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American Morning

Baghdad Crackdown; Bush's Iraq Visit; Iran is Watching

Aired June 14, 2006 - 06:30   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Happening this morning, Tropical Storm Alberto downgraded to a tropical depression. Right now it's over South Carolina.
President Bush back home from yesterday's surprise trip to Iraq. Later today, he's going to brief congressional leaders on his visit.

And Operation Advancing Forward Together has begun in Iraq. Tens of thousands of security forces, most of them Iraqi, are fanning out across Baghdad as part of a security crackdown.

Let's get right to John Vause. He's live in Baghdad for us on more -- with more on that operation this morning.

Hey, John. Good morning.

JOHN VAUSE, CNN CORRESPONDENT: Good morning, Soledad.

That security operation now just over eight hours old. And in general terms, it seems that Baghdad is a little quieter today than it has been, especially compared to the last week. But this operation seems to be less than what we were originally led to believe by the Interior Ministry here, limited mostly to hundreds of checkpoints in and out of the roads into the capital here in Baghdad, as well as a very high visibility of Iraqi forces on the streets of Baghdad.

Cars have been searched. And at last report, police say they found three Katyusha rockets and have diffused at least two roadside bombs. But for now, no activity in the areas controlled by the militias or those Sunni neighborhoods which are seen as a stronghold for the insurgency here. But this is still early.

The prime minister says the operation is open ended. But still, this operation has not been enough to stop a car bombing in Baghdad. Police say the explosives were set off by remote control, killing at least two people. Also in that same area, a police patrol came under attack from a roadside bomb, but in that instance, no one was hurt -- Soledad.

S. O'BRIEN: And then some major anti-U.S. demonstrations in Baghdad to talk about, John. Can you fill us in on those?

VAUSE: Well, it seems not everyone here was not happy to see President Bush on that surprise visit to the Iraqi capital yesterday. About 2,000 supporters, possibly more, of the Shiite cleric Muqatada al-Sadr have taken to the streets, protesting not only the visit by the U.S. president, but also the ongoing U.S. occupation. They've been chanting, "No, no, America!" And that "Iraq is for Iraqis!" -- Soledad.

S. O'BRIEN: John Vause in Baghdad for us this morning.

John, thanks -- Miles.

MILES O'BRIEN, CNN ANCHOR: President Bush got back to the White House about three hours ago after that surprise visit to Baghdad. He wanted to look Iraq's new prime minister right in the eye.

CNN's Kyung Lah live now from Washington with more.

Kyung, good morning.

KYUNG LAH, CNN CORRESPONDENT: Good morning, Miles.

The key for this White House will be to keep that momentum going politically. We are anticipating more talk on the Hill today about the status of U.S. troops in Iraq. Some Democrats are urging a speedup of the troop draw-down, and now some members of the Bush administration, while being cautious, say they are looking forward to that day.

(BEGIN VIDEOTAPE)

LAH (voice over): The president returned to Washington early this morning, the closing scene to a well-choreographed political theater, from meeting with Iraq's new prime minister, to exchanging handshakes and high-fives with U.S. troops.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've come today to personally show our nation's commitment to a free Iraq.

LAH: Riding the success of eliminating terrorist leader Abu Musab al-Zarqawi and seeing a new Iraqi cabinet completed, the political talk now is troop draw-downs.

DONALD RUMSFELD, SECRETARY OF DEFENSE: There will be meetings with General Casey and minister of defense and the prime minister in the weeks ahead, discussing at what pace we're going to be able to draw down our forces. And it will -- it will all be done in a very orderly way.

LAH: Moderate Democrats say now is the time for troops to begin heading home.

SEN. CARL LEVIN (D), MICHIGAN: I hope that that is true, that you'll see some phased redeployments in the coming months. And I think the president's trip is likely to lead to phase redeployments this year.

LAH: But Republicans warn against pulling out of the still unstable country too soon.

SEN. RICK SANTORUM (R), PENNSYLVANIA: It is important for the Iraqi people to know that we are not going anywhere, that we are not setting timetables. (END VIDEOTAPE)

LAH: The president does have a full schedule ahead today, hardly any time for a nap, Miles. He will be briefing political advisers called the Iraq Study Group and then he'll be talking to congressional leaders about his trip to Iraq -- Miles.

M. O'BRIEN: Kyung Lah in Washington.

Thank you very much.

At ABC News in New York, a welcome visit from a wounded colleague yesterday. Anchor and correspondent Bob Woodruff, severely injured by a roadside bomb in January in Iraq, stopped by with his wife, Lee.

(BEGIN VIDEO CLIP)

BOB WOODRUFF, ABC NEWS ANCHOR: I woke up in this -- in this hospital, and I looked up and I just thought about you guys. And I thought about everything that I wanted badly to come back to.

LEE WOODRUFF, BOB'S WIFE: Bob is the luckiest guy in the world, as the surgeons have said. But I also think a large part of healing is about being surrounded by people who care about you and love you, and he's had that from everyone here.

WOODRUFF: Man, it's good to be here.

(END VIDEO CLIP)

M. O'BRIEN: It was Woodruff's first visit to the newsroom since being hurt. No word on when he'll return to work.

Happening "In America" now.

Jerry Lewis battling back from a heart attack in a San Diego hospital this morning. Lewis suffering a mild heart attack on a flight from New York. He also apparently has pneumonia. Lewis is now 80. He's postponed some shows in Las Vegas for next month, but says he still plans to host the annual Muscular Dystrophy Telethon Labor Day Weekend.

In New York, school administrators at Northport High School sending out a letter of apology to parents over Adolph Hitler quotes in the school's yearbook. Two seniors submitted quotes from "Mein Kampf" to be put next to their pictures. Neither quote was stopped by the yearbook's staff or faculty advisers. The school hasn't decided whether to discipline either student.

Arizona firefighters starting to get the upper hand on a wildfire north of Phoenix, but the fire has still moved within a mile of more than two dozen homes there. Residents were moved to an evacuation center. The fire sparked by lightning.

A risky operation to separate conjoined twins in Los Angeles set for later this morning. The 10-month-old girls, Regina (ph) and Renata (ph), joined from the chest to the pelvis, and they share some vital organs. The surgery will involve a team of 80 experts. It is expected to take 24 hours.

And proof yet again that it's never too late to fulfill your dreams. Josephine Velasco (ph) will graduate from Galileo High School in San Francisco today at the tender young age of 98. Josephine (ph) attended the school from 1921 to 1924. She never got her diploma.

Congratulations to her.

S. O'BRIEN: She looks amazing for 98.

M. O'BRIEN: She looks fantastic. Truly young at heart.

Chad Myers, we all hope to look that good at 98, don't we?

CHAD MYERS, CNN METEOROLOGIST: She looks good enough to go for her Ph.D. You know?

M. O'BRIEN: She's still going.

MYERS: Yes.

M. O'BRIEN: She's going to keep going.

MYERS: Good morning, guys.

(WEATHER REPORT)

MYERS: Back to you guys.

S. O'BRIEN: All right, Chad. Thanks.

Still to come this morning, no relief for those Indonesian villagers in the shadow of Mount Merapi. Once again, they're being chased by the volcano. We'll have more on that this morning.

M. O'BRIEN: And then Germany gearing up for what could be the most explosive game of the World Cup. Security forces preparing for the possibility of riots. A report from Germany is ahead.

S. O'BRIEN: And then this: Are Iranian spies targeting New York City? An update on security concerns about that just ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Millions of tourists come to New York City each and every year to see the sights. Others, though, might have other reasons for looking around and taking pictures. Are Iranian spies in the U.S.? And are they targeting New York City?

CNN's Mary Snow has a CNN "Security Watch" this morning.

(BEGIN VIDEOTAPE) MARY SNOW, CNN CORRESPONDENT (voice over): Is Iran keeping a close eye on New York City landmarks like the Brooklyn Bridge, major buildings and subways? New York City Police Commissioner Ray Kelly lists three surveillance cases involving Iranians since 2002 as reasons for concern.

COMMISSIONER RAY KELLY, NEW YORK POLICE: Well, we know the Iranians have always had an aggressive surveillance program in the United States, and particular in New York City.

SNOW: In 2004, the State Department expelled two security guards at Iran's U.N. mission in New York after authorities say they were discovered taking pictures of subways, buses, tunnels and other landmarks.

MICHAEL O'HANLON, BROOKING INSTITUTION: But my view is that there is a hypothetical danger here, but it's not imminent.

SNOW: At the time, the Iranian mission dismissed the incident, saying the photos were tourist shots. But two other pairs of security guards at the Iran mission have been forced to leave the United States since 2002 under similar circumstances.

Kelly says he believe it adds up to a pattern.

KELLY: Well, here's three incidents that we know of, but it's certainly been the word in the intelligence community that they engage in this sort of thing quite regularly.

SNOW: Just what would they do with these pictures? Kelly says there's no specific information on that, but he counts these incidents among 17 terrorism or potential terrorism incidents he says points to the need for additional security for New York. He is protesting cuts and funding from homeland security grants to New York.

(on camera): CNN has made repeated calls to the Iranian mission here in New York, but we did not receive a response.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

S. O'BRIEN: Mary's report first aired on CNN's "THE SITUATION ROOM." You can see more with Wolf Blitzer weekdays at 4:00 p.m. Eastern.

And be sure to stay tuned to CNN day and night for the most reliable news about your security -- Miles.

M. O'BRIEN: Still to come on the program, another major CEO turning down his annual bonus and pay raise. Yes, I said it, he turned it down. Andy is "Minding Your Business" with that.

And we're going to take you to Germany, where police are preparing for what could be the most violet scenario of the World Cup. Soccer fans, they play for keeps. Stay with us for more AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Happening this morning, Tropical Storm Alberto is now a tropical depression. Right now it's centered over South Carolina, dumping plenty of rain along the way.

President Bush is back in Washington, D.C., this morning after yesterday's surprise trip to Iraq. He's going to brief congressional leaders on his visit later today.

And in Indonesia, a volcano erupts again, forcing hundreds of people to flee Mount Merapi, spewing searing hot gas and volcanic debris right into the air. Merapi's been very active over the past month -- Miles.

M. O'BRIEN: Palestinian tensions top our look at stories correspondents all around the world are covering for CNN today.

(BEGIN VIDEOTAPE)

FIONNUALA SWEENEY, CNN CORRESPONDENT: I'm Fionnuala Sweeney in Jerusalem. Tensions running high in Gaza and the West Bank. About 50 civil service workers stormed the parliament building in Ramallah Wednesday, demanding food and money. The international community has slapped sanctions on the Palestinian Authority following the Hamas election victory in January. Tens of thousands of civil servants have gone unpaid.

Meanwhile, Israel has said it is not responsible for an explosion in Gaza last Friday in which seven members of one family were killed while picnicking on a beach. They point to a number of factors and suggest Hamas may have laid mines on the beach. However, Human Rights Watch disputes the Israeli report on almost every fact.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

STAN GRANT, CNN CORRESPONDENT: Hi. I'm Stan Grant in Beijing.

It's a simple diplomatic equation, China, a key U.N. Security Council member, needs oil. Iran has oil, needs the support of a U.N. Security Council member. You can throw Russia in there as well. The three countries involved in a strategic summit in China, as Iran continues to hold out against international pressure to get rid of its nuclear program.

(END VIDEOTAPE)

(BEGIN VIDEOTAPE)

CHRIS BURNS, CNN CORRESPONDENT: I'm Chris Burns in Dortmund, Germany, and this is Friedensplatz, or Peace Square, where thousands will be turning out to watch from this public viewing screen as Germany takes on Poland. Here in Dortmund tonight, it's a crucial match, where if Germany wins they go on to the next level of the competition. If Poland loses, they're out.

Authorities are hoping things remain peaceful here, but take a look at the crowd barriers here. And authorities are concerned there could be some kind of showdown between hooligans from both countries. Authorities say they don't know how many hooligans will turn out, and they're not telling us how many police are on the ground. But they do say there are twice as many as during a recent match between Sweden and Trinidad and Tobago.

The main overnight train from Poland arrives here this afternoon, and we'll be watching.

(END VIDEOTAPE)

M. O'BRIEN: The World Cup in Germany, showcasing the ultimate in versatility, strategy and skill. We're not talking about the human soccer players here. The 10th annual RoboCup begins today. RoboCup is an international effort to promote intelligent robotics through soccer.

Scientists, engineers from all over the world take part in this thing. The ultimate goal is to develop a team of robots that can win against the human world champ -- World Cup champion soccer team by the year 2050.

The question is, would you pay to see a game like that? Scientists still working on the robotic, drunk, boorish fan. That's -- that's coming. That's coming.

ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": They could probably beat the U.S. team.

M. O'BRIEN: Probably.

S. O'BRIEN: Oh, hey. Hey. OK. Enough.

M. O'BRIEN: Currently, yes.

Andy Serwer, good morning to you, sir.

SERWER: Good morning to you guys.

Some business news coming up. A tale of two CEOs. One is doing the right thing, and the other, well, he's Jeff Skilling.

(LAUGHTER)

M. O'BRIEN: Also ahead on the program, actress Daryl Hannah making a splash in L.A. How does a mermaid climb a tree, you ask? Well, we'll have some answers for you and why police had to take her down from that tree and why she was up there in the first place ahead.

Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Andy Serwer, if you've been paying attention, has been chronicling the misadventures of H&R Block all season. And now...

S. O'BRIEN: Another chapter.

M. O'BRIEN: ... an interesting chapter. Actually, this is -- this is maybe -- maybe this is a turnaround.

SERWER: Maybe it's the right thing.

M. O'BRIEN: Yes.

SERWER: Of course, H&R Block, the nation's largest tax preparation company, has been in the headlines. And as Miles is suggesting, they haven't been very good headlines.

Now we're learning CEO Mark Ernst has turned down his annual bonus and pay raise because of all these problems. That makes sense. Disappointing earnings.

The refund loan program is under fire. So, too, is his Express IRA product for low income taxpayers. You may remember that.

So, he is foregoing a whole bunch of money. But he is taking 400,000 shares, options, and his long-term bonus. This is just a short-term bonus that he's foregoing.

S. O'BRIEN: What are the numbers? Do you know?

SERWER: They're not saying exactly what it is, which makes you wonder.

S. O'BRIEN: Well, has his short-term bonus just become the long- term bonus?

SERWER: Well, Soledad, you know, that kind of thinking -- you really should...

S. O'BRIEN: I know.

(CROSSTALK)

M. O'BRIEN: Tax deferred, you might say.

S. O'BRIEN: Right. That was the word I was looking for.

SERWER: An $860,000 salary, he is still keeping that as well.

M. O'BRIEN: Yes.

SERWER: Now, moving on, as promised...

S. O'BRIEN: Well, was he the one who was doing the wrong thing or the right thing? SERWER: No, he was doing the right thing.

S. O'BRIEN: Oh, OK. Sorry.

SERWER: Because it is clear that he is foregoing some money.

S. O'BRIEN: I follow you.

SERWER: OK?

S. O'BRIEN: Kind of.

SERWER: Kind of.

Jeff Skilling, the former CEO of Enron, of course, convicted now, awaiting sentencing on September 11th. But now we hear, by the way, that his lawyers want to push that back 45 days, surprise, surprise. Keep him out of jail longer.

M. O'BRIEN: I guess. Is that the only reason? Might as well just get it over with, right?

SERWER: Well, no.

M. O'BRIEN: Anyway...

SERWER: The longer you're not in jail the better, I think.

Sixty million dollars of his assets has been frozen, and now his lawyers, especially Dan Petrocelli, has filed a motion with the court saying that they want these assets unfrozed (ph) because he has obligations to his children, his family. And then Petrocelli said, and, of course, he owes a substantial sum of money to his lawyers.

S. O'BRIEN: To his lawyers.

SERWER: That's why Dan Petrocelli wants some of that money back. Fifty million dollars of stock and bonds, presumably not Enron stock that Mr. Skilling has, along with a couple of cars, a condo in Dallas, and a $5 million home in Houston.

S. O'BRIEN: What does the law say about that? I'm curious. I mean, you know, at some point, if you do have a family and kids and they need a home -- I mean...

SERWER: I think that he will get some of that money released. But...

S. O'BRIEN: How do they decide how much gets to go to your family and how much goes to your creditors?

SERWER: Well, I think he could get all of it back as long as he's not fined. It is, ultimately, his money.

M. O'BRIEN: Tell us what you've got next. SERWER: Coming up next, we're going to be talking about that crazy, crazy stock market. Will it ever recover, you guys? We'll talk about that in a little bit.

S. O'BRIEN: A bummer ahead.

SERWER: Yes.

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

SERWER: You're welcome.

S. O'BRIEN: A look at some of the stories we're working on for you this morning.

President Bush returning from his surprise visit to Iraq.

A major security crackdown is under way right now in Baghdad.

A government audit finds that FEMA disaster relief payments were used for things like season football tickets and Caribbean vacations and strippers.

Comedian Jerry Lewis recovers from a mild heart attack.

And two teenagers are facing assault charges for fights recorded and then posted on the Web site MySpace.com.

We're looking at all those stories this morning.

First, though, a check of the forecast. Chad's at the CNN Center.

Hey, Chad. Good morning.

MYERS: And good morning.

(WEATHER REPORT)

S. O'BRIEN: He paid $8,000 for a hotel room in Hawaii. He also paid for somebody else's sex change operation. These are just a few examples of how your tax money was misused after Hurricane Katrina. A new report out this morning has even more to be outraged over.

M. O'BRIEN: MySpace leads to jail space. A taped attack posted on the Web site leaves two teens facing some serious charges.

CAROL COSTELLO, CNN ANCHOR: I'm Carol Costello.

Actress Daryl Hannah climbs a tree and refuses to come down, and police -- until police cut her down. Why? We'll tell you in just a few minutes.

M. O'BRIEN: Donation or redemption? Members of a Delaware community turn their backs on a million-dollar gift because of a family history. S. O'BRIEN: And Marines not monsters.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He's being treated like a convicted murderer. He's not being treated like a potential murderer. Potential murderers are often out on bail and most often are not in solitary confinement.

(END VIDEO CLIP)

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