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Senate Confirmation Hearing for Nominee to Head Iraqi Forces; State of the Union; Prison Jihad

Aired January 23, 2007 - 11:00   ET

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


TONY HARRIS, CNN ANCHOR: And good morning, everyone. You're with CNN. You're informed.
HEIDI COLLINS, CNN ANCHOR: And I'm Heidi Collins.

Developments keep coming in to the NEWSROOM on this Tuesday, January 23rd.

Here's what's on the rundown.

War commander, David Petraeus, the general who will put the president's new Iraq strategy into action. Tough questions for him on Capitol Hill this morning.

HARRIS: Beirut burning. Hezbollah protesters setting up fiery road blocks, the general strike meant to topple the Lebanese government.

COLLINS: An Aussie diver nearly loses his head to a shark. Staring down the throat of a Great White. The great escape, in the NEWSROOM.

HARRIS: Fight for Iraq. The Senate confirmation hearing of President Bush's choice to command U.S. troops is under way right now.

It comes at a crucial time in the war. American confidence is down. Insurgent attacks are up. And there's no consensus on a winning strategy.

Let's go live to the Pentagon now and correspondent Barbara Starr.

Barbara, first of all, what was General Petraeus -- what has he been telling senators this morning?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Tony, a lot of the questioning is centering around this whole question of troop surge, plus-up, whatever anybody wants to call it. The question for General Petraeus is, will that be enough, an extra 20,000 troops or so? Will it solve the problems in Iraq?

Now, very interestingly, General Petraeus, who's known in the Army as sort of the godfather of counterinsurgency, he's really an expert in those matters, says that according to -- this is a math, an arithmetic problem, if you will. He says according to standard calculations, based on the population in Baghdad, actually there should be 120,000 security forces simply to try and control the violence in Baghdad -- 120,000.

Listen to what he spells out is really on hand now.

(BEGIN VIDEO CLIP)

LT. GEN. DAVID PETRAEUS, U.S. ARMY: If you add all of the U.S. forces that will be on the ground when we have the full increase in forces, including Special Operations forces, all the Iraqi forces, military and police, you get to about 85,000. Not all of those are as effective as we might want them to be, particularly on the police side, as you know.

However, there are tens of thousands of contract security forces and ministerial security forces that do, in fact, guard facilities and secure institutions and so forth that our forces or coalition or Iraqi forces would otherwise have to guard and secure. And so that does give me the reason to believe that we can accomplish the mission.

(END VIDEO CLIP)

STARR: So, very interestingly, General Petraeus saying it's those private contractor security forces, those private forces, that he thinks he will have to rely on to make all of this work. But General Petraeus taking a very sober-minded approach, Tony, saying it will not be easy, that it will be a long road ahead, and it may not be until the end of the summer that he'll be able to really make the calculation about whether this new security plan is actually working -- Tony.

HARRIS: Barbara, it sounds like he may have to rely on these contractors but that he would prefer that number of 120,000 in Baghdad.

STARR: That seems to be what he's laying out. Because the question that he's just been asked a few moments ago by the committee before we came on the air with this report, was, OK, if it's 120,000 that you say you really need, and you've got 85,000, what makes you think that the new security plan is going to work?

And his answer, again, is that he's got contractor forces. But, you know, what he's also telling the senators is that there will be a new way of doing business in Iraq. That U.S. forces will get out of those highly secure bases they're in, they will go live in the neighborhoods that they're fighting and protecting.

He's not yet able to answer the question, of course, how he will protect those U.S. forces when they start living and working in those Baghdad neighborhoods. But General Petraeus is a guy who many people say is very forward-thinking. And what he's trying to do is lay the groundwork here that it won't be business as usual and that these forces will be operating differently in Baghdad.

It could be months, though, Tony, before anybody can see whether it's really all going to work.

HARRIS: And based on these numbers, he might need to be a bit of a magician.

CNN's Pentagon correspondent, Barbara Starr, for us this morning.

Barbara, thank you.

COLLINS: The state of the union, a snapshot of the political divide. For the first time, President Bush will wade into a Democratically-controlled Congress to deliver his State of the Union speech.

CNN White House Correspondent Elaine Quijano now.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT (voice over): Amid deep bipartisan skepticism over Iraq, and with Republicans no longer in control of Congress, President Bush tonight will reach out to Democrats on domestic issues, hoping to find common ground.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: The president is going to offer some bold proposals that Congress could in fact enact.

QUIJANO: Bush advisers say this year's address will be thematic, not a laundry list of initiatives, and will focus on issues like immigration, energy, education and healthcare.

Michael Gerson, the president's former speechwriter, says the political drama of going before a Democratic-led Congress presents an opportunity.

MICHAEL GERSON, FMR. PRESIDENTIAL SPEECHWRITER: I think it's a chance for him to reassert some domestic policy leadership and to make the best case he possibly can for his Iraq policy.

QUIJANO: But polls show Iraq has eroded the president's political capital and damaged, some say, on his ability to lead on domestic issues.

JACK QUINN, FMR. WHITE HOUSE COUNSEL: The overwhelming part of the American public disapproves of the way he's handling the presidency. His back is to the wall. He's not in a position to go out there and dictate the end result of this process.

QUIJANO: And with fellow Republicans continuing to voice concerns about the president's plan for more troops in Iraq, even his defenders acknowledge words alone will not erase the doubt.

UNIDENTIFIED MALE: I think it's going to be the reality on the ground, not the rhetoric of the speech that determines if they support the policy or not.

(END VIDEOTAPE)

COLLINS: Elaine Quijano joining us now live from the White House lawn. Elaine, I wonder, can the president get through in this speech Iraq in such a way that he will be able to address Democrats and then hopefully accomplish some of these domestic goals?

QUIJANO: Well, certainly he's going to continue making the case for why he thinks that 21,000-plus more troops for Baghdad and for the Anbar Province in Iraq are needed. At the same time, though, the president and the White House feel that there is in fact some common ground when it comes to some domestic issues, immigration being one of them in particular.

That has been a problematic issue for Republicans. It has deeply divided the Republican Party, but the president actually shares some of the same views on immigration that some Democrats have.

But, of course, the big question mark right now is Iraq. You're absolutely right. And that certainly is looming large over everything. Aides say that the president's speech right now, running about 45 to 50 minutes, that Iraq will in fact be a significant portion of the president's address tonight -- Heidi.

COLLINS: All right. We'll be watching.

Thanks so much.

Elaine Quijano.

HARRIS: After winning his second term in office, President Bush boasted that he had political capital to spend. Today, he runs the risk of insufficient funds.

A closer look at the numbers now. Here's CNN's senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: President Bush will be addressing a skeptical audience, not just the new Democratic Congress, but also the American people. At 34 percent approval, Mr. Bush has the lowest job rating of any president on record going into his next to last year in office. Most Americans now call the Bush presidency a failure.

Remember the issue that brought down his father? This time, it's not the economy, stupid. More than 60 percent of Americans believe the nation's economy is in good shape. But Americans are strongly opposed to President Bush's policies in Iraq.

More than 60 percent oppose his troop increase and want Congress to try and stop it. Disillusionment with Iraq is having a spillover effect.

Only 28 percent of Americans now believe the United States and its allies are winning the war on terror. The lowest number ever. Most Americans say neither side is winning. President Bush's father learned that even a brilliant foreign policy success cannot save you if the economy falls apart. President Lyndon Johnson learned that a foreign policy disaster can destroy you, even if you have a strong domestic record. It's a lesson President Bush may learn, too.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

COLLINS: CNN is the place to watch the State of the Union Address. Primetime coverage begins tonight at 7:00 Eastern.

You can watch a special two-hour edition of "THE SITUATION ROOM." Then President Bush's address, live on CNN, followed by the Democratic response.

At 10:30 Eastern, Anderson Cooper has reaction from around the world, followed by a midnight edition of "LARRY KING LIVE."

Plus, no worries if you're away from your TV. You can watch it live and free on CNN.com's Pipeline. You can't beat that. Just go to CNN.com.

The best political team on television has you covered, even on the Web.

HARRIS: Afghanistan reeling from its deadliest suicide attack in months. The bomber blew himself up in a crowd of Afghan workers. The men were waiting to get into a NATO base near Pakistan. At least eight and, by some accounts, as many as 10 Afghan police and civilians were killed, several were wounded.

This is the nation's deadliest suicide attack since a bomber killed 12 people in September.

COLLINS: Thousands of anti-government protesters poured into the streets of Lebanon today, billed as a peaceful general strike, but quickly deteriorated. Cars and trees were set on fire and blocked several roads.

Government supporters clashed with the opposition. Lebanese security forces say two protesters were killed, about 100 other people wounded in Beirut.

Business ground to a halt. This is the worst violence since the group Hezbollah began its campaign to Lebanon's U.S.-backed prime minister.

HARRIS: The situation in Iraq and reaction here at home. How have things changed since President Bush's last State of the Union Address? A "Fact Check" in the NEWSROOM.

COLLINS: Going in as criminals, coming out as terrorists. Jihad behind bars ahead in the NEWSROOM.

HARRIS: A winter wonderland. The young and the young at heart enjoy a frozen treat in the desert.

More in the NEWSROOM.

COLLINS: Those are his feet, but it was his head the shark bit down on. That's the story an Aussie diver lived to tell. The man who came to dinner, in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: To Nashville, Tennessee, now, just one of the cities that could be in danger if a dam in Kentucky breaks. Right now, emergency efforts are under way to try to keep that from happening.

Authorities are lowering the water level on Lake Cumberland to relieve pressure on Wolf Creek Dam. The dam has been weakened by erosion, and if it breaks officials say it could unleash a deadly wave of flooding in Kentucky and Tennessee. There could be billions of dollars in damage.

The Army Corps of Engineers says failure of the dam is not imminent, but communities along the river are being told to have evacuation plans ready just in case.

COLLINS: Some storm-slammed parts of the U.S. getting a break. The weather not as nasty as it's been the last few weeks. Some areas still coping with snow and ice, but not everybody is complaining.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I want to make another snowman.

(END VIDEO CLIP)

COLLINS: See? It's lots of fun.

HARRIS: What was that?

COLLINS: "I want to make another snowman."

HARRIS: Oh, OK. OK.

COLLINS: Lots of fun for these young people in Tucson, Arizona. I swear, that's where it is.

It isn't often they get to see snow like this, of course. A weekend storm absolutely covered the city.

Along the U.S. border with Mexico, more rare scenes. Heavy snow fell in southern New Mexico and east of there, in El Paso, Texas. Forecasters say more snow could fall into that region today.

HARRIS: And if you're not cold now, you will be cold soon. So bundle up, cuddle up.

Hi, Chad.

CHAD MYERS, CNN METEOROLOGIST: Cuddle up?

HARRIS: Did I say cuddle or bundle?

(WEATHER REPORT)

HARRIS: How about this story? A diver off Australia's coast almost becomes a shark's lunch, attacked by what is believed to be a Great White. Here's his amazing story. And another diver, actually, Heidi, backed him up on this.

The shark was about to swallow him head first, but the diver imagined to free an arm. OK? Freed an arm and poked the shark in the eye.

COLLINS: Oh, they hate that.

HARRIS: Yes. So much so that the shark spit him -- spit him out so that he could get away.

(BEGIN VIDEO CLIP)

MARK NERHUS, SON OF SHARK ATTACK VICTIM: He had come up to the surface and he was going, "Help, help! There's a shark! There's a shark!"

And I went over there. And there was a big pool of red blood. And I pulled him out of the water. And he's going, "Just get me to shore. Get me to shore."

(END VIDEO CLIP)

HARRIS: What was that? What did he say?

COLLINS: We shouldn't be laughing. I mean, this is absolutely unbelievable.

HARRIS: But he's fine.

COLLINS: No, I know, but still.

HARRIS: It's funny.

COLLINS: You don't think this affected him?

HARRIS: Well, go see a shrink, get better.

The diver suffered a broken nuts, deep cuts. OK, all right, so he's got some injuries.

Marine experts say such attacks are relatively common in Australian waters. About 15 attacks a year there.

COLLINS: Yes.

Missing children and MySpace, online help for the lost. We'll tell you about the details coming up in the NEWSROOM. HARRIS: And a question. How do you get a sponge clean? The answer is simpler than you think.

COLLINS: Throw it out.

HARRIS: Stay with us in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: The Amber Alert system spreading the word when a child goes missing. It's getting help now from myspace.com. The social networking Web site is teaming up with the National Center for Missing and Exploited Children.

MySpace says it will distribute Amber Alerts to members about children missing in their communities. MySpace also says it is introducing new features to increase online safety and privacy for its members.

Stirring up a holy war behind bars. Well, some believe prisons maybe fertile ground for homegrown terrorism.

CNN's David Mattingly explains.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice over): In a California prison, the daily call to prayer beckons the Islamic faithful.

UNIDENTIFIED MALE (SINGING): Allahu Akbar.

MATTINGLY: But some say it could also be the sound of opportunity to those with a terrorist agenda, radicals who use religion to justify doing harm.

RICK RIMMER, CALIFORNIA DEPT. OF CORRECTIONS: Unfortunately in this environment it doesn't take very many individuals to create some considerable havoc, both within the prison system and in our communities.

MATTINGLY: A special report from two major universities warns of a global trend of criminals going into prison and coming out religious and political radicals. Shoe bomber Richard Reid is believed to have been influenced by a radical imam while in a British prison. In the U.S., California inmate Kevin James allegedly founded his own radical Islamic group and directed a terrorist plot, all from behind bars.

(on camera): Could the next Kevin James be out here?

RIMMER: Certainly. It's entirely possible.

MATTINGLY (voice over): Walking along the yard inside the infamous Folsom Prison, California prison security chief Richard Rimmer says it's impossible to stop the radicalization of prisoners and difficult to contain. RIMMER: You've got a population that has already demonstrated a lack of ability to adjust to a free world. And they've either gotten themselves wholly disenfranchised or caught up in significant substance abuse problems. We've seen conversion to religious practices across the board for years.

MATTINGLY: Experts say radicals can target new converts of any religion, but Islamic converts in prison might be more vulnerable because there are not enough qualified chaplains to teach and perform services.

Imam Salem Mohamed is a chaplain at Folsom just every other week. The rest of the time, he says, the inmates are on their own.

SALEM MOHAMED, FOLSOM PRISON IMAM: The opportunity rises that some people might end up being misguided and that they may start drifting away from the right path.

MATTINGLY (on camera): Folsom Prison is no longer the same place Johnny Cash sang about decades ago. State officials say like most prisons it's now dangerously overcrowded and understaffed.

Just take a look at this cell. This was constructed to be used by just one inmate, but today, two men have to live here. And it's not unusual on any given day to find one guard trying to look after hundreds of prisoners.

(voice over): According to federal prosecutors, Kevin James was able to exploit this overloaded system, to recruit followers virtually unnoticed. After parole, followers allegedly planned to kill Americans Jews and troops, targeting synagogues and military facilities around Los Angeles.

Four men, including James, are now charged with terrorism-related conspiracy. All pleaded not guilty and are awaiting trial.

In 10 years as a chaplain, Salem Mohamed says he has only encountered a few prisoners with radical ideas. The vast majority, he says, follows the call to prayer seeking peace, many trying to escape a life of violence. But as the allegations against Kevin James suggests, all it takes is one motivated, charismatic figure in the dark recesses of prison to sew the seeds of terror.

David Mattingly, CNN, Folsom, California.

(END VIDEOTAPE)

HARRIS: How about a little news you can absorb this morning? Well, they wipe your dishes, scour your countertops, and even scrub spills from your floor. The poor kitchen sponge gets no respect.

It did, however, get the attention of engineering researchers. They found you can safely sterilize sponges. Microwaving sponges at full power for two minutes should kill most germs.

Bet you didn't know that this morning. How about that for a "Daily Dose"?

You want more? Log on to our Web site. There you will find the latest medical news, a health library, and information on diet and fitness. The address, cnn.com/health.

COLLINS: Leading U.S. troops in Iraq. The man President Bush tapped for the job on the Hill in the hot seat. His confirmation hearing ahead in the NEWSROOM.

HARRIS: The point where life meets arts. For two filmmakers, that place is New Orleans. Their story ahead in the NEWSROOM.

(COMMERCIAL BREAK)

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

TONY HARRIS, CNN ANCHOR: Lieutenant General David Petraeus on the Hill under fire, armed with answers. The man President Bush tapped to be the top commander of U.S. forces in Iraq, grilled at his Senate confirmation hearing this hour.

Petraeus faces new challenges about securing Baghdad from a rising insurgency. But he says he has a new approach, one that includes sending U.S. troops to operate and live in Baghdad neighborhoods.

(BEGIN VIDEO CLIP)

LT. GEN. DAVID PETRAEUS, U.S. ARMY: Together with Iraqi forces, a persistent presence in these neighborhoods will be essential. Different approaches will be required in different locations. Whatever the approach, though, the objective will be to achieve sufficient security to provide the space and time for the Iraqi government to come to grips with the tough decisions its members must make to enable Iraq to move forward.

In short, it is not just that there will be additional forces in Baghdad. It is what they will do and how they will do it that is important.

(END VIDEO CLIP)

HEIDI COLLINS, CNN ANCHOR: Let's take a look now at what we are likely to hear in the president's State of the Union Address. Aides say President Bush will seek common ground with the Democrats who now control Congress. He will largely shy away from the divisiveness of Iraq and his new strategy that has stirred bipartisan opposition.

Instead, he'll call for cooperation on domestic issues. Among the challenges there, healthcare and U.S. dependence on oil from abroad.

HARRIS: The situation in Iraq: ominous turns since President Bush's State of the Union Address last January, to be sure, insurgents targeting American troops, the death toll climbing along with criticism of the president.

Time now for a fact check from CNN's Sean Callebs.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): This is last year, before Mr. Bush proposed sending more U.S. troops to Iraq: the 2006 State of the Union and a president flushed with optimism.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The road of victory is the road that will take our troops home. As we make progress on the ground and Iraqi forces increasingly take the lead, we should be able to further decrease our troop levels.

CALLEBS: A year ago in the same address, the president recognized the personal loss suffered by Bud and Sara Clay. Their son, Marine Sergeant Dan Clay, was killed fighting in Fallujah. Today, the Clays still grieve. But their support for Mr. Bush and his evolving policy in Iraq is unwavering.

BUD CLAY, SGT. DAN CLAY'S FATHER: Like all of us, he doesn't have a crystal ball. He has his hopes and things that he would like to do, but life is not like that. Realities of life are that, as you know, things change. And you make your best decision on the information you have and you go with that.

SARA CLAY, SGT. DAN CLAY'S MOTHER: His very intention ultimately is to get our boys home as soon as he possibly can. But he had a more important objective, and that is, that that area would be able to be left with -- in a semblance of security and peace.

CALLEBS: A year ago the president told the nation that perhaps security and peace in Iraq were within reach.

BUSH: We're on the offensive in Iraq with a clear plan for victory. First, we're helping Iraqis build an inclusive government so that old resentments will be eased and the insurgency will be marginalized.

MICHAEL O'HANLON, BROOKINGS INSTITUTE: Unfortunately, shortly after President Bush gave his 2006 State of the Union Address, Iraq's problems got even worse and an insurgency and a terrorist threat also became in most eyes a civil war.

CALLEBS: Mr. Bush's harshest critics say his words on Iraq and his policies there will define his presidency.

LAWRENCE KOLB, CENTER FOR AMERICAN STUDIES: I think if -- President Bush's legacy will be he led us into an unnecessary war. He led us in for the wrong reasons. And he didn't do it correctly.

CALLEBS (on camera): The Clays say last year on the day of the State of the Union, they spent about an hour with the president. During that time, he told them that he is not guided by public opinion polls or headlines, but rather the duty to do what he believes is right. His critics say perhaps that is part of the problem, that the president cannot distinguish between being resolute and digging his heels in and being stubborn.

Sean Callebs, CNN, Washington.

(END VIDEOTAPE)

COLLINS: CNN, the place to watch the State of the Union Address. Primetime coverage begins at 7:00 Eastern. Watch a special two-hour edition of the "SITUATION ROOM", then President Bush's address live on CNN, followed by the Democratic response.

At 10:30 Eastern, Anderson Cooper has reaction from around the world, followed by a special midnight edition of "LARRY KING LIVE".

And no worries if you're away from your TV. You can watch it live and free on CNN.com's Pipeline. Just go to CNN.com.

The best political team on television has you covered, even on the web.

HARRIS: Clean gas. And we're not talking pollution rules here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh, my gosh, does this have to do with terrorism? That's exactly what -- I called my daughter on my cell phone and told her about it.

(END VIDEO CLIP)

CALLEBS: Fill 'er up. A gas station calls it terror-free oil. Slick promotion in the NEWSROOM.

COLLINS: The point where life meets art. For two film makers, that place is New Orleans. Their story coming up in the NEWSROOM.

HARRIS: Oscar, Hollywood's golden boy. Who's on the list for a trophy this year? The nominees in the NEWSROOM.

VERONICA DE LA CRUZ, CNN CORRESPONDENT: It's official. Hillary Clinton saying I'm in as she announces that she will form an exploratory committee to run for president. You can take a closer look at other possible contenders for the '08 White House at CNN.com.

Take a look at this gallery. It's a possible list of 2008 presidential contenders, starting with Kansas Senator Sam Brownback, also one of the latest to announce he, too, will form an exploratory committee.

Read more on who's who in the running from both the Democratic and Republican Parties. Check out their bios and read more on what they stand for. Watch video as each candidate, like Illinois Senator Barack Obama, takes a first step towards the White House.

And keep up to date on all the latest political buzz in Washington by subscribing to the CNN political ticker.

Again, can you find it all online at CNN.com/politics.

For the DotCom Desk, I'm Veronica De La Cruz.

(COMMERCIAL BREAK)

COLLINS: Opening statements were expected today in the Scooter Libby trial.

Our CNN justice correspondent Kelli Arena has been inside listening in to those proceedings.

Kelli, I understand something pretty unusual happened there today.

KELLI ARENA, CNN CORRESPONDENT: Yes, you know, well, we're here for the -- if you remember, just so our audience remembers, Scooter Libby was formerly Vice President Cheney's right-hand man. He is standing trial for alleged perjury, obstruction of justice and making false statements in the investigation into who leaked the identity of a covert CIA operative, Valarie Plame. Patrick Fitzgerald is a prosecutor here. He is in the middle of his opening statements right now. He goes through a timeline of information when he says that Scooter Libby had various conversations in which Valarie Plame was identified as a CIA operative. Then he plays a tape, very unusual, audio tape of Scooter Libby's testimony before a grand jury in which he clearly says that he actually learned of Valerie Plame's identity from a journalist, Tim Russert of NBC News.

So you hear Fitzgerald lay out, you know, a very meticulous timeline of exactly what Libby knew and when. And then you hear Libby telling a grand jury exactly the opposite. But that is exactly what this jury has to decide. Did Scooter Libby lie? You know, are Pat Fitzgerald's facts straight? I mean, did everybody remember everything accurately? That's exactly what they have to decide today. Again, he's not charged with leaking the name of that CIA operative, instead of lying, of covering up his actions when the justice department started investigating. So it's going to be an interesting trial, I think.

COLLINS: What could this mean overall as the proceedings go on now, with, you know, hearing this audio that happened before a grand jury?

ARENA: Well, as I said, I mean, it comes down to, you know, did Libby really not remember? Did he intentionally lie? That's what he's being charged with. And we're going to see a parade of some very high-profile witnesses here. Russert himself, of course, Bob Woodward. The vice president is expected to testify. So at least in Washington, you know, this is a pretty big deal. It's going to really show the inner workings of the White House and exactly what the White House may or may not have done to silence critics of the Iraq War.

COLLINS: I know you have to get back inside. CNN Justice correspondent Kelli Arena. Kelli, thank you.

ARENA: You're welcome. HARRIS: War on terror. A gas station in the heartland taking the fight to another level. Check this out, Terror-Free Oil. That's the name of a new gas station in Omaha, Nebraska. Lots of red, white and blue there. It's part ofs a program known as the Terror-Free Oil initiative, a bid to get America to stop buying gas from countries accused of supporting terrorism.

(BEGIN VIDEO CLIP)

MARY ANN BUSCHER, CUSTOMER: Oh, my gosh, is this have to do with terrorism. That's exactly what I called my daughter on my cell phone and told her about it.

(END VIDEO CLIP)

HARRIS: More of the Terror-Free -- so-called Terror-Free gas stations now planned for other parts of the country.

COLLINS: Lo and behold, perhaps not the most talked about movie at the Sundance Film Festival, but one with a big New Orleans following.

CNN's Brooke Anderson reports.

(BEGIN VIDEOTAPE)

ZACH GODSHALL, FILMMAKER: It's really strange to come back here, because, I mean, the last time we were here, we were filming in front of this shed here.

BROOKE ANDERSON, CNN CORRESPONDENT (voice-over): Filmmaker Zack Godshall and Barlow Jacobs have a story to tell. The main characters may be fictional, but the situation is real.

UNIDENTIFIED MALE: The whole house shifted. You can see all the cracks.

ANDERSON: Eight months after Hurricane Katrina hit the Gulf Coast, the pair began filming a movie in New Orleans, using people and places hit hardest by the storm.

BARLOW JACOBS, FILMMAKER: What was so powerful about it is coming to set every day and having your cast and crew come to the set, some who were still living in FEMA trailers, some who were still coping with the death or loss of family and loved ones.

And not just to tell a story we'd written, but in a lot of ways, as Zack as saying, to tell their story. And it was very humbling.

ANDERSON: Their film, "Lo and Behold," revolves around claims adjusters, the people who played such a key role in determining how much insurance companies paid victims of Katrina.

UNIDENTIFIED MALE: The best way to help these people, get in, measure the damage, get out, do as many claims as possible.

ANDERSON: The story is based loosely on Jacob's experience as an actual claims adjuster.

JACOBS: I worked in South Florida as a claims adjuster for three months, worked seven days a week, you know, 18, 20 hours a day. Sleeping on couches, in our car, trying to eat as little as possible, just saving every penny I could. And after that, I moved back to New Orleans, Zack and I wrote the script, and then we used the money that I'd made claim adjusting and other funds I was able to get together and made "Lo and Behold."

ANDERSON: They incorporated real people into their narrative.

UNIDENTIFIED MALE: A lot of people we met on the street, that are in the film, what they had to say on that particular day and how we interacted with them as filmmakers and as actors, it kind of gave the film a texture of immediacy, of spontaneity, and a reality that you don't get to see that often.

ANDERSON (on camera): The filmmakers are hoping to follow in the footsteps of independent issue-oriented films like "Supersize Me" and "Thank You for Smoking." Those movies debuted here at the Sundance Film Festival and made a big impact.

(voice-over): Even as they unveiled the film at Sundance, their thoughts are with the people in New Orleans.

JACOBS: The city is still really messed up, and I think the film's going to show that, and you're going to see that there's still a lot to be done.

UNIDENTIFIED MALE: Godshall and Jacobs say if they're able to sell the film at Sundance, they will donate a portion of the proceeds to hurricane survivors.

Brooke Anderson, CNN, Park City, Utah.

(END VIDEOTAPE)

HARRIS: "YOUR WORLD TODAY" coming up in about 15 minutes at the top of the hour right here on CNN. Hala Gorani standing by with a preview.

HALA GORANI, CNN CORRESPONDENT: Hi, Tony and Heidi.

Well, it's a very busy day today. The prime minister of Lebanon, Fouad Siniora, has just started speaking live on Lebanese television, as it's crisis time again in Lebanon. Hezbollah ratcheting up the pressure, vowing to bring down the government of Fouad Siniora, leading to all-out gun battles in some areas in Lebanon. We'll bring you a live report.

Also, Davos, Switzerland, the most important gathering of movers and shakers in the world, prime ministers, presidents, business leaders, celebrities. We're live in Switzerland, and we'll tell you who will be making headlines this year.

Also, the Oscars, of course. The latest on the nominees. But also, why does the rest of the world find the Oscars so fascinating? And also the nominees for best foreign film. We'll have all that and more at the top of the hour. Hope you guys can join us.

HARRIS: Yes, we'll be there, Hala. Thank you.

You know, Hala talked about the Oscars, a fascination around the world.

COLLINS: I know you had a lot to say about Salma Hayek's dress, too.

HARRIS: I was a little disappointed. She very seldom comes out in a dress. It's an event. It's an event. This is a little disappointing. Who were the nominees this year? The race for Hollywood gold set. Who's in the running? "Dreamgirls" did very well. The full story in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Some new information coming into us, into the NEWSROOM, that is.

T.J. Holmes is working on it for us.

And T.J., boy, this goes back to 1971 and the killing of a San Francisco police officer.

T.J. HOLMES, CNN CORRESPONDENT: This is some 35 years ago, yes. It looks like police are making movement on a case of the death of one of their own, again, back in 1971.

but two arrests have been made out in San Francisco. The killing there was in San Francisco. But two arrests have been made. And the killing of a John Young (ph) -- Sergeant John Young, who was a member of the police department there in San Francisco back in 1971.

But two arrests have been made by two members of the Black Panther Party, who were affiliated with the Black Panther Party back then. According to police, this was an attack on a city police station there and the two people that have been arrested were part ever what's called the Black Liberation Army, which was kind of a violent arm of the Black Panther Party, if you will.

But two arrests have been made in a 35-plus year old cop-killing case out in San Francisco. Police not have released the names of the two people that have been arrested just yet. But we do expect to get many more details in a press conference that the city is going to hold a little later.

But again, a cop killing some 35-plus years ago. It looks like police are getting close to at least, they believe, to solving this case. But two arrests have been made. Expect many more details on that to come, guys.

COLLINS: All right,

T.J. Holmes, thank you.

HARRIS: One of the nation's most recognizable retailers is out shopping for a new CEO.

Susan Lisovicz is back at the New York Stock Exchange. She has details for us.

Good morning, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Tony.

Well, there is a gap in the executive suite of the company of the fame name. The nation's largest specialty retailer was already struggling when Paul Pressler (ph) came to The Gap four years ago from Disney with no retail experience. The "New York Times" says analysts began calling him "Dead Man Walking" after continued erosion in sales and another dismal holiday season. He'll get a $14 million severance package that some observers say puts him in better shape than the company he departs.

The son of one of the company's founders is interim CEO at The Gap. In the last two years, the companies sales have dropped. In all but two months, Gap's biggest brands, Old Navy and its flagship have taken the biggest hit.

After the first Gap opened in 1969, the company became popular for offering wardrobe staples t-shirts and khakis. But now some critics are calling Gap's clothes bland. What an insult, Tony.

HARRIS: Bland!

LISOVICZ: What an insult, Tony. I know it.

HARRIS: What to do if you get that label around your neck. Bland!

LISOVICZ: You don't buy it. And that's why you see the erosion in sales.

HARRIS: You don't buy it.

Yes, and, Susan, some changes to some other big retailers to talk about this morning.

LISOVICZ: Yes, one of the maxims in retail is "Change or die". And that's what's happening at J.C. Penney and Wal-Mart. Some change, that is.

Wal-Mart opened 40 years ago with bolts of fabric stocked on store shelves geared toward low-income shoppers who made their own clothing. The "Wall Street Journal" now says the company will stop selling cut fabric in favor of arts and crafts and party planning supplies.

And J.C. Penney is courting brides-to-be. The retailer is hosting its first solo bridal exposition instead of the standard industry-wide show. J.C. Penney is also relaunching its wedding registry website to include more products. Conde Nast says consumers spend nearly $9 billion a year on registry items.

Tony, I'm sure you already knew that.

(MARKET REPORT)

HARRIS: All right.

Susan, appreciate it. Thank you.

COLLINS: And the nominees are...

The race for Hollywood gold is on set. We'll tell you who's in the running ahead in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Kyra Phillips here now with a preview of what is coming up in NEWSROOM p.m.

KYRA PHILLIPS, CNN ANCHOR: Thanks, guys.

P.m., exclamation point.

Well, a new push in President Bush's speech tonight. The State of the Union and the state of your health care. We going to take the pulse of a new plan for insurance.

And a man says he swallowed -- he was swallowed headfirst by a shark and he lived to tell about it. Find out what he did to get the great white to stop gulping and start spitting him out.

Don Lemon and I will be here in the NEWSROOM, 1:00 p.m.

COLLINS: (INAUDIBLE).

PHILLIPS: I know. I'm dying to give it away. I love it. I love it that he jacked the shark up in the eye ball.

That's exactly what I would do if someone came to bite, I would stick my fingers in their eyeballs.

HARRIS: A shark smackdown, love it. Love it.

Kyra, thank you.

PHILLIPS: Watch it.

HARRIS: All right.

We are feeling the buzz from Hollywood this morning.

COLLINS: The Oscar nominations just out.

CNN entertainment correspondent Sibila Vargas is in Los Angeles with all the names.

SIBILA VARGAS, CNN ENTERTAINMENT CORRESPONDENT: I'm Sibila Vargas in Beverly Hills where the nominations have just been announced for this year's Oscars, the 79th annual Academy Awards.

In the best picture category, you got some interesting contenders, "Babel", "The Departed", "Letters From Iwo Jima", "Little Miss Sunshine" and "The Queen".

The Best Actor also category looks good. Leo DiCaprio for "Blood Diamond" will be facing Ryan Gosling in "Half Nelson". Peter O'Toole for "Venus". He's been nominated seven times. This is actually his eighth nomination, so a lot of people rooting for Peter O'Toole. Will Smith for "The Pursuit of Happiness". Forest Whitaker for "The Last King of Scotland".

In the Best Actress category: Penelope Cruz for "Volver", Judi Dench for "Notes on a Scandal, Helen Mirren for "The Queen". One of the top contenders, she's one numerous critical awards, Meryl Streep for "Devil Wears Prada" and Kate Winslet for "Little Children".

In the Best Director category, expect Alejandro Gonzalez Inarritu for "Babel", Martin Scorsese for "The Departed", Clint Eastwood for "Letters From Iwo Jima", and Stephen Frears for "The Queen" and, finally, Paul Greengrass for "United 93".

Lots of celebrations, but who will take home Oscar gold? We'll find out February 25th when the Oscars are handed out.

Sibila Vargas, CNN, Beverly Hills.

COLLINS: CNN NEWSROOM continues just one hour from now.

HARRIS: "YOUR WORLD TODAY" is next with news happening across the globe and here at home.

I'm Tony Harris.

COLLINS: And I'm Heidi Collins. Have a great day, everybody.

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