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Boston Panic; British Police Foil Alleged Terror Plot; Iraqi Prime Minister Speaks Out

Aired January 31, 2007 - 22:00   ET


In Britain tonight, police say they have thwarted a grisly terrorism plot. Nine people are in custody. It was a sting months in the planning.

And, in Boston, as Larry said, it wasn't terrorism, not in the end, but there was terror all the same.

And that's where we begin, with a publicity stunt gone terribly awry in the post-9/11 world. "Aqua Teen Hunger Force," it may not sound like a terrorism group. And, in fact, it's not. It's the name of a late-night cartoon for adults that is owned by the Turner Broadcasting System, which is the parent of CNN.

Today, that cartoon and one of its characters, this guy right here, set off a major bomb scare in Boston. A wave of outrage followed, and, then, just a short time ago, an arrest.


COOPER (voice-over): The first reports started coming in this morning.

TONY HARRIS, CNN ANCHOR: We told you about Boston police shutting down a portion -- the state police there in Massachusetts shutting down the northbound lanes of Route 93 there because of a suspicious package.

COOPER: Within an hour, the news seemed to only get worse.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Now police have located four other suspicious packages dispersed in different areas around the Boston area. They continue to look closer at these items before making the next step.

COOPER: While they were calls for calm...

THOMAS MENINO (D), MAYOR OF BOSTON: Like the governor says, it's no time for anyone to panic.

COOPER: ... Boston was gripped by fear. More than a dozen suspicious devices described as blinking electronic circuit boards were across the Boston area, including at a commuter rail station, a bus stop under Interstate 93, near two bridges over the Charles River, at a major city intersection, and the New England Medical Center. The bomb scare shut the city down. Streets were closed, and subway service was suspended, as local, state, and federal authorities responded in full. What they had on their hands, however, was a promotional snafu.

GOV. DEVAL PATRICK (D), MASSACHUSETTS: I think we are all relieved that the devices found so far have proven to be hoax devices.

COOPER: The objects were part of a 10-city marketing campaign from Turner Broadcasting for a late-night show on the Cartoon Network called "Aqua Teen Hunger Force."

The campaign features a character shown raising his middle finger. Turner, parent company of CNN, released a statement saying, in part: "We apologize to the citizens of Boston that part of a marketing campaign was mistaken for a public danger. We appreciate the gravity of the situation, and, like any responsibility company would, are putting all necessary resources toward understanding the facts surrounding it as quickly as possible."

Tonight, the chaos is over, but the outrage is not.

ED DAVIS, BOSTON POLICE COMMISSIONER: This has created an enormous inconvenience to people in the city. So, we're going to fully investigate this and get to the bottom of it.


COOPER: Well, as we said, an arrest has been made. Peter Berdovsky, a 27-year-old artist who allegedly placed the suspicious devices in and around Boston, today will be arraigned. He was arrested today. He is going to be arraigned tomorrow.

"The Boston Globe" is reporting that he posted pictures on his personal Web site that -- we're showing you the Web site right now -- of people installing the electronic boards featuring the cartoon characters at various locations, including a bridge -- the video speeded up on his Web site. We're showing it to you as we found it.

The investigation is ongoing tonight. So is the anger over the incident.

In an editorial, "The Boston Globe" wrote that executives at Turner Broadcasting -- quote -- "displayed an astounding lack of judgment." The paper also said that "tricksters at Turner, a unit of Time Warner, Inc., should pay the bill for the consequences of its lame marketing gimmick."

In the past hour, city and state officials held a press conference blasting Turner for not informing them about the devices until about 5:00 p.m. this afternoon.

As we said, the outrage is developing.

Howie Carr hosts a talk radio show on WRO -- WR -- excuse me -- WRKO-AM in Boston. And Jarrod Moses is president and CEO of Alliance, an entertainment market firm.

Gentlemen, thanks for being with us.

Howie, let me start off with you.

First of all, how big a deal was this in Boston today? How much of the city did it paralyze?

HOWIE CARR, RADIO TALK SHOW HOST: Oh, it -- it affected the entire city, starting at 8:00, when the first devices were found in Charlestown under a bridge that was the -- that is on I-93, the interstate highway.

And then it sort of died down for a couple hours. And then more of the devices started turning up. And there were -- subway lines were shut down. Various roads were shut down. People missed appointments. They were hours late. It was a total fiasco. It was like a two-foot blizzard hit the city.

COOPER: And I know you were getting calls on it all day. We're going to play one of them in a little bit.

But, Jarrod, I want to bring you in.

This is what they call, I guess, guerrilla marketing, which is increasingly popular, advertising showing up in all sorts of places.

But don't you have to apply for a permit for this kind of thing? Can anyone go around -- you can't -- you can't just go around and place electronic devices underneath bridges and expect nothing to happen, can you?


I mean, if you're going to do it the right way, you do get permits. But, unfortunately, right now, the penalty of the fines that people pay for things like this, in many cases, are cheaper than to actually go get permits and doing it the right way. So, because there hasn't been a case where somebody has really hit on the hand that hard, people go ahead and do these guerrilla marketing tactics all the time.

COOPER: Howie, I found it amazing that Turner -- I was just watching this press conference by city and state officials -- that Turner apparently didn't even contact them until about 5:00 p.m.

CARR: Right.

Well, Anderson, originally, everybody thought this was another one of these student hoax. We're familiar with them in Boston. And that's -- people were angry about that. But, once it became clear that this wasn't just some drunken fraternity prank -- it was hatched in the offices of a major publicly traded corporation -- that's when the anger really started to grow.

And people are just -- are beside themselves. I mean, they agree. Whether Democrats, Republicans, liberals, or conservatives, most people agree that Turner should have to pay a hefty price. I mean, it cost millions of dollars today, the city and the state of Massachusetts.

COOPER: No doubt about it.

Jarrod, how much do you think they are going to have to pay?

MOSES: They should pay millions. They should pay millions.

And, frankly, the advertiser of this show should pull out, if it's up to me. That's the real punishment.

COOPER: There's already talk. City officials were talking about hundreds of thousands of dollars just for sort of law enforcement fees for this kind of thing. They also indicated there are going to be civil lawsuits.

Howie, let's play one of the calls that you got today from a caller. Let's play that.


UNIDENTIFIED MALE: I'm not worried so much about the prank and all that stuff. And I'm not worried about who is going to get punished.

I'm more worried that now we have let ourselves -- we have let our guard down now, because another one of these stunts comes up, we don't know go into it full force, and it's a bomb.

CARR: Yes.

UNIDENTIFIED MALE: You know, we open ourselves up. These people -- these Turner people opened us up to be susceptible to doing someone doing something now, and us having a lackadaisical way about it.


COOPER: It's the old crying wolf.

Howie, what do you think Turner should do at this point to make this thing right? Because, I mean, city officials, the mayor was mad, and probably understandably so, that he hasn't been contacted by the higher-ups, I guess.

CARR: Well, he was also mad this evening, Anderson, that they told him that there are 38 of these devices. They're in three cities, not just Boston, but also Cambridge and Somerville.

And I guess the law enforcement asked, well, where are they? And they either didn't know or wouldn't tell them. So, there are still a potential tomorrow for more of these devices to turn up. And, again, they have to scramble to answer every one of these calls, like it is a real bomb. I don't think the city of Boston and the commonwealth will ever let down its guard. I mean, this is the city that the two original planes flew out of on 9/11. And that's another thing that just sort of makes this even more outrageous.

COOPER: And, Jarrod, you think -- we don't know what the idea behind this campaign was. They haven't -- Turner hasn't come out and said it. A lot of these things were placed underneath bridges, in -- in very public places.

You think it might have intentional to provoke some sort of reaction like this.

MOSES: Well, absolutely. That's my opinion.

I think that, if you're going to place it in places that will create mass hysteria, then the intention has to be to create mass hysteria, to get people to react to this, and to get people to ask the questions, what's this all about? And with the ultimate payoff of: Well, I will watch the show and see what...


COOPER: There's no evidence, though, at this point, Howie, that they were trying to create hysteria. That seems ludicrous, if some marketer thought that was a good idea.

CARR: Well, Anderson, they're calling -- in its statement tonight, Turner called them billboards.

They're not billboards. They're little devices. The first one was placed under this interstate highway bridge next to a major hub, a bus hub, and, also, very close to one of the major subway lines in the city.

I mean, if a terrorist was placing an IED, which apparently these things look like, according to the cops, this is exactly where you would place it.

So, whether they meant to cause hysteria or not, that's the effect it has had.

COOPER: Howie, did you get any calls from people saying that the city overreacted?

CARR: Oh, yes. We got a few calls, yes, from people who know the series. As early as, say, 3:30 or 4:00, people were calling up and saying, I think this is a stunt, a hoax by this -- by the Cartoon Network.

But most people are pretty angry. I would say that was a minority viewpoint, that the city overreacted.

COOPER: Understandable, why people would be angry. A lot of people had their day interrupted.

Howie Carr, it's good to talk to you.

Jarrod Moses, as well, thank you for your perspective.

MOSES: Thank you.

CARR: Thank you.

COOPER: From Boston to Birmingham, England, now, and a terror plot that officials say was very, very real.

British police today arrested nine men they say were planning an Iraq-style kidnapping near London.

CNN's Nic Robertson reports.


NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): You're looking at a major counterterrorism operation -- in the early dawn, eight arrests, one more soon after, police investigating at least a dozen locations. Police call it a chilling terror plot halted in its final stages.

DAVID SHAW, BRITISH POLICE: That we are literally right at the foothills of what is a very, very major investigation for us. And we're proceeding very slowly, understandably, but very carefully, to make ensure we build the best possible case.

ROBERTSON: The nine men under arrest allegedly planning a kidnapping that would have stunned the nation.

JOHN O'CONNOR, SECURITY ANALYST: In all probability, a British soldier, off-duty, and then taken in his home country, in his hometown, and then publicly tortured and executed, would have a terrifying effect.

ROBERTSON: And not just any soldier, but a Muslim soldier, a plan so advanced, the suspects were believed to have already identified a victim who had served with the British army in Afghanistan.

The plan, just what insurgents have done in Iraq, parade the victim on TV, demand that British troops withdraw from Afghanistan, and then execute him -- all quite a surprise to this quiet neighborhood in Birmingham, about 100 miles north of London.

But police say they had the men under surveillance for months, and moved in just as they were preparing to strike. The plot suggests a significant change in tactics among homegrown terrorists. This was not the mass-casualty attack, like the July 7, 2005, bombings in London that killed 52 people, but the targeting of one person to terrorize a nation and gain political leverage at the same time.

UNIDENTIFIED MALE: With a kidnapping, you do have the added advantage of having a prolonged amount of media impact. ROBERTSON: It's not clear if this is an al Qaeda-related plot. Most of the nine men arrested appear to be of Pakistan descent, neighbors say.

And, so, community leaders are calling for calm in this sprawling Middle England region, where racial tensions have flared in the past.

PETER NEWMAN, TERROR EXPERT: The Muslim community abroad shouldn't be victimized in this process.

ROBERTSON: Problem is, analysts say, the kidnapping may have been intended to do just that, sow division, putting Muslims on notice they could be targeted as collaborators.


COOPER: Well, Nic, what is the mood in the local community? You're joining us now in Birmingham. Do they think these guys are guilty?

ROBERTSON: You know, there's quite a divide here, Anderson.

The older people you tend to talk to here, particularly some of the community leaders, will tell you, look, people in this community broadly agree with what the police have done. They talk about cooperating with the police. They say it's important for the police to treat the community well, so that people, if they have any information, are prepared to come forward.

I talked to one relatively young man here who knows some of the people involved. He told me, he wouldn't be surprised if they had been involved like this.

But the majority of younger people I have spoken to here come out with a different opinion to the elders here. They say that they don't see evidence presented for this, that they knew these young men, that this wasn't the young men that they knew, that they think that this is some -- a diversionary tactic, if you will, by the British government, because it's facing problems at the moment. And they don't buy into it. And they're very, very skeptical.

They say: Look, we the people, the young people of this community, are against having British troops in Iraq and Afghanistan.

They say they're against the attack on September the 11th, but they're not buying into it, a lot of the young people here -- Anderson.

COOPER: Any evidence of connections with Pakistan, because we heard the same kind of reaction in the wake of the suicide attacks in England, and, then, later, it was revealed, of course, that there were connections with Pakistan?

ROBERTSON: And that's something that the British government here is saying that it's aware of in other terror plots. It says it's tracking perhaps as many as 30 different terror plots here. And many of them, they say, have ties back to Pakistan.

We have heard very limited details from the police so far, nothing that we know of so far that would tie this particular alleged plot back to Pakistan. And, of course, unlike those other terror plotters, and, indeed, bombers, who got training on how to make their bombs in Pakistan, brought that back here to commit their attacks, this group trying those new tactics not needing to learn how to make bombs. So, perhaps they didn't go to Pakistan. Certainly, the police are not saying right now -- Anderson.

COOPER: All right, Nic Robertson following the story -- thanks, Nic.

Just ahead: A presidential contender opens his mouth and inserts his foot. At least that's what a lot of people are saying tonight. In a moment, hear what Senator Joe Biden said about Senator Barack Obama and tell us if you think it was racist. Scores of viewers already have. We will bring you some of their reactions.

Also tonight: the Iraqi leader President Bush is betting thousands more lives on making big news, only here on CNN. Take a look.


COOPER (voice-over): He's the man on the spot in Iraq.

NOURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): If their assessment is for more, we will ask for these troops.

COOPER: Wait a minute. Come again?

NOURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): If their assessment is for more, we will ask for these troops.

COOPER: Iraq's prime minister on even more American troops, war with Iran, and more.

Also: money to rebuild Iraq, your money, tens of millions of dollars wasted.

UNIDENTIFIED MALE: People keep trying to do stuff as if they're talking about rebuilding Vegas.

COOPER: The difference is, you mess up in Vegas, you pay. You mess up in Iraq, and people die. We're "Keeping Them Honest."



COOPER: Another blow tonight to President Bush's plan to send more troops to Iraq -- yesterday, his nominee to run Central Command said he did not know whether the buildup is a good idea or not. He said he needs more time to weigh the facts.

And now, on Capitol Hill, a new sign that opposition to the plan is uniting across party lines.

CNN's Dana Bash, who is monitoring late developments, joins us now.

Dana, what exactly happened in the Senate tonight?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Anderson it was really a blockbuster bipartisan deal here tonight.

Democrats on the Senate side joined up with leading Republicans on a measure that condemns the president and his decision to send more troops to Iraq. Now, there had been two competing measures, one proposed mostly by Democrats, the other proposed mostly by Republicans.

But now, by joining forces, what they hope to do is to send a bipartisan reputation to the president of his Iraq plan. Now, here is the key language in this measure.

It says, "The Senate disagrees with the plan to augment our forces by 21,500." Now, that is less confrontational than what Democrats had proposed, which was to say, it is not in the national interests of the United States to increase troops levels in Iraq.

So, Democrats, bottom line is, they want to get as many votes as possible for this resolution, or measure, that will come up as early as next week. So, they compromised -- Anderson.

COOPER: So, John Warner changed his proposed measure not just to get -- not just to get Democrats on board, but also get Republicans on board?

BASH: That's exactly right.

And that's why Senator John Warner, who is a leading Republican in this, he agreed to add a graph to this measure that says that there's no way that they will cut funding for troops. That was aimed at Republicans. And, you know, this is really not good news for the White House tonight, because what they hope to do with this is, as I said, get this vote as early as Monday, and get as many votes as possible.

What they might need is 60 votes in order for it to pass. Even if they don't get that, they still probably will get significant support with this new deal tonight -- Anderson.

COOPER: All right, Dana Bash from Capitol Hill -- thanks, Dana.

Senator Joe Biden's presidential campaign can be measured in hours. He just got into the race today. And, no sooner than he did, he talked his way into a national controversy.

Senator Biden, the Democrat from Delaware, has a history of that, of saying things, for better or worse, that make headlines. Today, it was remarks to a newspaper about a colleague and possible rival, Senator Barack Obama, who is black. Listen.


SEN. JOSEPH BIDEN (D-DE), SENATE FOREIGN RELATIONS COMMITTEE CHAIRMAN: I mean, you have got the first sort of mainstream African- American, who is articulate and bright and clean and a nice-looking guy. I mean, it's -- that's a storybook, man.



COOPER: Senator Obama says he took no offense, but went on to call the remarks historically inaccurate, saying, nobody would call Jesse Jackson or Shirley Chisholm inarticulate.

And, as for 360 viewers, we have gotten dozens and dozens of responses on our blog.

Lori in Duluth writes: "I think it is unfortunate that an intelligent, articulate, clean-cut African-American is still viewed as rare, an oddity. I think that Mr. Biden needs to explain himself."

And this from Dick in Prescott, Arizona: "Cut him some slack. We are creating an atmosphere where it will soon be impossible to get our politicians to say anything meaningful -- meaningful, without fear of sticking their feet in their mouths."

Says John in San Antonio: "I am an independent, but I am always frustrated to see Democrats get a free pass on comments around race and religion, when a Republican would be destroyed in all media outlets."

And from Todd in Freehold, New Jersey: "I don't think Biden is a racist, but I do think his comments were insensitive and stupid."

As always, if you have got something to say, say it by going to We welcome your views there.

Iraq's prime minister says he may ask for even more U.S. troops, and that's not all. Our exclusive interview is next.

Plus: Is Iran the new Iraq? President Bush is ramping up his tough talk. The question is, why now? We will investigate -- next on 360.


COOPER: More now on what America is up against in Iraq.

In a moment, we will you about tens of millions of dollars wasted on making Iraq a better place, and, by extension, a safer place for Iraqis and Americans alike.

First, though, the man President Bush is counting on to hold a country together, Iraq's prime minister, Nouri al-Maliki.

Talking today with CNN's Michael Ware, he said he might request even more Americans help, if circumstances call for it. He also had a warning about using Iraq in America's confrontation with Iran.

Here's Michael's report.


MICHAEL WARE, CNN CORRESPONDENT (voice-over): Iraqi Prime Minister Nouri al-Maliki is a man caught between two great enemies. His country, he says, has become a battleground for a hidden struggle between Iran and the United States.

NOURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): We have told the Iranians and the Americans, we know you have a problem with each other, but we're asking you to please solve your problems outside of Iraq.

WARE: In an exclusive interview with CNN, Prime Minister Maliki chose his words carefully, agreeing with U.S. intelligence assessments of Iranian meddling in Iraq, yet supporting neither Washington, nor Tehran, urging both powers to leave his country be.

(on camera): Is American intelligence wrong when it says Iran is working to kill American soldiers in your country?

AL-MALIKI (through translator): Why is it wrong? I didn't say it does not exist. When the Americans say their intelligence says Iran is killing their soldiers, it means their intelligence is based on information they have got. This is not an obscure thing.

WARE (voice-over): Though his government only came into being through U.S. intervention, Maliki says he won't allow the U.S. to use Iraq as a base to attack either Syria or Iran.

AL-MALIKI (through translator): And we will not accept Iran using Iraq as an opportunity to attack the American forces. But does this not exist? It exists. And I assure you it exists, because it is based on the struggle between the two countries.

WARE: And all of this amidst an unrelenting war against his government and the occupying U.S. forces by a homegrown insurgency and al Qaeda, enemies, he claims, strengthened by U.S. blunders.

AL-MALIKI (through translator): We say that a big part in the existence of the terrorist organizations are the mistakes that have been committed in the process of building the Iraqi security forces.

WARE: Mistakes, he insists, have also compromised attempts to dismantle Iraq's powerful militias.

(on camera): Your own security forces are heavily penetrated by the very militias that you are going after. Do you have their loyalty? AL-MALIKI (through translator): They exist. And I pointed to that, because we, unfortunately, inherited this from the wrong process of building the troops that started after the fall of the regime. Nevertheless, we have taken a number of measures and operations to cleanse these forces.

WARE (voice-over): As for the White House plan to send 21,000 additional troops to Iraq, Maliki believes the new strategy will work, but says that's not his only option.

AL-MALIKI (through translator): If there seems to be more need, we will ask for more troops, because the success of the Baghdad security plan for us and for the U.S. administration is an important and sensitive job.

WARE: More troops, political deals, and reconciliation, anything, he says, to avoid drowning the country in blood.


COOPER: Michael joins us now from Baghdad.

Michael, how relevant is Maliki now? I mean, does he have real power?

WARE: Well, this is the question. This is the litmus test for America's partner here in Iraq.

We saw President Bush, in his State of the Union address, turn to the government of Prime Minister Nouri al-Maliki and said that this new strategy that was being undertaken is going to demand more of this government.

What President Bush was saying is that Nouri al-Maliki has promised to deliver time and time and time again, and he has failed to do so. Is that because he's incapable or because he's complicit with these militias that he's failed to address?

We do know that he was put into power through a political deal by one of the most powerful militias in the country, the Mahdi army, led by anti-American cleric Muqtada al-Sadr.

Now, in a country where political power, the currency of power, still comes at the end of a barrel of a gun, this prime minister has no militia. Yet, his government is an alliance of armed militias.

So, him trying to exert any kind of authority is an extraordinarily difficult thing. Yet, this is America's key to withdrawing from Iraq.

COOPER: Very quickly, Michael, just on a personal basis, what's he like?

WARE: He's a very, very polished politician.

Yet, he also appears very strong, very measured, obviously, in his words. Yet, he comes with a bearing. I mean, he doesn't betray the fact that this man is under intense pressure.

Yet, you can still see within him the cracks beginning to emerge. And you could hear in his -- in what he had to say the strains that are obviously appearing in the relationship with the United States.

COOPER: All right. Michael Ware -- thanks, Michael.

When we come back: the confrontation with Iran, why it's happening now, and what -- the forces that are driving it.

Also tonight: It was supposed to make Iraq a better place.

Take a look.


COOPER (voice-over): Money to rebuild Iraq, your money. Tens of millions of dollars wasted.

UNIDENTIFIED MALE: People keep trying to do stuff as if they're talking about rebuilding Vegas.

COOPER: The difference is, you mess up in Vegas, you pay. You mess up in Iraq, and people die. We're keeping them honest.

Witness to a mystery woman.

RICK RICHMAN, SAN FRANCISCO RESIDENT: The woman over there, take a good look at her, and I'll tell you why later.

An alleged con artist on the run. A beloved daughter. Two women, one mystery that you're helping to solve. New leads, new insight into a troubled young life, only on 360.


COOPER: We heard Iraq's prime minister a moment ago talking about the sparring on his country's soil between America and Iran. More now on why and what's driving the confrontation and how some believe things could spiral out of hand.

With that, here's CNN's John King.


JOHN KING, CNN CORRESPONDENT/ANCHOR (voice-over): The war is in Iraq, and Iran is more and more the target of the president's tough talk.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iran is providing material support for attacks on American troops. We will disrupt the attacks on our forces.

If we were to fail in Iraq, Iran would be emboldened in its pursuit of nuclear weapons.

KING: Why all this focus on Iran now?

SHIBLEY TELHAMI, UNIVERSITY OF MARYLAND: Part of it is strategic and part of it is undoubtedly political, and the two come together.

KING: Strategic, and the Pentagon officials say they have solid evidence that they are supplying rockets, Katyusha rockets, parts for powerful roadside bombs known as explosively formed projectiles.

And military sources tell CNN the Pentagon is investigating a possible Iranian role in the January 20 raid in Karbala that left five American soldiers dead. Though the State Department yesterday was more cautious.

Beyond Iraq, Iran's nuclear program and its support of Hamas and Hezbollah make it a growing strategic headache for the United States. In addition to the administration's stronger words, two carrier groups have been sent to the Persian Gulf, part of a clear message to Iran.

ADMIRAL WILLIAM FALLON, U.S. NAVY: It seems to me that in the region, as they grow their military capabilities, we're going to have to pay close attention to what they do and what they may bring to the table.

KING: Administration critics say diplomacy would work better than more tough talk.

LEE HAMILTON, CO-CHAIR, IRAQ STUDY GROUP: What's happened? Iran has become the most powerful country in the region. It continues to support terrorist organizations. It's continuing to develop its nuclear potential. How can anyone say today that our policy towards Iran is working? It is not.

KING: Politically, the goal is to help sell an unpopular plan to increase U.S. troop levels in Iraq, an idea even many of the president's fellow Republicans oppose.

PETER HART, DEMOCRATIC POLLSTER: The president now has a circle that is equivalent to the circle that Richard Nixon had at the very end of his presidency. Republicans are leaving him. They're sending a message.

TELHAMI: You have people who are asking for withdrawal. And the president, in highlighting the Iranian threat inside Iraq, is driving the point home that an American withdrawal would create a vacuum that would benefit Iran.

KING: The verbal sparring with Iran is also contributing to an already troubled U.S. image in the Arab world. Professor Telhami conducts an annual poll of Arab public opinion.

TELHAMI: Every leader they like is a leader who is standing up to the United States of America. For the very first time this year, the president of the United States is more disliked than the prime minister of Israel. That is quite telling.

(END VIDEOTAPE) COOPER: John, we heard from Lee Hamilton in your report. How are other Democrats responding to the tough talk in Iran?

KING: Well, they're being very careful. On the one hand, they're accusing the administration of saber rattling, saying what are they trying to do here? Are they trying to provoke a military confrontation with Iran?

On the other hand, Anderson, while the president is clearly on incredibly shaky ground when it comes to the war in Iraq, nobody in the United States Congress, Democrat or Republican, is going to stand up and defend Iran.

President Ahmadinejad has talked about wiping Israel off the map. He has refused to cooperate with the nuclear program. The support of Hamas and Hezbollah, of course, deeply alarms Israel and many here in the United States.

So while they're watching the administration, they're suspicious of its motives and what they call saber rattling. They're not going to defend Iran in a fight with President Bush.

COOPER: Also joining us, John Roberts.

John, how do negotiations over Iran's nuclear program fit into all of this?

JOHN ROBERTS, CNN ANCHOR: Well, you know, obviously, Anderson, the president is trying to get the Europeans, trying to get the Russians, trying to get the Chinese on board to try to, you know, exact some sort of punitive sanctions against Iran. They have gone a certain distance, but even the administration admits that they're not tough enough to try to bring Iran to its knees and get it to give up its nuclear program.

But there certainly is a tremendous amount of nervousness here in Washington and across the country about this idea that Iran might be next. And you see Democrats who are saying to the administration very forcefully if you try to go into Iran with congressional authority you're going to provoke a constitutional confrontation here.

But it would appear as though -- if the president could make a case, that there is a legitimate threat from Iran, whether it be because of its nuclear program, whether it be because of its actions in Iraq, he has a lot of latitude to be able to take military action.

COOPER: John King, let's talk about other Arab states. You talk about Arab public opinion in your report. How do moderate Arab Sunni nations view this back and forth between Tehran and Washington?

KING: They're very, very nervous about it. Because the Sunni regimes want the United States to contain Iran. They do not want the United States to go to war with Iran, because they're afraid of what that would do to public opinion in their countries.

It's very much like the war in Iraq. The regimes privately support the administration. They privately supported the administration toppling Saddam Hussein, although many of them warned the White House of just this scenario.

They said if you go into Iraq and the war is not clean and decisive and you do not have a quick victory, what you will do is embolden and empower Iran. Almost four years later, that is what we see, an emboldened and empowered Iran in the Middle East.

COOPER: And John Roberts, all this is putting Iraq's prime minister is a very difficult position. He's essentially now saying, take it outside, asking both American and Iran to solve the problems outside Iraq.

ROBERTS: It's interesting. In his interview with Michael Ware to see the moral equivalency that he gave both the United States and Iran. I mean, he's putting George Bush and Ahmadinejad on the same page, on the same level with each other.

Here you've got Maliki, who is beholden to the United States, to provide security, to provide reconstruction funds, to try to maintain some sort of security in Iraq. And yet at the same time he has to live next door to Iran. And Iran has all of that influence with the Shiite population, despite the fact that there are differences between the Persians in Iran and the Arab Shia in Iraq.

So he walks a very fine line here, kind of like a razor's edge. I would not want to be in his position for a number of reasons, not just that one.

COOPER: John King, in your piece, it was just stunning to hear that Arab public opinion poll that Israel's prime minister is more popular in the Arab world than President Bush.

KING: And even more significant when you think that now Mr. Ahmadinejad is so popular, because of the traditional rivalries. Iran, after all, is not part of the Arab world. It is a Persian state. Traditionally, it is a Shia regime that has not gotten along with the Sunni countries, Saudi Arabia, Bahrain, the United Arab Emirates. Those are Sunni regimes.

So it is striking that -- and the -- Israel, of course, is always the enemy to the Arab world, largely because of the Palestinian dispute. So to have the president of the United States now the most disliked figure in the Arab world. Compounded by the fact that Mr. Ahmadinejad, Hugo Chavez, other critics of the United States, are so popular, it tells you everything you need to know about the diplomatic, the public relations problem this administration has beyond Iraq. This is now a generational problem for the United States in the Middle East.

COOPER: Not good news, no matter how you look at it. John King, John Roberts, thanks guys.

Well, following the money trail, the U.S. has a trade embargo on Iran. You can't say the same about some of America's allies. Here's just the raw data. Last year, Iran exported more than $63 billion in goods. Its biggest commodity, of course, is petroleum, making up 80 percent of its exports. Iran's trading partners include Japan, Italy, Taiwan and France.

Back to Iraq. Millions of dollars spent on the war vanished. No one seems to know where the money is gone. Tonight, we're "Keeping Them Honest".

Also tonight, closing in on an alleged con artist on the run. An Ivy Leaguer accused of stealing another woman's name and making it her own. Our viewers are keeping their eyes open, and one may have even spotted her. Details ahead.

And a programming note: be sure to watch Friday for a special edition of 360, "Invisible Chains: Sex, Work and Slavery". The truth about slavery today. Happening right here in America. More of 360 after this.


COOPER: Every week, the State Department puts out a status report on Iraq. You can get it on its web site. It includes a breakdown of how much money is being spent.

Well, the latest report shows that nearly $5 million went towards security and law enforcement for the week of January 15. That's nearly $5 million for the one week. You're paying for that. You're also paying for the millions that continue to be wasted.

CNN's Joe Johns tonight is "Keeping Them Honest".


JOE JOHNS, CNN CORRESPONDENT (voice-over): How has the government been spending your money, $100 million of it and counting, to rebuild police stations and police training facilities in Iraq? Some of the spending may constitute fraud, an almost deplorable waste of your money. A scathing assessment from the government's own special watch dog, the inspector general for Iraq reconstruction.

In Washington, reaction to the report, stunned.

HAMILTON: When you have this incompetent, when you have unauthorized work, when you have shoddy facilities, when you have money that is squandered, there are very, very few things that hurt our effort more in trying to succeed in Iraq than that kind of performance.

JOHNS: Take a look at these pictures of a police college built in Baghdad. A U.S. contractor started it. Later the Army Corps of Engineers took over the project. The plumbing appears shoddy.

The report describes the work as poor quality, using non-standard construction methods. Live electrical wires dangling from ceilings. Light fixtures filled with urine. Water leaking from sewer pipes. You get the picture.

The report also features the $51 million meant for a training facility and residential camp for the Iraqi police that, well, turned into a fiasco. It started three years ago. A non-U.S. firm hired to produce more than 1,000 trailers for the police project, but shortly after the trailers were built, the government cancelled the contract. That meant the government was stuck trying to figure out what to do with the trailers.

The inspector general also found more than $4 million spent on items not authorized, including 20 trailers for VIPs and even, incredibly, an Olympic-size swimming pool.

RICK BARTON, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: So much of what we've seen go wrong there was not having a good feeling for the context of Iraq. So people keep trying to do stuff as if they're talking about rebuilding Vegas.

JOHNS: In fact, it's like a very bad night in Vegas. Why? Because they've actually lost or can't account for another $36.4 million worth of equipment.

And finally, "Keeping Them Honest", you should know that police college with all the problems, it cost $70 million. And now the Army Corps of Engineers is still trying to fix the place up.


COOPER: Joe, you know, it's been suggested the inspector general found actual fraud. What is being done about it?

JOHNS: Anderson, they're calling it potential fraud, so there's a little bit of wiggle room there. The best they can say is they are investigating. But they don't tell us exactly where that fraud is.

COOPER: All right. Well, let's keep on it. Joe, thanks. Joe Johns reporting.

Still ahead, a showdown in the making of the president's power to take the country to war, should he decide to, in Iran.

Also, the mystery that some 360 viewers are trying to help solve.


COOPER (voice-over): Witness to a mystery woman.

UNIDENTIFIED MALE: The woman over there, take a good look at her, and I'll tell you why later.

COOPER: An alleged con artist on the run. A beloved daughter. Two women, one mystery that you're helping to solve. New leads, new insight into a troubled young life, only on 360.

(COMMERCIAL BREAK) COOPER: An update now on a story that we've been following for a while. It is about a woman who may have lived multiple lives. She says she is an identity theft who conned her way into two Ivy League schools. It seems nobody knew who she was. Then we profiled her, and that's when the search heated up.

CNN'S Gary Tuchman investigates.


GARY TUCHMAN, CNN CORRESPONDENT (voice-over): Rick Richman was having brunch with his girlfriend, Hannah, at a San Francisco restaurant when he abruptly stopped talking because of a person at the next table.

RICHMAN: I looked at the woman, and it registered to me like immediately when I saw her, how do I know her and then I was like, whoa.

TUCHMAN: Richman was watching CNN on the night of January 18 when we presented the bizarre tale of Esther Reed.

COOPER (voice-over): They say she stole a missing girl's identity. Now, she's missing, too.

TUCHMAN: A Montana woman who's been officially listed as missing for seven years. But police recently learned she was alive and using other people's identities to do some strange things. Upon reflection, Richman called police. But the woman and her male companion had left.

RICHMAN: After I definitely knew that it was Esther Reed, I said to Hannah, the woman over there, take a good look at her, and I'll tell you why later.

TUCHMAN: He told her later about this small town of Travelers Rest, South Carolina, where a different woman, named Brooke Henson, has also been missing for seven years.

JON CAMPBELL, TRAVELERS REST POLICE: My working theory is that she was murdered and her body was disposed of.

TUCHMAN: But this summer police in New York City contacted the Travelers Rest.

CAMPBELL: They called us and said, "Your girl's in New York. She's alive."

TUCHMAN: Lisa Henson is Brooke's aunt.

LISA HENSON, BROOKE HENSON'S AUNT: I was jumping for joy. I mean, it was incredible.

TUCHMAN: But a sad mistake had been made. The woman found was using Brooke Henson's identity, but was actually the woman who may have been in the San Francisco restaurant, Esther Reed. CAMPBELL: This girl was actually living as our victim and went to great lengths to live as her and to become Brooke. She was able to get some true identification, using fake identification, and she was able to take the SAT, the GED, in our victim's name and she applied to Columbia.

TUCHMAN: And Harvard. Incredibly, the high school dropout was admitted to both Ivy League universities. Police provided us pictures of her with four boyfriends, all officer candidates at West Point and Annapolis. Those relationships and thousands of dollars she received in wire transfers from overseas have led them to ask the military to investigate whether she could be a spy.

(on camera) Way before the sighting here in San Francisco, Esther Reed used a different identity while dating another boyfriend, this one not in the military. That boyfriend did not want to appear on camera but said that Esther Reed always had a lot of money because she claimed she was winning international chess tournaments.

He isn't a good chess player but wanted to play her in a game of chess. She always refused. Finally, they did play a game on the computer and he won. Esther Reed disappeared from his life shortly after.

(voice-over) Esther Reed's father still lives in her hometown of Townsend, Montana.

(on camera) Can I ask you one more question about Esther?

(voice-over) Earnest Reed did not want to open the door but did tell us earlier he is convinced his daughter does not want to be found.

(on camera) Do you think she's using another I.D. right now?

CAMPBELL: Most probably.

TUCHMAN (voice-over): Police say they had evidence Esther Reed had been spending time in Northern California, so they believe the woman in Chow's restaurant may very well have been her.

RICHMAN: I definitely think that was her. And I think that she's here in San Francisco.

TUCHMAN: But she remains at large, and her intentions still mysterious.

Gary Tuchman, CNN, San Francisco.


COOPER: Amazing she was able to talk her way into Columbia and Harvard. And just to put her picture out there again. Her name is Esther Reed. If you've seen her or believe you've seen her, the police would like to talk to you.

Joe Johns joins us now with a "360 News and Business Bulletin" -- Joe.

JOHNS: Hi, Anderson.

There are some big spenders on Capitol Hill. Today, the House passed a $463 billion spending bill to keep the government operating past the current cut-off date of February 15. The vote was 286-140.

Republicans complained that the Democratic leadership allowed no amendments and only limited debate on the bill. Democrats said they were just trying to clean up the mess Republicans left last year.

President Bush picked a good day to visit the New York Stock Exchange. The Dow gained 98.5 points, closing at a record high of 12,621. The NASDAQ gained 15, and the S&P rose 9 points. The president was on Wall Street for a state of the economy speech.

Speaking of the economy, the Commerce Department released a new report today showing growth at a stronger pace than expected in the final quarter of last year.

Also today the Federal Reserve left a key interest rate unchanged at 5.25 percent -- Anderson.

COOPER: Joe, thanks very much.

Coming up, the terror scare that brought Boston to a standstill, closed the harbor, raised fears of a coordinated terror attack. The latest ho is in hot water don't on 360, next. Dreams are powerful. Just because we're retiring doesn't mean our dreams have to.


COOPER: Two terror scares, one in Great Britain. Apparently, the real deal. Police breaking up what they say was a plot to carry out an Iraqi style kidnapping and videotape the beheading of a British soldier. Nine people are in custody.

In Boston, one person is in custody for a major bomb scare. Twenty-seven-year-old Peter Berdovsky, a freelance video artist is facing at least one felony charge for setting off panic throughout Boston today.

These pictures are from his personal web site. They appear to show devices similar to the ones at the center of the scare. It was supposed to be a publicity stunt to promote a late night cartoon called "Aqua Teen Hunger Force". The cartoon is owned by the Turner Broadcasting System, which is the parent company on CNN.

The stunt involved electronic light boards emblazoned with cartoon characters like this one. The boards were placed around the city, but apparently, no one thought to notify the city first or to think the boards might be mistaken for bombs. Take a look.


COOPER (voice-over): The first reports started coming in this morning.

TONY HARRIS, CNN ANCHOR: We told you about Boston police shutting down a portion -- the state police there in Massachusetts shutting down the northbound lanes of Route 93 there because of a suspicious package.

COOPER: Within an hour, the news seemed to only get worse.

UNIDENTIFIED FEMALE: Now, police have located four other suspicious packages disbursed in different areas around the Boston area. They continue to look closer at these items before making the next step.

COOPER: While there were calls for calm.

MAYOR THOMAS MENINO, BOSTON: The governor says at no time for anyone to panic.

COOPER: Boston was gripped by fear.


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