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PAULA ZAHN NOW

10 Rockets of Unknown Origin Land Inside Southern Lebanon; Dozens of Transatlantic Terror Suspects Still at Large?; America's Vulnerabilities

Aired August 14, 2006 - 20:00   ET

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


PAULA ZAHN, CNN ANCHOR: Good evening, everybody. Glad to have you with us tonight.
There is breaking news in our "Top Story" coverage tonight. It is the most dangerous threat so far to the very shaky cease-fire in the Middle East. Here are the very latest bulletins.

As we speak, the cease-fire between Israel and Hezbollah is only 19 years -- hours, that is, old. But Israel's military has just confirmed that about 10 rockets have landed inside southern Lebanon tonight. Now, contrary to the first reports, Israel now says they may not have been Katyusha rockets, after all, the kind of rockets Hezbollah has been firing into Israel.

In any event, since the rockets have hit inside Lebanon, Israeli forces are not responding.

We're going to get an update on that in just a minute.

Meanwhile, roads into southern Lebanon are jammed, as thousands of civilians head home. Hezbollah is promising to help them rebuild. Its leader, Hassan Nasrallah, is even declaring victory tonight. And, for nearly an hour after his televised speech, Beirut's sky lighted up with fireworks, as his supporters celebrated.

President Bush now calls Lebanon -- and those are some of the fireworks you're looking at right there -- President Bush now calls Lebanon the third front in the war on terrorism, after Afghanistan and Iraq. He is warning Iran and Syria, don't give Hezbollah any more weapons.

Let's get straight to this hour's breaking story, reports of rockets landing inside southern Lebanon.

For that, let's turn to Chris Lawrence, who's along the dangerous Israeli-Lebanese border to begin that coverage.

Chris, what are Israeli officials confirming?

CHRIS LAWRENCE, CNN CORRESPONDENT: Paula, our producer here on the scene, Justine Redman, spoke directly to an official with the Israeli Defense Force.

He confirmed that those rockets started falling about midnight, our time. He says, right now, we have not confirmed who fired those rockets, but we do know that Israel has not retaliated. It raises two questions: whether the rockets were targeting some of the thousands of Israeli troops still patrolling southern Lebanon, or whether Israel has pushed its enemy so far north, that those rockets no longer have the range and capability to hit here in northern Israel.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): The cease-fire has created peace, but not peace of mind.

UNIDENTIFIED MALE: It seems very fragile at the moment.

LAWRENCE: Even after the cease-fire, there were several skirmishes. Israeli soldiers shot and killed several suspected Hezbollah fighters, who they say posed a threat to their forces in southern Lebanon.

UNIDENTIFIED MALE: That's why it's imperative that the vastly expanded UNIFIL and the Lebanese army take up their positions as quickly as possible.

LAWRENCE: The commander of U.N. peacekeepers met with Israeli and Lebanese officials on the border. They expect a multinational force of 15,000 fighters to start deploying there by early next week.

UNIDENTIFIED MALE: That buffer, then, makes the cease-fire hold.

LAWRENCE: Israeli officials say that, until the United Nations takes over security, Israeli troops will engage Hezbollah guerrillas only if they're threatened.

UNIDENTIFIED MALE: We're calling upon them to leave their weapons and walk away. But, even if they don't leave their weapons, we're not shooting them from the back.

LAWRENCE: In northern Israel, the sound of mortars is giving way to the sound of mothers. Sigal Ifroth (ph) and her family evacuated last month. They have come back to Kiryat Shmona. Their hometown was hit by 242 rockets since they left.

UNIDENTIFIED FEMALE: We there's going to be peace, but I'm not believe it. And I think that it's not safe to be here.

LAWRENCE: Still, for the first time in more than a month, there was peace and life on Israeli streets.

The country's prime minister, Ehud Olmert, admits, the operation was less than a complete success. Olmert claims that Israel pushed Hezbollah out of southern Lebanon, but promises to scrutinize the mission's failures.

Skeptical Israelis already feel this war has made Hezbollah leader Hassan Nasrallah more powerful than ever.

UNIDENTIFIED FEMALE: And I think that he wins in this war, if you're asking me. I think that he's -- win. He win. He win. (END VIDEOTAPE)

LAWRENCE: Again, we want to reiterate our breaking news, Israeli Defense Forces confirming to CNN that 10 rockets have fallen in southern Lebanon over the past few hours. Again, we do not yet have confirmation on who fired those rockets.

But it at least raises the possibility that it could have been Hezbollah, but, then, again, too, we have to determine whether this was an order from above, so to speak, or perhaps a renegade faction of Hezbollah that has decided to ignore its leadership's decision to accept the cease-fire with Israel -- Paula.

ZAHN: Chris Lawrence, thanks for the update -- and, once again, Israeli military officials telling our producers on the ground that they have not responded to these rockets, which were fired over this two-hour period that Chris was just talking about.

Our "Top Story" coverage now moves on to Beirut, where the news about tonight's new rocket attacks in southern Lebanon is also just breaking.

Let's go to Jim Clancy for the very latest from Beirut -- Jim.

JIM CLANCY, CNN CORRESPONDENT: There is no claim of responsibility coming from Hezbollah at this hour. We're going to have to wait some time, first to determine what kinds of rockets those are.

But it is worthy to remember that, during the conflict, just after the U.N. resolution was voted on, Hassan Nasrallah, the leader of Hezbollah, came out publicly and said that, while he would accept a cease-fire, he would not stop fighting Israeli troops inside Lebanon.

He, of course, is most famous here for driving the Israelis out, in the minds of many of his followers. He would not mind having that image refreshed in all of their memories. But, so far, there's no claim from Hezbollah.

I would think that we would see that. There's no such thing as a renegade Hezbollah unit. At least there never has been.

Meantime, all across Lebanon this day, people came out, and, for the first time, the bombs weren't falling.

(BEGIN VIDEOTAPE)

CLANCY (voice-over): Lebanon was one giant traffic jam from Beirut southward, as people displaced by the fighting tried to go back to their homes over bombed-out roads and bridges.

UNIDENTIFIED MALE: Thirteen days on byroads. And now we're going to go back.

UNIDENTIFIED MALE: Where are you going?

UNIDENTIFIED MALE: We're going home.

CLANCY: At the same time, Hezbollah leader Hassan Nasrallah appeared on television from an unknown location to claim that all the suffering had not been for nothing.

"We are facing a strategic and historic victory, and this is not exaggeration," he told his audience -- Nasrallah taking special care of his support base, pledging immediate aid to those whose homes have been damaged or destroyed. Teams of Hezbollah activists were already scouring the southern suburbs, just hours after the cease-fire, assessing damage and promising help.

But Nasrallah made it clear that the Lebanese government would have to deal with the billions of dollars in damage caused to Lebanon's airports, bridges, roads, and power stations. A major unanswered question remains, whether Hezbollah fighters will leave southern Lebanon and pull back above the Litani River.

"Who comes today, asking Hezbollah to disarm and give up their weapons to the government?" Nasrallah declared.

Senior political sources believe, Hezbollah will not disarm in the south, even though that is required, as the Lebanese army and U.N. peacekeepers are to take over security. Whether Israel will accept that remains in doubt -- that uncertainty only part of the danger facing the tens of thousands of Lebanese who venture back to their homes. The casualty count continues to climb, as unexploded ordnance kills and wounds civilians, especially children.

DAVID SHEARER, UNITED NATIONS HUMANITARIAN RELIEF COORDINATOR: There is an estimate that, possibly, up to 10 percent of the mortars and shells, artillery shells, that were fired into southern Lebanon did not go off. So, that is -- means there are thousands of rounds lying around, and we want to make sure that people are incredibly careful about moving around.

CLANCY: Fireworks displays were organized as victory celebrations. Impromptu gunfire raised the risk of too much enthusiasm.

Late-night celebrants in Beirut blared horns and chanted for Hezbollah and its leader.

UNIDENTIFIED MALE: Hezbollah! Hezbollah!

CLANCY: But the party was eerily in contrast to the casualty count and the economic toll the war has caused. In some ways, the celebration was a diversion. What Lebanon needs is a solution. And that can only come in the cold light of day.

(END VIDEOTAPE)

ZAHN: So, Jim, we have just confirmed that 10 rockets have landed in southern Lebanon. But, prior to that being announced, the reporting was still confusing about exactly what it is that Hezbollah has agreed to, either publicly or privately. Can you help clear that up for us tonight?

CLANCY: Well, I think the first observation I would have is that Hezbollah writes its own rules.

What Hezbollah wants to do in this case is to simply give guarantees that, if there's an international force and the Lebanese army down there, its fighters will not bear arms. It will not be a competitive military force in the area south of the Litani River.

On the other hand, the countries that are donating troops, putting in troops here for the international force, want guarantees that go beyond that. They want to see, in that area, those Hezbollah fighters turn over their arms, including rockets like the ones we're talking about tonight, because there's too much danger of an incident. There's too much danger that tempers could flare, and, suddenly, the rockets could fly.

That may be what we're seeing tonight. You had, earlier, four Hezbollah fighters killed who were supposedly threatening Israeli troops. That was the report coming out of Israel. Is this a response to that? It is unclear right now.

We're going to have to wait and see some of this cleared up -- serious concerns, though, about the disarmament issue down there on the border.

ZAHN: And, at least at the hour, the -- the Israelis are saying they're not going to respond to those 10 rocket attacks.

Jim Clancy, thank you so much for the update.

Now, tonight's breaking news about the launching of these 10 rockets into southern Lebanon is a very powerful reminder that the brand-new cease-fire is very delicate and fragile, indeed.

Now, right before that news broke, I spoke with Mohamad Chatah, a senior adviser to Lebanon's prime minister. He joined me from Beirut.

(BEGIN VIDEOTAPE)

ZAHN: What is your government doing tonight to disarm Hezbollah?

DR. MOHAMAD CHATAH, SENIOR ADVISER TO LEBANESE PRIME MINISTER: Tonight, Paula, the Lebanese army is making preparations to deploy in the south. And that will be in conjunction with U.N. troops who are already there and some that will be coming to beef up U.N. presence there.

At the same time, we're making sure that, when the army deploys, it will be the only armed force in the south. And that's why we're having discussions within the country to make sure that that happens.

ZAHN: So, will your government confiscate the weapons of Hezbollah?

CHATAH: What we care about, as a government, is to make sure that we move from where we are now to a point where that is not the case, that -- that we don't have armed presence or -- or dual armed authority in the south.

Now, how do we move from here to there? What is going to happen to the weapons? You know, I -- I -- I can't answer that now. There are many ways that that can happen. The important thing is, once we get from point A to point B, there will be no other authority, and any weapons outside those of the government or those of the United Nations will be considered illegal, and will be confiscated.

ZAHN: How, then, do you make sure that is the case?

CHATAH: There's no way that the Lebanese army is going to go there and forcibly take away Hezbollah's weapons.

The Lebanese cabinet, which includes Hezbollah, has agreed that the only force in the south will be the Lebanese army. And that's the only way the Lebanese army is going to deploy there.

ZAHN: So, are you telling me tonight, if you won't forcefully remove the rocket launchers and the munitions and the weapons from Hezbollah, that you are relying on Hezbollah's good faith?

CHATAH: It's not only good faith. It's arrangements to make sure that, on the ground, there's only one armed authority. That's why we're not rushing to the south to be in the middle of a -- of an uncertain situation.

ZAHN: You still haven't answered the question, whether you personally trust Hezbollah to disarm.

CHATAH: We're after making Hezbollah a normal party, political party, having the same rights and obligations as others.

This can happen. And Hezbollah says, yes, it can happen. Sure, it wants to resolve issues with Israel. We want that, too. But we cannot have two armies anymore. And that's something that the Lebanese people have spoken about, and said, yes, we want one country; we want one army.

ZAHN: Mohamad Chatah, thank you so much for your time tonight. We really appreciate your joining us.

CHATAH: You're welcome.

(END VIDEOTAPE)

ZAHN: And, coming up: more top stories we're following tonight, including some startling and new revelations about the alleged plot to blow up jetliners over the Atlantic.

(BEGIN VIDEOTAPE)

ZAHN (voice-over): The transatlantic terror probe produces a scary discovery. There could be dozens of terrorists still at large. And there's no telling where the investigation will finally lead. Plus, Target: USA -- how a determined enemy can find ways to attack. What have we done since 9/11, and why are we still so vulnerable?

All that and more just ahead.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ZAHN: Our "Top Story" coverage now moves on to the growing investigation into the alleged airline bombing plot in England. We have two reports with chilling new details in the investigation.

First to Deborah Feyerick in London, who has learned more about how the suspects may have raised money to carry out their plan.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): As Americans raised money to help victims of last year's deadly earthquake in Pakistan, the same relief effort was under way in Britain -- the difference, British investigators now believe some of the money raised in the U.K. went not to victims, but to several of the terror suspects, to carry out the jetliner plot.

The money was reportedly raised by a Pakistani charity that funds Islamic militants. A spokesman for the group, Jamat al-Dawat (ph), denies the charge, and tells CNN they never sent anyone to Britain to raise donations.

John Conyngham spent years investigate money laundering.

JOHN CONYNGHAM, GLOBAL DIRECTOR OF CORPORATE INVESTIGATIONS, CONTROL RISKS GROUP: It may well have been, of course, that many of -- the vast majority of funds that were raised for this earthquake donations were coming from genuine people, with genuine motivations, wishing to help. We're talking about a very small percentage here where -- who -- who may have decided to divert some of those funds, for very different reasons.

FEYERICK: And it's not just the money that's under scrutiny. Lord Nazir Ahmed, a member of parliament, is a leader among Britain's Pakistanis. He tells CNN, at least four of the alleged plotters traveled to Pakistan, telling their families they were going to help the earthquake victims.

LORD NAZIR AHMED, MEMBER OF BRITISH PARLIAMENT: Anything could be possible. We don't have any facts. What is truth is that these young people went to Pakistan to help with the charitable cause. They were young. They may have got involved with something which is illegal. They may not. So, only God knows what happened.

(END VIDEOTAPE)

ZAHN: So, Deborah, is there any evidence at all tonight that any kind of meeting took place between those young men and the planners of this operation?

FEYERICK: There is evidence that at least two of the young men may have met with an explosives expert.

But the one thing you have to keep in mind is that it would probably have been virtually impossible for these young Brits to avoid making contact with Islamic militants, since they were the ones who were really running many of the rescue operations there.

ZAHN: Deborah Feyerick, we're going to leave it there. Thanks so much.

Our "Top Story" coverage now turns to the urgent search going on right now for buried explosives in London.

Dan Rivers got an exclusive look at one of the most important clues so far.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT (voice-over): British security sources have told CNN they are confident of finding bomb-making material, even as the detailed forensic investigation into the alleged terror plot focuses on this apartment in East London.

These exclusive CNN photos taken by a neighbor with a camera phone show plastic containers being carried from the flat by police.

JOHN WEIR, NEIGHBOR: Most of it has been packaged up. I have seen some -- the round drums, the chemical drums they have sealed tight, lids and what have you. They have -- there's a few of them have come out.

RIVERS: The intensive police search is also continuing in woods near the town of High Wycombe. According to security sources, the police are looking for evidence of explosives-testing.

The British security sources confirm, the evidence seen so far indicates the alleged plotters were planning to blow up aircraft at their maximum cruising altitude, mid-Atlantic, positioning the explosives at the weakest point of the aircraft, intending for evidence to sink to the bottom of the ocean, potentially, the sources said, allowing similar follow-up attacks.

(on camera): Security sources have told CNN that they expect that some of the suspects being held at this high-security police station in central London may well be released without being charged.

(voice over): The British security sources have also cast doubt on multiple British and Pakistani media reports that the suspects have links to this man, Matiur Rehman, one of Pakistan's most wanted men for his alleged links to al Qaeda.

Security delays eased slightly at London's main airports, after the threat levels on both sides of the Atlantic were reduced.

But Britain's home secretary stresses, the security service MI5 is still hunting dozens of potential terror cells.

JOHN REID, BRITISH HOME SECRETARY: There are a number of other security service operations under way. There is still a very serious threat of an attack. The threat level is at severe, indicating the high likelihood of an attempted terrorist attack at some stage.

RIVERS: MI5 officers who were following the movements of the suspects have already been redeployed to monitor dozens of other suspected terror cells around Britain -- the security service estimating there are more than 1,200 individuals of concern across the U.K.

(END VIDEOTAPE)

RIVERS: Well, the police can hold those suspects for up to 28 days. There is no indication, though, that any charges are going to be laid any time soon. And it looks as if the police will use the full 28 days to gather their evidence, as they go through this inquiry.

I have also had confirmed that the security services have been monitoring other terrorist cells, suspected terrorist cells, which have been involved in sort of adventure training, team-building exercises in various national parks across Britain.

ZAHN: Dan Rivers, thanks so much.

Now, nearly five years after 9/11, the terrorist threat to the United States is changing, and changing all the time. So, we're devoting the rest of this hour to an urgent look at where America is most vulnerable to terrorists? We call it Target: USA.

Now, next in our "Top Story" coverage: the amazing high-tech scanners that may soon be coming to an airport near you, or, at least, a lot of Americans are hoping so.

(COMMERCIAL BREAK)

ZAHN: Welcome back.

As part of our "Top Story" coverage tonight, we're taking an in- depth look at where America is most vulnerable to terrorist attacks, and what, if anything, we are actually doing to improve our safety.

We call it Target: USA.

Now, last week, startling news from England about the alleged plot to blow up transatlantic airliners right out of the sky set off a nationwide CNN investigation.

And, tonight, reporters all over the country will show us exactly where those threats are.

But, first, the threats in the skies -- for more than 10 years now, U.S. authorities have known that al Qaeda wants to use liquid explosives on airplanes. So, what has been done about that? Well, last week, the government banned passengers from carrying liquids on to planes. But we wondered if there aren't any better solutions.

Here's investigative correspondent Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): Put this bag through a current X-ray screening device at any major U.S. airport and all you will find, says Joe Reiss, is regular stuff.

JOE REISS, MARKETING DIRECTOR, AMERICAN SCIENCE & ENGINEERING: But here's an umbrella...

(CROSSTALK)

REISS: ... again, a very normal thing. And there's a travel alarm clock in the bag.

GRIFFIN: But that's not all that is here. And that's why this report is troubling. Inside this typical looking briefcase with typical looking stuff is an easily hidden threat that Reiss says current screening would have missed.

REISS: What you're missing, though, on this image is a bottle with hydrogen peroxide concealed right behind it, which is exactly one of the substances that was of concern from the events of last week, here, again, not displayed by the conventional transmission X-ray.

GRIFFIN (on camera): But shows up right there.

REISS: But, clear as day, it just pops off the screen in the backscatter X-ray image.

GRIFFIN: Reiss is the head of marketing for American Science and Engineering outside of Boston. His company is using something called backscatter technology that he says would find organic material, liquid explosives, any explosives, that, until now, could easily be carried on an airplane.

Take a look at this image, which appears to be just a couple of wireless e-mail devices called BlackBerrys. And that's exactly what it is, until you see the image through new technology. One of the BlackBerrys appears to glow.

REISS: And it doesn't really matter, for this technology, if it's a liquid or a solid. It really makes no difference. Here's a solid explosive simulant that has been concealed on the back of that BlackBerry device. You will never find it with that conventional X- ray image.

GRIFFIN: American Engineering is using the same technology to do full body scans. Its CEO says, secondary screeners would be able to find just about anything concealed on someone's person, without even touching them. ANTHONY FABIANO, CEO, AMERICAN SCIENCE & ENGINEERING: It's the backscatter advantage. We will find explosives. We will find organic material. And we will identify them more clearly.

GRIFFIN: Critics warn, this could violate a person's privacy, but that hasn't stopped Anthony Fabiano and others across the country and across the world in a terror technology race, trying to come up with a foolproof system that will remove the threat.

The Ahura Corporation is marketing a handheld device, which CEO Doug Kahn says can almost instantly determine if this bottle of wine really is a bottle of wine, even without opening the bottle.

DOUGLAS KAHN, CEO, AHURA CORPORATION: The FirstDefender fires its laser.

GRIFFIN: The laser can read the chemical fingerprint of what's inside almost anything. This mouthwash bottle held acetone. So did this water bottle. And the wine, in just a few seconds, turned out to be gasoline.

KAHN: Gasoline, 82 percent.

GRIFFIN: The problem, say security analysts, is, technology is only part of the solution. Relying exclusively on it will have us constantly chasing new inventions, instead of chasing terrorists.

BRIAN RUTTENBUR, SECURITY TECHNOLOGY ANALYST, MORGAN KEEGAN: I actually think the -- the best solution is intelligence, stopping the terrorists before they even get to the airports, what we did this time. And that's with communications intercept. That's human intelligence. That's a variety of things that I think is much better off than trying to catch the terrorists once they're there.

(END VIDEOTAPE)

GRIFFIN: According to analyst Brian Ruttenbur, there are 20 or so companies trying to develop the one machine that's going to protect us, Paula, from liquid explosives.

But, even if the one machine does emerge in all this, they are very expensive, slow to put in place, and become ineffective or outdated the moment terrorists change their tactics. Paula.

ZAHN: Which they seem to be doing all the time. Drew Griffin, thanks so much.

Republican Congressman John Mica has been warning about the potential threats from liquid explosives since 2001. And he chairs the House Aviation Committee and he joins us now. Thanks so much for joining us. So, if we have known about this threat for ten years now, how is it possible that we have no reliable system in place to detect them in American airports?

REP. JOHN MICA (R), FLORIDA: Well, unfortunately most of the systems we have in place are the results of some bad incident, whether it was 9/11, where they took over the plane, we secured cockpit doors, we put air marshals on board, we trained pilots. Whether it was Richard Reid, now we take off our shoes, or we do some examination, or the puffers that we now have because of the explosives, where we had two Chechen women get on board and simultaneously take down, with explosives, two airplanes. Now, we're in the gel and liquid explosive business.

ZAHN: But whose fault is it that we don't have more reliable equipment in place? Is it because, as Drew Griffin just explained, the technology is changing so fast or we simply can't afford to blanket the country with these machines?

MICA: Well, part of it is, again, Congress took action, they created a 45,000 screener force. Now what do you do with them? Changing that out to a high tech system is very difficult. I've called for some of those changes based on testing the system for some of the things we've seen just in the last few days. Some of those changes are under way. For example, now last couple of weeks I've been visiting airports. We're starting some behavior analysis, it's a form of, I hate to say it, but profiling, but we need something to stop people when they get there, if we don't have the technology in place. It may be a while before we get some of the things you just heard about. Those technologies that are advanced to detect the types of threats that we have right now.

ZAHN: You talk about an awful lot of deficiencies and need a really close and quick answer to this one. From an A to an F what kind of grade would you give us on our preparedness now almost five years from September 11?

MICA: We're probably somewhere about between a C and a B, but this is a difficult process. You just heard some of the developing technologies. They're expensive getting them in place, putting in place some interim measures, which we're trying to do. We switched out with much criticism last Fall, you may recall, looking for scissors and needles, things of that sort, that didn't pose threats. We started looking for components, bombs or clean bombs, which are part of the threat that we now face. So we've started that. We'll have other measures in place. Some of which I said I've seen just in the last two weeks before this latest incident.

ZAHN: Well, some tremendous challenges ahead for our country. Congressman Mica, thank you so much for joining us and helping us better understand exactly what it is we're up against here. Appreciate it.

MICA: We're getting there. It's a slow process.

ZAHN: All right. That's what a lot of people are saying. Thanks so much.

Airliners may be at the top of the list of terrorist targets, but there is another major security loop hole at virtually every airport. That's coming up on our next half-hour as we continue our top story coverage of target USA. We'll be right back.

(COMMERCIAL BREAK)

ZAHN: As we continue our top story coverage of target USA we're going to do something very special tonight. We've sent four correspondents across the country to find some of the weak spots in the war on terror, and we start with Tom Foreman tonight in Washington. Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hi Paula. It's a glad place to look at the entire country. You want to know why we have security problems, because we're huge. Third largest country in the world by population and by land mass. And look at Chicago here. Not only do you have rail lines everywhere and metro lines, you've got landmarks like the Sears Tower. You've got a half dozen different sporting arenas, all gathered in this area. That's why this is an issue. And look at the shopping centers. This is the big issue. Look at that. That's in Chicago alone.

And when we widen out to look at the entire country, you can see why there are many targets in target USA. We have more than 6,000 power generating plants in this country alone, 6,000 power generating plants, 12,000 miles of coastline, 141,000 miles of railroad lines in the country. We've got more than 5,000 airports with paved runways and look at this, 47,000 shopping centers which attract more than 200 million shoppers every month. That's why security is an issue because there are so many targets and one of the big ones potentially is up in New York City where we find Allan Chernoff at Grand Central Station.

ALLAN CHERNOFF, CNN CORRESPONDENT: Tom, just have a look at the terminal behind me. Seven hundred thousand people a day walk through here. Seven million use all of New York City's transit systems. With those sorts of numbers, it is simply impossible to secure the trains and the platforms here as you would for an aircraft. It simply cannot be done.

Having said that, though, there certainly are measures that security officials here and the New York City Police Department are taking to reduce the risk of perhaps a bomb being exploded over here. For example, armed guards patrol this terminal, there are bomb sniffing dogs, dozens of them, and, of course, plenty of security cameras. As a matter of fact there's one right above where I'm standing, but all this designed to reduce, not eliminate, the risk. Now, to John Zarella, my colleague standing by at the Port of Miami.

JOHN ZARELLA, CNN CORRESPONDENT: Allen, well, you know port security is not just about containerized cargo, it's about cruise ships. Nine million people every year board cruise ships in the United States. Here in Miami, the busiest cruise port in North America, nearly 2 million people board every year. Now just today alone three cruise ships departed here from the Port of Miami, security 24/7. You can see it above the water line.

The Coast Guard is responsible for a great deal of the port security, not just cruise ships but containerized cargo, its main mission trying to stop any potential threat before it actually reaches the port. And that being said, what they might do, for example, is board ships at sea if there are suspected terrorist activities on board. Back here at the port what you might see below the water line are divers, who are specially trained check the hulls of the cruise ships, just in case anything is there.

And now to my colleague Bob Franken on the U.S./Canada border.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And, John, right behind me you see Canada less than a mile away, an easy boat ride or a swim for that matter. We took a boat from the nearby city of Brockville over to the United States to test an honor system. People who come into the U.S. are expected to voluntarily go up to a video phone and let the Border Patrol and customs people know that they have arrived.

But so many people, by the hundreds and thousands, just ignore that, and the point is that becomes another gap in a 4,000 mile long border with Canada that people used to probably talk about being the world's largest unprotected border, but in this day and time they can't afford to leave it so unprotected -- Paula.

ZAHN: Bob Franken, thank you, and thanks to the rest of my team out there tonight and for much more now on where America is most vulnerable to terrorist attacks, be sure to tune in to "ANDERSON COOPER 360" at 10:00.

And now, onto our top story, a panel of security experts. Stephen Flynn is on the Council of Foreign Relations. He's the author of "America the Vulnerable." Daniel Prieto is the director of the Reform Institutes Homeland Security Center. These guys are out there someplace, and Jack Riley is a homeland security expert with the Rand Corporation.

Stephen, I'm going to start with you tonight. We've just heard about some of the changes that have been made to make security stronger. We also heard about some pretty disconcerting weaknesses. There you are. I can see you now. What is it that you find most troubling?

STEPHEN FLYNN, AUTHOR, "AMERICAN THE VULNERABLE": Well, really, it's a lack of urgency about which we're dealing with our vulnerabilities here at home. I mean, we can almost go through, as you just did, the tour de force of our infrastructure. Not all of it is as critical as others.

I mean, there's some parts of this that are just very vital, but some that is very, very important for just supporting our way of life and are quality of life. Ports certainly are there, energy sector, mass transit systems. We just have not gone as far as we need to do for a nation that's at war.

We've put virtually all the eggs in the basket of bringing the battle to the enemy. About a half a trillion dollars a year we're spending on traditional security, but the total amount of money, for instance, the Port of Los Angeles in Long Beach has received -- arguably our most important port -- since 9/11 is $40 million. That amount is what we spend every day at TSA to provide airport passenger screening.

ZAHN: So is that your key issue? And I want you to answer it quickly so I can move on to the rest of the panel.

FLYNN: The key issue really is the risk of our ports and our energy sector as targets for mass economic disruption is something that I think we need to work the most on with greater urgency.

ZAHN: All right. Daniel, we know that al Qaeda continues to attack mass transit systems. Where are we almost five years after September 11 in that regard?

DANIEL PRIETO, REFORM INSTITUTES HOMELAND SEC. CTR.: Five years after September 11, Paula, I think we are safer as a nation. We've done a lot to hurt al Qaeda, we've done a lot to improve awareness in the country. But as your lead-in stories show, the vulnerabilities seem endless.

And I think what your viewers should take away from that is not that we should even try or that we could, if we wanted to, provide 100 percent security. I think the problem is that we haven't been smart enough, and we haven't been fast enough in terms of how we protect things and what we protect.

I think if you think about the infrastructure targets in this country, I think the most dangerous, in my mind, are chemical facilities. Those facilities could, if targeted or attacked, could hurt or kill -- create casualties in order of magnitude much larger than September 11.

I think in the transportation space, we haven't been smart enough. We spent nearly $20 billion since 9/11 on airplanes, but we've spent less than $500 million on mass transit. So I think we need to be smarter, but we also need to do a better job prioritizing.

I think chemicals are at the top of the list, transportation is next, and very close to there as well, to Steve's point of economic disruption, are the energy sector, oil and gas, and the energy grid.

ZAHN: Sure. And then, of course, we have to move on to the critical issue of border security here, Jack. What is it that Americans should be most concerned about: the porous border with Mexico or with Canada as we just saw Bob Franken take us on a tour?

JACK RILEY, RAND CORPORATION: Well, I think the larger concern is the border as a whole. It's the ports, the airports, and the land borders, each of which has particular kinds of vulnerabilities and each of which is essential to keeping weapons and terrorists out of the country.

ZAHN: And Stephen to be perfectly fair here in watching all these pieces together, it can be pretty darn frightening. Just give us some perspective on how Americans should look at all of this stuff collectively?

FLYNN: I think what's important to represent is that -- for Americans to recognize is that terrorists don't have unlimited resources and there's not a huge footprint, there's not a huge number of them here. They have a very low tolerance for failure. It could take two to three years to put together the kind of operation we saw in 9/11 and the softer the target, the easier it would be for them to do.

The more resilient -- and it doesn't have to be fail-safe, but the more resilient we make ourselves, the less risk they want to take. So we pick -- as Dan said, we need to prioritize, and then we need to look at pragmatic things that don't give us fail-safe security but give us practical security.

It's a bit like safety with cars. We can't make a car perfectly safe, but what we can do is take intelligent measures to minimize the risk, you lose your life, you get in an accident, that's the kind of thinking we need to bring to dealing with our critical infrastructures as well.

ZAHN: Gentlemen, we got to leave it there. Stephen Flynn, Daniel Prieto, Jack Riley, appreciate your time tonight.

Now some people have never had to wait in line to go through airport security, but maybe they should. Coming up next, our top story coverage, airport workers and a huge security loophole.

(COMMERCIAL BREAK)

ZAHN: And more now of our top story coverage of "Target USA."

You're about to see a troubling security gap where you'd least expect it: at the airport itself. That is especially shocking because one of the suspects in the alleged plot to blow up airliners over the Atlantic was an airport worker. And while passenger check-in rules are more restrictive than ever, Rusty Dornin found that many employees can simply walk into a secure area with no search at all.

(BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): Take off your shoes and empty your pockets. Not even Congress is exempt from airport security screening, but plenty of airport workers are.

CHARLES SLEPIAN, SECURITY EXPERT: They don't even go through once a day and take everything out of their pockets. They come in, they swipe a card through a reader, a door opens, and they're now in a secure area of the airport.

DORNIN: Mike Brooks is former corporate security manager for Delta Airlines in Atlanta. He says this is a huge vulnerability. The gate on the tarmac. Airline employees can swipe a badge as they drive in and get on the buses.

MIKE BROOKS, SECURITY EXPERT: Then they get on to the bus and then the bus drives them right down here and into there and right to the concourse without going through any type of security whatsoever. Now, they have been through background checks and fingerprints, but ...

DORNIN (on camera): They don't go through the security line to be checked every day.

BROOKS: No, not every day.

DORNIN (voice-over): Atlanta airport officials told us to call the Transportation Security Administration, which issues national guidelines for security for all airports. They say airline and airport employees, including some vendors who have cleared 10-year criminal background checks, are, quote, deemed not a threat to aviation and don't have to be screened every day. But some airports may vary slightly. In San Francisco all flight crews must go through security screening, even those who have had the mandatory background check, but airport spokesman Mike McCarron says there's a human factor.

MIKE MCCARRON, SAN FRANCISCO AIRPORT SPOKESMAN: You can build machines that will read equipment properly. You can put in procedures that are followed properly, but a human being is the most unpredictable part of the whole system.

DORNIN: In 2002, 29 airport workers at three Florida airports were covered to have false IDs. In 2003, 27 airport workers were busted smuggling drugs on to aircraft, bringing up that nagging question, if they can smuggle drugs, what else could they put on an aircraft?

UNIDENTIFIED MALE: To me that's a vulnerability. Even though you're a loyal employee and you've been there for a long time, who's to say you're not having a bad problem and you need some money. I say every person has their price. Hopefully they don't.

DORNIN: Some security analysts say it's time everyone be forced to go through some kind of screening. But they say the airlines continue to fight it, arguing it would be time consuming and far too expensive.

Rusty Dornin, CNN, Atlanta.

(END VIDEOTAPE)

ZAHN: So do you suppose any terrorist has ever heard of Dillingham, Alaska. Coming up next in our top story coverage, a small town bonanza courtesy of your tax dollars.

(COMMERCIAL BREAK)

ZAHN: Our top story coverage now moves on to the growing controversy about how the federal government spends your tax money to keep us safe. Now, you be the judge of whether one Alaskan city used its anti-terrorism dollars wisely. Here's Ted Rowlands.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT (voice-over): The only way into Dillingham, Alaska is by plane or if it's summer and the ice has melted, by bout. Most people here make their living off fishing. There's a post office here and a few businesses. There's dozens of surveillance cameras. Some of the cameras are mounted on poles, others on buildings. They're pointed at the harbor, the shipping dock, and the police station.

UNIDENTIFIED MALE: They've been a very good thing, yes.

ROWLANDS: Richard Thompson is the police chief in Dillingham. He says the cameras are a fantastic way to help his tiny police force of just six people keep this city and surrounding area safe. The cameras have been up less than a year but the chief says they've already made a difference.

CHIEF RICHARD THOMPSON, DILLINGHAM POLICE DEPT.: Anecdotally at this point, our calls for service in the areas covered by the camera have plummeted.

ROWLANDS (on camera): In all there are only 2,300 people that permanently live in the city of Dillingham. There are 69 cameras up around the city. If you do the math, that's one camera for every 33 people.

(voice-over): The cameras were paid for with federal Homeland Security funds. According to Chief Thompson, Dillingham needed a new video surveillance system at its jail. The state of Alaska twice refused a request, so the city came up with the idea to ask the state for Department of Homeland Security money. Sure enough a few months later this letter showed up, awarding Dillingham with more than $200,000 for cameras that are supposed to be used to help protect the city from, quote, threats and acts of terrorism.

TIM SMEEKENS, DILLINGHAM RESIDENT: There's so many placed in this country that could use these cameras other than Dillingham. There really isn't a terrorist threat here.

ROWLANDS: Tim Smeekens lives in Dillingham and wants the cameras taken down. He says the cameras are a violation of privacy and he says the idea that Dillingham, Alaska needs cameras to prevent or deter terrorism is ridiculous.

SMEEKENS: Anybody who would come up with that is really stretching the truth or their imagination to justify it.

ROWLANDS: The grant has upset people around the country, including people in New York, who are fighting for more federal funding to help expand their camera security system. Dillingham mayor Alice Ruby however, defends the cameras, saying her city is a port, with little or no oversight of what is ships in or out and she says, every summer thousands of people from around the world come here to work in the fishing industry.

MAYOR ALICE RUBY, DILLINGHAM, ALASKA: We don't claim to be, you know, a primary site for an invasion of the U.S., but it does help us enhance our security, and we are a community where the population doubles and triples in the summer.

ROWLANDS: While the camera controversy has divided this city, it has also put it on the map. The city's website shows images of Dillingham courtesy of the new cameras. Mayor Ruby says the city has been getting website hits and e-mails from around the world. What's not clear is whether $200,000 worth of cameras in Dillingham, Alaska is protecting anyone from terrorism. Ted Rowlands, CNN, Dillingham, Alaska.

(END VIDEOTAPE)

ZAHN: As you can see a lot of cities across America want those cameras themselves. We'll be right back.

(COMMERCIAL BREAK)

ZAHN: And that wraps it up for all of us here tonight. Thanks so much for dropping by. We will be back same time, same place tomorrow night. We hope you join us then. Until then, have a great night and "LARRY KING LIVE" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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