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AMERICAN MORNING

Crisis In The Middle East; G8 Faces Crises; Worsening Wildfires; CIA Leak Lawsuit

Aired July 14, 2006 - 07:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: And we begin with breaking news. Escalating attacks in the Middle East. Israel and Hezbollah again trading rockets and bombs this morning.
Middle East unrest is pushing oil prices to a new record high. How bad is it going to get for all of us?

MILES O'BRIEN, CNN ANCHOR: A Pennsylvania town takes a drastic stand against illegal immigration. But have they gone too far?

S. O'BRIEN: And destructive wildfires growing now in southern California. Two big fires are on the verge of becoming one big disaster.

M. O'BRIEN: And a space walk creates a tiny new satellite. I guess you could call it putty knife one. We'll talk to the man who lost his tool but not his cool as we dial up 1-800-Space-Station ahead on this AMERICAN MORNING.

Good morning to you. I'm Miles O'Brien.

S. O'BRIEN: And I'm Soledad O'Brien.

There is still no break in fighting in the Middle East. Israel continues to pound away at targets in Lebanon, including another attack on the airport. President Bush apparently telling the Lebanese prime minister that he's going to help push for a cease-fire. We're covering all the angles this morning. CNN's senior international correspondent Nic Robertson in Beirut for us.

Good morning, Nic. Good morning.

NIC ROBERTSON, CNN CORRESPONDENT: Good morning, Soledad.

Prime Minister Fouad Siniora did receive a phone call from President Bush a little while ago, pledging support and understanding for the government's current position. The prime minister already called Condoleezza Rice to tell her about the escalating situation, express his concern and asked her and the United States government to get involved and bring a comprehensive cease-fire at this time.

Beirut has been under continued attacks through the morning, with (ph) the attacks on the airport. Now there were five Middle Eastern airline aircraft waiting to get off the runway to fly out of Beirut to safety. The airport was patched up. A deal was made that they could fly off. Right after that, the airport was bombed again. Roads linking into the airport, a tunnel, two bridges have been hit. A fuel depot at the airport has been hit. A fuel depot at an electricity generating station south of the city has been hit. There's power outages in areas in the center of Beirut.

The port towns of Triplie (ph), of Siden (ph) and of Tiare (ph) are blocked according to Lebanese officials. The main road linking Beirut to the Syrian capital of Damascus was hit overnight. It was hit again in the early hours of this morning. The impact on people here is to feel that they are not Hezbollah. The people of Lebanon, rather than Hezbollah specifically, are bearing the brunt of these attacks.

Soledad.

S. O'BRIEN: Well, let's talk a little bit about that difference if we can for a moment. We heard just a moment ago from the former Israeli Prime Minister Ehud Barak who clearly is linking Hezbollah and the Lebanese government. I mean there's a connection, but how much control does the Lebanese government have over Hezbollah?

ROBERTSON: Well, so far they appear not to have had very much. There were cabinet meetings yesterday. They proved inconclusive. The government didn't decide which way to go and what to do about Hezbollah.

Hezbollah, through its leader, Sheik Hassan, Sheik Hassan Nasrallah has earlier this year threatened to attack anyone that tries to disarm Hezbollah. Hezbollah has two ministers in the cabinet. No doubt they were arguing the position of Hezbollah.

But it seems that this time that the government is either unable or perhaps as the Israeli officials have been saying, unwilling to reign in Hezbollah. The net result is, is that Hezbollah today, through its TV channel Al-Manar, announced more Katyusha rocket attacks on a town in northern Israel. The situation at the moment appears to be continuing attacks. And I hear aircraft in the skies overhead right now.

Soledad.

S. O'BRIEN: Nic Robertson updating us. All right, Nic, thanks. We're going to continue to check in with you throughout the morning.

Let's talk more about those attacks. Let's get right to Israel this morning. Paula Newton live in Jerusalem for us.

Hey, Paula.

PAULA NEWTON, CNN CORRESPONDENT: Hey, Soledad.

So on the other side of the equation here, in fact, the Israelis also confirm that at least one Katyusha rocket landed in Nahariya just a few minutes ago. And that was the exact location where the first Israeli lost her life to that Katyusha rocket. You can imagine the jitters in that border community right now, Soledad. They have been in bomb shelters most of the evening and now they may have to remain there for a good portion of the day.

It's a very difficult thing to explain to the Israeli families along the border there. And at this point what is going on in this conflict is really starting to resonate with the families there. There are starting to feel it as well in terms of what's already gone on in Gaza and what continues to go on in Lebanon.

Soledad.

S. O'BRIEN: Paula, is there any sense that as the violence escalates there is -- the room for negotiation is sort of getting squeezed out?

NEWTON: Well, they're working on it, Soledad. Assistant secretary of state, David Welch, is right now in Ramallah on the West Bank talking to Palestinian authority president Mahmoud Abbas. We should get more of that meeting later on. I wouldn't expect too much for it. What he needs to do right now is to lay the foundation for what could be at any point in time some type of meeting of minds to think, hey, what's going to get us out of this.

Unfortunately, Soledad, what you see happen in this region, you know, the clock has almost gone back 10 years on what's gone on here and this whole cycle of violence and retaliation and violence and retaliation you kind of have to think at this point they've gone past the point of no return and they will exhaust themselves to a certain extent before any kind of reasonable peace can be seen.

Soledad.

S. O'BRIEN: Paula Newton for us this morning. Paula, thanks.

Miles.

M. O'BRIEN: The United Nations meets in an emergency session on the crisis later today. Lets get right to Richard Roth at the U.N. for a preview of that.

Richard, good morning.

RICHARD ROTH, CNN CORRESPONDENT: Good morning.

Of course this meeting an urgent meeting on the Lebanese situation follows the United States veto yesterday by U.S. Ambassador John Bolton. The first veto for Bolton in his capacity as America's delegate here, first U.S. veto in nearly two years. The U.S. ambassador said this resolution, which would have condemned Israel's incursion into Gaza, was untimely and not productive.

(BEGIN VIDEO CLIP)

JOHN BOLTON, U.S. AMBASSADOR TO U.N.: This draft resolution would have exacerbated tensions in the region and would have undermined our vision of two democratic states, Israel and Palestine, living side by side in peace and security.

(END VIDEO CLIP)

ROTH: The United States says that tensions would be increased by this resolution. It really, though, it said it was out moded (ph). It did its best, Washington, to stall action on it. The Palestinians were pushing for this much. There's been the two-week delay. They also think this veto sends a horrible signal to the region.

(BEGIN VIDEO CLIP)

RIYAD MANSOUR, PALESTINIAN REPRESENTATIVE TO U.N.: The failure to adopt today's draft resolution will not help to calm the situation or contribute to resolving the current crisis and it seriously harms the credibility of the council at this crucial time.

(END VIDEO CLIP)

ROTH: Ambassador Bolton blamed Syria and Iran for sponsoring attacks against Israel. He says that's where the real culpability is. We're going to have this urgent session in a few hours, Miles, on Lebanon. And it's likely to be debate. Though Lebanon is likely to call for international intervention in this situation.

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

In Beirut, U.S. embassy personnel and their families may soon be leaving town, but the State Department admits it is still too dangerous for any travel. Israel's bombing shut down the airport as we told you this morning. And the main road to Syria also destroyed by bombs. The Pentagon is preparing for a possible mandatory evacuation of the embassy and, as well, more than 20,000 other Americans that are currently in Lebanon. That operation would be backed by Marines coming from ships in the Mediterranean.

Whatever bombs drop in the Middle East, gas prices rise almost instantly in Peoria. Oil prices hit a new high. It's running around $78 a barrel now. Yesterday the price rose $4 a barrel. Andy Serwer will be with us in a few minutes with more on those oil woes.

Soledad.

S. O'BRIEN: Oil, in fact, and the Israel-Hezbollah conflict and Iran's nuclear ambitions, lots to talk about between President George Bush and his Russian counterpart, Vladimir Putin. Mr. Bush arrived in St. Petersburg, Russia, a little more than an hour ago. He and Mr. Putin are going to talk before the big G-8 gathering. CNN's senior international correspondent Matthew Chance is live in St. Petersburg.

Matthew, good morning.

MATTHEW CHANCE, CNN CORRESPONDENT: Good morning to you as well, Soledad.

That's right, President Bush has now arrived in St. Petersburg to attend the G-8 Summit of industrialized countries. That scheduled to get underway tomorrow. Ahead of that, though, there are a good many items on President Bush's itinerary.

Not least, of course, his meeting later on this evening with Vladimir Putin, the Russian president. The two leaders have a great deal to discuss. They'll be talking, obviously, about the rising tensions in the Middle East. They'll also be discussing the issue of North Korea and Iran's very controversial nuclear program.

U.S. officials say that President Bush will also bring up the thorny issue in a frank and private way of democracy in Russia. It's been one of the areas that has been a cause of tension between Russia and the United States over recent months. Washington accusing Russia of backsliding on democratic freedoms under Vladimir Putin. Russia denying that.

But as if to underscore the importance of the issue for Washington, President Bush will be meeting and participating in a round table of civil activists over the course of the day. NGOs, human rights activists, people like that, just to get their opinions ahead of that Putin meeting.

Back to you.

S. O'BRIEN: Matthew Chance for us this morning. Matthew, thanks.

Miles.

M. O'BRIEN: For firefighters in southern California, it is a train wreck in the making. Two big wildfires headed right for each other and the forecast offers not a shred of hope for relief from mother nature. CNN's Kyung Lah is right in the cross-hairs of both fires in Morongo Valley, California.

Kyung.

KYUNG LAH, CNN CORRESPONDENT: Well, Miles, this is the area where those two wildfires are expected to meet. But the immediate problem that firefighters say they're facing is this glow that you see over my shoulder. What you're seeing over there, that line, it may just look like a glow to you at home, but that, when the sun comes up, is expected to be a high wall of fire coming straight down that hill.

Sitting below that hill at the base are homes. Hundreds of homes. This is an area of a mandatory evacuation now. That took place yesterday afternoon. Hundreds of people told to flee because of that wall of fire coming down the hill. Firefighters today say they're going to try to do the best they can to protect those homes. They're going to light a fire at the base of the hill and hopefully that will burn up and that fire will burn itself out.

Overnight firefighters say there is a victory to tell you about. No homes were loss despite that fire coming perilously close to a few houses here. Forty seven thousand eight hundred acres have been scorched by this wildfire.

Governor Schwarzenegger has declared this are a state of emergency. What that does is it frees up some money for the firefighters to continue their fight from the air and on the ground. This fire has cost approximately $6 million, so they desperately need that money.

What they were expecting yesterday is that the two wildfires would meet in this canyon in this area. It did not happen. They say if the weather continues the way it is, that will likely happen today. Residents say they are certainly hoping that it won't happen and that their homes will be saved.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're just loading up for a hasty retreat. We're not packing everything. We're putting stuff that we need in the cars and we're going to wait it out and see if we can get through this.

UNIDENTIFIED MALE: It's coming right over the ridge right now, so it's looking pretty close. It's looking like it could happen.

(END VIDEO CLIP)

LAH: Firefighters say what they really need is for mother nature to help out. Now yesterday the winds did die down at some point in the afternoon slightly. They say that if the winds do stay a little low, hopefully they'll make some headway.

Miles.

M. O'BRIEN: Kyung Lah in Morongo Valley, thank you very much.

Let's get right to the forecast. Rob Marciano, not a pretty picture there is it?

(WEATHER REPORT)

S. O'BRIEN: Coming up this morning, much more breaking news out of the Middle East. We're going to take a closer look at the roll Iran and Syria are playing in this crisis.

M. O'BRIEN: Also, the outed CIA operative Valerie Plame suing the vice president and others. She says he ruined her career. But does she really have a case?

And a small town city council goes English only. Their tough new law on illegal immigration ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Happening this morning.

The search for the Mambai bombing suspects is now expanding with police tracing calls to Pakistan and Bangladesh. Indian Prime Minister Manmohan Singh is going to meet today with the victims who were wounded in the attacks. Japan's prime minister says he wants the U.N. to vote on a resolution that would imposing sanctions on North Korea before the G-8 Summit begins tomorrow. Japan's hoping to move forward on the resolution despite China's threat to veto the draft.

And it appears that Iran's going to miss a deadline that's aimed at persuading the country to suspend its uranium enrichment program. Iran's nuclear program will be among the key topics at the G-8 economic summit.

Miles.

M. O'BRIEN: More bad news for Boston's big dig. Inspectors say more than 200 ceiling vaults may be faulty. Same as the bolt that gave way on Monday allowing that big piece of concrete to fall crushing a car killing one woman. Lawmakers of Boston gave control of the big dig to the governor yesterday.

The city council in Hazelton, Pennsylvania, passing a law making it harder for illegal immigrants to live or work there. The law calls for $1,000 fines on landlords who rent to illegals and requires all city documents be in English only.

It's day 11 in space for the crew of the space shuttle Discovery. All the cargo's been transferred. The space walks are done. Time to button it up and move along. The crew will do one final round of late inspections to ensure that there wasn't any damage to the orbiter from micro meteoroids or space debris. By the way, space walker Pierce Sellers made a little space debris during his space walk. He lost a putty knife. It's now a satellite. We'll call it putty knife one.

Valerie Plame, the woman at the center of the CIA leak case, is now suing the vice president, his former chief of staff and the president's chief political operative, Karl Rove. She says they ruined her career. Interesting. CNN's senior legal analyst Jeffrey Toobin joining us now.

Good to have you with us, by the way.

JEFFREY TOOBIN, CNN CORRESPONDENT: Good morning.

M. O'BRIEN: She's suing them individually, right? This is like going after their personal bank accounts essentially.

TOOBIN: Correct.

M. O'BRIEN: OK. But there are laws in place and we talked about this, I believe, during the Clinton administration where there were some lawsuits that were aimed at him, that protect public officials while they're in office. Explain how that works.

TOOBIN: Right. It's called official immunity. It's that basically the idea is, is that there's a body of law that says public officials cannot be sued for acts that they do in the course of their jobs unless there are absolutely extraordinary circumstances. That is one of many hurdles that Valerie Plame has in this lawsuit. M. O'BRIEN: All right. First on that. Are there any loopholes in that? Because it says in the course of doing their duties.

TOOBIN: Right. I mean . . .

M. O'BRIEN: That does sort of create a little bit of play, right?

TOOBIN: Right. If it's outside -- if it is so far outside their duties. If, for example, you're on duty and you beat someone over the head with a baseball bat, that wouldn't be considered in the course of your duties.

M. O'BRIEN: OK.

TOOBIN: This is probably a little closer to official duties even if you believe the accusations that Plame made and those, of course, are far from proven.

M. O'BRIEN: Right. Unless your duties are a loan shark, in which case that is your duty.

TOOBIN: That's right. But that wouldn't be part of the government . . .

M. O'BRIEN: All right. So the point is, the chances of this moving forward are not great legally then?

TOOBIN: I think this lawsuit ranks somewhere between an actual lawsuit and a publicity stunt. We'll see where it falls.

M. O'BRIEN: And case in point here. Let's talk about the reality here. Valerie Plame, while she can no longer be an undercover CIA operative, a big fat million dollar book deal situation. Her husband, Joseph Wilson, big book deals as well. Where are the damages here, you know?

TOOBIN: Well, that is a very good question, where are the damages? But even before you get to the issue of damages, you have to deal with the question of liability and their claim that the Cheney and Rove and Libby conspired together to out her. I mean in fairness to them, the evidence that has been made public so far suggests that they did not conspire together. That Robert Novak, who was the vehicle through which she was outed, says there was no agreement among them. So, you know, putting aside the issue of damages, which as far as I can tell there are none, the question of liability is not even proved at all.

M. O'BRIEN: And there's also the question in the pictures we saw in "Vanity Fair," for example. And then, you know, going to the White House correspondents dinner in a way sort of -- Joseph Wilson and Valerie Plame kind of basking in the limelight once this all came out. Wouldn't that be used against them in a court of law?

TOOBIN: That would be used against them. In fairness to them, their argument would be, look, I was outed as an undercover agent. There's no point in trying to stay secret anymore. Now the fact that she seems to be enjoying the limelight is a bit of a problem. But the fact that she no longer was acting secretly she would say that's the problem of the people who outed me, not my problem.

M. O'BRIEN: All right. Is there then -- I mean what motivates this? Do you think it's, as you say at the beginning, it's a bit of publicity that . . .

TOOBIN: Well, I mean, yes, she just agreed to another book deal. She wants to keep her name in the news. But also, I think in fairness, she did have a career as a CIA agent. She was undercover. That was taken from her involuntarily and, you know, she is upset about that and wants some sort of remuneration, justification, reward for having gone through that suffering, thus the lawsuit. This is a long way from getting any money, I'll assure you.

M. O'BRIEN: All right, Jeff Tobin, thank you very much.

TOOBIN: All right.

M. O'BRIEN: Soledad.

S. O'BRIEN: We're going to hear from Valerie Plame and her husband, Joe Wilson, a little bit later this morning. CNN is going to have live coverage of their news conference. We expect that at 10:00 a.m. Eastern.

Ahead this morning, injured Kentucky Derby champion Barbaro has taken a turn for the worse. People everywhere pulling for him to survive. We'll take a look this morning at how Barbaro won the nation's heart, as we continue right here on AMERICAN MORNING.

(COMMERCIAL BREAK)

M. O'BRIEN: Oil prices going up at record levels. Andy Serwer is here with the bad news.

Hello, Andy.

ANDY SERWER, CNN CORRESPONDENT: Good morning, Miles.

Yes, truth be told, oil prices hovering right now around $78 a barrel. That is a record high and they have been climbing on the news in the Middle East. Obviously no oil facilities in Lebanon and Israel, but, of course, the fear is that it could somehow spread to other oil producing parts of the region. And just the general unsettled feeling this produces, obviously, not good for the psychological part of the oil business.

Also, there's problems in Nigeria, as well. There were some explosions at an oil facility there, as well as militants attacked boats carrying supplies to a Chevron facility offshore. Several sailors were killed there. Obviously that is not good either. Some analysts suggesting that the price could easily go to $80 a barrel, which would be a big psychological situation there as well. And, you know, we've got$3 a gallon gasoline. I think it's safe to say that we shouldn't expect any significant declines from that level at this point, particularly with so many people driving in the summertime.

M. O'BRIEN: Well, this gets back to my old song about how, you know, stuff that's in the tank at the corner gas station, the price of that will go up even though that was, of course, drilled a long time ago.

SERWER: That's right.

M. O'BRIEN: It's just the way it works.

SERWER: Right, it is just the way it works. We've finally gotten to that point, that it's simply the way it works and we're going to be paying more.

M. O'BRIEN: Get used to it, right?

SERWER: Yes, get used to it.

Now, none of this was good news for the stock market yesterday, as you can imagine. The Dow was down about 166 points. We're now down 288 points over the past two days. There's also, you know, more problems in the market in terms of tech stocks. People are concerned about earnings there. The Dow still up a little bit for the year. You can see this is a year-to-date chart, just up about 1 percent. But the volatile Nasdaq is down nearly 7 percent. Futures are up this morning but, you know what, it's still early, unfortunately. So, you know, we'll have more news to digest. With the stuff coming across the wire minute by minute here is it, obviously, going to affect what's going on on Wall Street this morning.

M. O'BRIEN: All right. What else is coming up?

SERWER: All right. We're going to be talking about chip makers coming up soon. Intel slashing jobs and also states attorney's general have filed lawsuits against chip makers. So we'll be doing some of that.

M. O'BRIEN: Thank you, Andy.

SERWER: You're welcome.

M. O'BRIEN: Coming up on the program, the crisis in the Middle East. What role are Iran and Syria playing in the violence. We'll take a closer look at that.

And are we -- we're all pulling -- and that's the crisis in the Middle East for sure.

We're also going to talk about -- there you go -- Barbaro. Everybody's pulling for Barbaro.

SERWER: Yes.

M. O'BRIEN: It's sad, you know. A closer look at how the injured Kentucky Derby champ won our hearts and is now in really grave condition. Stay with us. (COMMERCIAL BREAK)

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