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CNN NEWSROOM

Iraq Under Scrutiny; APEC Summit; Seton Hall Fire Case; Parents Accused; Gerri's Top Tips

Aired November 15, 2006 - 10:00   ET

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


HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris. Spend a second hour in the NEWSROOM this morning and stay informed. Here's what's on the rundown.

The top general for Iraq and Afghanistan called before Congress this morning. Questions about the war for General John Abizaid.

COLLINS: Consolidation in the turbulent airline industry. U.S. Airways offering Delta a deal. It could create a mega airline. Would your ticket end up costing more or less?

HARRIS: And they're accused of keeping their children in cages. Child cruelty or a necessary step? An Ohio couple on trial this Wednesday, November 15th. You are in the NEWSROOM.

COLLINS: The Iraq War and its top U.S. general face a new level of scrutiny this morning. A congressional hearing takes place with a new look to the political landscape. And its star, a straight-talking commander who could soon face a very different mission -- troop withdrawals. Here now CNN Pentagon correspondent Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT, (voice over): General John Abizaid, the top commander for the war in Iraq, goes to Capitol Hill today as the first commander to testify since the midterm elections. When he last testified in August, the words were blunt.

GEN. JOHN ABIZAID, COMMANDER, U.S. CENTRAL COMMAND: I believe that the sectarian violence is probably as bad as I've seen it, in Baghdad in particular. And that if not stopped, it is possible that Iraq could move towards civil war.

STARR: But with Republicans still in charge, Abizaid is walking into a hornets nest. Each side has already staked out its position. Everyone will be watching to see how candid Abizaid will be. Will he say mistakes were made by the generals. Democrats who will take charge of Congress in January want to start pulling troops out within four months.

SEN. EVAN BAYH, (D) INDIANA: We need to tell them we're not staying forever and that if they don't get their act together, we're going to withdraw sooner rather than later. STARR: Republican Senator John McCain wants to see an increase above the current level of 144,000 troops. Abizaid hasn't yet tipped his hand about what recommendations he might make, but two days ago in Baghdad he warned Iraqi Prime Minister Nouri al-Maliki his government must quickly take more responsibility for security.

As they await recommendations from the Iraq Study Group, commanders say they still support troop withdrawals, but only if conditions on the ground permit. The biggest problem of all may be whether sectarian violence has gone too far to save the country and drastic measures are required.

COL. DOUGLAS MACGREGOR, U.S. ARMY (RET.): Get out of Iraq, admit you've made a mistake and leave and understand that what emerges is going to be what the people who live in that country want.

(END VIDEOTAPE)

COLLINS: Joining us now from the Pentagon is Barbara Starr.

And, Barbara, you know, we've heard over the years, I should say now, about contingency plans and altering these plans as we talk about leaving Iraq. What do you think Abizaid may actually be recommending by way of a logistical, tactical way of getting out of the country.

STARR: Well, Heidi, I think it would be very surprising if General Abizaid diverted from what he has said now for so long. His view is that it is Iraqis that will provide the solution in that country, not the U.S. military. He made it very clear by all accounts to Prime Minister Nouri al-Maliki that the Iraqi government needs to step up and take control and get this sectarian violence under some level of control and crack down on the militia.

So how to make that happen. One of the theories that you hear around here is setting some time lines to turn over some of the more peaceful provinces to Iraqi control, having U.S. troops standing by, ready to help if need, but to begin to put some time lines down on paper as a means of really trying to pressure the Iraqi government to step up to the plate.

Heidi.

COLLINS: The timing of this is phenomenal, I think, though, is it not, Barbara, when we look at what happened yesterday with these mass kidnappings. People who were thinking about becoming Iraqi security forces. We know a lot of U.S. soldiers were in the area and Iraqi forces in the area. Sort of right under their noses this event takes place. And we are still talking at the same time about coming out of the country and leaving it up to Iraqi security forces.

STARR: Well, I think many commanders would tell you that yesterday's mass kidnapping event really underscores the problem, that Iraqis are having a tough time taking control. But that even if you put 50,000 more U.S. troops on the ground in Iraq, would it make a fundamental difference to the security situation unless you get the Iraqis out on the streets and get them really operating as the main security force?

There's no indication at this point that any massive influx of U.S. troops would actually help the situation. The overwhelming view really does appear to be still that it is going to be Iraqis who have to solve the problem and that there isn't a military solution to all of this. So, you know, Heidi, at the end of the day, it may be General Abizaid that tells the new Democratic Congress what they might find difficult to hear, that there are no magic bullet solutions for the country.

COLLINS: Yes. Well, we, of course, will be watching it very closely here.

Barbara Starr at the Pentagon, thank you.

STARR: Sure. In fact, in talking about it possibly being time to leave Iraq, we're going to hear from the soon-to-be chairman of the Senate Armed Services Committee. That's Senator Carl Levin. He will be live with us here in the NEWSROOM.

HARRIS: Brother, in the deep south, it may be best to stay indoors today. Strong storms rumbling across the region right now. Just hours ago severe weather swept across Washington Parish in Louisiana. Some damage reported there. Also under the gun today, parts of Arkansas, Tennessee, Mississippi, Alabama and Georgia. Let's get to Chad Myers now in the Severe Weather Center for an update on all of this.

Chad.

(WEATHER REPORT)

COLLINS: U.S. Airways to Delta, can we talk? The carrier floating a merger plan to Delta. The deal worth about $8 billion. The joint airline would work under the Delta name and it would be one of the world's biggest. One hitch, though, Delta has long insisted it is not interested in a corporate marriage. It's expected to emerge from bankruptcy next year.

HARRIS: President Bush in the air and on his way to southeast Asia this hour. He's heading to the Singapore area right now. Then it's on to Vietnam for the Asia Pacific Economic Summit. Just a few hours ago, Air Force One made a refueling stop in Moscow. That gave the president time to sit down with Russian Leader Vladimir Putin. CNN's Atika Shubert is waiting for the president to arrive in Singapore.

Atika, good to see you.

ATIKA SHUBERT, CNN CORRESPONDENT: Good to hear from you, Tony.

In fact, it was a very unusual visit by President Bush to Moscow. Usually you fly west to get to Asia, but it seems that President Bush went out of his way to meet with Russian President Putin. He was very warmly received by President Putin and his wife. President Bush and the first lady exchanged gifts and small talk, but they also discussed two topics. Specifically Russia's entry into the WTO and the Iran's nuclear program. Now those are two topics that will also be revisited during President Bush's visit to the APEC Summit in Hanoi, Vietnam. But before he goes there, he'll be making a brief stop here in Singapore.

Tony.

HARRIS: And, Atika, what is the goal? You mentioned the two topics that will top the agenda. And what is the goal in those discussions? To reach some kind of an accord, better understanding?

SHUBERT: Well, certainly in Russia's case, it wants to become the member of the WTO as soon as possible. The thornier issue is Iran. President Bush clearly has said that they want to see Russia take -- to pressure Iran more to drop its nuclear program. Russia has been very hesitant to do so. So those are two of the topics he's likely to discuss that he did discuss in Moscow and will discuss again in Vietnam.

HARRIS: CNN's Atika Shubert waiting for the president in Singapore.

Atika, thank you.

COLLINS: Criminals communicating in code. Even invisible ink?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was written in grapefruit juice. And pretty much you write it in a q-tip or toothpick and then the back of it is heated up and the message becomes visible.

(END VIDEO CLIP)

COLLINS: Signals from supermax. That's ahead in the NEWSROOM.

Also, are they monsters or parents trying to keep their kids safe? The case of the couple accused of caging their children, coming up.

HARRIS: And is it time to leave Iraq? We will talk with the soon-to-be chairman of the Senate Armed Services Committee, Senator Carl Levin, in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: We are getting some information in now to CNN about a plea deal way back in the Seton Hall dorm fire trial. Carol Lin is covering that for us.

Carol, remind us about this whole incident.

CAROL LIN, CNN CORRESPONDENT: Seven years ago, Heidi, two students were accused of setting a banner on fire inside a dorm in Seton Hall. That fire spread quickly. It killed three students and 49 other students were killed in the melee as they tried to escape that dorm building.

What's happening right now in Newark, New Jersey, is that apparently a plea deal is being made with one of the defendants. According to the Associated Press, as we're just watching these proceedings here, one of the students, Joseph LaPore, will plead guilty to third-degree arson, third-degree tampering and resisting arrest. He'll face a five-year prison term without the possibility of parole for at least 16 months.

There is one other defendant, Heidi. We haven't heard yet what Sean Ryan is going to do. But both of these young men who are now 26 years old could have faced up to 30 years in prison. This was such a sad, sad story as these kids were fighting for their lives after that fire in that dorm.

COLLINS: Wow, you know, it's fascinating to me these charges. And I remember just a few weeks ago the Esperanza Fire in California, the forest fire, arson they said. Five firefighters died. Charges of murder. But here we didn't have that.

LIN: No. There were actually several different counts. There was like 14 different counts. We're only hearing about the counts that he's pleading guilty to in this plea deal.

You know, there were local reports from the local newspaper there that these -- that this conversation about this plea deal went late into the night last night. So they were, you know, relatively speaking, given that he could have had 30 years, apparently he made the best deal he could. A five-year prison sentence on three counts.

COLLINS: All right. Very good.

Carol Lin, thanks for updating us on that.

HARRIS: A child cruelty or a legitimate way to keep special needs children from harm. Jury selection is underway for an Ohio couple accused of caging their children. CNN's Rusty Dornin looks at the case.

(BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT, (voice over): When the headlines hit, Michael and Sharon Gravelle were made out to be monsters. Last year, a county social worker found these, bunk beds with wooden slats and chicken wire built for some of their Gravelle's 11 adopted children who had special needs. Word spread quickly. People were hearing the Gravelle's had caged their kids. One neighbor was appalled.

UNIDENTIFIED FEMALE, GRAVELLE'S NEIGHBOR: That makes me ill.

DORNIN: But the couple fought back. They brought reporters into their home to explain. Michael Gravelle gave no excuses. He said it was to protect the children. Children seen here who he claims sometimes got up at night and started fires or tried to hurt their siblings. MICHAEL GRAVELLE, DEFENDANT: No, I did it the way that we thought we need to do and to keep our children safe.

DORNIN: Following more than a year of court hearings, the children were taken from the couple and placed in new foster homes. The Gravelles now face 16 felony charges of child endangerment. Sharon Gravelle's attorney says he will try to convince the jury these were definitely not cages.

UNIDENTIFIED MALE, SHARON GRAVELLE'S ATTORNEY: Again, you can see the wood slatting. Here's an alarm. You close the door.

DORNIN: The alarm would go off when the children got out of bed at night. Punishment, says the defense, was not the intent.

UNIDENTIFIED MALE, SHARON GRAVELLE'S ATTORNEY: They weren't told, go to your cage and I'll lock you in. These beds do not have locks. They had alarms so that the parents could find out when they were getting out of bed.

DORNIN: Social worker Elaine Thompson saw the beds more than a year ago but never reported it.

ELAINE THOMPSON, SOCIAL WORKER: But I also understood the behaviors of these kids and that the Gravelles had legitimate reasons for needing to keep these kids safe.

DORNIN: Now the social worker also faces a court trial on felony charges of child endangerment. Sharon Gravelle told us tonight that to deal with the severe emotional problems of her foster children, she practiced something called attachment therapy, which involves, among other things, creating a highly disciplined structure and providing what she called abundant constant love.

While officials say the children did not appear physically abused, at least one boy told authorities he was punished and kept in a bathroom.

LT. RANDY SOMMERS, HURON COUNTY SHERIFFS DEPT.: As I recall, Michael said 91 days and that was for urinating in his cage.

DORNIN: The defense says emotionally disturbed children often make things up. And some of the children's testimony has been misconstrued by the prosecution. Family therapist Greg Keck says the beds weren't appropriate, but the Gravelles aren't the only ones to blame.

GREG KECK, FAMILY THERAPIST: Everybody who was in and out of that home, and there must have been a lot over the years, should have seen what we all finally saw and made some kind of judgment about it.

DORNIN: And in this northern Ohio town, there is still fierce debate about whether the Gravelles are criminals or parents who made very poor judgments in a tough situation.

Rusty Dornin, CNN, Norwalk, Ohio. (END VIDEOTAPE)

COLLINS: Coming up, hope for a lame duck. President Bush looks for help on his domestic spying program before Democrats take over. We'll talk about that ahead in the NEWSROOM.

HARRIS: And is it time to leave Iraq? We will talk with this man. The soon-to-be chairman of the Senate Armed Services Committee, Senator Carl Levin, in the NEWSROOM.

COLLINS: And we're also going to be talking mutual funds and tax time bonds. Gerri Willis is going to be talking with us about that.

GERRI WILLIS, CNN CORRESPONDENT: That's right.

Hey there, Heidi.

There is a ticking time bomb in your mutual fund. We'll have all the details. That's next on "Top Tips."

(COMMERCIAL BREAK)

HARRIS: The top U.S. commander in the Middle East on Capitol Hill facing the hard questions on the Iraq War. General John Abizaid goes before the Senate Armed Services Committee this morning with a vastly changed political landscape. The hearing on Iraq will be the first since the resignation of Defense Secretary Donald Rumsfeld, the chief architect of the war, and it's the first since Democrats won control of the new Congress. Democrats are likely to bring up the topic of a phased withdrawal of American troops.

He'll chair the Senate Armed Services Committee beginning this January. Senator Carl Levin joining us now to talk about Iraq and the Democrats' strategy on the war.

Senator, good to see you. Thanks for your time this morning.

SEN. CARL LEVIN, (D) ARMED SERVICES COMMITTEE: Thank you. Good to be with you.

HARRIS: Well, let me see if I have at least the framework of your proposal correct here. You would like to see troops coming home in the next four to six months. Is that correct?

LEVIN: Not quite.

HARRIS: OK.

LEVIN: What we have suggested, in fact we had a vote on this proposal last June, is that the president tell the Iraqis that beginning in four to six months we would begin a phased reduction of our forces in Iraq.

HARRIS: So you would tell them that. What is your fundamental belief -- the fundamental belief that supports the proposal? LEVIN: That the Iraqis have to take responsibility for their own future. That the problem here is the lack of a political settlement between the various sectarian factions. That there is no military solution. Only a political solution. And that we've got to force the Iraqis to accept that by telling them that we're going to begin a phased reduction of our forces in four to six months.

So it's not precipitous. It allows them to plan. It allows them to contemplate what the alternatives are and to take steps in order to eliminate this violence through a political settlement.

HARRIS: So, Senator, you read the piece in this morning's "New York Times." A former head of U.S. Central Command, General Anthony Zinni, is quoted saying, "there is a premise that the Iraqis are not doing enough now, that there is a capability that they have not employed or used. I am not sure they are capable of stopping sectarian violence."

Do you believe the al-Maliki-led government is doing all that it can to gain control of the country?

LEVIN: It's not working out a political deal between the Sunnis and the Shia and the Kurds. That's what is essential. They've delayed that deal and there's no military solution here. We can -- some people propose we send in more troops. That just gets us in deeper. We can't save the Iraqis from themselves. They've got to be informed very clearly that the -- there's no open-ended commitment of American troops anymore and that they've got to take responsibility for their own future.

HARRIS: Senator, if you -- how about this as a proposition. Because we've heard it from time to time in the various guest interviews that we've featured here on CNN, that the minute you pull troops out of Iraq, you pull them out at 8:00 in the morning Baghdad time, by noon you have all-out full-on civil war. What do you make of that?

LEVIN: That you have civil war right now going on. That this is the course that they're on. If what we were doing now is working, then I would agree with you. But what we're doing now is not working. It is delaying the Iraqis making the choices that they've got to make. Do they want a civil war or do they want a nation? We have to give them time to contemplate that option, but then we've got to tell them that they've got to take over the responsibility.

HARRIS: You know what General Abizaid is going to say to you today. He's going to say that we are soldiers. We are at war and the job isn't done. So any discussion of a pullback in four months, six months, a year from now, that's not getting the job done. That's not success. And we want to stay and get the job done. How do you counter that?

LEVIN: That they're not able to get the job done militarily. I think he knows that. I'm not so sure that what you say he's going to say is what he's going to say. HARRIS: So do you believe, I'm just curious as to what you believe, that U.S. forces on the ground in Iraq right now are fueling the insurgency?

LEVIN: I think it's a mixed picture. The one hand, we, obviously, are providing some security, in the green zone particularly. It's a kind of a security blanket for the Iraqi leaders. On the other hand, we're a target. To that extent, we're fueling it. And, as a matter of fact, both General Casey and General Abizaid have acknowledged that to some extent our presence is fueling the insurgency, giving them that target.

HARRIS: How do we not appear weak? I'm thinking about the hearing today. The Iraq Study Group is going to come back with its findings in a month. There will be a discussion about that. How do we not appear weak in this country as we go through this process of trying to figure out the next way in Iraq? And what kind of a message does this very process send to the Syrians and the Iranians who are most certainly watching?

LEVIN: That our current course is weak because it's not succeeding. And there's nothing worse than a course of action where it is not succeeding and just digging a deeper and deeper hole. So if you're in a hole, quit digging. Look for alternatives.

This president has continually said stay the course, stay the course. If it were working, I'd be all for it. But it's not. So how do you change the course? How do you change that dynamic? How do you force the Iraqis to finally recognize that it's only a political deal between them which is going to end this insurgency? How do you force that on them? You don't do it by telling them that you're just going to just stay there as long as they want us to stay there because that allows them to evade and avoid the responsibility which must be theirs.

HARRIS: You going to get some of those answers from the general today?

LEVIN: We don't know. I think the general, though, is open to new options. I hope he is. But whatever he really feels, I hope he'll tell us his own personal, professional opinion.

HARRIS: Yes.

Senator Levin, thanks for your time. We appreciate it.

LEVIN: Sure. Good being with you.

HARRIS: And just a note here, Senator Jeff Sessions, a Republican member of the Armed Services Committee was set to join us this morning. Unfortunately, he had to cancel at the last minute.

COLLINS: Want to go ahead and take a look at the big board once again for now. Looking at the Dow Jones up about 22 points or so, resting at 12,241 at this very moment. Also Nasdaq up about 9 points. So we will continue to watch that. So do you own mutual funds? Your investment returns are up. Way up this year. But, as with any investment, there are some words of warning as well. Here's CNN personal finance editor Gerri Willis. She's joining us from New York.

Why can't it all just be good news, Gerri?

WILLIS: Well, there is some good news. Funds have gained about 10 percent this year. Hurrah.

OK, the bad news, they're required to distribute any income they receive, like stock dividends. Now this distribution is said to be one of the biggest in years. Bottom line here, you'll be on the hook for a much larger tax bill.

Here's an example of what the tax sting is for a $10,000 investment over the course of 10 years. Check it out. Growth in the Wasatch Micro Cap Fund before taxes is over $77,000. After taxes, it's less than $59,000. As you can see, you get quite a haircut with taxes no matter where you're investing.

Heidi.

COLLINS: That's such a bummer. Let's get rid of that graphic. Just stay in denial.

No, you do need to gauge your risk, though, with all of this.

WILLIS: Indeed you do. Now this doesn't hurt some people. If you have a traditional I.R.A. or a 401(k) there is no reason to panic. These are tax-deferred investments. You don't have to worry. But prepare for a very big tax shock if you're investing outside a tax advantage fund. Big gainers this year, real estate, international, small-cap stock funds. So to get an estimate of what you may owe come tax time, or to find out when you can expect your fund's disbursement which is usually this month or next, go to your mutual fund's Web site. They'll have information there -- Heidi.

COLLINS: And a little secret for the folks at home. Don't invest now. The mutual funds people are going to love us.

WILLIS: I know. Maybe it's on your to-do list, but you might want to wait. If you invest any fund now outside of 401k or traditional IRA, you may be unwittingly buying a higher tax bill. But if you wait a few months, until January, to buy mutual funds, you'll be more prepared for that tax hit.

Now when you do decide to invest, make sure you look at tax- managed funds. These funds try to minimize taxable gains by using stock losers to offset winners in their portfolio. And if you're thinking about selling our mutual fund soon, make sure you check the disbursement date and sell before that time.

And of course we want to hear from you. Send us your questions to toptips@CNN.com. We'll answer them here every Friday and we love to hear from you. COLLINS: And the mutual fund people.

WILLIS: And the mutual fund people. They know all about this issue.

COLLINS: I'm sure they do. Gerri Willis, thank you.

WILLIS: You're welcome.

ANNOUNCER: Live in the CNN NEWSROOM, Tony Harris and Heidi Collins.

(WEATHER REPORT)

HARRIS: Criminals communicating in code. Even fruit juice?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It was written in grapefruit juice. And pretty much you right it in a Q-tip or a toothpick, and then the back of it is heated up and the message becomes visible.

(END VIDEO CLIP)

COLLINS: Signal from Supermax. We'll tell you all about it, coming up in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: A supermodel, Naomi Campbell, in court today. Anger- management issues seemingly causing some problems for her. Carol Lin following those developments for us in the NEWSROOM.

Carol, good morning.

CAROL LIN, CNN ANCHOR: Good morning, Tony.

It is so tangled, because there are so many allegations of her slapping, and hitting and cursing at former employees that I had to untangle this mess during the commercial break.

Apparently today's court appearance has to do with Naomi Campbell, who is accused of hitting a former employee with a cell phone, conking her on the head and accusing her of stealing her Stella McCartney jeans. There may be a plea deal in the works. Today's hearing was adjourned until January 16th. This is in the midst of Naomi Campbell's former maid apparently making an allegation just yesterday that Naomi Campbell slapped her and called her some sort of a bigoted name, because once again she could not find her jeans. So she needs her jeans, and she's ending up in court. So rule No. 1 as an employer, don't slap and don't call your employees names.

HARRIS: If you take a job as a housekeeper, maid for Naomi Campbell, perhaps you should negotiate some hazard pay.

LIN: Yes. You know what? Naomi Campbell, she's apparently taking it in stride, according to her people. She's wearing T-shirt that says "Naomi hit me" on the front and "I love it" on the back.

HARRIS; All right. That's enough of that. All right, Carol. Appreciate it. Thank you.

LIN: We cover everything from the breaking news desk.

HARRIS: We do.

COLLINS: I don't even know where to go from here. But I am going to move on. America's tightest prison, has it sprung a leak? New concerns that not all communications from Supermax are letters home.

Take a look at this report from CNN's Drew Griffin.

DREW GRIFFIN, CNN CORRESPONDENT: Supermax is the sprawling maximum security federal prison in Colorado, a $60 million warehouse for the very worst criminals. Mass murderers, terrorists, isolated for life. Well, at least that was supposed to be the plan. But there is dramatic new evidence that some of those criminals might be plotting terrifying crimes from behind bars. Investigative correspondent Drew Griffin reveals the dangers inside the Alcatraz of the Rockies.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Here in the shadows of the Colorado Rockies are many of our worst known terrorists. Ramzi Yousef, the first World Trade Center bomber. 9/11 wannabe Zacarias Moussaoui, the shoe bomber Richard Reid. The Olympic bomber Eric Rudolph. The Unibomber, one of the Oklahoma City bombers, al locked up for life in the nation's toughest prison, Supermax.

Almost every hour is spent in these cells. Eat here, shower here. Solid doors and narrow windows make it hard to even see another inmate. Yet official documents show the prison is understaffed. Phone calls are not always monitored, neither is the mail. Supermax is a danger of becoming super lax.

(on camera): If those terrorists being held inside Supermax are plotting and planning their next attack right now, chances are the federal government wouldn't even know it.

(voice-over): Who says so? The Justice Department itself. Last month the inspector general said the Bureau of Prisons quote, "is unable to effectively monitor the mail of terrorists and other high risk inmates in order to detect and prevent terrorism and criminal activities."

One criminal case in point, the 18th Street Gang marks its turf and runs drug sales near downtown Los Angeles.

UNIDENTIFIED MALE: What has happened is that every street corner now has a gang.

GRIFFIN: The gangs extort kickbacks. They call it taxes or rent from the street dealers.

SOSA: You'd better pay your taxes, pal, or else you're going to get killed or you're not going to deal dope in my town.

GRIFFIN: The man running the drug gang? The FBI says it is Ruben Castro, from his cell at Supermax.

(on camera): And even though he's behind bars and away for life, he still holds that power?

SOSA: Most definitely.

GRIFFIN (voice-over): Prosecutors charge for the past three years, Castro has been able to give orders in telephone calls and coded letters from Supermax.

SOSA: And he uses his girlfriend, wife or mistress or whatever she is or any other person that will take a message out.

GRIFFIN: Inmates are allowed only a handful of calls a month, but the Justice Department report says half of those phone calls were not monitored in the last year that it checked.

The Madrid train bombings in 2004 triggered the recent Justice Department report. After those attacks, investigators discovered an al Qaeda follower had been writing to terror suspects in Spain from his cell at Supermax, yet the staffing levels have continued to drop. The report says personnel assigned to the check mail and phone calls often are sent to cell blocks instead as substitute guards.

MIKE SCHNOBRICH, PRISON GUARDS UNION: I think they are pulled from those positions on occasion more often than they should be to work in other parts of the prison to make sure we're that maintaining security there.

GRIFFIN: The guard force has fallen well below what it was when Supermax opened. Last year, a minimum manpower figure was set. Supermax is now under that. Inmates too often are winning a war of wits.

TERRI FLYNN, ASST. U.S. ATTORNEY: They have time and they have the patience to figure out ways to communicate with each other.

GRIFFIN: Prosecutor Terri Flynn helped convict two leaders of the Aryan Brotherhood this fall, of starting a race war at the Lewisburg Federal Prison in Pennsylvania by sending out a message from Supermax written in invisible ink.

FLYNN: In the case of the Lewisburg message, it was written in grapefruit juice. And pretty much you write it in a Q-tip or a toothpick and then the back of it is heated up and the message becomes visible.

GRIFFIN: The gang also used a code based on how many letters were printed or written in long hand.

FLYNN: This would be a C.

GRIFFIN (on camera): It's somewhat ingenious.

FLYNN: It is. The decipher system was that was developed by Sir Francis Bacon in the 15th century.

GRIFFIN (voice-over): We did try to get answers from the warden here at Supermax. He declined to be interviewed on camera. So did the top prison officials in Washington. Colorado legislator Buffie McFadyen district includes Supermax. She says money must be found soon to beef up security here.

(on camera): If somebody is in there right now over that hill and they are plotting and planning a terrorist attack, there's a good chance that we wouldn't know about it, yes?

BUFFIE MCFADYEN, COLORADO STATE REP.: Absolutely. It could happen. Could happen. And that should be frightening for any citizen in the United States of America.

GRIFFIN (voice-over): Drew Griffin, CNN, Florence, Colorado.

(END VIDEOTAPE)

HARRIS: We have been telling you most of the morning the Republican leadership meeting was under way. We're understanding that it is just about to wrap up. With Senator Mitch McConnell being named minority leader. He was running unopposed. But the race we've been watching most of the morning was for the number two position of minority whip. A real spirited contest between Senator Trent Lott in his attempt to get back into the Republican leadership and Senator Lamar Alexander. Both men went into the meeting this morning feeling confident about their positions, but we have just learned that Senator Trent Lott has won the number two position in the Republican leadership. He is now the minority whip. And he won that seat by one vote. We will be checking in shortly with our congressional correspondent Dana Bash who will have more on all of this.

(COMMERCIAL BREAK)

HARRIS: So the Senate Republican leadership meeting has just wrapped up. And CNN congressional correspondent Dana Bash has been working the phone, and she joins us now. Dana, you know, I don't want to steal your thunder on this. So, why don't you tell us what came out of the leadership meeting.

BASH: The headline according to a Republican source who actually is in the meeting that is still going on, the headline is that Senator Trent Lott has apparently won the number two spot in the Senate leadership. This is something that frankly, it appears to be a dramatic comeback. As we have been talking about this morning, Tony, Trent Lott, four years ago, of course, was pushed aside as majority leader of the Senate after racially insensitive remarks. And now in the past week and a half or so since it was clear the Republicans were going to be in the minority in the Senate, he waged a very quiet, but very aggressive campaign to get back into the Republican leadership and we understand from a Republican source who just came out of the meeting which again is still going on, the elections are still happening that Trent Lott apparently has won that spot.

Lamar Alexander, the Republican senator from Tennessee has been working on this for 18 months or so. He told us as late as yesterday that he still felt confident that he had the votes in the bag. He thought he had iron-clad commitments from his colleagues that he would be the nuber two person. He said what is important from his perspective is that Republicans, especially in the wake of what he called the drubbing that Republicans got in the election, that there be a fresh face. But it appears to be -- that that is not the case. It appears that, in fact, Trent Lott has waged a quiet campaign and won the number two spot.

But we are, again, waiting to hear from the leaders. They are still inside. That meeting -- it is a secret ballot. The election, all leadership elections up here are a secret ballot and the ballot we understand has been completed. We'll hear what they have to say momentarily.

HARRIS: All right Dana, just one quick question. Why Trent Lott? Why this comeback? Why does it appear that Republicans have chosen Trent Lott to make this big comeback?

BASH: It's a very good question and an very important question. Republican senator after Republican senator who I talked to about this in the last day or so, said one thing -- and that is what they thought is that they need somebody who understands the very complicated Senate procedures, especially in the minority. Somebody who understands how to maneuver and, frankly, outmaneuver Democrats when it comes to the Senate floor and somebody who also has experience in trying to unify a caucus and unify a Republican party that really is fractured and really has any Republican up here will tell you, lost its way.

So that is the main reason why I would say I probably talked to about 10 Republican senators. Some of whom weren't necessarily even going to vote for Senator Lott, but to a person, they said that would be the reason Senator Lott should get a chance to come back into the leadership because they -- many of them said he is exactly the kind of person they think they need right now, especially in the minority.

HARRIS: Very interesting. CNN congressional correspondent Dana Bash. Dana, we'll see you at the top of the hour. Thank you.

BASH: Thank you.

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COLLINS: Meanwhile, coming up, hope for a lame-duck. President Bush looks for help on his domestic spying program before Democrats take over. That's ahead in the NEWSROOM.

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HARRIS: Old and new leadership for Senate Republicans? You'll need a scorecard. Who's on first coming up. And Capitol Hill Q & A. The top U.S. general for Iraq goes before Congress this morning. It will be like any other congressional review of the war. We promise you. Details in the NEWSROOM.

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