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American Morning

War of Words; 'Death of a President'; $10,000 Tip; Life After Work; Iranian Plane Fire

Aired September 01, 2006 - 08:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Ernesto drenches North Carolina with nearly a foot of rain. There's flooding in Washington that's inevitable. Now it's turning west. We'll track it.
And Hurricane John up to a category three, threatening Baja, California.

CNN severe weather expert Chad Myers is standing by for us.

MILES O'BRIEN, CNN ANCHOR: A defiant Iran not giving an inch. President Bush calls it a grave threat.

What is the next move?

The U.N. ambassador, John Bolton, will be our guest shortly.

S. O'BRIEN: And a virus transmitted by mosquitoes is claiming another life. No vaccine exists. We'll tell you about what happened to this little boy.

M. O'BRIEN: And why you may want your insurance company to be very profitable, to rake in the big bucks. Advice on buying insurance.

S. O'BRIEN: Plus, the story behind the big story -- the bartender's $10,000 tip. Apparently it was four star service and now she's got a big smile to match. That story is ahead on this AMERICAN MORNING.

Welcome back, everybody.

I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien.

Thanks for being with us.

S. O'BRIEN: Let's begin with Iran this morning.

A developing story there.

There are reports of a plane that has caught fire in the northeastern part of the country.

Aneesh Raman is in Tehran, joining us by phone -- Aneesh, what's the latest? ANEESH RAMAN, CNN CORRESPONDENT: Soledad, good morning.

We are getting few details and far between from Iranian television. Today is a weekend day here, so officials have been reluctant to come out too quickly.

We have just heard from a police spokesman who confirms 50 bodies have been recovered after a Russian Tupolev plane that is part of the Iranian domestic air industry essentially, as it was landing in the southern part of the country, one of the tires burst and the plane then caught fire.

We have seen on state-run-television higher estimates, though, of the casualties. The number that has been going on state-run- television is 60 people at least have been killed. There were about 140 people, we understand, on board this flight when this happened.

The police officials have not said what the situation is right now or what the condition is of those that were rescued from this plane -- Soledad.

S. O'BRIEN: All right, not very much information to report.

We're following the story, though.

Thanks, Aneesh -- Miles.

M. O'BRIEN: A storm to the left, a storm to the right, high winds, heavy rain and flooding all around.

Tropical Storm Ernesto still soaking North Carolina, after making landfall last night.

CNN's Kathleen Koch live in Raleigh.

Harris Whitbeck in Cabo San. Lucas, Mexico, where Hurricane John is taking aim.

And, of course, our severe weather expert, Chad Myers, at the hurricane headquarters in Atlanta.

Let's begin with Kathleen -- Kathleen, what's it -- what's going on now?

KATHLEEN KOCH, CNN CORRESPONDENT: Miles, the rain and the winds are beginning to slack off just a little bit here in the Raleigh- Durham area, as Ernesto moves north and east of this region. Luckily we have, the entire time, been on the good side of the tropical storm, which is the west side.

So, we've had roughly an inch and-and-a-half of rain here, winds gusting about 30 miles an hour. You can feel them picking up here just now.

And that has brought down a lot of trees in this region, a lot of power lines. Just a report of a tree down on one couple's home here in the Raleigh area, though they were not injured.

But roughly in the entire state, they're looking at about 70,000 residents without power. So the power crews are working feverishly right now, this morning, to restore electricity to all of these homes in the state.

It was, however, the Gulf Coast -- or the coastal area of North Carolina that caught the full brunt of Ernesto when it came in right around midnight last night, near the North Carolina-South Carolina border, in the town of Long Beach. They had sustained winds there of 65 miles an hour, record rains in some coastal areas. Wilmington, North Carolina got eight inches of rain.

The Coast Guard closed ports up and down the North Carolina coast as a precaution. In Buford County on the coast, officials went door- to-door, actually warning residents in low lying flood prone areas to get out and seek shelter.

Here in this area, they have lifted the flash flood watch, but they still have some 25 swift water rescue teams on standby. They're very worried that as daylight breaks that people will get out, get out on some of the flooded roadways and then get themselves into a very sticky situation.

But, again, it looks like we've dodged the bullet on this one -- Miles.

M. O'BRIEN: Kathleen Koch, thank you very much.

CNN's Harris Whitbeck joining us live now from Cabo San Lucas with more on what's going on there -- hello, Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Hello, Miles.

Hurricane John expected to make its presence felt around 11:00 in the morning, just about five or six hours from now. We're already beginning to feel some winds. Not much rain yet. But we could see up to 18 inches of rain all along the southern tip of the Baja, California peninsula.

Fifteen thousand residents of low lying areas now should be in shelters. Mexican civil defense officials say the Mexican Army is empowered to force people to move into shelters which have been set up in public schools.

Me, there are about 7,000 tourists in this very popular resort destination. Most of them were not able to get out on flights that were very, very full. They have stayed behind, are hunkered down in resorts, which have asked their guests to evacuate their rooms and move into ballrooms, in most cases, ballrooms, which are considered to be more secure.

Again, we don't expect the storm to hit until around 11:00 in the morning and -- but, again, we are already beginning to feel some of the effects of the winds -- Miles.

M. O'BRIEN: Harris Whitbeck in Cabo San Lucas.

Thank you very much.

Let's go now and take a look, kind of a bird's eye view of all of this, a god's eye view, whatever you like.

Chad Myers in the CNN hurricane headquarters -- hello, Chad.

CHAD MYERS, CNN METEOROLOGIST: Hi, Miles.

We got the 5:00 p.m. Pacific daylight time advisory on John and now just the 8:00 a.m. for Ernesto.

Ernesto is down to 50 miles per hour now. But John is still at about 115 miles per hour and still over very warm water here.

The Pacific Ocean current that you think about in San Francisco- with the cold water in L.A. that doesn't occur until way out here.

So John still in very warm water, still the potential for more strengthening before it makes a run-right at Cabo, which is right there on the tip of the Baja, California peninsula, and then back out into the colder water. And that's when it gets down to a category one.

If this makes a direct hit on Cabo, it's going to be really a damaging wind storm.

If it doesn't make a direct hit on Cabo, it's going to be a damaging flood storm. They're going to have flooding anyway. But this Cabo San Lucas area is just a mountain and then the wash just comes right smack down into the ocean and it's going to be a mess for those folks there.

Look at the rain here now.

D.C. Richmond, Hampton Roads, Newport News, Chesapeake really seeing heavy rainfall now. The most dangers area right through here, with flooding, even though there are flash flood warnings all over the areas, all the way from North Carolina on up even into parts of Virginia and Maryland.

The western side of the storm was the dry side of the storm. And that's where Kathleen Koch is.

But the eastern side of the storm, east of Raleigh into Richmond and D.C. that's where the wet part of the storm will be. And we're going to see three inches of rain everywhere that you see that white -- obviously, three inches or more. Look at Surf City, North Carolina. That's a foot, a foot of rain in 24 hours. Even in Myrtle Beach, almost seven inches of rain there. And Wilmington, North Carolina, as of 4:00 in the morning -- we'll get a new update -- but I think it pretty much has stopped in Wilmington -- almost 10 inches of rain.

The wind continues today. That's going to be a problem for the East Coast. The winds are going to be strong, and they still are. There you go, Virginia Beach, 41 miles per hour. Nags Head, 43, on up into Chincoteague, 36 miles per hour now. And that's blowing a lot of water into the Chesapeake and we could see the Chesapeake actually come up.

When the rain is trying to go down the rivers, the wind is going to try to push that rain back up the rivers. And that could cause some flooding in some pretty big places -- Soledad.

S. O'BRIEN: All right, Chad.

Thanks for the update.

A 9-year-old boy in southeastern Massachusetts is dead. He died from Eastern Equine Encephalitis, or "Triple-E," as it's called. Hundreds of people attended a prayer service in Middleborough for John Fontaine last night. "Triple-E" is transmitted to humans by mosquitoes.

Reporter Linda Ergas from WHDH in Boston has our report.

(BEGIN VIDEO TAPE)

LINDA ERGAS, WHDH CORRESPONDENT (voice-over): Little Johnny Fontaine started feeling sick on August 18th, after football practice. That was a Friday. And by Sunday, he was in the hospital.

UNIDENTIFIED FEMALE: It's awful, just awful. I couldn't even imagine. I can't even imagine what the parents are going through.

ERGAS: This was Johnny's second year playing football with the Mitchell Memorial Club. He was a cougar and parents and teammates are speechless. They were told at the 4:00 practice.

UNIDENTIFIED MALE: It's unbelievable that a mosquito could take somebody down with that. And just a few weeks ago, he was running around the field like the rest of the kids.

ERGAS: The co-chair of the football club saying: "The fields in Middleborough are sprayed constantly." On top of that, the state has sprayed twice over the area.

No question, Johnny's death has parents feeling very uneasy.

UNIDENTIFIED FEMALE: It's pretty sad your kids can't play outside and you've got to worry about them getting stung by a mosquito and winding up in a coma in Boston.

ERGAS: For those who knew him, Johnny was an unforgettable little boy.

UNIDENTIFIED MALE: And if you looked at him, his freckles, his freckles looking out on -- from that helmet, with the dirt on the face and -- I mean those types of things you don't forget.

(END VIDEO TAPE) S. O'BRIEN: Oh, it's such a sad story; really, really, really brutal.

If you want more information, here's what you need to know about "Triple-E." It's spread, as we mentioned, from mosquitoes to humans. And here's a look at some of the symptoms -- high fever, headache, stiff neck, fatigue. It could appear two to 10 days after infection. Also, brain swelling could be -- lead into a coma or brain damage, as well.

The virus is hardest on children and the elderly, as if often the case. And according to Massachusetts health officials, three out of every 10 cases is fatal. Thirty percent of the people who get bitten by these kinds of mosquitoes will die.

The Centers for Disease Control says no human vaccine is currently licensed. There's unlikely to be one in the foreseeable future.

Really, really scary stuff this morning.

M. O'BRIEN: So parents, watch those, what appear to be flu symptoms, very carefully.

S. O'BRIEN: Oh, gosh, it's so awful.

M. O'BRIEN: Coming up on the program, that U.N. deadline has come and gone. And Iran's nuclear program is still up and running.

So what does the United Nations do now?

We'll ask the U.S. ambassador to the U.N. John Bolton.

S. O'BRIEN: And the war on terror is on its way to a war of words. We'll take a look at that the president's new strategy and what it all means for the mid-term elections.

M. O'BRIEN: And next time you call your insurance company greedy, think twice. It might be good that they're raking it in when it comes time for a claim. We'll explain.

(COMMERCIAL BREAK)

M. O'BRIEN: Well, the deadline came and went, and, as expected, Iran ignored calls to end enriching uranium. And that sets the stage for a debate in the United Nations over how to punish Iran with sanctions.

John Bolton is the U.S. ambassador to the U.N.

He joins us here.

Good to have you with us, Mr. Ambassador.

JOHN BOLTON, U.S. AMBASSADOR TO U.N.:

Glad to be here.

M. O'BRIEN: The United States has a bit of a credibility issue post-Iraq, the weapons of mass destruction that weren't there.

How difficult does that make it for you and your like to keep a coalition together and a united front against Iran?

BOLTON: I don't really think there's a credibility issue for the United States with respect to Iran, despite what happened in Iraq. And the reason for that is much of the information on Iran's nuclear weapons program is fully public. It's been disclosed in reports by the International Atomic Energy Agency. We obviously know a lot we're not revealing, as well as, all of which is consistent with the idea that Iran is pursuing nuclear weapons.

I don't think there's really much debate about that.

M. O'BRIEN: But isn't there a little bit of ambiguity? It still could technically be a civilian program.

BOLTON: I don't think so. I don't think you can have the wide range of activities that Iran is engaged in, in -- for any reason other than seeking a military capability.

I'll just give you one example. Uranium metal, discussed in the latest IAEA report. Almost no use for uranium metal except to fabricate it into a weapon.

Now, if they're running a peaceful program, what do they need to be experimenting with the metal for?

M. O'BRIEN: Let's talk about the rhetoric, though.

Saddam Hussein, of course, had a lot of bluster about weapons of mass destruction. And it turns out that that served him politically, domestically and with his neighbors, as well.

Is it possible that's what we're seeing here?

BOLTON: Well, I think Saddam, had he had the opportunity, certainly would have wanted the weapons of mass destruction. That's why he kept what he called his nuclear Mujahedeen together -- the scientists and technicians who were central to his nuclear program.

What Iran is doing is trying to get very close to a capability completely indigenously to fashion nuclear weapons that we won't be able to stop.

That's why we feel a sense of urgency here.

M. O'BRIEN: What kinds of sanctions are we talking about?

BOLTON: We're still in discussion with other members of the Security Council. But basically we are looking at sanctions that would target the Iranian leadership, target their nuclear and ballistic missile programs and target their weapons programs generally.

M. O'BRIEN: How do you do that, though, without, in some way, punishing the Iranian people?

BOLTON: Well, I think the kinds of sanctions we're talking about, the Iranian people don't benefit much from the Iran ballistic missile program. They certainly don't benefit from the riches that the clerics who lead Iran have accumulated over the years and stashed in foreign banks.

So there are a lot of things we can do that I think would put the squeeze on Iran but not adversely affect the people.

M. O'BRIEN: So you're talking about freezing accounts, potentially?

BOLTON: Things like that, travel restrictions, but also focusing on Iran's effort to get increasingly sophisticated weapons, which we think we'd like to get into.

M. O'BRIEN: As you meet with your fellow ambassadors, is there a lot of agreement on this, at this point? Or are people all over the map?

BOLTON: I think the central point for us is the agreement that the foreign ministers of five permanent members in Germany reached in Berlin about two months ago where they agreed that if Iran did not suspend its uranium enrichment activities, they would come to the Security Council for sanctions.

We're counting on the countries represented by those foreign ministers keeping their word.

M. O'BRIEN: Do you run-the risk, though, as you march down the road to sanctions -- because inevitably if the first round doesn't create any change in action, you're going to have to ratchet things up. You could risk alienating the Iranian people as a whole, who, by all accounts, like Americans.

BOLTON: I think it's very important that we try and stay in touch, through a variety of means, with the average people of Iran because it's clear, our quarrel is not with them. Our quarrel is with their leadership, which for nearly 20 years has been seeking a nuclear weapons capability.

That doesn't benefit the people of Iran. It benefits the leadership. And I think we need to keep making that distinction.

M. O'BRIEN: Is there a viable military option, do you think?

BOLTON: Well, any American president has to take into account his responsibility to protect the American people. And an Iran with nuclear weapons is a frightening thing. This is the world's largest funder of international terrorism. It arms Hezbollah and Hamas in the Middle East. The idea of that kind of state, led by a man who has called for Israel to be wiped off the map having nuclear weapons, is something we have to take very seriously.

M. O'BRIEN: You mentioned Israel.

I want to talk about Israel in just a second. But the lesson of Iraq and the Israel raid on that nuclear program was well learned in Iran. We're told that their program is widely dispersed, probably deep underground. To go after it would be a very difficult thing, militarily.

BOLTON: Well, again, I don't want to speculate. But let me just say, the entire range of the nuclear fuel cycle has a lot of choke points on it. And it's not -- it's -- if you -- if one choke point is dealt with, that's -- that could take care of the program.

But our focus is peaceful and diplomatic. That's what President Bush has assigned us to do. That's what we're prepared to pursue in the Security Council.

M. O'BRIEN: Now, meanwhile, the Israelis have said they reserve the right to take unilateral action.

How much consultation are you having with them? Would they let you know if they were to engage in some kind of raid on Iran?

BOLTON: Well, I don't -- I don't think there's any reason to think that they would give us or anybody else advanced notice. And I think if we were to have a concern about a military operation, it would be something that we would pursue in the same way.

But let me -- let me come back to the point, because I think this is important. We think this can be solved peacefully and diplomatically. But the real burden here is on the leadership of Iran. They keep saying that their program is for peaceful nuclear purposes.

OK. Then let them come clean to the International Atomic Energy Agency.

Instead, yesterday's report from the IAEA shows their -- the continued pattern of obstructionism and lack of cooperation. If Iran doesn't have anything to hide, why aren't they cooperating?

M. O'BRIEN: Let me ask you this. The type of rhetoric that you just gave us a sample of, the president has said the United States is alone in taking that tact publicly.

Why is that?

BOLTON: I don't think the United States is alone at all. I think the foreign ministers of the five permanent members have made it very clear that...

M. O'BRIEN: But I haven't heard the kind of -- those kinds of comments that the president and you just made, those...

BOLTON: Well, I think they've made it clear that an Iran with nuclear weapons is unacceptable. We have made an extraordinarily generous offer to Iran, extraordinarily generous. They could have a completely different relationship with the United States if they give up the pursuit of nuclear weapons.

They haven't done that. The foreign ministers have agreed we're going to come to the Security Council for sanctions and on that point there's no disagreement.

M. O'BRIEN: Ambassador John Bolton, thank you for being with us.

BOLTON: Thank you.

M. O'BRIEN: And we're back with a little more in a moment, including frustrated Katrina victims who say their insurance companies won't pay up because they're too focused on the bottom line. But that may be a good thing in the long run.

We'll explain in our series, "Red Tape and Rubble."

And here's a tip to remember. We'll meet an Appleby's bartender who got a $10,000 tip on a $26 tab.

Did she deserve it?

Well, we'll ask her, coming up.

(COMMERCIAL BREAK)

S. O'BRIEN: Maybe you should be rooting for your insurance company to be making huge profits. It may seem unlikely, but it could pay off for you in the long run.

This morning in his final installment of "Red Tape and Rubble," AMERICAN MORNING'S Ali Velshi tells us why.

(BEGIN VIDEO TAPE)

ALI VELSHI, CNN CORRESPONDENT (voice-over): Fred Gast, like thousands on the Gulf Coast, isn't happy with how his insurance company, Allstate, has treated him in the year since Katrina.

FRED GAST, KATRINA SURVIVOR: The water level in this house, about this area right here.

VELSHI: He's still living in a FEMA trailer outside his Mississippi home, having received less than a quarter of what he claimed from his insurance.

GAST: They've done a good job for their stockholders and they've increased their bottom line. You have to take that profit motive away from them and encourage them to do a better job on dealing with their policyholders.

VELSHI: But, financial experts say, you do want a company that's focused on the bottom line. MELISSA GANNON, THESTREET.COM WEISS RATINGS: It's important to watch the financial strength of these companies, obviously, because you want, if you have a claim, you want to make sure the company is around to pay it.

VELSHI: Thestreet.com ratings evaluates insurance companies using a combination of size, profitability, liquidity and how big a reserve the insurance has. At the top of the financial strength list, United Services Automobile Association, a Texas-based insurance that mainly services members of the armed forces.

The nation's biggest insurance by revenue is AIG, American International Group. They received a rare compliment from one Mississippi lawyer who's suing five other insurance companies.

RICHARD "DICKIE" SCRUGGS, ATTORNEY: AIG, the largest in the world, paid everybody's claim, regardless of wind or water. They're a healthier company financially and it was easier for them to pay the claims.

VELSHI: After AIG, the next biggest is Warren Buffet's Berkshire Hathaway, which owns Geico-and other insurance companies. State Farm is number three.

Fred Gast's insurance, Allstate, is the fourth largest insurance by revenue.

Attorney Dickie Scruggs, who represents clients of Allstate and four other insurance companies, mocked the company's slogan when he asked why he was suing Allstate.

SCRUGGS: Don't -- don't believe you're in good hands.

VELSHI: For its part, Allstate says it's already paid more than $3.5 billion in Katrina-related claims.

The financial health of your insurance does matter. Mississippi Farm Bureau Mutual Insurance, which was the state's number two insurance, went out of business after paying $450 million in Katrina- related claims.

So it seems Fred Gast is right about one thing. Insurers that watch the bottom line are most likely to be around to pay your claims. He gets that.

GAST: I don't intend to demonize their employees. They're doing what they're told to do.

VELSHI: He'd just like Allstate to pay the rest of his claim.

Ali Velshi, CNN, New York.

(END VIDEO TAPE)

M. O'BRIEN: Anderson Cooper with a look at what's coming up on his program tonight -- Anderson. ANDERSON COOPER, CNN CORRESPONDENT: Coming up tonight on "360," they welcomed Katrina evacuees. But now residents of Houston, and even the mayor, lash out, saying enough is enough, it's time to go home.

Are storm victims really responsible for the rising crime rate in Houston?

We're keeping them honest.

"360" tonight, 10:00 p.m. Eastern -- Miles.

M. O'BRIEN: Thanks, Anderson.

The top stories are straight ahead, plus some disturbing images of a fictional assassination of the president. Have filmmakers gone too far here?

We're watching Tropical Storm Ernesto, of course. And that's Norfolk, Virginia, live pictures.

Flood warnings?

You bet.

That story is ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

S. O'BRIEN: Get the latest news every morning in your e-mail. Sign up for AMERICAN MORNING Quick News at cnn.com/am.

A short break.

We'll be back in just 60 seconds.

Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Good morning.

Welcome back, everybody.

I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien.

Thanks for being with us.

Carol Costello is here.

She has a look at the headlines -- hello, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hello, Miles.

And good morning to all of you.

A developing story to tell you about out of Iran.

According to reports, a passenger plane caught on fire as it was landing at an airport in the northeastern part of that country. At least 80 people are reported dead. Dozens more have been rescued.

Now, according to these same reports, a tire blew out as the plane was landing, sparking the fire. The flight originated from a city in south Iran.

Tropical Storm Ernesto and Hurricane John causing big trouble for residents on both coasts this morning. Ernesto dumping about eight inches of rain in parts of North Carolina. The biggest concern there, of course, is flooding.

Virginia is now feeling the effects of the storm.

And Hurricane John in the Pacific re-strengthens to a category three. Right now it's spinning toward Mexico's Baja Peninsula -- and California. Hundreds of tourists now evacuated.

(WEATHER REPORT)

COSTELLO: Polygamist leader Warren Jeffs could be heading to Utah as soon as today. Jeffs is accused of arranging marriages between under age girls and older men. He did not fight extradition during a hearing yesterday in Las Vegas. Ironically, the name of the institution Jeffs is heading for Purgatory Correctional Facility in Utah.

New Orleans Mayor Ray Nagin is in New York City today, and, boy, will it be interesting to see how he is received here. Nagin is hoping to raise funds in the Big Apple for the Big Easy. The two-day economic pitch comes after Nagin criticized the pace of rebuilding lower Manhattan after 9/11. Nagin called Ground Zero -- quote -- "a hole in the ground."

That's a look at the headlines this morning.

SOLEDAD O'BRIEN, CNN ANCHOR: All right, Carol, thank you very much.

He might regret that as he has those meetings, don't you think?

COSTELLO: I think he might.

S. O'BRIEN: Yes, he was stepping back from that statement when we talked to him in New Orleans the other day.

Thanks, Carol.

President Bush spoke on Thursday to war veterans in Salt Lake City about what he calls the enemies of liberty, terrorists organizations like al Qaeda and Hezbollah and countries like Syria and Iran. Then he made this analogy. Listen. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: As veterans, you have seen this kind of enemy before. They are successors to fascists, to Nazis, to communists and other totalitarians of the 20th century and history shows what the outcome will be.

(END VIDEO CLIP)

S. O'BRIEN: The president also said the U.S. must stay the course in Iraq because it too is a battleground between democracy and tyranny.

Joining us to discuss all of that, CNN's senior political analyst Bill Schneider.

Hi, Bill, good morning.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Good morning, -- Soledad.

S. O'BRIEN: The president you know is facing a country as you well know where support for the war is declining, but the support for the war on terror is very strong. So I guess it makes sense to link the two. Is that what's behind the strategy?

SCHNEIDER: That's exactly what's behind it. The president believes that he can portray this to the American people as essentially one front, the war in Iraq is part of the war on terror. And his problem is that the polls indicate that Americans no longer see that.

Our own CNN poll shows that 52 percent believe that the war in Iraq is actually a distraction from the overall war on terror. The CBC News-"New York Times" poll shows the same thing. That's got to bother the White House.

There are kind of two images here, if this is all part of the war on terror, then it directly threatens the American people. The alternative image is this is really a civil war that's breaking out in Iraq, a war between religious sects, Shiites and Sunnis. And if that's the case, Americans say, what business really is it of ours?

S. O'BRIEN: Well you know we just showed that poll. The question there was is the war in Iraq part of the general war on terror? And if you pop that poll back up again, you could see the numbers are kind of split. It was 51 percent to 44 percent. And you know, you consider a plus or minus margin of error of 3 points, it's kind of split. Is the president trying to exploit that -- those numbers being so close? Is that what's happening?

SCHNEIDER: Well the numbers are pretty close. I mean 44 percent is a lot of people who agree with the president. But the point is that that 51 percent who say the war in Iraq is a distraction, that number has been growing. It's reached a majority in the CNN poll, also in the CBS News-"New York Times" poll. That number has been increasing. That's a trend that the president is trying to reverse.

S. O'BRIEN: Here's another trend that the president is not trying to reverse but I think is we have seen a lot of. Another word for terrorist is becoming Islamic fascist or Islamic fascism. We've heard it a number of times now and the president is kind of linking the fascists, the Nazis and the communists all together, especially you know in front of a very friendly audience that he was talking to of veterans. What is behind this strategy, -- Bill?

SCHNEIDER: Well the word fascism I' not sure is entirely descriptive. Fascism implies belligerent nationalism, racism, dictatorship, an all-powerful state. Terms that aren't really descriptive of the religious extremists and radicals that are involved in -- that are really the enemy in this fight.

But it does throw -- it serves a political purpose more than an analytical purpose. It throws the critics of the war on the defensive because it portrays them as people who are not fighting fascism. It sees this as a new Cold War in which the critics are really not doing their part.

S. O'BRIEN: Let me ask you a question about what you have been covering a lot of this race in Pennsylvania.

SCHNEIDER: Yes.

S. O'BRIEN: A key congressional race. How is what we're talking about the war in Iraq and its link to the bigger war on terror, how is that playing out in that race you've been covering?

SCHNEIDER: Well in Pennsylvania and I've also been in Connecticut, what you find is Republicans on the defensive in that part of the country I should stress. In the northeast of the country, Republicans who have defended the war in Iraq suddenly find themselves constantly having to explain their support for President Bush, their support for the war.

You might have seen that Representative Chris Shays, who has been an ardent supporter of the war, recently modified his position and said he is in favor of a timetable. In Pennsylvania, I covered the campaign of Mike Fitzpatrick in the 8th District, also a Republican who has shades of difference with the president. He does not support a timetable. But you find Republicans there on the defensive.

Fitzpatrick's opponent is an Iraq war veteran, Patrick Murphy, who is using that issue to give him credibility as a critic of the war because he says I was there, I know what's going on and people tend to listen to that.

S. O'BRIEN: Senior political analyst Bill Schneider for us.

Thanks, -- Bill.

SCHNEIDER: Sure.

MILES O'BRIEN, CNN ANCHOR: All right, this just in to CNN. We have some pictures coming in from one of our affiliates in the Washington, D.C. area right now. This is the scene. These are live pictures thanks to WTTG.

You're seeing the remnants of an accident that occurred on a van that was transporting nine children to some local hospitals. Happened this morning. They were -- excuse me -- they were struck by a van at a school bus stop. The children were standing at the bus stop on Piney Branch Road (ph). The van lost control, ran into them. This is in Prince George's County which is suburban D.C., Silver Spring.

The children, age from 10 to 14, six being treated for serious injuries, although they're not considered life threatening. Montgomery County police say they're investigating. But once again, a van apparently plowing into a bus stop, nine children hurt and transported to hospitals. We'll keep you posted on that one.

S. O'BRIEN: I know they don't want to release the name of the school because they want to make sure they have people to notify...

M. O'BRIEN: Got to let the parents know.

S. O'BRIEN: ... the parents first...

M. O'BRIEN: Yes.

S. O'BRIEN: ... before they tell us what school that is. But we are going to continue to watch this story.

M. O'BRIEN: Back with more in just a moment.

(COMMERCIAL BREAK)

S. O'BRIEN: Have you heard about this film? It's a new film. It's pretty disturbing. The opening scene depicts a Syrian man assassinating a President Bush look alike. It is a docudrama created by a British film company for a program about the war on terror. But of course, as you can imagine, the spotlight is less on the war on terror in the film and more on the assassination.

CNN's Brooke Anderson has our report this morning.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Thank you.

BROOKE ANDERSON, CNN CORRESPONDENT (voice-over): It's a terribly disturbing image. A figure resembling President Bush hunched over after being shot by an unknown assassin. It's a scene in "Death of a President," a new British docudrama that will be airing on British public broadcaster Channel 4. It depicts the unthinkable, a fictional assassination of President Bush during a visit to Chicago in October of 2007.

(on camera): The British film, shot documentary style, depicts the aftermath of the assassination in which the chief suspect is a Syrian-born man. "Death of a President" will premiere soon at the Toronto Film Festival. And once it hits North American shores, controversy is bound to come with it.

RICHARD WALTER, UCLA PROFESSOR: There are going to be people who are outraged and who will complain. Nothing new about that.

ANDERSON (voice-over): In a statement, the film's writer- director, Gabriel Range, describe his movie as -- quote -- "a striking premise which may be seen as highly controversial. But it's a serious film which I hope will open up the debate on where current U.S. foreign and domestic policies are taking us."

As of now, there are no plans to show "Death of a President" in the United States. Whether or not American audiences will ever see "Death of a President," the movie brings up a question movie makers and audiences everywhere have to wrestle with, how far is too far in depicting the dangerous times in which we live?

(END VIDEOTAPE)

M. O'BRIEN: This just in to CNN. We have some new picture that just came in of that Iranian plane accident. It happened in the northeastern city of Mashhad. There you see what appears to be in the U.S. it would be a 727 but I'm not positive if that's a Boeing aircraft just off the top but certainly looks that way. In any case, there is a Russian plane that's of a similar design.

In any case, it, upon landing, apparently a tire blew, and then perhaps the landing gear failed after that. But that sparked the blaze that we have been talking about. We have been told that there were upwards of 80 people killed, perhaps as many as 60 got away from the fire before it overtook the plane.

But any case, this is Mashhad. This is in northeastern Iran. A landing incident which caused a tire to blow, somehow that sparked a fire and that is what has caused at least 80 fatalities. As we get more details on this, we'll bring them to you.

Up next, Andy will be "Minding Your Business." Stay with us.

(COMMERCIAL BREAK)

M. O'BRIEN: Cindy Kino must be one heck of a bartender. Last weekend, a regular customer, who's always been a pretty good tipper, left her a gratuity which gives new meaning to the word. His tab was 26 bucks. The tip, 10,000 -- 10,000 bucks.

Joining us now from Hutchinson, Kansas is Cindy Kienow.

Cindy, what do you put in those drinks?

CINDY KIENOW, RECEIVED $10,000 TIP: Lots of alcohol.

M. O'BRIEN: Well, it works. All right. Give us the back story here. This guy had been coming in for quite some time, over four years or so. First of all, I haven't seen his name anywhere. Are we keeping his name out of this for some reason?

KIENOW: Yes, we're -- I don't know his name, so I can't give it to you.

M. O'BRIEN: You don't?

KIENOW: But we're just -- no, no, I don't know his name.

M. O'BRIEN: Yes. OK. But did he use a card or anything or did he leave 10,000 bucks in cash there?

KIENOW: Yes, it was a credit card slip.

M. O'BRIEN: Credit card slip. So his name would have been on there, right? So you're not coming clean with this name thing yet, huh?

KIENOW: No, we're trying to protect his privacy.

M. O'BRIEN: I understand. OK. Onward we go. What did he say to you? Did -- was there any explanation or was there just this thing, because the first thing I would think is this is a joke?

KIENOW: Yes, that's what I thought. And I asked him if he was serious and he said, yes, that it wasn't a mistake, that he wanted me to have it. And I kind of went into shock.

M. O'BRIEN: I bet. Did you -- were you able to mouth any words at that point? What did you say?

KIENOW: I thanked him for it. He said that I could buy something nice for myself with that, he was sure. And I said, yes, so.

M. O'BRIEN: I should say. Now I assume you've...

KIENOW: I've...

M. O'BRIEN: Go ahead. Finish up.

KIENOW: I'm sorry. I couldn't move. I was just kind of in shock and I couldn't really move, so.

M. O'BRIEN: Yes. So have you thought much about what you're going to do with the money?

KIENOW: I have a few things I -- my dad is having knee surgery in October so I'm going to help him out with that. And I'm -- there's a bachelorette party that I'm going to in Vegas in November for a friend of mine, so we're going to have fun with that. And...

M. O'BRIEN: You be careful in Vegas now, -- Cindy.

KIENOW: Yes.

M. O'BRIEN: Careful. That strip was built on the backs of losers like me. So you be careful now. Don't -- just use a little bit of that money. Now Applebee's, where you work, says you're a great employee. Are you worth a $10,000 tip, though? KIENOW: Of course. We try to give all of our guests $10,000 service.

M. O'BRIEN: Good answer. And are you sure this is going to -- you already checked the credit card, this is all going to pan out, right, the $10,000 didn't bounce or anything?

KIENOW: Yes. No, everything is good. They're just doing a few things to protect him and to protect me and we should know in the next couple of days for sure.

M. O'BRIEN: Wow. Well, that's something. Cindy, congratulations to you, keep up the good work there. And if I'm ever in Hutchinson, I'm coming to Applebee's and...

KIENOW: Yes, come in and I'll make you a good drink.

M. O'BRIEN: I bet you will. All right. But I'm not going to give you 10 grand, I'm sorry. I'm sorry.

KIENOW: We can negotiate it.

M. O'BRIEN: Great to meet you. Congratulations, Cindy Kienow, congratulations.

KIENOW: Thank you very much.

S. O'BRIEN: Good for her. You're not even going to give her 15 percent, you're cheap.

M. O'BRIEN: I'm not that cheap, though. But if she makes a good drink, you know.

All right.

S. O'BRIEN: Good for her.

M. O'BRIEN: Another reason to dislike lawyers.

Andy Serwer is here with.

S. O'BRIEN: Let us count the ways, shall we?

ANDY SERWER, "FORTUNE" MAGAZINE: Yes. First thing we should do -- no.

Let's talk a little bit about lawyers and how much they make. It is pretty amazing 25 year olds say coming out of law school joining a big law firm in New York City and the starting salary is $145,000 for your first year. And that doesn't include bonuses and the like. Now here's what's going on.

M. O'BRIEN: And for that you get 150-hour week.

SERWER: You really work very, very hard. It's not a lot of fun.

M. O'BRIEN: Yes.

SERWER: I know, I have got relatives in the business.

And it's interesting, a little back story here, the going rate was $125,000. A small firm raised it $135,000. Then the big law firm, Sullivan and Cromwell, came in and decided to up the ante to $145,000. Then all the other big firms followed suit. So you can see they all watch each other very,...

S. O'BRIEN: Right.

SERWER: ... very closely here because it's incredibly competitive. You're going after the best legal talent in the country or even the world and you know, you can't be $10,000 below. You're just not going to get the best people.

S. O'BRIEN: Because it's back to that 150 hours a week thing.

SERWER: Yes, that's right, because you have got to get paid for that stuff.

M. O'BRIEN: Yes.

SERWER: You probably make about $3 an hour doing that job.

M. O'BRIEN: If they ever figure that out that would be bad.

SERWER: Yes, that's right.

Miles, and here's a story right up your alley...

M. O'BRIEN: Yes.

SERWER: ... concerning the new spaceship contract that NASA just awarded yesterday as I'm sure you know and the spaceship's called Orion and the project went just kind of a surprise to Lockheed Martin. Lockheed beat out a joint bid between Boeing and Northrop Grumman. And a lot of observers said that the Boeing bid was in the driver's seat. NASA being tight lipped about why Lockheed actually got it.

And, Miles, as you know, the space shuttle is set to close I think in 2010.

M. O'BRIEN: 2010 and in 2010 they'll retire it.

SERWER: Right.

M. O'BRIEN: And the goal is to have this thing flying by no later than 2014, perhaps.

SERWER: Right.

M. O'BRIEN: And then the idea is to go back to the moon.

SERWER: Yes.

M. O'BRIEN: And then ultimately on to Mars. But this is, you know, a long time off at this point.

SERWER: Yes, and it would be connected to space station projects, my understanding is, and...

M. O'BRIEN: Yes, well it can serve the space station but also can continue in exploration. But the interesting thing is, they have gone back to the future with an Apollo-like design.

SERWER: That's right.

M. O'BRIEN: A capsule on top of a rocket. I guess we don't have the animation here, but it keeps the debris from hitting anything fragile.

SERWER: Right.

M. O'BRIEN: So it's much safer.

SERWER: I read here they're calling it Apollo on steroids.

M. O'BRIEN: Yes.

SERWER: It's obviously a very supped up version. And -- but it's not clear to me how they reenter. I guess they reenter the same way an Apollo would.

M. O'BRIEN: Potentially a splash down. They haven't decided whether they'd land in the water or on the ground, but either way it will be a parachute landing, so.

SERWER: But this is a big deal for Lockheed.

M. O'BRIEN: Yes.

SERWER: I mean this is obviously a multibillion dollar project. And it will be interesting to see if Boeing which my understanding was the key maker of the space shuttle, will be able to get back in.

M. O'BRIEN: Right.

SERWER: And I'm sure they will because there's only a few defense contractors...

M. O'BRIEN: Yes.

SERWER: ... and aircraft manufacturers big enough to do this. And so they all kind of end up sharing a little bit of the pot.

M. O'BRIEN: I mean it was -- is United space alliance which was a partnership of Lockheed Martin and Boeing. So they have a way...

SERWER: They used to cooperate.

M. O'BRIEN: They have a way.

SERWER: Now they compete and then they'll cooperate again. M. O'BRIEN: Yes. That's how that works, yes.

SERWER: And that's how that works, yes.

M. O'BRIEN: Yes, thank you, Andy.

S. O'BRIEN: All right, thank you, -- Andy.

SERWER: All right, you're welcome.

S. O'BRIEN: Coming up in just a moment, our top stories, including that fiery crash landing in Iran. Aneesh Raman has got details from Tehran for us this morning.

Another incident we're watching here in the U.S., a van that lost control and smashed into a school bus injuring lots of children. We have got details from Washington.

State of emergency to tell you about in North Carolina, we're watching Tropical Storm Ernesto.

And in the Pacific, Hurricane John is now a Category 3 storm. Severe weather expert Chad Myers tells us where it's going next.

Plus, a return of the Automat. For just a few quarters, a yummy burger like that could be yours.

Those stories and much more ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Retirement is a hot commodity for 65-year-old Richard Busch. Busch creates pottery from scratch in his Glenfiddich Farm studio in Leesburg, Virginia. He learned his craft by taking classes and workshops in the late '80s.

RICHARD BUSCH, POTTER: What started out as just kind of a casual hobby turned into the first kind of a passion and then I have to admit it became kind of an obsession.

MORRIS: Busch worked as a magazine editor for more than 30 years. In 1997, he had an unique opportunity from his company.

BUSCH: As luck would have it, I was offered a chance to retire early. And, so, even got a little bit of a jump start on what had become a bit of a fantasy. The idea was to have a studio and a show room and a place where people could come and buy things.

Quite a few things that are new.

I make a lot of vases. Cylinders that are used for cooling wine. Espresso sets, mugs, plates, you name it. I just absolutely love coming down stairs in the morning and rolling out some clay and getting on the wheel. MORRIS: Busch says you can find him working about seven days a work.

BUSCH: When you love what you do, you just want to keep doing it as much as you can.

MORRIS: Valerie Morris, CNN, New York.

(END VIDEOTAPE)

MYERS: Hi, everyone, I'm meteorologist Chad Myers in Atlanta.

A quick update now for you on Ernesto, a pretty serious situation going on in the Hampton Roads area, also to Elizabeth City. Elizabeth City already has picked up nine inches of rain in 24 hours. Wilmington, North Carolina, a new record for you, 9.5 inches, even some spots now over a foot of rain in parts of northeastern North Carolina. A lot of roads are under water. You need to be careful today. If you don't have to go out right at this point and time or even for this day, do not.

Everywhere that you see pink, that bright pink, that's nine inches of rain or more. And all the way up from Elizabeth City through Corolla (ph) and Duck (ph) seeing an awful lot of rain there. And now the rain piling up in Newport News and Hampton Roads.

This dark red area here, this is actually the radar estimating how much rain came down so far. And just in the past 12 hours, six inches of rain there. Not picking up quite as much for Richmond, Virginia, but it's about to pick up for you now, Williamsburg. Also all the way up into Richmond picking up rainfall and it's even as far north as almost Washington, D.C.

We do know that water is blowing into the Chesapeake Bay. Waters are rising a little bit. We'll have to see if that makes a big difference or it could be some coastal flooding. Eastern shore, also Annapolis, even up into the Potomac. We'll see how much water actually pours in there.

We'll get right back to you here on AMERICAN MORNING in two minutes. Stay with us.

(COMMERCIAL BREAK)

S. O'BRIEN: Developing story this hour out of Iran. Dozens killed when a plane catches fire while it's landing.

M. O'BRIEN: Ernesto opens up the floodgates on North Carolina and now Virginia. The Potomac could flood Washington. And the storm is heading inland.

As for Hurricane John, upgraded now to Category 3, threatening Baja, California. CNN's severe weather expert Chad Myers watching it for us.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: It's like a bun caught (ph) in the stream (ph).

(END VIDEO CLIP)

S. O'BRIEN: Kind of like a baby boomer's flashback. The original fast food restaurant, the Automat, is making a comeback. Here is the big question of course is how does it taste? Jeanne Moos takes a look.

Those stories and much more ahead on this AMERICAN MORNING.

And welcome back, everybody, I'm Soledad O'Brien.

M. O'BRIEN: And I'm Miles O'Brien. Thanks for being with us on this Friday.

We begin in northeastern Iran where a burning airliner has now claimed the lives of at least 60 people. It happened as the jet landed in Mashhad. Apparently a tire blew and that might have set off a sequence of events that sparked a fire.

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