.

And we -- I had a zoomed in shot -- I'm still going try to find it -- where if you get all the way down into the dust cloud, you can see the debris in the dust cloud...

M. O'BRIEN: Oh, here we go.

Is that it?

MYERS: Yes.

M. O'BRIEN: That's it.

MYERS: The debris in the dust cloud is actually going clockwise and it should be going counter-clockwise in the northern hemisphere.

There you can kind of see how it just looks like a dust devil. It doesn't look like very much.

You know the problem?

There is an airplane hangar right under that thing.

M. O'BRIEN: Oh, boy.

S. O'BRIEN: Oh, no.

MYERS: You can barely see the building, but that's the -- those are the shards of metal that are getting torn off that airport hangar right there at the El Reno Airport.

M. O'BRIEN: Oh, jeez. Yes. And they probably thought, oh, we've got a big storm coming, let's get the plane in the hangar right away, you know?

MYERS: Right. Right. Yes, keep it away from the hail.

M. O'BRIEN: And -- oh, well.

MYERS: Well, there you go.

M. O'BRIEN: Well, that's interesting stuff...

MYERS: We will have some more severe weather today, guys.

Let's get right to it real quick.

The storm moving through Little Rock now. All watches have either gone away, been canceled or just have run-out of time and expired.

(WEATHER REPORT)

S. O'BRIEN: Well, a 15-year-old from North Carolina is recovering after he hit his head during a dive at the U.S. Open. The video is actually very tough to watch. We're going to show it a couple of times, so if you can't take it, please, just don't watch.

The teenager, his name is Greg Ferrucci, as he dives.

Take a look at this. He goes up and does the flip and then slam -- oh, gosh.

M. O'BRIEN: Ouch. Ouch. Ouch.

S. O'BRIEN: That is hard to watch.

He slams his head right into the springboard.

He was pulled out of the pool. His coach jumped right in, fully clothed, and hauled him out. He was then treated on the deck there and then rushed to the hospital.

We're told he suffered only a concussion...

M. O'BRIEN: You know, when you think...

S. O'BRIEN: ... thankfully, and he is expected to be OK, which is great.

M. O'BRIEN: He could have broken his neck.

S. O'BRIEN: Oh my god. Oh my god.

M. O'BRIEN: Imagine if it was a platform dive, all kinds of issues there.

S. O'BRIEN: Oh, that could kill you, easily, so...

M. O'BRIEN: Yes.

S. O'BRIEN: So apparently he's in great shape. So it's some good news to report out of that story today.

M. O'BRIEN: Wow!

Still to come on the program, more on those bombings in Egypt. We will talk to a terrorism expert about the motivation behind this particular attack.

S. O'BRIEN: Then a pretty dramatic day at the Enron trial. Former chief Ken Lay takes the stand, talking about what he says was his biggest mistake.

M. O'BRIEN: And later, do high gas prices have you yearning for a hybrid? We'll talk to a car dealer to see if that is what is happening in his showroom.

That's ahead on AMERICAN MORNING.

(COMMERCIAL BREAK) M. O'BRIEN: At long last, Ken Lay, the Enron founder, has taken the stand at that blockbuster white collar crime trial in Houston. He testified yesterday. He was back on the stand today.

His defense, in essence, is blame it on others -- his chief financial officer, how about the media?

Peter Elkind is covering the Enron trial for "Fortune" magazine.

He's dropped in periodically to tell us how things are going there.

He's also co author of the book "The Smartest Guys In the Room," about the Enron collapse. If you want to understand what happened there, that's a good place to start.

He joins us from Houston.

Peter, good to have you back with us.

PETER ELKIND, "FORTUNE" MAGAZINE: Good to be with you, Miles.

M. O'BRIEN: Ken Lay trying to be kinder and gentler.

Did it work?

ELKIND: Well, we're going to see. We'll see how kind and gentle he is on cross-examination. But he came out of the box, actually, fairly harsh --

M. O'BRIEN: Really?

ELKIND: ... acting contemptuous that he was -- of the notion that he should be there, even sitting there in defense of himself and of the company.

M. O'BRIEN: Interesting, because I -- well I read was that he was, you know, backslapping with the reporters and trying to put forth this sort of grandfatherly image. But in the context of that, a little righteous indignation is OK, is that the thinking?

ELKIND: That's exactly right. And that certainly was his tone at the beginning of the testimony. He insisted in a very strong voice that he had done absolutely nothing wrong and it was outrageous that he was there in the first place.

M. O'BRIEN: All right. And is he -- is he saying he just didn't know what was going on and that underlings sort of, you know, did a sorcerer's apprentice on him, Andy Fastow in particular?

ELKIND: Well, Andy Fastow is certainly the villain. But he's insisting that there was absolutely nothing wrong at Enron. Just as Jeffrey Skilling was (UNINTELLIGIBLE)...

M. O'BRIEN: Well, something -- something had to be wrong at Enron. ELKIND: Well, that -- actually, they're saying really there wasn't, except -- they're saying that the company was done in by a cabal, essentially, of Andy Fastow, short sellers and the media.

M. O'BRIEN: Well, there you have it, blame the media, huh?

ELKIND: Well, they're very explicit about it. And in particular some stories that ran in the "Wall Street Journal," which they insist were fed by short sellers who were trying to drive down the company's stock.

M. O'BRIEN: Interesting tact.

Let's take a look at some recent white collar trials and see how this will go.

Bernie Ebbers of WorldCom fame basically said he didn't know what was going on. It didn't work.

Dennis Kozlowski, Tyco, didn't work.

Richard Scrushy, HealthSouth, he had a similar defense, saying it happened, underlings. Ding. He actually wins.

Do you -- now, which side will Ken Lay be in here, do you think?

ELKIND: Well, it's very hard to predict. And I wouldn't want to make that call coming out of the box here with one day of Ken Lay's testimony. But it's a very aggressive defense, a very, you know, a defense with chutzpah, you might say, saying that even though this company went bankrupt just a few months later, that Ken Lay had no reason to believe anything was wrong with the company.

M. O'BRIEN: That's just -- it's kind of -- it -- does that stretch credulity?

ELKIND: Well, I think it does. And the notion that -- that short sellers can do in a company is very improbable. The notion that the media was conspiring hand in glove -- a reputable publication like the "Wall Street Journal" -- hand in glove with short sellers, is improbable. And on the Andy Fastow front, yes, he was stealing from the company. But it's not what Ken Lay didn't know about Andy Fastow's activities that troubled the market and set off concern in the financial markets. It's what Ken Lay did know, namely that he was doing business with his own company.

M. O'BRIEN: Let's talk about credibility now.

Who, at this point, is credible, in the eyes of the jury, do you think?

ELKIND: Well, it -- again, they've only seen Ken Lay on the witness stand for a day and the real test is going to be in cross- examination. I think he -- he is certainly a very different personality than Jeff Skilling. He always has been. He's folksy. After a slow start where he came across a little rough, I think, for him, he made a point of establishing eye contact with the jury and looking over at the jury box, which he hadn't done before.

And I think the jury has warmed to him a little bit. But, you know, they're going to have to decide whether his story makes any sense or not. And there's a long way to go before we can assess that.

M. O'BRIEN: In the final analysis, is he a sympathetic character and does he stand in contrast to a Jeff Skilling in that front?

ELKIND: I think in terms of personality, absolutely. His -- his personal story is a Horatio Alger story -- son of a poor Baptist minister. He's worked hard all his life. Rags to riches, no question about it.

M. O'BRIEN: And as far as Skilling?

ELKIND: Well, Skilling is -- rose to great wealth, but his personality has all sorts of edges on it that Lay's does not. And he sparred very aggressively with the prosecutors on cross-examination. We'll see how Lay handles tough questions, which he hasn't had to face in this kind of setting before.

M. O'BRIEN: It'll be interesting to see if the jury can come to a split decision on this one, won't it?

ELKIND: I think it's a possibility. There's some sense that they're going to be in for a dime, in for a dollar.

M. O'BRIEN: Yes.

ELKIND: That if one is convicted, it'll drag the other one down. But it's also possible they could cut the baby in half, so to speak.

M. O'BRIEN: Interesting.

All right, Solomon like decisions in Houston, perhaps.

Peter Elkind from "Fortune" magazine, always a pleasure.

ELKIND: Good to be with you.

M. O'BRIEN: Soledad.

S. O'BRIEN: An exclusive with Larry King tonight. For three decades, we all asked, you know, who's Deep Throat? Well, the Nixon administration inside who helped Woodward and Bernstein expose the Watergate scandal, now we know it was Mark Felt, the FBI's number two guy.

Well, tonight, Felt sits down with Larry King in his only television interview since the identity was revealed.

(BEGIN VIDEO CLIP FROM "LARRY KING LIVE")

LARRY KING, HOST: How did you know all the things you knew?

MARK FELT, "DEEP THROAT": Well, I was focusing on the paperwork and the oral work that came to me, just on an over the counter basis. So I was familiar with it all.

KING: So you see yourself as just doing what any good person would do?

FELT: Yes. Yes.

KING: Some people have said that you were kind of like a Lone Ranger during this scandal, a law enforcement officer acting alone.

FELT: Well, that's a compliment, in any way, but it's true. I was acting alone pretty much.

KING: Did you ever, during all this time, were you ever tempted to tell anyone?

FELT: No.

KING: Never?

FELT: Never.

KING: Did your family know?

FELT: No, they didn't know either.

KING: Your daughter didn't know?

FELT: No.

KING: How did you do that?

FELT: Just maneuvered round and about.

KING: What about when you -- when you would read in the papers, this person is Deep Throat or that person is Deep Throat or -- how did...

FELT: I'd clip it and put it in a book.

KING: You saved items...

FELT: Yes.

KING: ... about who Deep Throat might be?

FELT: Yes.

(END VIDEO CLIP)

S. O'BRIEN: You can catch the full exclusive interview tonight on "LARRY KING LIVE." That's at 9:00 p.m. Eastern time.

Still to come this morning, violent demonstrations on the streets of Greece triggered by a visit from the secretary of state, Condoleezza Rice.

Plus, we're going to talk to a terrorism expert about just who may be responsible for those deadly attacks in Egypt.

That's up next on AMERICAN MORNING.

We're back in a moment.

(COMMERCIAL BREAK)

S. O'BRIEN: Another terror attack at an Egyptian resort, this one in Dahab. At least 23 people dead, dozens more injured, including four Americans. It is the fifth attack on tourists in Egypt over the past two years.

Joining us this morning from London to discuss the implications, Sajjan Gohel.

He is the director of international security at the Asia-Pacific Foundation.

Sajjan, nice to talk to you, as always.

Thanks.

On Sunday we hear this message from Osama bin Laden and then a day later, Monday evening in Egypt, you have this attack.

Do you think they're related?

SAJJAN GOHEL, ASIA-PACIFIC FOUNDATION: Well, Soledad, I wouldn't look too much into it, because this attack was multiple, coordinated, a mass casualty atrocity. It would have been too soon for a group to plan an operation of this scale.

But what you're finding is that terrorist groupings throughout the world are inspired by the messages that Osama bin Laden and his deputy, Ayman el-Zawahiri, offer.

In fact, Ayman el-Zawahiri, the number two, issued a statement on March the 4th. That could have actually played a role in inspiring yesterday's horrific terrorist attack.

S. O'BRIEN: So maybe not directly linked, but certainly some kind of a link there.

Who do you think is responsible, Sajjan?

GOHEL: In the past, the terrorist attacks that have taken place in Egypt have actually been conducted by legal groups. In fact, the country is very much the ideological home to al Qaeda. A lot of the group's personnel are Egyptian and the government has had a very hard time in eradicating the threat.

If we look at the last two attacks on resorts, in Taba in October 2004, and Sharm el Sheikh in July last year, local Bedouin tribesmen actually played a role in facilitating the attack. And the strong suspicion is that this attack could also involve the same type of individuals, based on the fact that it's in the same area. We don't know as yet. Information is still coming out. But it is highly suspected to be Egyptians that have played a role in this.

S. O'BRIEN: Why -- what would motivate the Bedouin tbsp to play a role in this?

GOHEL: Well, in the past, the Bedouin tribes have actually been involved in the drug trade quite a lot. They were involved in smuggling in the region. And it seemed inevitable that as they were drawn to crime, not too far behind is terrorism. They are strange bedfellows, but they work very well together.

And the extremists inside Egypt have exploited the situation. Because the Mubarak government cracked down on the terrorists heavily, they basically moved their resources from the major towns and cities of Egypt. They moved to the coastal resorts, where they felt they were able to launch attacks without any difficult.

And as we have seen since 9/11, there have been a number of deadly attacks inside Egypt. And what is so worrying is that this probably isn't going to be the last one.

S. O'BRIEN: Yes, no, I think that's fair to say.

There was a crackdown, too, against terrorists back in November of '97 after the attack on Luxor.

Are you saying that in the time that has passed since then that there's been a backing off of that vigilance, essentially?

GOHEL: Well, that's a good point. Since the Luxor massacre, the Egyptian government had to act very quickly. It improved its security apparatus, its intelligence. It was able to dismantle a number of cells.

But as we have seen, Soledad, is that what the terrorists do is that they evolve. They change their strategies. They buy their time. They wait for a time like this and then they'll strike without any warning. They're the invisible enemy. They can't be identified or distinguished by uniform.

And that is the major challenge for the government. They're going to have to now get a hold on this because Egypt depends heavily on tourism. These type of attacks will severely threaten their own economy, which is what the terrorists wanted. They wanted to create economic, political and social consequences.

S. O'BRIEN: And so far it's working.

All right, terrorism expert Sajjan Gohel.

Thanks, Sajjan, as always.

Appreciate it.

GOHEL: My pleasure. S. O'BRIEN: Miles.

M. O'BRIEN: Ahead on AMERICAN MORNING, are rising gas prices changing your dream car into a nightmare? And how is that changing the tires you might be kicking? We'll talk to a dealer about that.

It's now 8:26 Eastern time.

I'm on my fourth or fifth or it might even be my sixth cup of coffee. Before I have another, I'm going to listen to the latest study on coffee and cardiac health. That one is brewing. It'll be served piping hot, shortly.

(COMMERCIAL BREAK)

S. O'BRIEN: Violent clashes in Athens. Secretary of State Condoleezza Rice is there this morning. Vocal protesters are facing off with police.

Iran's nuclear ambition becomes a rallying point for the Iranian people. They see it as more than just a power struggle.

And gas prices are rising. Are prices really changing the way we shop for cars? We'll go on a little shopping trip, just ahead this morning.

Good morning.

Welcome everybody.

I'm Soledad O'Brien.

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

We're glad you're with us.

Carol Costello looking at some headlines for us -- good morning, Carol.

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