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American Morning

North Korea Missile Threat; New Jersey Rolls The Dice; Minding Your Business

Aired July 05, 2006 - 07:00   ET

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

MILES O'BRIEN, CNN ANCHOR: Had worked it might have been able to reach the western U.S. The North Koreans do have a nuclear program, but American intelligence believes it's unlikely they have a nuclear device that is small enough to fit into the nose cone of a missile. We begin our coverage this morning with our national security correspondent, David Ensor, live new from Washington.
David, what is the purpose of launch after launch after launch? I'm asking you to get into the mind of the North Korean regime, but let's give it a try.

DAVID ENSOR, CNN CORRESPONDENT: Well, analysts are saying this certainly today. You do not launch seven different missiles, three different kinds of missiles, all within hours of each other, and do it as a missile test. This was not designed to see how good the missiles are. This was designed to send a message in the view of U.S. analysts.

And the message was, North Korea is strong. North Korea could attack many places all at once if it wants to. North Korea needs to be receiving a good deal of attention from the world. And North Korea is a little annoyed that Iran is being offered a package of incentives, as well as disincentives, including a light water breeder reactor, by the world, by the U.S. and the Europeans, if it will give up its nuclear program. Well, North Korea would like some of those goodies too. So the idea is to get attention, to upset the neighborhood and it seems to have done that.

Miles.

O'BRIEN: David, the Taepodong-2 missile, the long range missile, which we had been talking so much about in advance, a lot of concern about that test. That one was a dud through all of this. What are we to make of that?

ENSOR: Well, that's a little embarrassing for Kim Jong-il that that missile failed within less than a minute of launch. That is the one everyone was worried about. That's the one that theoretically might have the range to reach U.S. territory, Alaska perhaps, maybe even the west coast. So the fact that it fizzled and went into the Sea of Japan is obviously good news from the point of view of U.S. intelligence and military officials who were watching its every move.

But that said, the fact that it was launched at all is regarded as provocative by the United States and a source of great concern. And if you think the U.S. is upset, take a look at how Japan feels. They had a missile fired over them in 1998 by the North Koreans and clearly they are quite upset about this one, Miles.

O'BRIEN: And, of course, South Korea to be mentioned here as well.

ENSOR: That's right.

O'BRIEN: Millions of people within artillery range of North Korean guns. And as this situation begins to escalate, not to mention the U.S. troops there as well, as this situation begins to escalate, that is on everyone's mind in that part of the world.

ENSOR: Well, that's right. I mean North Korea is playing, in a way. It's not fired at anybody, but these missiles don't have very good guidance systems and everyone knows that. They could, by accident, hit somebody and start off a conflagration. So they're playing with fire. Everyone knows it.

And, you know, there's going to be a strong diplomatic reaction at a minimum to this. But we'll just have to see where the North Korean dictator wants to take this. He clearly wants attention. He's hoping to get concessions. He believes that by this sort of performance he will get them.

But the risk for him is that he will also unify people against him. The Chinese, the Russians are likely to be more inclined to vote for sanctions against him or other stern measures against North Korea because of what he's done. So he's playing with fire, but that's the way North Korea likes to play it.

Miles.

O'BRIEN: And often times they do overplay their hand. David Ensor, who covers national security issues, for us. Thank you very much.

Let's go to the White House now. The White House sending its chief negotiator on North Korea to Asia today. For more on the reaction from there, we turn it over to Suzanne Malveaux who's on the North Lawn this morning.

Good morning, Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, good morning, Miles.

As you know, President Bush is getting constant updates on these missile launches and administration officials we've heard from, National Security Adviser Stephen Hadley, as well as the White House Press Secretary Tony Snow, both of them saying that this was a provocative act, provocative behavior by North Korea. But the security adviser stressing here that there's no immediate danger to the United States.

Clearly the administration is really walking a tightrope here. On the one hand they realize this is an attention-getting strategy. A tactic. They don't want to fall into in play. They don't want to fall into this trap. So what they are saying, on one hand, they're condemning this act. But the other hand, really trying to pull back a little and say, look, this is not an issue between the United States and North Korea. A statement yesterday coming out from Tony Snow saying, "this provocative act violates a standing moratorium on missile tests to which the North had previously committed, regardless of whether the series of launches occurred as North Korea planned. They nevertheless demonstrate North Korea's intent to intimidate other states but developing missiles of increasingly longer ranges. We urge the North to refrain from further provocative acts, including further ballistic missile launches."

So what is the United States doing? They're sending Christopher Hill of the State Department, the chief negotiator, to the region to try to work with at lies, Japan, South Korea, China, to put the kind of pressure on North Korea to get them back to the six-party talks.

Even last night, Miles, a demonstration of this administration trying to show it was not going to play into North Korea's hands. President Bush celebrating, watching the fireworks, on the Truman Balcony, had a birthday party. All of that to convey this message here that they are removed, they are stepping back. But at the same time, Miles, make no mistake, very much concerned about what has happened there.

O'BRIEN: All right. The timing not lost on the administration at all, happening on the Fourth of July. Almost on the same countdown clock at the space shuttle. Suzanne Malveaux at the White House.

Carol.

CAROL COSTELLO, CNN ANCHOR: Japan and South Korea, the two most threatened countries, were quick to react. China's response is significant. It has the most influence over North Korea. This morning it is calling for a cool-headed response to the missile test. We have live reports from all three places. Jamie FlorCruz in Beijing, Sohn Jie-Ae in Seoul. But we begin with Atika Shubert in Tokyo.

Atika, Japan is close. Of course it's nervous. Can it impose economic sanctions or war economic sanctions on North Korea?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, Japan has taken its toughest stand. It's already decided to impose economic sanctions, although it does seems to be approaching it gradually. Its first step was to bar North Korean officials from entering Japan and also to suspend a ferry service that runs between North Korea and Japan. It's the only direct link between the two countries.

And the government has said that it will consider putting in more economic sanctions. But first it wants to concentrate on the U.N. Security Council meeting that's due to happen in a few hours' time. Japan is trying to consolidate the international reaction to this and trying to get the Security Council to issue a resolution condemning the missile launches.

Having said all of that, even though there is a tough stand here, Japan's prime minister, Junichiro Koizumi, also briefly met with reporters, saying that even though these missile launches will gain North Korea nothing, there still must be left room for negotiations. So clearly leaving the doors open for talks with North Korea. But we'll have to wait and see after the security council exactly what kind of position Japan and the rest of the international community will take on North Korea.

COSTELLO: Atika Shubert, thanks.

South Korea has also been reluctant to threaten sanctions in the past. But that may be changing. Sohn Jie-Ae live in Seoul, South Korea, to tell us more.

SOHN JIE-AE, CNN CORRESPONDENT: Well, Carol, South Korea has not yet said anything about sanctions, but South Korea has expressed frustration as to what it views as North Korea's provocative act. Now the South Korean foreign minister, as well as the South Korean government spokesman, has said that North Korea's firing of the missiles has given new strength to hard-line views outside of South Korea, especially those in the United States and Japan. That it has further isolated North Korea and that it has made it more difficult for South Koreans to be more favorable toward the North.

And that is what South Korea has said for a long time tried to do as South and North Korea tried to reconciliate South Korea's for the past decade or so, has made a policy of embracing North Korea. And it has worked very hard. And South Korea, at this point, is very frustrated when it sees what its attempts being erased by North Korea.

Carol.

COSTELLO: Jie-Ae, thanks.

As we said, China may be the most important player in all of this. And we do have some reaction beginning to come out of that country now. Jaime FlorCruz live in Beijing, China.

Jaime, China is calling for a cool-headed response. What does that mean?

JAIME FLORCRUZ, CNN CORRESPONDENT: Well, it means that China hopes that all the parties will desist from taking any further actions, such as perhaps economic sanctions that will merely add tension and complicate the situation. That was the message from the China foreign minister spokesman, Liu Jianchao, who issued a statement just not long ago. After an initial silence, China's finally taking a position that it wants restraint, although it mans seriously concerned.

This is typical of China position on this. China remains a very important player in this because it is a member of the permanent -- it's a permanent member of China's security council and it will veto power. However, China also wants to please the Americans and to play a peace-keeping or peace-maker role rather than a troublemaker role. So they hope that both sides, the United states and North Korea, will stick to diplomacy and will return to the six-party talks. Carol.

COSTELLO: But won't more pressure be heaped upon China to do something about this because it has the most influence there? What specifically can China do?

FLORCRUZ: China does not want to apply publicly anyway, to apply pressure on North Korea. They think that North Korea is a very proud nation, it's a sovereign country and they prefer to use diplomatic channels behind the scenes to convince North Korea to give up its nuclear ambitions, as well as to stop launching missiles as they did this morning. China also hopes that the best way to resolve this crisis is through diplomacy, through negotiations, through dialogue, and especially directly between the U.S. and North Korea.

Carol.

COSTELLO: Jamie FlorCruz reporting live from Beijing, China, this morning. Thanks.

O'BRIEN: We're about three hours away from an urgent meeting of the U.N. Security Council. CNN's Richard Roth live now at the United Nations to give us a sense of how this will go.

China's reaction will be watched very closely, Richard. China, with, by far, the most sway of any country over North Korea.

RICHARD ROTH, CNN CORRESPONDENT: It's an uncomfortable position for China here at the Security Council, especially following multiple missile launches from North Korea, a country which it has defended in parts during past crises. China was able to keep the North Korea item, you might say, off the political agenda here. It is a permanent member of the Security Council. It has veto power.

That Security Council meeting will get underway in about three hours behind closed doors. There won't be any speeches today in public. There will certainly be some ambassadors talking to the press.

NATO, this morning, calling for a firm international community response, looking to the Security Council. Former U.S. Ambassador Albright says the problems for the U.S. will be finding that united front against the North Korean, though Russia today summoning the North Korean ambassador in Moscow in for talks. Both China and Russia warned North Korea not to launch missiles.

Miles.

O'BRIEN: I guess the question which comes up time and again is, what is the goal? What does the North Korean regime want?

ROTH: Well, they certainly wanted attention, which they're going to get from the U.N. today. They may not fear political statements on paper. It may be if things get to sanctions, economic measures that may cause a dent in their, you know, flagging economy, you might say. But in the past, they haven't exactly reacted when there have been tough words here at the United Nations.

O'BRIEN: Richard Roth at the United Nations, thank you very much.

Coming up on our program, more on those North Korean missile tests. We'll see whether they offer any clues about the country's nuclear program.

COSTELLO: Also ahead, Atlantic City casinos might have to fold today. We'll look at the budget battle that could shut down the city's slots and card tables.

O'BRIEN: And hard to been it's been 10 years now since we first said hello Dolly to the sheep. The clone sheep. Did she revolutionize medicine as promised or was that kind of a woolly case of hype? We'll get into that in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Happening this morning.

Israel attacking the Palestinian interior ministry. The second air strike on Gaza this week. The Israelis still trying to free an Israeli soldier held hostage by the Palestinians.

Afghanistan now. Kabul on alert. There are a series of bombings. Three morning attacks killed at last one, injured dozens of others in the Afghan capital. The blasts come a day after a double explosion in Kabul injured seven people.

High stakes talks to stop Iran's nuclear ambition delayed for at least a day. Unclear why. Iranian leaders meeting with European diplomats to see what incentives might prompt the Iranians to stop enriching uranium.

A court appearance today for six of those alleged terrorists in Miami. They're accused of plotting to blow up several buildings, including Chicago's Sears Tower. The judge will decide if they should be held without bond.

The immigration debate heating up once again -- or hitting the road today I should say. Senators Arlen Specter and Ted Kennedy will hold a public hearing on the matter in Philadelphia. Meanwhile, House Republican will hold a hearing in San Diego.

The first full day in space for the crew of the space shuttle Discovery. The astronauts up and running now and enjoying the view. They'll start checking out the orbiter for any damage that might have occurred from falling foam during yesterday's launch. So far the indications, everything's OK, but they'll be doing a lot of work trying to check it out. Discovery set to arrive at the International Space Station sometime tomorrow.

Time for a check of the forecast. Chad Myers at the CNN Center with that.

Hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Miles.

How many launches have you seen?

O'BRIEN: You know, I was trying to count them up. It's been a bunch. it's been a bunch.

MYERS: Does it ever get old?

O'BRIEN: No. I've got to tell you, you know, my heart starts beating and it's kind of scary and just so impressive all at once.

MYERS: I hear the ground rumbles like an earthquake, too.

O'BRIEN: You know, when the conditions are right, there is a little pond right there by that clock and the flag, the fish, the mullet, will jump out of the water.

MYERS: No kidding.

O'BRIEN: It's amazing. I mean that's -- it just rumbles.

MYERS: Yes, all right. Well, hey, great job yesterday.

O'BRIEN: Thank you.

MYERS: I mean I watched everything from home, so good stuff.

O'BRIEN: Well, thank you, Chad.

(WEATHER REPORT)

COSTELLO: Countdown is on for gamblers in Atlantic City. The city's 12 casinos already starting to close down ahead of the 8 a.m. deadline. And all because the New Jersey state government has not been able to reach a budget deal. CNN's Mary Snow is live in Atlantic City this morning.

Good morning.

MARY SNOW, CNN CORRESPONDENT: Good morning there, Carol.

And it's sort of a last call here at the Borgata. If you can see behind me, the slot machines are silent. Poker tables are being cleared out. This casino and 11 others here in Atlantic City are under state order to shut down in less than an hour now. This because of a budget stalemate.

(BEGIN VIDEOTAPE)

SNOW, (voice over): In a rare July 4th special session, New Jersey Governor John Corzine told lawmakers to act on what he called an immediate constitutional crisis. A crisis that could play out on New Jersey's poker tables Wednesday morning. Atlantic City's 12 casinos could be forced to shut for the first time if a state budge agreement isn't reached. Gamblers say they feel like bargaining chips.

MITCHELL KRAMER, GAMBLER: Put all these people out of work and the income that the state derives from the casino, it's asinine to shut these casinos down.

SNOW: Casinos would be affected because they can only operate with state monitors. Those monitors are part of the next phase of a government shutdown that began Saturday. Union leaders say it would affect far more than state employees.

BOB MCDEVITT, UNION LEADER: Right now there's 60,000 workers in the Atlantic City industry that are holding their breath and it's just not fair.

SNOW: The showdown reaches everything from state offices, to race tracks, even state beaches could be forced to close down. It centers around a one percentage point sales tax increase the state's Democratic governor says is needed to narrow a $4.5 billion deficit.

GOV. JOHN CORZINE, (D) NEW JERSEY: Any spending cut, any tax increase is politically risky and difficult. But I also understand that taking a problem head-on is better than hiding from it even when it hurts.

SNOW: Corzine is facing resistance from fellow Democrats, mostly the New Jersey state assembly speaker, who says Corzine's plan is not the only remedy.

JOSEPH ROBERTS JR., (D) NEW JERSEY ASSEMBLY SPEAKER: It is almost as if his position is, if there is no sales tax, there is no state of New Jersey.

SNOW: Corzine says his plan would cost an average family $260 a year. State officials say, if casinos are closed, $1.2 million would be lost per day in tax revenue. The political cost is still being tallied.

(END VIDEOTAPE)

SNOW: And needless to say, a lot of frustrated gamblers here this morning. A lot of them said they didn't expect it to come to this. And some casino owners also said that they expected that a compromise would be reached in time for the shutdown to be averted. And this is the first time these casinos have been shut down since they opened here in Atlantic City in 1978.

Carol.

COSTELLO: Wow, so $16 million a day in profits for those casinos. So maybe this is the push the state legislature needs.

SNOW: That is what, obviously, a lot of these gamblers and operators are hoping for. But a lot of people walking around here today kind of shrugging their shoulders, shaking their heads, saying they don't understand the logic. If this is a money maker and the whole problem is that the state is losing money, why shut the casinos? That's the big question being asked.

COSTELLO: Does seem quite illogical, doesn't it? Mary Snow live in Atlantic City this morning.

O'BRIEN: It would force us all to think like a politician, which would be a difficult thing.

COSTELLO: Who can understand that?

O'BRIEN: Who can get that, right?

The Reverend Jesse Jackson is taking on a new battle. Coming up, Andy will tell us why Jackson is going after one of the big oil companies. He's got quite a list of grievances. Not Andy, I mean Jesse Jackson does. Anyway, he's "Minding Your Business."

COSTELLO: Well, Andy, too.

O'BRIEN: Yes, but he's got some other issues.

And later, could the U.S. really fend off a missile attack by North Korea or anybody else for that matter? An up close look at America's missile defense system. Try to get beyond the hype on that one, too. Stay with us for more AMERICAN MORNING.

(COMMERCIAL BREAK)

COSTELLO: Well, the Reverend Jesse Jackson is protesting at a Texas refinery and he says all Americans should be concerned. Andy's "Minding Your Business." He's here to tell us more.

ANDY SERWER, CNN CORRESPONDENT: I will, Carol.

Jesse Jackson yesterday on the Fourth of July demonstrating in front of BP's Texas City, Texas, refinery. You may remember this refinery last year where there was a terrible explosion there and 15 workers were killed, 170 were injured. About 100 demonstrators were there, including some United Steelworkers.

Reverend Jackson has a hodgepodge of complaints, I think it's fair to say. He's concerned about price gouging by BP, discriminatory hiring practices, as well as unsafe working conditions. So you've got the gouging, the unsafe, and then discriminatory practices. Jesse Jackson saying that there are no upper level African-American or black executives at BP and no black owners of distribution companies of BP. BP owns Amoco and ARCO.

BP counters by saying that 24 percent of its officials and managers in the U.S. are minorities, including 614 blacks. They have two African-Americans on the board, they say. And it's interesting that the reverend is going after BP because it has a long standing reputation for being the green oil company. The oil company that responds and cooperates with environmentalists and conservationists. Exxon has a sort of different reputation. But in this instance, I think, he sees fit to go after BP.

O'BRIEN: Green isn't enough. He wants a rainbow.

SERWER: Yes.

O'BRIEN: All the colors.

SERWER: A rainbow coalition, in fact.

O'BRIEN: Yes. Absolutely.

What's next?

SERWER: Next we're going to be talking about incoming Treasury Secretary Hank Paulson and all the cash that he's getting before he assumes his new post.

O'BRIEN: Make it a little easier to handle that government pay, huh?

COSTELLO: Oh, so that's -- that's (INAUDIBLE).

SERWER: Timing is everything.

O'BRIEN: Yes, no, not at all, Carol.

COSTELLO: Thanks, Andy.

M. O'BRIEN: Coming up, we'll have the latest for you on the breaking news that continues to come out of North Korea. The country's missile test. Yet another one while you were sleeping. We'll look at what they mean and what the possibilities are for North Korea's nuclear capabilities.

Ten years now since we said hello Dolly. Dolly the cloned sheep. The not so little lamb. Did she make good on promises for medical break-throughs? I don't think she made any promises, but the people who made her. That's ahead on AMERICAN MORNING.

COSTELLO: That would be amazing.

(COMMERCIAL BREAK)

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