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American Morning

Pizza Bomb Developments; Changing Policy in Iraq; Campaign in Crisis: McCain Staff Shakeup

Aired July 11, 2007 - 06:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Break in the case. A crime that horrified the country. A pizza delivery man used to rob a bank with a bomb around his neck. Now the new clues and the murder suspects in the spotlight, on this AMERICAN MORNING.
And good morning to you and welcome. It's Wednesday, the 11th of July. I'm John Roberts, along with Kiran Chetry.

It's just such an amazing story.

KIRAN CHETRY, CNN ANCHOR: It really is.

ROBERTS: And that's one kind of close to you, you could use to work in that town as well.

CHETRY: We always marvel at the strange and odd stories that were generated out of Erie, Pennsylvania. This one, really, though, takes the cake. And there are new developments, which we will get to.

But also on our radar this morning, yesterday we had talked about the debate, if you will, between Sanjay Gupta, our, of course, esteemed medical correspondent here, and Michael Moore.

ROBERTS: He was a little one-sided to begin with, but we made up for that last night.

CHETRY: That's right. Exactly. Because they appeared together on Larry King to debate the issues as it relates to health care in the U.S.

ROBERTS: Yes, Sanjay Gupta had done a reality check on Michael Moore's new film, "Sicko." Michael Moore disputed some of the facts that Sanjay used. Sanjay did say that one little figure that they used was wrong in transcription. It was the amount of money that Cuba spends per capita on health care. Michael Moore had said 51. The transcription indicated it was 25. So Sanjay said, we did get that wrong. But he stuck to all of his other guns. And here's a quick look at how that debate last night came out.

(BEGIN VIDEO CLIP)

SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: Mike, I think you'd have to agree . . .

MICHAEL MOORE, FILMMAKER, "SICKO": (INAUDIBLE). GUPTA: No, let me -- you'd have to agree that people would walk away from your film with the perception that health care's free in England.

MOORE: Yes.

GUPTA: And can -- I mean, you're a filmmaker. You know how to do this whole thing.

MOORE: It is free. It is free.

GUPTA: You pay for it through taxes.

MOORE: It is free.

GUPTA: I mean, in France, there's 13.5 percent payroll taxes, a 5 percent income tax. That's in addition to what . . .

MOORE: Yes, we pay for it -- OK. Well, when will I get to say something here?

GUPTA: Go ahead.

LARRY KING, "LARRY KING LIVE": All right, Sanjay.

Go ahead, Michael.

MOORE: Man, oh, man.

KING: Go ahead.

MOORE: We got Michael Moore speechless. That's pretty hard to do here.

(END VIDEO CLIP)

CHETRY: Ding, ding, ding, Sanjay won that round.

ROBERTS: Yes, it was a little bit of back and forth last night. A pretty healthy one too. But I think in the end they agreed that there's a problem with health care in this country that needs to be addressed.

CHETRY: We're going to hear more from that debate last night on Larry King in just a couple of minutes.

But first, there will be a major development announced today in the pizza bomb case. Back in 2003, police cornered a bank robber in Erie, Pennsylvania. He told them that he was a pizza deliveryman and that a gunman had locked a bomb around his neck to force him into robbing the bank. There you see the picture of him sitting there. This case was made all the more disturbing because as bomb squads were en route, it actually -- the bomb exploded. The deliveryman was killed instantly. And it left a lot of unanswered questions. Was he involved? Was he an innocent victim? And who put the bomb around his neck? Well, today, finally, some answers. CNN's Jason Carroll is here with more on what we can expect from today's announcement.

Fascinating case. And now it seems that there's been a break.

JASON CARROLL, CNN CORRESPONDENT: Absolutely a break. And I really think you hit the mark when you called this one a strange one. Later this afternoon, authorities will hold a press conference where they are expected to announce that they are charging two people this connection with the crime.

(BEGIN VIDEOTAPE)

CARROLL, (voice over): It was a frightening moment. One that became a mystery lasting nearly four years. This pizza deliveryman, Brian Wells, handcuffed, minutes away from death. Police unsure if he's a victim or a bank robber. Wells telling them a bizarre story, saying armed gunmen forced him to rob a bank and attached a so-called collar bomb around his neck.

And time was running out. Why is no one coming to get this thing off me? I don't have a lot of time.

But no one knew how much time. Minutes earlier, surveillance video had captured Wells as he walked into this PNC Bank in Erie, Pennsylvania. He had a gun shaped like a cane in his hand, a lollipop in his mouth and, as you're about to hear in this 911 call, a strange object around his neck.

CALLER: The guy just walked out with -- I don't know how much cash in a bag. He had a bomb or something or something wrapped around his neck.

CARROLL: When police finally caught up with Wells, he told them they had the wrong man. Listen as he tried telling them the story about the gunmen who he says put the bomb around his neck.

BRIAN WELLS, PIZZA DELIVERYMAN: He pulled a key out and started a timer. I heard the thing ticking when he did it. It's going to go off.

CARROLL: Minutes passed. A bomb squad raced to the scene. They didn't make it in time. We cannot show you what happened next.

Wells was killed in the explosion. His family called him a victim, proclaiming his innocence on a website.

JOHN WELLS, BROTHER OF DELIVERYMAN: My brother told them there was a group of strangers that accosted him at gunpoint, shot at him when he tried to run away.

CARROLL: Now, finally, almost four years later, a break in the case. A knowledgeable source tells CNN, investigators are expected to charge Marjorie Diehl-Armstrong and Kenneth Barnes (ph) with conspiracy to commit bank robbery. It's not clear at this point if they knew Wells. Diehl-Armstrong is already in prison, serving time for the murder of her ex-boyfriend James Rodin. Barnes is behind bars as well, in Erie County prison being held on a drug charge. (END VIDEOTAPE)

CARROLL: And authorities have not said if they believe Wells was a victim or a co-conspirator. Perhaps at the press conference they will answer that question. And tell us if the suspects knew Wells. Marjorie Diehl-Armstrong, the one who's serving time for killing her boyfriend, the body of that man was found at a home near where Wells made his final pizza delivery. Coincidence? Perhaps, Kiran, we will see at this press conference.

CHETRY: Yes. And, I mean, and the aside, oh, is there was, you know, her ex-boyfriend found in the freezer.

CARROLL: Yes.

CHETRY: I mean, it's unbelievable. A lot of people said, why would somebody -- if they were, you know, a co-conspirator, agree to have that around their neck knowing that it might go off? I mean that's the big question.

CARROLL: Right. A lot of unanswered questions here. Perhaps we'll get some more information at this presser.

CHETRY: Jason Carroll on the case. Thank you.

ROBERTS: New this morning, a closer look at a candid warning from Homeland Security Chief Michael Chertoff. A gut feeling he has about the risk of a terror attack this summer. Chertoff told the editorial board of "The Chicago Tribune" that al Qaeda and other terror groups are preparing to strike.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I believe we're entering a period this summer of increased risk. We've seen a lot more public statements from al Qaeda. I mean there are a lot of ways you can speculate about or a lot of reasons you can speculate about that. But one thing that occurs to me is, if they're trying -- they feel a little more comfortable in raising expectations. Well, all these things give me a kind of a gut feeling that we are in period of -- not that I have a specific threat, you know, that I have in mind right now, but that we are entering a period of increased vulnerability.

(END VIDEO CLIP)

ROBERTS: But Chertoff adds that there was no specific intelligence about a planned attack, but he is urging all Americans to remain vigilant.

Also new overnight, prosecutors in London decided to retry two terror suspects after a jury failed to reach a verdict on their guilt yesterday. The jury convicted four other men, all charged with plotting to bomb London's transportation system back on the 21st of July 2005. The House will vote either tomorrow or Friday on a plan to start withdrawing troops from Iraq within the next four months and a full pullout by next April. A similar bill is in the senate and President Bush says if passed he'll veto it.

A television reporter in Chicago is out of a job today. Reporter Amy Jacobson was fired after a rival station released exclusive video of her in a bathing suit hanging out at the home of the husband of a missing woman. Jacobson was at Craig Stebic's home on Friday, along with her two children. She says that she was called by Craig's sister who invited her to the home to discuss the case. The search for Lisa Stebic has been covered extensively in Chicago and across the country. Lisa was last seen by her husband, Craig, on April 3rd.

CHETRY: Well, it's time now to check in on some of the other big stories with our AMERICAN MORNING team of correspondents. Ali Velshi back from his world travels, finding it's a lot more expensive to get around. The dollar now at a record low.

So besides being able to sleep in your own bed, you've got more money in your pocket now too.

ALI VELSHI, CNN CORRESPONDENT: What does it say to you, Kiran, when getting back to New York is a deal. I am broke. That's why I'm back at work. I've been traveling and I come back to find out that the dollar is at lows against major currencies.

Check out how the U.S. dollar is trading. It's at the lowest point it's ever been against the euro since 1999, when the euro started. It's now going to cost you upward of $1.37 to get a euro, more than $2 get a British pound. And even the Canadian dollar, which has struggled for years against the U.S. dollar, will now -- one Canadian dollar is worth 95 cents. It's almost one to one now.

So, you know what, if you're about to travel, stay home. It's too expensive to travel right now. This is good news for U.S. manufacturers because it makes U.S. exports less expensive. But we've got to keep an eye out on this dollar. I'll be back a little later, Kiran, to tell you why this is happening and how it affects your investments.

CHETRY: All right. Good enough. Ali Velshi, thanks so much.

VELSHI: OK.

CHETRY: Meanwhile, there is a heated debate and a vote today in California. Should pet owners be forced to spay or neuter their animals? Chris Lawrence is live at the state capital in Sacramento where they expect things to get quite heated as they continue the debate.

Hi, Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Hey, Kiran.

Yes, about 8:00 this morning state lawmakers behind me will take up a vote on this issue that would make it mandatory for every pet owner in the state of California to get their dogs and cats fixed or face a pretty hefty fine. Supporters say there just aren't enough homes for all these dogs and cats and this is going to save the state millions of dollars that it would spend -- that it spends right now housing, feeding and ultimately euthanizing them. Critics say -- well, there's a lot to this story. We're going to get more into it a little bit later in the newscast.

Kiran.

CHETRY: Yes. And one of the big questions, how would they even go about enforcing it. We're going to have a debate on that a little later as well. Chris Lawrence, we look forward to your report. Thanks so much.

Well, it looks like there's still a lot of heat out in the western part of the nation. Our Chad Myers is in the CNN Weather Center keeping track of it all for us this morning.

Hi, Chad.

(WEATHER REPORT)

ROBERTS: Coming up now to 10 minutes after the hour. Democrats in Congress are saying America needs to get its troops out of Iraq soon. President Bush says they need more time. So what do the American people say? CNN's senior political analyst Bill Schneider has got the latest number on where the American people stand.

Good morning to you, Bill.

Let's take a quick look at the first number here. Record number of people think it was a mistake to send in U.S. troops. Sixty-two percent. It would seem, Bill, that the American public quickly souring on the idea of a sustained campaign there.

WILLIAM SCHNEIDER, CNN CORRESPONDENT: Well, it's not so quickly. They've been souring for some time. This is just the highest level of opposition to the war that we've ever seen. Americans see continuing casualties in Iraq. They see a situation that doesn't appear to be stabilizing. And, most important, they hear the news that the Iraqi government is not meeting the political benchmarks. They don't think this is a military failure on our part, they think it's a political failure on the part of the Iraqis.

ROBERTS: So does that suggest then, Bill, that after this interim report comes out later on this week, that those numbers may increase even more?

SCHNEIDER: They could -- very well could. If that interim report is not good, if it says the Iraqis are failing to meet the benchmarks, then Americans are going to conclude, what are we there for? Americans want to win or get out. And they don't believe that we're winning.

ROBERTS: The CNN/Opinion Research Corporation poll also found that 71 percent of people would favor removing all U.S. troops by April of next year. What do you find most significant about those numbers?

SCHNEIDER: Well, that they have concluded by, in overwhelming numbers, it's nearly three-quarters, that we have to get out of Iraq and they want a time certain to do that, which is what the Democrats in Congress are pressing the president to do. Look, the troop buildup has been in place now and it doesn't appear to be working. Only 22 percent of Americans say the situation has improved as a result of the president's policy. Well, if we're not accomplishing our objectives and the Iraqis are not making any progress, Americans are left to conclude one thing, we better get out.

ROBERTS: My mistake, Bill, it was a "USA Today"/Gallup poll. It also found 55 percent of people think that Congress should wait until after General Petraeus reports in September the 15th before taking any action. I mean that would seem to go against everything that's going on in Congress right thou.

SCHNEIDER: Well, yes, the president is pleading with Congress to wait for that report. That's another couple of months. And the public seems inclined to say, OK, we can wait a couple of months. Is that because they have confidence in the president? I don't think so, because his ratings are at an all-time low as well.

It's because they want to give the benefit of the doubt to the military. They have confidence in General Petraeus and in the military. So the question simply said, should we wait to hear what the commander in the field, General Petraeus, reports two months from now before Congress acts? They still want out, but they figure, well, we'll give the military the benefit of the doubt here.

ROBERTS: Bill Schneider with analysis on all of those numbers.

Bill, thanks very much.

SCHNEIDER: Sure. John.

ROBERTS: Kiran.

CHETRY: All right. Well, you know, it all started when our Sanjay Gupta did a fact check on Michael Moore's movie "Sicko." Moore used that to launch a tirade on everything from health care, to mainstream media, to the war in Iraq. Well, it was round two last night on Larry King. Let's take a look.

(BEGIN VIDEO CLIP)

SANJAY GUPTA, CNN MEDICAL CORRESPONDENT: I thought it was a good movie. And I wanted to say that. And I think -- no, and, listen, I think it strikes at this irrefutable fact that just about every American that you speak to, Michael, that I've spoken to, is unhappy with our health care system. It's broken. We get it. And the fact that you try and, you know, peg me or anybody else with somehow being responsible or not fixing it in some way I think is ludicrous. I thought it was a good movie because you're going to raise awareness about this very important issue.

LARRY KING, "LARRY KING LIVE": That's what I didn't understand. Why, Michael, did you get so mad? I thought that report was kind of balanced and in the end he agreed with you.

MICHAEL MOORE, FILMMAKER, "SICKO": Yes. In the end, he says the facts were fudged.

KING: Why did you get so mad?

MOORE: Well, he says the facts were fudged. That's a lie.

KING: Some of the facts.

MOORE: And so anybody who speaks a lie -- no, none of the facts are fudged. And it's all -- this is a good example, Larry, and I asked you before we went on if your producer could put up the slides because he said that we didn't point out that Cuba was number 39. It's right there in the movie. Right there on the screen. You can see Cuba is 39.

And when he ran his report, anybody who Tivoed it can rerun it now and you can see that they've covered up -- the CNN logos have covered up Cuba as number 39. It's right there. And he's just not telling the truth.

(END VIDEO CLIP)

CHETRY: Conspiracy theory with the CNN logo.

ROBERTS: Wow. I think that would be giving us more credit than we should be afforded. But Sanjay's point was last night, his main point was that Michael Moore appeared to cherry pick some of these numbers. For example, when talking about the cost per capita of Cuba's health care system, he chose one report. That same report also had a number for the cost per capita of the American health system. He didn't use that one, though.

CHETRY: Right.

ROBERTS: He chose another one that was higher. So Sanjay was just suggesting you're sort of tweaking the facts or at least picking facts that help to make your case.

CHETRY: And the interesting thing is, on balance, Sanjay pretty much agreed with a lot of what Michael Moore is trying to get across. That there needs . . .

ROBERTS: Totally. There's a serious, serious problem in this country.

CHETRY: Yes, absolutely.

ROBERTS: Forty-seven million people without health insurance. That's really bad.

CHETRY: We're going to have Sanjay on a little later, actually, to talk more about that, as well as some other medical news.

ROBERTS: Meantime your "Quick Hits" now. Investigators now say a six-month-old boy and a four-year-old girl were among the five killed when a plane crashed into their homes near Orlando. Three people were severely burned, including a 10-year-old boy. The pilot, the husband of a Nascar executive, was attempting an emergency landing after reporting smoke in the cockpit..

An explosion in Mexico shut off three fuel pipelines. Exports were not affected, though, and no one was hurt. But this is the fourth incident in a week. A small leftist group has claimed responsibility for those explosions.

A senator sex scandal heating up. New allegations swirling around Louisiana Senator David Vitter today. Did his visits go beyond the so-called D.C. madam in Washington? We're live in New Orleans next on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: Here's some new information this morning in the senator sex scandal. Republican Senator David Vitter hasn't been seen in public since his phone number was tied to the D.C. madam's client list. Well now a woman known as the Canal Street madam, this one in New Orleans, is speaking out. She is claiming that the senator visited her brothel. AMERICAN MORNING's Sean Callebs has been following this story for us.

And so the plot thickens today, Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Yes, indeed. And a second madam who says that she can tie herself to Vitter and this ongoing scandal. And this is someone who's pretty well known in the New Orleans area. I talked with her extensively last night. And she says for nearly a quarter of a century she's operated brothels here in this area until she was shut down by the feds back in 2002. And while she is still on parole for pleading guilty to operating a brothel, that is not stopping her from talking about Vitter.

(BEGIN VIDEOTAPE)

CALLEBS, (voice over): Sitting on the bed of her small home, the alleged Canal Street madam says she's going public in an effort to defend embattled Senator David Vitter.

JEANETTE MAIER, "CANAL STREET MADAM": I didn't want to hurt somebody who was decent, OK. Somebody who was good. And, so what, men fool around. Not all men, but a lot of men.

CALLEBS: Jeanette Maier says she first met Vitter in New Orleans back in the late '80's or early '90s. She can't remember. Maier spent much of Tuesday talking with various media outlets about this story. We have no proof of her allegations, only Maier's word.

MAIER: So I had girls that worked and girls come back and say, you know, that they had partied and they were with David. And like I gave a (BLEEP). It was always thought not to, hey, the least I know, the better off I am.

CALLEBS: Maier says Vitter paid her girls $300 an hour.

Why did you think it was important to keep quiet all the years, because the rumors come out when he was running for the U.S. Senate. Why was it important to you to keep quite?

MAIER: Because a real madam doesn't -- believe it or not, they do have morals. You don't give out guy's names.

CALLEBS: Maier's attorney, Vinny Mosca, says, Vitter's name is not found in the former madam's black book, but Mosca says he has no reason to doubt her. We couldn't reach Vitter for comment. But in 2004, he adamantly denied having any relationship with the alleged Canal Street madam, saying he was being attacked by crass Louisiana politics.

What makes this so hard for Vitter's constituents to believe is the senator has made traditional family values the cornerstone of his political career. And just Monday, Vitter apologized for being linked to the alleged D.C. madam, Deborah Jeane Palfrey, who's facing racketeering charges for allegedly running a brothel disguised as an escort service.

Despite the allegations, the staunch conservative still has plenty of backers.

UNIDENTIFIED MALE: Boys will be boys.

UNIDENTIFIED FEMALE: I appreciate his honesty, first of all. He kind of nailed it on the head. And I thing that none of us is without things that, you know, that we haven't dealt with in the past.

CALLEBS: Vitter's apology was prompted in part by questions from "Hustler" magazine. It was "Hustler" editors that on Monday first asked Vitter why he was calling the alleged D.C. madam back in 2001, while he was still a congressman.

(END VIDEOTAPE)

CALLEBS: And let's remember, Larry Flynt made that very public declaration a month ago, offering $1 million to anyone who could prove that a member of Congress or a high ranking government official was intimate with a prostitute. And this day could be another long one for Vitter as well, Kiran. We know that Flynt is going to hold a news conference at 5:00 Eastern Time for the sole purpose of dishing more dirt on Vitter.

CHETRY: Oh, wow. All right.

Let's get back to the Canal Street madam for a second. She talked about how madams have some sort of, you know, loyalty to their commerce and don't speak about it. But now she's going public. So why now?

CALLEBS: Yes, interesting. Does she have an ulterior motive out there? Well, quite possibly. She said she made a lot of money until 2002. But once the feds cracked down, prosecuted her, she basically lost everything. She doesn't have any money to speak of these days. She is trying to come up with some kind of book deal. She is trying to bill herself as a consultant. So theoretically, she could be trying to get publicity, just trying to buffet her cause.

CHETRY: Wow. All right. We'll continue to follow this throughout the morning. Sean Callebs, thank you.

ROBERTS: QuickSCAT satellite talking tough. Let's try that again. That 6:00 a.m. mouth. Boy, the QuickSCAT satellite topping our "Quick Hits" now. A Senate committee hearing today on the QuickSCAT weather satellite. Debate about the value of the aging satellite was one of the reasons that the director of the National Hurricane Center resigned this week.

Could the iPhone already be outdated. An analyst with J.P. Morgan says a patent filing suggests that Apple is working on an iPhone nano. It could cost $300 or less and might be available by the end of the year.

CHETRY: Did we call that one?

ROBERTS: Well, some people did.

The CNN/YouTube debate is only two weeks away. How you can participate in the groundbreaking event, coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: Well, are you or your family living near a vicious dog? Your "Quick Hits" now. There's a new online registry for dangerous dogs and it's letting Virginia residents find out. It would work like a sex offender registry. If a dog has bitten someone, this law requires that they end up on the registry.

A smuggler gets five years in prison, not for drugs, but for smuggling baseball players into the U.S. from Cuba. Gustavo Dominguez was convicted of smuggling five ball players into the U.S. in hopes that they would make the major leagues and that he would then be their agent.

And a first at the all-star game last night. Ichiro Suzuki, from the Seattle Mariners, hit the first inside the park home run in all- star game history. It was long enough to lift the -- it was enough, actually, to lift the American league to a win. And it also earns Suzuki MVP honors. Congrats.

ROBERTS: Twenty-seven minutes now after the hour. Of course, coming up on the 23rd, from Charleston, South Carolina, we've got our CNN/YouTube debate with the Democrats where we're asking you to pose questions to the candidates. Our Jacki Schechner is looking at reaction online to all of that.

What did you find this morning, Jacki? JACKI SCHECHNER, CNN CORRESPONDENT: Well, here's what's so exciting, John. I don't know if people grasp the idea that this is not about news people asking questions of the candidates. This is what you want the talk about. We're inviting you, upload your video to YouTube and those are the questions that are going to be asked during the debate. We have more than 600 questions submitted so far. I want to give you a little taste of some of the ones on the war in Iraq. Just one of the themes that people have embraced. Take a listen. This is Eddie (ph) who's 23.

(BEGIN VIDEO CLIP)

EDDIE: If the U.S. had no position to leverage a settlement, what would your administration do to contain ethnic cleansing and civil war? Something we all consider to be inevitable.

(END VIDEO CLIP)

SCHECHNER: So he wanted to know about the aftermath of the war in Iraq.

We've got another one from Jeff in San Diego. Wants to know about the Iraq Study Group report and what some of the presidential candidates think about that report in particular.

(BEGIN VIDEO CLIP)

JEFF: Specifically, what did you agree with? What did you disagree with? And if it was your decision, would you have embraced the report in its entirety, would you have taken pieces from it or would you have gone with the troop surge strategy? Thanks.

(END VIDEO CLIP)

SCHECHNER: So you can, of course, tackle topics like the war in Iraq, which are generally popular topics during the debate, or you can tackle something that's personal to you. The idea is, what do you want to hear? Go to youtube.com/debates. Upload your video. It is not difficult to do. You've got until July 22nd. But, the sooner the better.

John.

ROBERTS: All right, Jacki, thanks very much. I was trolling through that yesterday and looking at some of the questions. Some of them are pretty interesting.

SCHECHNER: It's nice to get a different take on thing. You know, we have a list of the things that we like to ask presidential candidates. But this is what you want to know. This is going to be really cool.

ROBERTS: Some of them more direct. Some of them more obscure.

Jacki Schechner, thanks very much.

SCHECHNER: Sure.

ROBERTS: And, don't forget, catch the CNN/YouTube debate coming up on Monday, the 23rd, from Charleston, South Carolina. Anderson Cooper will host that debate.

And, by the way, Jacki was talking about the Iraq Study Group and some questions about that. We've got the co-chairman of the Iraq Study Group, Lee Hamilton, coming up in just a few minutes. We'll talk to him about Iraq here on AMERICAN MORNING.

CHETRY: You know, this was a bizarre bank robbery. It happened four years ago. And now there is a possible break in the pizza bomber mystery. We're going to have the latest. A live update from Erie, Pennsylvania, coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: A pretty shot this morning from Savannah, Georgia. A live look right now coming to us from w -- I'm sorry -- WTOC in Savannah.

Can you read that? It's white on white this morning.

ROBERTS: I've got my contact lenses, so, yes, I'm cheating.

CHETRY: Well, welcome back. It is Wednesday, July 11th. I'm Kirin Chetry, along with John Roberts.

Glad you're with us today.

ROBERTS: Good morning to you.

(NEWSBREAK)

CHETRY: Well, could the mystery finally be solved? A pizza deliveryman robbed a bank in Erie, Pennsylvania, back in 2003. When police caught him, he said that gunmen forced him into the robbery by locking a bomb around his neck. And sure enough, there was a bomb around his neck. As he sat in front of those police cars while they waited for the bomb squad to get there, it exploded and killed him, leaving a lot of unanswered questions as to whether or not he was telling the truth.

We'll, today, the U.S. attorney is expected to charge two people, Marjorie Diehl-Armstrong, as well as Kenneth Barnes, with the robbery, as well as some other charges like conspiracy and a weapons violation related to this situation in the death of Brian Wells. Both of them already in prison on other crimes. So the plot certainly thickens in this one.

And Kevin McDowell of WICU-TV in Erie, a former colleague of mine -- we worked together back in the late '90s -- is on the phone with us now.

Hi, Kevin.

KEVIN MCDOWELL, REPORTER, WICU-TV: Hi, Kiran.

CHETRY: So, was this expected, first of all, these -- that there would be a break in the case? Or did this seem to come out of nowhere?

MCDOWELL: Well, we had been anticipating a break in this case probably for the last year or two from what we know behind the scenes. Investigators have had pretty much the case wrapped up for a while. So it's just a situation of getting all their ducks in order. And it looks like they're ready to go now.

CHETRY: So this Marjorie Diehl-Armstrong, she's in prison because of another bizarre incident in which she confessed to, I guess, killing her boyfriend, and then his body was found in her refrigerator?

MCDOWELL: Which is what first got her involved in this case, because Brian Wells -- we just saw that on the screen -- Brian Wells, the pizza deliveryman, his last delivery, where he apparently got the collar bomb put around his neck, was at the end of a road, where at the other end of that road was where the body of her boyfriend was stashed in a freezer. And that's what initially connected Marjorie Diehl-Armstrong -- this is back in 2003, a couple of weeks after this happened -- what initially connected Marjorie Diehl-Armstrong with this case in the first place. So it is a bizarre almost B movie soap opera.

CHETRY: Yes. Well, is there any indication at all, Kevin, in Erie about whether or not Brian Wells was telling the truth when he said, look, I just went to go deliver pizzas and this is what happened, or whether he was an accomplice?

MCDOWELL: No, this is what everybody is waiting for. We don't know if we're going to get any answers to that today. But of course the community wants to see justice done.

But after -- after four years, they just want to see how all this came together. And one of the main answers -- main questions they have they're hoping to get an answer to is, was Wells involved in this plot? There have been rumors on both sides. Yes, but he never expected to be killed in it, obviously. And no, he was just an incident pizza deliveryman.

A lot of people are also interested in how the conspirators, if these folks are guilty, how the conspirators came up with this plot. Because it was not only the collar bomb and the cane gun he was carrying, but also, he had a map, almost a scavenger hunt of clues to get that collar bomb off. He had to make specific stops at specific times in order to find the clues at the scene.

CHETRY: Right. That's amazing, too. It just seems like it was extremely well thought out. And one of the -- one of the suspects has actually been -- I think there were some questions about her mental soundness anyway. So...

MCDOWELL: Yes. Marjorie Diehl-Armstrong, exactly. CHETRY: So we'll see what happens. But thanks for your insight on the case today. We'll be watching all morning.

MCDOWELL: Fascinating. See what happens when you leave town, Kiran?

CHETRY: Exactly. All the crazy stuff happens.

Kevin McDowell of WICU-TV.

Good to talk to you today.

ROBERTS: "Grave and deteriorating," that's how former congressman Lee Hamilton described the situation in Iraq back in December when he and James Baker produced the Iraq Study Report.

As Congress tries this week to find a new way forward in Iraq, many are looking back to that report. Lee Hamilton joins us now from Washington.

Good morning, Congressman. How are you?

LEE HAMILTON, CO-CHAIRMAN, IRAQ STUDY GROUP: I'm fine, thank you. Good morning.

ROBERTS: So this report, the ISG report, sat on the shelf for some seven months. Suddenly, it's all in vogue among Republicans. You've got to feel pretty good about that today.

HAMILTON: Well, I think the recognition on our part is that there aren't any good choices in Iraq. It's very tough to develop a policy here and build a consensus behind it. We understand that takes some time.

The ISG report is the only bipartisan recommendation out there today, and we think it has considerable merit. And we're pleased, of course, that some of its recommendations are being looked at more carefully.

ROBERTS: Chairman Hamilton, Senator Lamar Alexander yesterday was on AMERICAN MORNING. He said that this may be a pivotal week in the debate over Iraq.

Do you sense that?

HAMILTON: Well, we're certainly coming to a major climax in the Iraqi policy debate. That could happen this week, it might happen as the president pleaded yesterday in September, when General Petraeus makes his report. But the restlessness in the United States Congress, which I think reflects the restlessness in the country, is clearly apparent. And the pressures are building to follow the polls of the American people, which clearly indicate they've soured on this war.

ROBERTS: Senator Joe Lieberman was also pleading for patience yesterday. Let's take a quick listen to what he said, and then I'll ask you about it. (BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I don't think it's over by any means, but what I'm saying is it's moving in the right direction. And that's why this is such an unfair and inappropriate time to be mandating a retreat. I mean, that would be basically legislating defeat when we still have a chance to win.

(END VIDEO CLIP)

ROBERTS: What do you think, Chairman Hamilton? Is it moving in the right direction? Is there still a chance to win?

HAMILTON: Well, of course people who say there's a chance to win rarely define the term. I don't really know what they mean.

Are we making some progress in pacifying areas? Yes. And we've lost progress in other areas.

American casualties are up. Overall, the violence in the country has not diminished. Services in Baghdad are as bad as they were in the prewar levels with regard to water and electricity. The sectarian clashes continue.

I do not see any fundamental change in the equations in Iraq today. It is still grave. It is still deteriorating.

I do not favor that we cut and run. I think Senator Lieberman was referring to that. I agree with him on that point. But I'm a long way from seeing dramatic progress.

ROBERTS: Still grave, still deteriorating.

HAMILTON: Yes.

ROBERTS: Let me switch gears and ask you about another topic, because you were also the chairman of the 9/11 Commission, co-chairman of the 9/11 Commission.

Michael Chertoff, the DHS director, said yesterday to the "Chicago Tribune" editorial board that he has a gut feeling that America is at a greater risk of a terror attack this summer. What does your gut tell you?

HAMILTON: Well, my gut has always told me that we would be hit again in the United States. There can be no doubt at all about the intent.

I thing the secretary was quite right about that. They have repeated it again and again and again. They want to kill Americans, and kill as many Americans as possible.

What is less sure is their capability. But we've seen evidence of that in Europe. We would be very, very foolish to be complacent in this country.

ROBERTS: Former congressman Lee Hamilton, chairman and co- chairman of both the 9/11 Commission and the Iraq Study Group.

Thanks for being with us this morning. It's always good to see you, sir.

HAMILTON: Thank you.

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CHETRY: Well, he's dropping in donations and in the polls, and now he's lost his campaign manager, chief political strategist, and also two other top aides. So what is John McCain, the once presumed Republican front-runner, to do?

John Dickerson is a CNN political analyst and a chief political correspondent for slate.com.

You also wrote an article, "Can McCain Survive the Carnage?"

There are headlines this morning that are just brutal. It seems as though, you know, at least the mainstream media is sort of telling him to pack it up and move out of town because it's over.

JOHN DICKERSON, CHIEF POLITICAL CORRESPONDENT, SLATE.COM: Yes, it's pretty -- pretty brutal coverage. And as an abstract matter, the media sometimes gets it terribly wrong.

Remember John Kerry's obituary was written when he fired his campaign -- top campaign manager, and then he came back to win the Democratic nomination. But things have looked very tough for McCain. And as you mentioned, his campaign was already struggling.

CHETRY: And you covered his campaign back in 2000. You know the players pretty well. What, in your opinion, is really going on here?

DICKERSON: Well, they are passionate people. And there were conflicts over the fact that McCain had such bad fund-raising numbers, and also this notion of letting McCain be McCain. And that's what really was bugging the senator here, is he kind of wondered what happened to his campaign. And everybody has a different notion of what needs to happen so that McCain can get back out there and try and recapture some of that magic that was part of his 2000 campaign.

CHETRY: Let's listen to what a fellow candidate, rival candidate, in fact, Rudy Giuliani, said yesterday.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R) PRESIDENTIAL CANDIDATE: This is way too early for anybody to be, you know, written off. And John McCain is a fighter. I expect John to be right there and waging a really tough campaign.

(END VIDEO CLIP)

CHETRY: I mean, is that what you want? You want your rival coming out to defend you, it seems, when no one else is?

DICKERSON: No, you don't want that. And it's the generous thing for the mayor to do, and the mayor is ahead in the polls. And I'm sure he hopes that any McCain supporters would come and support his campaign.

CHETRY: Bottom line, do you think John McCain can come back from this?

DICKERSON: It's a tough fight, but the good thing for senator McCain is none of this internal problem hurts his underlying presidential characteristics. And if he can get out and sell those, people won't be saying, well, what about your strategists here or there? They'll be looking for his qualifications. And so he's still got all of those intact.

CHETRY: All right. John Dickerson, CNN political analyst, with slate.com as well.

Thank you.

DICKERSON: Thank you.

CHETRY: We're back in just a moment.

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CHETRY (voice over): Coming up on AMERICAN MORNING, forcing owners to have their pets fixed?

UNIDENTIFIED FEMALE: I think it's the responsibility of the owner. And they should be able to make that choice. The government should not mandate that.

CHETRY: Should the government have the power to make owners spay or neuter their pets? Even Bob Barker's weighing in.

That's next on AMERICAN MORNING.

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ROBERTS: Fifty-two minutes after the hour.

A major cat and dog fight will reach a frenzy today in California. The question: Should pet owners be forced to spay or neuter their animals? The battle is pitting two television stars against each other.

Our Chris Lawrence is live in Sacramento with more.

Good morning to you, Chris. What a catfight this is. CHRIS LAWRENCE, CNN CORRESPONDENT: Yes, John. The fur is definitely flying.

You k now, this bill has already passed the state assembly. And it comes up for a vote here in the Senate at about 8:00 in the morning. Pet lovers by the thousands are lining up on both sides of this issue.

(BEGIN VIDEOTAPE)

LAWRENCE (voice over): Every year about half a million dogs and cats are put to death in California. Now a proposed law would make it mandatory for owners to get their pets fixed or get fined $500.

BOB BARKER, ANIMAL RIGHTS ACTIVIST: There are just too many cats and dogs being born.

LAWRENCE: On one side, animal rights activist Bob Barker, who supports the bill. On the other, the actor who played Lassie's owner on the original TV series. He says anything that restricts the gene pool at an earlier age could diminish valuable dogs in the breeding population.

JON PROVOST, ACTOR: Lassies have since the 1940s had a certain look bred into them by the Weatherwax family. And that's what we're trying to preserve. I mean, there's no other Collie that looks like Lassie.

LAWRENCE: Critics say public education and programs that pay to spay and neuter are already working in places like Los Angeles, which euthanizes 18,000 animals a year, down from 60,000 10 years ago.

UNIDENTIFIED MALE: There is no immediate crisis. The state is showing good progress.

LAWRENCE: The bill is based on a local ordinance enangtd 12 years ago in Santa Cruz. Supporters say it's reduced the number of animals going to the shelters by 60 percent. And if the state bill passes, California will save millions of dollars on euthanizing all those unwanted pets.

REBECCA SPINA, SUPPORTS BILL: Obviously, we have much better places where the money could go and less cruelty to the animals. So it would be very nice.

LAWRENCE: Mary Ellen Richards says she chose to get her dogs fixed.

MARY ELLEN RICHARDS, OPPOSES BILL: I don't agree with the government having to come in and say you have to do this.

(END VIDEOTAPE)

LAWRENCE: You know, rescue and guide dogs get exemptions. And breeders can pay for a special permit to stay in business, but getting pet owners, much less politicians, to agree won't be a walk in the park -- John.

ROBERTS: Our Chris Lawrence for us this morning.

Thanks.

And coming up in our 8:00 hour, we're going to dive head-long into the debate over whether pet owners should be forced to spay or neuter. We'll be joined by live representatives from the California Healthy Pets Coalition and California's PetPAC. That's coming up at 8:20 Eastern -- Kiran.

CHETRY: Well, he's in charge of keeping America safe, and now Michael Chertoff says he has a gut feeling that a terrorist attack could be in the works.

We're going to speak with a former employee at the Department of Homeland Security. That's coming up next on AMERICAN MORNING.

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CHETRY: Well, Ali Velshi is back at two minutes until the top of the hour, minding our business.

Welcome back. We missed you.

ALI VELSHI, CNN CORRESPONDENT: Well, thank you. I'm happy to be back.

I told you earlier how the U.S. dollar is sinking against all these other currencies.

CHETRY: Right.

VELSHI: So it's like a discount being back in New York. But it's not like the news is so fantastic here either.

I was hoping for a little turnaround in the housing market. The housing market -- I don't know if you remember -- a few months ago, the CEO of DR Horton, the largest homebuilder in the country, said, and I quote, "2007 is going to suck." Well, apparently it does for the company.

Their orders for the second quarter of the last three months have dropped 40 percent. They're seeing a cancellation rate of 38 percent. And it's spreading beyond the housing sector.

Home Depot yesterday said it expects a drop in earnings by about 18 percent. Some of that is because it's selling off one of its units, but a lot of that is because people, when their home values are not going up, do less construction, less renovation, things like that.

Sears, where people buy their appliances, it's also suffering. Sears saw a drop in almost every category, including a particularly large drop in appliances. So, when your house isn't worth as much, when interest rates are getting a little bit higher, you end up spending less on the things that you need for your home or on renovations. And that starts to affect the entire economy.

Obviously a story we'll keep a tight eye on.

I'll be back with more business in the next hour, but the next hour of AMERICAN MORNING starts right now.

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