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American Morning
Foley's Lurid E-Mails: The Investigation; Woodward Fallout; Israeli Pullout; Women Under Fire
Aired October 02, 2006 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: Good Monday morning. It's October 2. I'm Soledad O'Brien.
RICH SANCHEZ, CNN ANCHOR: And I'm Rick Sanchez in for Miles O'Brien.
Here's a look at what's happening right now this morning.
O'BRIEN: Congressman Mark Foley is under investigation by the FBI this morning. The Florida Republican resigned on Friday after it was revealed that he sent sexually explicit e-mails to teenage boys who were working as pages on Capitol Hill.
SANCHEZ: Reacting to new calls for his resignation, Defense Secretary Donald Rumsfeld says he has no plans to quit. A new book by Bob Woodward is highly critical of how Rumsfeld and the Bush administration are handling the Iraq war.
Well, right now Secretary of State Condoleezza Rice is on her way to the Mideast. She is hoping to revive Israeli-Palestinian peace talks. Rice will make stops in Israel, Egypt, Saudi Arabia and also the Palestinian territories.
O'BRIEN: In just a few hours, the U.S. Supreme Court begins its new term. Thirty-one cases are already on the schedule, including cases on abortion, affirmative action and immigration.
In Atlanta today, an emergency hearing for Brian Nichols. Remember him? He's accused of killing four people during a courthouse rampage last year. Prosecutors say he is plotting an escape from jail and they want to review security measures at that jail.
And just a few moments ago in Stockholm, Sweden, two Americans won the Nobel Prize in medicine. Andrew Z. Fire and Craig C. Mello won for their work in genetics. They discovered a way to control the flow of genetic information.
A look at the weather this morning with Chad Myers at the CNN Center.
Hey, Chad, good morning.
CHAD MYERS, CNN METEOROLOGIST: Good morning, Soledad. Good morning, Rick.
(WEATHER REPORT) Back to you.
O'BRIEN: All right, Chad is watching it for us.
Thank you, Chad.
This morning, four weeks before Election Day, Republicans in Congress are in damage control mode. Florida Representative Mark Foley is out. He resigned. He's accused of sending sexually explicit e-mails to teenage boys who were congressional pages.
We're covering all aspects of this scandal this morning, the investigation and the fallout as well. Here's AMERICAN MORNING's Bob Franken in Washington, D.C.
Hey, -- Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Good morning, Soledad.
And Republican leaders of the House of Representatives are trying to deflect charges that they engaged in a cover-up over Congressman Mark Foley's conduct. To deflect that in the minds of many, the Speaker of the House, Dennis Hastert, has called on the attorney general and Governor Jeb Bush of Florida to conduct investigations into the conduct, the alleged conduct of Congressman Foley, former Congressman Foley, and also into their conduct. There are charges that they engaged in what a Democratic leader is calling a cover-up.
What has been acknowledged is in late 2005, almost a year ago, Louisiana Republican Congressman Rodney Alexander heard from the family of a 16-year-old former page who said he had gotten e-mails from Congressman Foley that he called sick, sick, sick.
After an investigation, after Alexander had gone to various members of the House leadership, including staff members of Speaker Hastert, it was determined that Foley's explanation, he was only being over friendly, was adequate, that they warned him to have no further contact with the 16-year-old and to be careful.
Well now it has come out, allegations, that there had been instant messages, much more explicit ones, that had been sent to former pages in 2003. Some of those read, and they're very kind of scary reading. One, as Foley, who is allegedly identified as Maf54 on the instant message, says to a teenager, you in your boxers, too? The teenager says, nope, just got home. I just had a college interview that went late. Maf54: Well, strip down and get relaxed. That according to "ABC News."
And another one, Maf54: Do I make you a little horny? The teenager: A little. Maf54: Cool.
That was the gist of the type of instant messages that have been connected, allegedly connected, to Congressman Foley.
Now, Dennis Hastert, the Speaker, has called for that federal investigation. The FBI says that it has begun a preliminary inquiry. It is not quite clear where all of this is going to go, but now Republican leaders are deeply concerned that they are going to get badly splattered by this and that they are going to be charged with conduct that was unacceptable -- Soledad.
O'BRIEN: All right, Bob Franken for us in Washington.
Thanks, Bob.
On another front, the Bush administration is expected to spend much of the week trying to contain the damage from journalist Bob Woodward's book. The new book is called "State of Denial."
CNN's Kathleen Koch has more from the White House.
(BEGIN VIDEOTAPE)
KATHLEEN KOCH, CNN CORRESPONDENT (on camera): The White House is staying on the offense, countering the allegations in the new book. They have put out talking points called "Five Key Myths in Bob Woodward's Book." They dispute his claim the president ignored early requests for more troops in Iraq, that Chief of Staff Andy Card led a campaign to remove Defense Secretary Donald Rumsfeld and that First Lady Laura Bush also wanted him removed.
As to the charge that Condoleezza Rice brushed off CIA Director George Tenet and his counterterrorism chief two months before 9/11 when in an emergency meeting they sounded the alarm that intelligence showed that al Qaeda may soon mount an attack against the United States, Counselor to the President Dan Bartlett said, -- quote -- "We don't believe that's an accurate account."
Now the president himself has yet to directly respond to any of the claims in Woodward's book. He will, though, have ample opportunity this week as he leaves today for a three-day campaign swing through the west.
Kathleen Koch, CNN, the White House.
(END VIDEOTAPE)
O'BRIEN: Bob Woodward is Larry King's guest tonight. "LARRY KING LIVE" airs every night at 9:00 p.m. Eastern right here on CNN -- Rick.
SANCHEZ: It hasn't happened in almost 40 years. This morning, the Lebanese Army is deployed along Lebanon's southern border, the promise that it will fight what it calls any Israeli aggression. This follows a near complete pullout by Israeli forces.
CNN's Brent Sadler is joining us now. He's live with the very latest on this really ongoing situation as people try and figure out when the Israelis will go, -- Brent.
BRENT SADLER, CNN CORRESPONDENT: Yes, good morning, Rick.
After a month's long occupation that came into effect after the start of the war between Hezbollah and Israel July 12, the last, almost the last of the Israeli forces left south Lebanon in the hours of darkness. This was a very quick, very much a low-profile pullout of those very last remaining Israeli forces, a couple of hundred strong we understand from U.N. sources on the ground here.
There is, though, still one pocket where Israel still has troops in a village called Gasha (ph). Could be problems there if negotiations fail to convince the Israelis to leave there.
Now it's up to the Lebanese themselves in the form of the Lebanese Army. They began taking up, securing positions along this volatile border for the first time in 40 years. Up until the beginning of the war, Hezbollah was right slap bang along the Israelis on that border, able to strike at will inside Israel.
Now the Lebanese Army is backed up by some 5,000 United Nations peacekeepers. That force will triple in the months ahead. But at the same time, Hezbollah still has weapons hidden and its militants have melted away into villages that are now trying to reconstruct along that border.
While there is an arms embargo that's being enforced by the international community, that will be bolstered when the German Navy deploys soon here. The first time the Germans will have deployed in the Middle East militarily since the end of the Second World War.
Hezbollah, it seems, will be under a lot of pressure. But Hezbollah still, say military analyst here, poses a significant threat because even after 34 days of conflict, the organizational structure and its weapons capability remains in tact -- Rick.
SANCHEZ: Sounds like you're saying they're not physically at the border, at least they're difficult to see physically at the border, but there's no question that they're still there, Hezbollah that is.
SADLER: No question that their sympathizers, Hezbollah sympathizers are still there. Those fighters, many of them that engaged the Israelis, came from the villages. They simply dressed into their camouflage uniforms, picked up their assault rifles and their weapons, joined the fight.
And then since then they've laid down those weapons, hidden them. And there are vast, it's understood, complexes, concrete underground complexes that have remained in tact. And there's no intention, it seems, from the U.N., nor the Lebanese Army, to go after weapons caches or to try to dismantle that military complex which, albeit invisible, still it's said remains there in the south of this country -- Rick.
SANCHEZ: Brent Sadler, bringing us that story, we thank you so much.
Well the tanks are out, the new prime minister is in and Bangkok, Thailand is trying to somehow get back to normal. Two weeks ago, Thai Prime Minister Thaksin Shinawatra was ousted in a coup. Since then, 10 members of his party have resigned. The Army commander who organized the takeover has now been sworn in as interim prime minister and promises a return to a democratically-elected government and soon -- Soledad.
S. O'BRIEN: Happening in America this morning, a family tragedy in North Charleston, South Carolina. Michael Simmons is accused of shooting his wife and 1-year-old child -- his wife of one year, rather, and her four children. A neighbor spotted the bodies in the family's mobile home, called police. Simmons was caught trying to leave the scene. Police say the shootings followed a domestic dispute.
Wildfires are burning in central Washington State. The wind- driven fires are centered near the town of Bridgeport. So far more than 12-square miles have been scorched. There are no evacuations ordered yet. The fire is believed to have been sparked by a down power line.
In California, firefighters are close to containing one of the largest fires ever to hit that state, the Day Fire. It's called that because it started on Labor Day, burned 254-square miles of forest. Now firefighters say calm winds and high humidity are helping them control the fire. Fighting the fire has cost an estimated $67 million so far.
Eight people, including two children, narrowly escaped a burning boat. Take a look at this. These pictures are incredible. It's off of Long Beach harbor. Authorities say the smoky fire started in the 41-foot boat's engine compartment. Firefighters towed the burning boat to a pier. The fire, though, forced them to take it right back out to the open water, and the fire eventually caused the boat to just sink.
What started out as a fishing trip almost ended in tragedy for a man in Florida. Clinton Daughtery (ph), you see him there, spent 24 hours in the water before he was rescued. He was fishing with four friends about 15 miles offshore when their boat began to take on water and it capsized. Happened early Saturday morning. His four friends were quickly rescued, but Daughtery became separated because he was trying to swim to shore. An Air Force helicopter, though, spotted him on Sunday afternoon and was able to pick him out of the water. Lucky guy.
SANCHEZ: Yes.
O'BRIEN: Still to come this morning, recovery crews finally find the wreckage of a plane crash deep in the Amazon forest. We'll tell you how they found it.
And the Pentagon rules say no women in combat, but on the ground in Iraq, it's a far different reality. We'll bring you that story as well.
And Andy Serwer has got business headlines.
Good morning, -- Andy.
ANDY SERWER, "FORTUNE" MAGAZINE: Good morning, Soledad.
Congress passes a bill which could cripple online gambling. We'll tell you which Web sites might be affected coming up next on AMERICAN MORNING.
(COMMERCIAL BREAK)
O'BRIEN: Happening this morning, Brazilian authorities say there are no survivors from a jetliner crash in the Amazon jungle. The plane carrying 155 people went down on Friday. Apparently it clipped a smaller plane in midair. The smaller plane was able to land safely.
In Canada, authorities are still looking for the cause of Saturday's deadly overpass collapse. It happened just outside of Montreal. Five people were killed, six other people were injured.
And now that almost all of the votes are counted, Brazil's presidential race is headed for a run-off. Last night, officials announced that the President, Luiz Inacio Lula da Silva fell just short of the majority needed for re-election.
Welcome back, everybody.
It's time to check the forecast with Chad Myers at the CNN Center.
What are you looking at?
MYERS: Looking at some rain moving out of Boston, out of New England.
(WEATHER REPORT)
Back to you guys.
O'BRIEN: All right, Chad, thanks.
MYERS: Sure.
SANCHEZ: Well the Vietnam War lasted a decade, and during that time only eight military women were killed. Get this, in the last three years in Iraq, 55 women have died, many by hostile fire, raising the question about whether the ban on women in combat is the reality on the ground.
Pentagon correspondent Barbara Starr takes a look at this complex issue.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): As a little girl, Emily Perez loved the movie "Sound of Music" so much she told her mother she wanted to be a nun.
VICKI PEREZ, EMILY PEREZ'S MOTHER: I told her, Emily, we're Baptists, you can't be a nun. STARR: In high school, she visited the U.S. military academy at West Point.
DANIEL PEREZ, EMILY PEREZ'S FATHER: She said this might be the place for me.
STARR: Last month, Second Lieutenant Emily Perez became the first female West Point graduate killed in Iraq when her convoy was hit by a roadside bomb.
Emily Perez is one of at least 55 military women to die in Iraq in a U.S. military where women are not allowed to serve in ground combat jobs.
Dawn Halfacre (ph) lost an arm when a rocket-propelled grenade tore through her humvee.
DAWN HALFACRE, ARMY: You know I'm reminded every day, you know every time I look in the mirror that I was most certainly in combat.
STARR: This former Army captain worked with Iraqi police.
HALFACRE: I carried an M4 with a 203 grenade launcher on it.
STARR: So far, more than 150,000 women have served in Iraq, in Afghanistan. The Pentagon says they are essential.
Kayla Williams wrote a book about her tour of duty with the 101st Airborne Division.
KAYLA WILLIAMS, AUTHOR/IRAQ WAR VET: Women are in combat. That is the reality on the ground. We can know this by the fact that women are dying in combat.
STARR: The Perez's say everyone in Iraq is at risk.
V. PEREZ: I would think that Iraq...
D. PEREZ: It's combat, I guess, yes.
V. PEREZ: ... is combat.
D. PEREZ: Iraq is a combat zone.
V. PEREZ: I mean we're -- everything -- there's no -- what is it,...
D. PEREZ: Safe zone...
V. PEREZ: ... safe zone.
D. PEREZ: ... or safe haven.
STARR: Emily's parents believe their daughter was every bit the military commander. D. PEREZ: Emily was one she always led from the front. And her thing was I'm going to be in the lead vehicle because these are my soldiers and I have to bring them back home safe.
STARR (on camera): This memorial honors the more than two million women who have served on the battlefield since the American Revolution. Today what is clear is that when America goes to war, American women are on the front lines.
Barbara Starr, CNN, Arlington, Virginia.
(END VIDEOTAPE)
O'BRIEN: Still to come this morning, action in Washington sends ripples across the Atlantic as Internet gambling stocks take a big plunge.
And your chance to win a million dollars just for reviewing a movie, we'll tell you how to do it just ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
SANCHEZ: And welcome back to AMERICAN MORNING.
In fact, want to show you something. Check this out. It's a brand new Mini Cooper. Hard to tell here, but the standard Mini Cooper is, ready for this, a full three inches longer. So this is a little one. As it could be...
O'BRIEN: I could wear higher heels in my Mini Cooper.
SANCHEZ: The Mini's new design is one of the most popular stories on CNN.com this morning. The new Mini was unveiled at the Paris Auto Show.
Here's another one for you, you could become a millionaire. Do you think you have a good idea for marketing all those online DVD rentals from Netflix? If so, it could make you a million bucks, seriously. Netflix is offering a million dollars in a prize aimed at improving its movie recommendation system. Netflix says the winning software program must show at least a 10 percent increase in its system.
And investors may be cashing in their chips, at least when it comes to online gaming stocks.
Andy Serwer is "Minding Your Business." He's joining us now with something that really I guess this caught lot of folks by surprise.
SERWER: It did, Rick. This has happened on Friday, Congress unexpectedly passing a law that could potentially cripple the online gambling business. It makes it illegal for banks and credit cards -- credit card companies to process payments to gambling sites. It was tacked on to a safe ports act on Friday. Needs to be signed by President Bush on November 7. Now the online gaming business is a $12-billion-a-year business in the United States, growing like crazy. These companies, 888, Party Gaming, SportBetting.com, these operate offshore. And these stocks actually trade in the U.K and they have been plummeting this morning. 888 gets half of its profits from the U.S. market and it says that it's going to shut down the U.S. arm of its operations this morning.
SANCHEZ: Wow, and these are people with basically a phone bag sitting in Antigua or other islands in the Caribbean...
SERWER: Yes.
SANCHEZ: ... and parts of Latin America, right? None of them are in the United States?
SERWER: That's right. I mean they might be based in London, operations in the Caribbean and a lot of customers here in the United States.
SANCHEZ: Wow.
SERWER: Wall Street this morning is a buzz over another transaction in the gambling business. Harrah's, the nation's largest casino company, is said to be going private through a buyout, this according to "The Wall Street Journal." The stock has a market value -- the company has a market value of some $12 billion, 40-some casinos, operating Ceasars Palace, Horseshoe, Harrah's, Balis. So this could be one of the biggest buyouts ever on Wall Street, so we'll be watching that.
And then finally this morning, Rick, let's go to Wall Street and see how the numbers looked. This is on Friday, you can see here, a bit of a downer, but that's the bad news. The good news is for the week the Dow was up 170 points. And we just ended the third quarter and it was a very good one for investors. The S&P 500, the Nasdaq and the Dow Jones industrials all up over 4 percent for the past three months. That's good stuff. And futures are up this morning pointing to a higher open.
SANCHEZ: So a tough ending but a good week all the way around.
SERWER: Exactly.
SANCHEZ: Thanks, -- Andy.
SERWER: You're welcome, Rick.
O'BRIEN: Ahead this morning, a look at the top stories, including the congressman's e-mails who have forced -- which have forced his resignation and are now raising questions about what Republican leaders knew and when they knew it. We've got a live report from Washington, D.C. straight ahead.
And the White House says that Bob Woodward's new book is full of holes. We'll take a look at the political impact ahead on AMERICAN MORNING. (COMMERCIAL BREAK)
SOLEDAD O'BRIEN, CNN ANCHOR: Happening this morning, Iranian president Mahmoud Ahmadinejad says that his country is determined to expand its nuclear program. Overnight, Ahmadinejad told professors at Tehran University that Iran is committed to generating nuclear electricity.
The Venezuelan president, Hugo Chavez, said today that Fidel Castro tells him he's ready to die. Chavez met with Castro back in August, as the Cuban president was recovering from intestinal surgery.
And baseball star Roger Clemens is denying accusations that he used performance-enhancing drugs. According to a federal affidavit found on the "L.A. Times" Web site, a former teammate of Clemens accuses him and four other players of juicing.
Good morning. Welcome back, everybody. I'm Soledad O'Brien.
RICK SANCHEZ, CNN ANCHOR: And I'm Rick Sanchez, sitting in for Miles O'Brien.
O'BRIEN: Nice to have you. Thank you for helping us. We appreciate it.
SANCHEZ: Thank you.
O'BRIEN: Let's get right to our top story, the Republican Party finding itself quite on the defensive this morning over a congressman's improper e-mail to a former page. This as the FBI begins a preliminary investigation of Florida representative Mark Foley. CNN was first in telling you details of this story, including Foley's decision not to seek re-election, and that a member of the House leadership knew of the accusations months ago, and that the House speaker asked the FBI to investigate.
Let's take you right to AMERICAN MORNING'S Bob Franken in Washington.
Hey, Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Hello.
House Speaker Dennis Hastert asking both the FBI and state officials in Florida to investigate these e-mails. At the same time, the House leadership, including the speaker, Dennis Hastert, coming under severe criticism for what the Democratic leader has called a possible cover-up. Democratic leader of the House, Nancy Pelosi, says that the House leader should testify under oath about what they did and when they started doing it.
We do know, according to their accounts, that about a year ago, in the fall of 2005, Louisiana congressman Rodney Alexander was told about an e-mail that Foley had sent to a 16-year-old former page. The former page had considered the e-mail suggestive. The parents had reported it, but they said they wanted nothing more to come of it. Various House leaders, including staff members in Hastert's office, were told at the time. They warned Foley to stop this, agreed with Foley that it might have been just quote "over friendly".
Then we move to the spring of this year, where Speaker Hastert now acknowledges that he probably heard this from House leaders, including the head of the Republican Campaign Congressional Committee, Tom Reynolds, and the House majority leader, John Boehner.
All of this has raised questions among critics about why the Republican leadership did not act so decisively. Republican leadership is now saying there should be a federal investigation, and that state investigation, the FBI says, that it has already begun a preliminary inquiry, particularly now that it's come to light from ABC News, some instant messages allegedly sent by Foley to other former pages.
These ones were supposed to have been sent in 2003. According to ABC, one of them read, for instance, from Maf54, identified by ABC as Foley, "What are you wearing?" The teen, in response, "T-shirt and shorts." Maf54: "Would love to slip them off of you."
This is causing quite the firestorm. Foley has resigned from Congress, is no longer a member of Congress.
There's a big political fight, Soledad, because, of course, Congress and the race to see who will have control of the House of Representatives and the Senate, for that matter, is very much up for grabs. This could be a severe blow to the Republicans -- Soledad.
O'BRIEN: Bob Franken for us this morning.
Thanks, Bob -- Rick.
SANCHEZ: The Bush administration is also dealing with the fallout from Bob Woodward's new book, "State of Denial," this morning.
CNN's Kathleen Koch has more on this one from the White House.
(BEGIN VIDEOTAPE)
KATHLEEN KOCH, CNN CORRESPONDENT: The White house is staying on the offense, countering the allegations in the new book they've put out, talking points called "Five Key Myths in Bob Woodward's Book". They dispute his claim the president ignored early requests for more troops in Iraq, that chief of staff Andy Card led a campaign to remove Defense Secretary Donald Rumsfeld, and that first lady Laura Bush also wanted him removed.
As to the charge that Condoleezza Rice brushed off CIA director George Tenet and his counterterrorism chief two months before 9/11, when in an emergency meeting they sounded the alarm that intelligence showed that al Qaeda may soon mount an attack against the United States, counselor to the president Dan Bartlett said, "We don't believe that's an accurate account." Now, the president himself has yet to directly respond to any of the claims in Woodward's book. He will, though, have ample opportunity this week as he leaves today for a three-day campaign swing through the West.
Kathleen Koch, CNN, the White House.
(END VIDEOTAPE)
SANCHEZ: And Bob Woodward, by the way, is Larry King's guest tonight. "LARRY KING LIVE" airs every night at 9:00 Eastern right here on CNN.
O'BRIEN: In America, the man suspected in a deadly courthouse rampage is due in an Atlanta courtroom this morning. Brian Nichols was on trial for rape last March. He's accused of shooting and killing four people, including a judge during an escape attempt. Prosecutors are seeking the death penalty for Nichols.
The one-time suspect in the JonBenet Ramsey murder faces child porn charges today. John Karr is facing a California jury, even though prosecutors say they've lost a key piece of evidence, a computer with pornographic photos. Karr's defense lawyers have asked the charges be dismissed.
Today is the first Monday in October, and that means that the United States Supreme Court is back in session. At precisely 10:00 a.m., Chief Justice John Roberts will pound the gavel and call the court to order.
James Meredith, the first black student at the University of Mississippi, was honored with a statue in his likeness to mark the 44th anniversary of integration at Ole Miss. Meredith's 962 enrollment at the school sparked rioting that killed two people.
Residents of a Fairplain, West Virginia, apartment complex are afraid they don't have any solid ground to stand on. Take a look at some of these pictures.
Heavy rains have caused a 30-foot-deep sinkhole to form in the complex. The hole, which is near the entrance, has gotten so big that postal workers won't deliver the mail for fear of falling in.
Time for a check of the forecast. Chad Myers is at the CNN Center with that.
Hey, Chad.
CHAD MYERS, CNN METEOROLOGIST: It didn't seem to be that wet there to do that kind of damage, but obviously.
O'BRIEN: Yes. You know, maybe it's just the pipes are getting damaged. That's what happens in San Francisco a lot.
(WEATHER REPORT) SANCHEZ: Well, lawmakers are running for cover this morning, concerned about a couple of things, the fallout from the Foley e-mail scandal.
That story, also the rest of the political "Hot Topics," that's coming up just ahead.
Also, Israeli troops are mostly out and Lebanese troops are now in. What this will mean for southern Lebanon and the Middle East, as well.
We are coming right back.
(COMMERCIAL BREAK)
O'BRIEN: Here's a look now at stories that CNN correspondents around the world are covering today.
(BEGIN VIDEOTAPE)
BRENT SADLER, CNN BEIRUT BUREAU CHIEF: I'm Brent Sadler in Beirut.
Israeli troops withdraw from almost all of south Lebanon some seven weeks after waging a costly war on Hezbollah, a conflict that tore Lebanon apart, but left the extremist pro-Iranian militants intact. Its arsenal of rockets badly damaged but not destroyed.
Now, as the Lebanese army takes control of border security for the first time in some 40 years, how much safer are Israelis going to be? And how certain can the Lebanese be that Israel won't launch another war against its arch enemy?
(END VIDEOTAPE)
(BEGIN VIDEOTAPE)
DAN RIVERS, CNN CORRESPONDENT: I'm Dan Rivers in Bangkok where it's been the first day of business for the country's new prime minister, Surayud Chulanont, after last month's military coup. He had his first official guest this morning, the U.S. ambassador to Thailand, Ralph Boyce. After the brief meeting, Mr. Boyce came out and said that he had been encouraged that democracy would be re- established in Thailand.
(END VIDEOTAPE)
O'BRIEN: Palestinian infighting is going on in Gaza. A flare-up today as protesters from Fatah threw rocks at a Hamas leader's home. On Sunday, nine people were killed in clashes between Hamas and Fatah. The fighting is over unpaid wages and stalled unity talks.
For more on these stories, or any of our top stories, you can go right to our Web site at CNN.com.
Still to come on AMERICAN MORNING, the Foley fallout. What's the impact on Republicans as we head into November elections? That's today's "Hot Topics" subject.
Stay with us. We're back in a moment.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Pop it, Sawyer (ph). Come on, man!
CAROL COSTELLO, CNN CORRESPONDENT (voice over): What is the best overall workout that includes cardio, strength training, endurance and flexibility? You might be surprised. "Forbes" magazine ranked squash as the number one healthiest sport.
UNIDENTIFIED MALE: There's the socialness (ph) of it, of being with a buddy. There is the competitiveness of, "I'm going to beat you." And then there's just the absolute flat-out hard workout of hitting the ball and running as hard as you can for an hour.
COSTELLO: Tom (ph) says squash is a game you can play for a lifetime and it's fun to master.
UNIDENTIFIED MALE: The object of the game is the players have to alternate hitting the ball back to what's called the front wall.
UNIDENTIFIED FEMALE: I'm pretty flexible from just playing squash over the years. But, also, I run a lot, and it's just really increased my endurance and it's just great.
COSTELLO: Sawyer (ph) says playing squash also strengthens his tennis game.
UNIDENTIFIED MALE: You burn something like four times as many calories playing an hour of squash as you do an hour of tennis. And so, it's a great workout.
COSTELLO: Carol Costello, CNN.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
O'BRIEN: Happening this morning, Brazilian authorities say there are no survivors from a jetliner crash in the Amazon jungle. A plane carrying 155 people went down on Friday. Apparently, it clipped a smaller plane in midair. The smaller plane was able to land safely.
In Canada, authorities are still looking for the cause of Saturday's deadly overpass collapse just outside of Montreal. Five people were killed. Six other people were injured.
And now that almost all the votes are counted, Brazil's presidential race is headed for a runoff. Last night officials announced that the president, Luis Inacio Lula da Silva, fell just short of the majority he needed to be re-elected.
SANCHEZ: It is Monday. And that means it's time for political "Hot Topics." The fallout from the resignation of Congressman Mark Foley will be the talk of Washington, no doubt.
John Mercurio is the senior editor of the "National Journal's Hotline," and he's good enough to join us now to talk about this a little bit.
There's no question, John, that at this point Mark Foley is probably in a lot of trouble. But a lot of people are wondering, as well, whether the Republican leadership might be in trouble as a result of this, as well.
And the question I guess that would probably be asked is, when did they know? And who knew? And what did they know? And I guess these are very important questions that are going to be asked this week, right?
JOHN MERCURIO, SR. EDITOR, "HOTLINE": Exactly. I mean, we've got basically five weeks until the election, the midterm -- the midterm elections. Republicans had been able, over the past couple of weeks, I think, to return the sort of political landscape to topics that they prefer to run on, which is national security. You know, sort of their record in Congress.
But I think you're going to see over the next couple of days, and certainly over the next couple of days, and probably over the next couple of weeks, a lot of questions pressed by Democrats about when Republicans knew what was going on with Mark Foley and exactly what they knew. And I think that's going to become an issue, a pretty prominent issue going into these last couple of weeks.
SANCHEZ: Here's an example, as a matter of fact. This is Jane Harman. She's the vice chair of the intel committee. Here's what she had to say.
Let's listen to this and then we'll talk a little bit about it on the way back.
(BEGIN VIDEO CLIP)
REP. JANE HARMAN (D), CALIFORNIA: If the Republican leadership knew more months ago, I think they had an obligation to act and they had an obligation to inform the Democratic leadership.
(END VIDEO CLIP)
SANCHEZ: The intimation here is that they didn't tell the Democrats. And not only did they not tell the Democrats, but there's only one Democrat on that committee, that page committee.
MERCURIO: Right.
SANCHEZ: He says he knew nothing about this, but apparently the Republicans on the committee did know something about it.
MERCURIO: The suggestion here...
SANCHEZ: Yes, exactly. What is the suggestion here? MERCURIO: Right. I think the suggestion here is that Republicans learned of this situation and decided to treat it as a political issue, and not as the -- you know, an issue that they wanted to protect this page from further harm from Congressman Foley. I mean...
SANCHEZ: But that's a -- that's a...
MERCURIO: ... by a political issue, I mean, the congressman, Rodney Alexander, whose district this page came from, went to the head of the House Republican Campaign Committee to discuss this. Now, Congressman Alexander may have perfectly valid reasons for why he did this, but the perception that's out there is that he viewed this and the Republican leadership viewed this as a political problem, not a problem with Congressman Foley's treatment of these children.
SANCHEZ: That's interesting you would say that, because that's obviously what many will -- what many critics will say, that they put politics in front of what may be the welfare of the children in this case, a 16-year-old involved in the page program.
How do they battle that, though? Is there any indication that they're trying to? We understand that they've asked for investigations, correct?
MERCURIO: There's certainly -- there's certainly an indication that they're trying to battle that. They did probably the best thing they could, which was to call for this independent investigation, an investigation that will be taken control of outside of the Republican leadership in the House. And I think what they're trying to do is make a distinction between two sets of e-mails that we're talking about -- the e-mails that they say they heard of last year which they describe as "overly friendly," to which they said they then went to Congressman Foley and asked him to stop contacting this page, and another set of e-mails that we -- that we've seen that are more -- more accurately described as "sexually explicit".
Now those are the e-mails that are much more harmful.
SANCHEZ: Yes.
MERCURIO: Those are the e-mails for which Congressman Foley was forced to resign. And those are the e-mails I think that Republicans need to distance themselves from, or at least say that they were unaware of.
SANCHEZ: By the way, as a parent -- and I'm sure a lot of our viewers who are watching right now are parents as well -- this term "overly friendly"...
MERCURIO: Right.
SANCHEZ: ... when it comes to the welfare of your kids, I mean, isn't there a light that goes off in your head automatically when you see something like that? MERCURIO: Sure. And that's why I think ultimately even the "overly friendly" e-mails are going to be viewed by, as you said, parents and people all over this country as something that should have set alarm bells off in the minds of the House Republican leadership. This is something that I think you're going to see a lot of outrage about. And I think the Republicans need to respond to that outrage by doing more than they already have, or at least explaining themselves better.
SANCHEZ: Let's -- we're down to 30 seconds, and we're down -- and probably can now talk about the thing we had been -- we would have been talking about had this scandal not broken, and that is the Bob Woodward book. In the Bob Woodward book there seems to be at least an intimation that the Bush administration knew that the violence was getting worse in Iraq and yet didn't tell the American people.
Also, that George Tenet ran to tell Condi Rice before 9/11 that there was a serious threat from al Qaeda. That apparently never got dealt with.
MERCURIO: Right.
SANCHEZ: And that there seems to be a very serious feud between Mr. Rumsfeld and Condoleezza Rice.
Which of these three are the headliners for you?
MERCURIO: I think those are all the headliners. I think this book is extremely interesting. And if I can make sort of an awkward parallel between the Foley situation and this Bob Woodward book, I mean, is that you seem to see the appearance of cover-up, the appearance of not being necessarily straight with the Republican people. And I think that's what Democrats certainly want to take into this campaign season, is this idea that you have an administration and you have the House Republican leadership not being necessarily as open and as forthcoming as they should be with the American people. We'll see if that sort of line of reasoning works with the voters.
SANCHEZ: John Mercurio, senior editor for "Hotline".
Excellent conversation. We thank you so much for joining us.
MERCURIO: Thanks, Rick.
SANCHEZ: Soledad.
O'BRIEN: Andy Serwer is "Minding Your Business" coming up next.
Good morning, Andy.
ANDY SERWER, EDITOR-AT-LARGE, "FORTUNE": Good morning, Soledad.
What happens to a trendy big-name retailer when a top executive steps down? Two different stories, at J. Crew and Pier 1. We'll tell you about them coming up next on AMERICAN MORNING.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back to AMERICAN MORNING.
Two major retailers are soon going to be seeing some changes in the boardroom.
Andy Serwer is "Minding Your Business" once again. He joins us.
What are you talking about?
SERWER: I'm talking about a couple of very familiar names, Rick, J. Crew and Pier 1. First of all, let's start off with J. Crew.
No longer a family affair, this company. Emily Scott, who co- founded the company with her father, Arthur Cinander, in 1983 will be leaving the board, along with her husband, Thomas Scott. Both have been directors for several years, and Scott had earlier been the CEO.
You might remember J. Crew went public back in June, and has been a barn burner. Up 28 -- 27 percent since then.
O'BRIEN: So why are they leaving?
SERWER: Well, you know, at some point you just probably want to cash in. Working for awhile.
The stock dropped on the news that Scott and her husband are leaving. And so, you know, maybe a situation where Wall Street saying, boy, these are people who have this brand in their DNA, and they're no longer going to be there.
Pier 1 a different situation. Embattled CEO Marvin Girouard is out. He's been head of this company since 1999. And basically, took the company on a roller-coaster ride.
It went way up, and then since then it's been way down. Stocks going from $25 to $7 over the past three years.
And it's really struggled a lot, too, Rick. I mean, the different ad campaigns. You had Kirstie Alley, then you had one of the designers from the "Queer Eye" on there.
Its trendy imported furnishings have been copied by, say, Target and even Wal-Mart. They had a catalog. The catalog didn't seem to take fire.
And, you know, when you have a business like this, you try to have a proprietary set of merchandise. Very difficult to do...
(CROSSTALK)
SANCHEZ: Yes. Well, they probably were the originals, but there's a bunch of them. When you go to any of the shopping malls nowadays there's like two or three stores that are just like them.
SERWER: That's exactly right. And, you know, in retailing in business, sort of the most important thing is -- for some people -- is if you see someone with a great idea, you copy it.
O'BRIEN: Copy is kind. Steal.
SERWER: It's a time-honored -- yes, steal.
It's a time-honored strategy, Rick.
SANCHEZ: I understand you got something on the casinos?
SERWER: No. Actually, we're going to be talking -- well, we'll be talking about casinos a little bit later in the program. We're going to be talking about Wal-Mart, though...
SANCHEZ: Yes.
SERWER: ... and some news there. They're going to be looking to change their workforce, maybe bring in more part-timers, which is controversial because, of course, in such a big employer and how they pay people, and that sort of strategy is very critical.
SANCHEZ: Wal-Mart in business news again?
SERWER: Can you imagine?
SANCHEZ: Thanks, Andy.
SERWER: Hard to believe.
O'BRIEN: Let's get a check of the forecast now. Chad's got that at the CNN Center.
Hey, Chad. Good morning again.
MYERS: Good morning, Soledad.
(WEATHER REPORT)
MYERS: The next hour of AMERICAN MORNING starts right now.
O'BRIEN: Disgraced and forced to resign, but will a congressman's raunchy e-mails trigger an anti-Republican backlash five weeks from Election Day?
And striking back. The White House says Bob Woodward got it wrong denying his book, the "State of Denial".
SANCHEZ: Also ahead, they are sports icons that many of your children probably admire. Some of baseball's brightest stars now have to come forward and deny accusations that they, too, may have been pumped up on performance-enhancing drugs.
Also, hope for diabetics. Can a pill replace all those blood checks, all those daily insulin injections? A look at promising new medical research on this.
This is right here on AMERICAN MORNING. O'BRIEN: And welcome back, everybody. I'm Soledad O'Brien.
SANCHEZ: And I'm Rick Sanchez, in today for Miles. Good to be here.
O'BRIEN: It's nice to have you. Thank you very much.
The scandal that surrounds Florida congressman Mark Foley and the e-mails that he sent to a 16-year-old male congressional page all the talk of Washington this morning.
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