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American Morning
CIA Leak Lawsuit; Oil Crisis
Aired July 14, 2006 - 08:33 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Welcome back, everybody. We want to take you to some live pictures right away. You're looking at pictures of Qirya Shemona. This is in Israel near the Lebanese border.
MILES O'BRIEN, CNN ANCHOR: And what we're seeing here, we believe, are the immediate remnants of an attack from the other side of the border from Hezbollah militants, probably Katyusha rockets. So yet another reprisal, the tit for tat violence continues, so does the escalation. We're watching it for you. Let's get a lock at the headlines. More on this and other stories, Brianna Keilar in the newsroom. Brianna, good morning.
(NEWSBREAK)
S. O'BRIEN: Terrible, terrible news. All right, Brianna, thanks for the update.
Former CIA operative Valerie Plame going after the big guns. She's suing Vice President Dick Cheney, former aid Lewis "Scooter" Libby and White House political strategist Karl Rove. She contends they ruined her career.
AMERICAN MORNING's Bob Franken live for us in Washington, D.C. Hey, Bob.
BOB FRANKEN, CNN CORRESPONDENT: Good morning. And here we thought the story was starting to wind down, didn't we?
The lawsuit on behalf of Valerie Plame and her husband, Joseph Wilson IV, claims that the administration was trying to get vengeance by disclosing her secret CIA identity because he had been was such a harsh critic of the administration.
Reading from the lawsuit complaint, this complaint arises out of a conspiracy among current and former high level White House officials in the White House and actions taken by, and on behalf of those officials in 2003 to violate the constitutional and other legal rights of Valerie Plame Wilson and her husband Joseph Wilson IV.
Now, the practical affect of this will be less what kind of compensatory, or punitive damages might be available, but it has the ability to once again bring to the public eye and perhaps under sworn depositions the conduct of White House officials could prove to be an embarrassment. A lot of that will be up to the judge.
The only of the officials that would make a comment was Karl Rove. His spokesman, Mark Corallo put out a statement that said, among other things, that it is clear that the allegations are absolutely and utterly without merit.
Well, we're going to be hearing an awful lot about these allegations. Another avenue has been opened up to keep the story before the public -- Soledad.
S. O'BRIEN: Yes. That is true.
What about precedent here? Has it been done before -- sue a vice president?
FRANKEN: Well, we could do a legal program here, maybe call it the "billable hour," or something like that.
The fact is that there is probably conflicting legal precedent. That's the kind of thing that the lawyers will argue. The practical effect of this is the possibility that it's going to force on the public record information that could be embarrassing or not embarrassing to the White House.
S. O'BRIEN: Hmm. We will see. Bob Franken, thanks.
We're going to hear from Valerie Plame and her husband Joe Wilson later this morning. CNN's got live coverage of their news conference that they're holding. 10:00 a.m. Eastern is when that happens -- Miles.
M. O'BRIEN: Latest on the CNN gas gauge. Queue the music. Tension builds. What do you think it's going to be, Soledad?
S. O'BRIEN: Why, $2.96 a gallon. Although, I played $3.27.
M. O'BRIEN: You cheated. You looked at the TV.
S. O'BRIEN: I did.
M. O'BRIEN: $2.96 a gallon. Yeah, and here, forget about it. That's for unleaded regular.
A month ago it was $2.89, a year ago $2.32.
Bombs over Beirut leading to bomb shells at the gas pump for our SUV nation. Oil prices now at a new summit And Probably headed higher.
Let's check in with the expert on all of this. Phil Flynn joining us from the Chicago Board of Trade. He deals in oil. The oily business of trading oil.
Phil, good to have you with us. I've got to tell you, everybody is at home saying, OK, three bombs get launched and the guy down the corner starts raising gas prices. People feel like they're getting gouged.
PHIL FLYNN, CHICAGO BOARD OF TRADE: They really do, but they're really not. The truth of the matter is that the oil prices and the oil market is at the greatest threat I have seen it in years. And in it's -- there are real reasons for this oil price and gasoline prices to spike up, and comes down to risk.
Basically, what oil prices don't tend to that price is an insurance policy to make sure that oil gets from point A to point B, in the particular time frame. And obviously, you have to admit that what's happened in the Middle East has raised those risks considerably.
I wouldn't want to write an insurance policy on an oil tanker right now, I'll tell you that, especially it was going through the Strait of Hormuz off Iran.
M. O'BRIEN: Interesting. There's a lot of things to consider. And you guys really factor in more than most of us think about.
FLYNN: Yes.
M. O'BRIEN: Here's -- I want to -- this is a surprising list for most people. The top suppliers of oil outside of this country -- Canada, Mexico, Saudi Arabia then, Venezuela and Nigeria. We are not as Middle East dependent as a lot of people might think.
FLYNN: No.
M. O'BRIEN: So, how does stuff in the Middle East impact us so directly?
FLYNN: Well, the bottom line is, is that the way the world oil markets are, there's not a invalable (ph) spare drop anywhere on the globe. For example, if we lose Middle Eastern oil because of this situation -- let's say Iran decides to stop pumping oil tomorrow, what country are we going to go to to replace that oil? Countries like China and India that use Iranian oil are going to say, hey, we need oil too. So it goes right into the available world pool of market. And when you start taking away from that, you are taking away from the United States.
So, you know, right now, with no spare production capacity in the world right now or very little to speak of, a disruption anywhere on the globe affects every American directly and immediately.
M. O'BRIEN: So, we're all in the same bath of oil here?
FLYNN: We sure are. We're sinking in our own barrel of oil. That is right. We're going over the river in a barrel if we lose this oil.
M. O'BRIEN: Put the -- put for a moment, put this all in perspective with the hybrid/ethanol craze. I mean, that's just such a fraction of a percent. When will they really start having an impact, do you think?
FLYNN: That's the big debate. You know? What scientists are debating right now. And some people think it will never, ever replaces oil directly. But I'll tell you what...
M. O'BRIEN: Well, something's got to replace oil eventually, right?
FLYNN: Yes. I mean, -- and ethanol is going to play a big roll. But the problem is, it's -- and the ethanol markets are traded here in Chicago. And they're going on fire right now. The grain markets are crazy, because of ethanol.
But the problem you have is that most experts don't believe we can grow enough corn, grow enough soybean, grow enough bean oil to replace the amount of oil it's going to take.
Then you are competing with what we eat every day. So, it's going to be a real difficult process to totally replace it.
Everybody points to Brazil and says, well, you know, they went to sugar totally. But the amount of oil and ethanol that they consume is a very small percentage to the United States. It's going to take ethanol, but it's also going to take other fuels, as well to meet the demand growth in the next 20 years. And it's going to be an incredible challenge.
And we are going to do it. We're going to find different technologies because high prices create ingenuity and the prices are really making people smart right now.
M. O'BRIEN: There's your silver lining. Good job, though.
Hey, just quickly, I hear a lot of yelling back there. Is that just a typical day?
FLYNN: Well, this is actually a typical day. We had some big numbers that came out on import prices and retail sales. Retail sales a lot softer than thought for us. So drove this bond market that's right behind me up a little bit initially because it shows that the economy might be softening a little bit more than thought for. So, that could affect the fed's interest rate decision going forward.
M. O'BRIEN: Boy, you have got to keep your voice intact when you do that job.
FLYNN: I know. I'm telling you. I have lost it three or four times this week.
M. O'BRIEN: I believe it. I believe it. Phil Flynn, our energy analyst. Thanks for dropping by again. Appreciate it -- Soledad.
S. O'BRIEN: Potential disaster unfolding in Southern California. An area already under a state of emergency. One massive wildfire is threatening to merge with another. And weather conditions are making an already dangerous situation much, much worse.
CNN's Kyung Lah is live Morongo Valley. She's got the very latest for us.
Kyung, good morning.
KYUNG LAH, CNN CORRESPONDENT: Good morning, Soledad.
Firefighters are working furiously this morning as we speak trying to prevent that potential disaster. What you're seeing over my shoulder, and there are houses below this area, but that fire line that you're seeing right there, that's backfire, intentionally set fire by the firefighters in order to burn out some of that brush. They're hoping that the fire on this edge, the southern edge, will burn itself out. That's very active fire in this region. Firefighters trying to protect the people who are below. At this point, there are hundreds of people in this region who have been evacuated. Right in this Morongo Valley area, under mandatory evacuation. Total evacuation for all of the people in this fire, the Sawtooth Fire is 2,000 homes. Overnight firefighters say they did not lose any homes. This is a major victory for them, because the fire did burn very close to homes, 47,800 acres.
Governor Schwarzenegger declared a state of emergency for this region. That frees up some state dollars. This fire will cost about $6 million. What firefighters are looking ahead to today saying if the weather conditions continue, they're looking at a very tough fight.
(BEGIN VIDEO CLIP)
RICK GRIGGS, SAWTOOTH FIRE SPOKESMAN: The heat, the humidity is going to come back up. We don't know what the winds are going to do, and in these canyons, the winds can be shifting and we'll just have to see what the fire brings today.
(END VIDEO CLIP)
LAH: And what they're also looking for is whether or not this fire, the fire behind me, the Sawtooth Fire, will be merging with another fire, the Mallard (ph) Fire. If those two fires combine, firefighters say that they're just going to have to continue to try to build a ring around it and try to contain it. At this point, the Mallard Fire, the other fire that is just west of us has only five percent containment -- Soledad.
S. O'BRIEN: Bad, bad news there. All right, Kyung Lah for us, thanks.
(WEATHER REPORT)
S. O'BRIEN: Ahead this morning, we're taking a disturbing look inside America's prison system. A deadly gang, they're caught on tape beating fellow inmates and carrying out a reign of terror behind bars. We'll show you the pictures.
M. O'BRIEN: And later, the Middle East on the brink. Is Israel responding proportionately, or has it crossed over a dangerous line? Senator John McCain is our guest ahead on AMERICAN MORNING.
(COMMERCIAL BREAK) S. O'BRIEN: The Aryan Brotherhood, a white supremacist group that operates behind bars, has been called one of the deadliest criminal gangs in America. In California, prosecutors are trying to put an end to this secret society by sending gang leaders to death row. A new story to tell you about this morning.
We've got to warn you, though, some the videotape is very disturbing. Take a look.
(BEGIN VIDEOTAPE)
S. O'BRIEN: This videotaped beating is what federal prosecutors are using to lay out a disturbing portrait of America's prison system. The tape is some of the most powerful evidence in the racketeering and murder trial of four members of the Aryan Brotherhood, a white supremacist organization accused of instituting a reign of terror on black inmates in several prisons. The videotape was recorded by a corrections officer inside the Supermax prison in Florence, Colorado, the same prison that houses Zacarias Moussaoui and Ted Kaczynski, the Unabomber.
Authorities say one of the attackers is Christopher Overton Gibson. He's among four alleged leaders of the Aryan Brotherhood and implicated in 32 murders and attempted murders. Prosecutors say the videotape reveals just how much some of the most secure penitentiaries have been taken over by gang violence.
LAURIE LEVENSON, FMR. PROSECUTOR: This is an enormous case, probably the largest of this kind brought by the government.
S. O'BRIEN: In a California room, prosecutors built their case around the gang's leader, Barry Byron Mills, nicknamed "The Barron," saying he had a role in every beating and killing of prison inmates. His codefendant, Tyler Davis Bingham, "The Hulk," was described as Mills criminal partner, who helped orchestrate the killings.
In their closing arguments, prosecutors say, despite being locked up in a maximum-security prison, the Brotherhood managed to assemble an infrastructure that operated like the mob, dealing drugs, putting hits on other players who disrespected their rules.
Former assistant U.S. attorney Gregory Jessner led the investigation.
GREGORY JESSNER, FMR. ASST. U.S. ATTY.: More than half of them involved stabbing with a prison-made knife fashioned out of metal found in the prison.
S. O'BRIEN: The prosecution's case was attacked by defense attorneys as a witch hunt in a prison system where violence is common and paid informants are known to lie.
LEVENSON: This is not an easy case for the prosecution, because to prove their case, they essentially had to call other inmates, and those inmates, are murderers, and liars and gang members and all the things that jurors don't like. S. O'BRIEN: Federal authorities are trying to use the racketeering and corruption statute to dismantle the gang of its powerful influence, similar to how the government brought down mob figures, like the Gambino family.
If convicted, Mills and Bingham could be sentenced to death in San Quentin, the same prison where the gang started the reign of terror more than 40 years ago.
(END VIDEOTAPE)
S. O'BRIEN: Of the 40 people arrested, 16 of them could face the death penalty -- Miles.
Up next, Andy "Minding Your Business." Hello, Andy.
ANDY SERWER, "FORTUNE" MAGAZINE: Hello, Miles.
A great way to makes tens of thousands of dollars in America. Drop some Mentos into some bottles of Diet Coke. We'll explain. Also Goldman Sachs versus Goldman Sex. Are you confused by that? Well, some say you might be. Coming up, we'll tell you all about it.
(COMMERCIAL BREAK)
(BUSINESS HEADLINES)
S. O'BRIEN: Top stories after a break. Stay with us.
(COMMERCIAL BREAK)
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