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Dow Industrials Tank Again; Jury Reaches Verdict in Jose Padilla Case; Small Signs of Hope in Mine Rescue; Survivor Describes Peru Quake; Hurricane, Storms Threaten Coast

Aired August 16, 2007 - 13:00   ET

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

DON LEMON, CO-HOST: Hello, everyone. I'm Don Lemon live at CNN world headquarters in Atlanta.
KYRA PHILLIPS, CO-HOST: And I'm Kyra Phillips.

Happening right now, we're waiting for a news conference from Utah on the trapped miners. We expect to hear from the mine owner, Bob Murray, and the assistant labor secretary, Richard Stickler. We're going to bring that to you live as soon -- soon as it begins.

LEMON: Another developing story here in the CNN NEWSROOM, market turmoil. Look at that. The Dow, the market's down 335 points, and it just keeps going. Our Susan Lisovicz joining us now at the New York Stock Exchange to give us an update on that.

Susan, a rocky day for the markets.

SUSAN LISOVICZ, CNN CORRESPONDENT: It's a rocky day for the markets, and perhaps more important, it's not a phenomenon. This is something that we've become all too familiar with.

Just one month ago, the Dow Industrials closed above 14,000 for the first time ago. What we've seen then is a dramatic change in investor sentiment. That is painfully playing out on Wall Street and is affecting all of us, really. Any one of us who are invested are probably exposed to the losses we're seeing now, because the Dow, the NASDAQ and the S&P 500 are all down at least 10 percent from those recent highs we saw just one month ago.

We're in a correction phase. That is something that happens a lot of times when the market gets to frothy levels. But in this case, you not only have had these all-time highs, you had a steady drum beat of bad news that began in the housing market and that has expanded from there. Not only in the U.S., but we've seen it worldwide, as well.

And we got more bad news on that front today, and I'll tell you about it a little later on in the program.

Back to you guys.

LEMON: You better believe, Susan Lisovicz, we're going to be checking with you throughout the day right here in the CNN NEWSROOM. And you can see that we have the big board, which is the little board now, right there on Susan's left shoulder. Are -- we're going to keep that at the bottom of the screen there all day throughout the NEWSROOM to check in on the markets until the closing bell. So you can rely on CNN happening for the latest on Wall Street -- Kyra.

PHILLIPS: Another story we've been following. It's happening right now. After less than two days of deliberation, the jury in the Jose Padilla terror case has apparently reached a verdict.

Our Susan Candiotti has been following this for us.

We're expecting to hear something about 2 p.m., Susan?

SUSAN CANDIOTTI, CNN CORRESPONDENT: That's right, Kyra. That's in order to give all the parties enough time to get to the courthouse and get in place, which you're talking about a lot of people involved in this trial. It's been going on for three months, involving three dependents.

And, Kyra, this is a huge case -- let's remind everybody -- for the Bush administration, because it was a real headline grabber when we first learned about Jose Padilla, oh, gosh, five years ago.

Remember, he was originally accused of being the so-called dirty bomber that had been allegedly planning to carry out attacks in the United States using radioactive truck bombs.

But then he was never charged with that. Instead, he was put into a Navy brig, virtually in isolation for three years and without any representation. And then finally, he was charged in a civilian court, and that's how we got to this point.

He is charged, not with being a dirty bomber, again, but with three counts, the most serious to murder, to maim, to kidnap, conspiracy charges in a jihad to be carried out overseas. And this was long before September 11, dating back to 1998. He and two other defendants.

If he is found guilty, he could face up to live in prison, he and the other two defendants.

And the question here before this jury, who was the real Jose Padilla? Was this a man who went overseas to carry out murder and mayhem, or, as the defense contends, was the prosecution looking through goggles of guilt and was he simply there will to study Islam and religion and the Arabic language?

PHILLIPS: All right. Susan Candiotti, we are expecting that verdict to be read about 2 p.m. Eastern Time. We'll take it live when it happens. Thanks, Susan.

LEMON: And while we stand by for the latest briefing on the mine rescue effort in Utah, there's renewed hope tempered with caution. Devices put on top of the mine have picked up unidentified noise where six trapped miners might be.

(BEGIN VIDEO CLIP) BOB MURRAY, CEO, MURRAY ENERGY: The sounds lasted about five minutes, and they were at a frequency of about a second and a half. It could be rapping, but, sir, we really don't know, and I wouldn't read too much into it yet. But it is hope. It is hope.

(END VIDEO CLIP)

LEMON: It is hope.

CNN's Brian Todd is in Huntington, Utah.

Brian, the big question about rescue is have they heard anything else?

BRIAN TODD, CNN CORRESPONDENT: Since that time, Don, that they picked up those sounds, they have told us that they have not heard anything. We could get an update in just moments when they come down here and brief us.

And it is important to realize that in these geophones they use for these signals, they can pick up all sorts of noise: on the surface, possibly below the surface. It could be rock breaking below the surface. It could be literally anything. So that's why Robert Murray, the mine owner, was saying in that sound bite not to read too much into it.

But it does give them hope. The fact that Mr. Murray said that this was in a bit of a pattern over the course of five minutes, registering about every second and a half, is what he said. And there might be some contention to that from federal officials who initially said there was no pattern. We're going to try to get that information soon.

But also in a couple of minutes, we're supposed to see pictures from a chamber that was drilled down to. This was the third hole that was drilled into this mountain. It broke through into a chamber a little less than 24 hours ago. And what they've said about this particular chamber, it could have been a place where the miners could have retreated for air, if they had survived the initial collapse.

The information that we initially got about the pictures from this chamber -- we got this last night -- was that this chamber was undisturbed and that there was what they call a bratis (ph) curtain there. Not sure if the curtain was put up after the collapse or during the original mining. But hopefully, we'll know some of that information soon, Don.

LEMON: All right. Thank you very much for that, Brian Todd.

And of course, we want to remind you we're awaiting -- awaiting a press conference there in Utah. As soon as that happens, we'll bring it to you live, right here in the CNN NEWSROOM.

PHILLIPS: Well, a major disaster has shattered parts of Peru. Rescue teams are struggling to reach the area just south of Lima that bore the brunt of a strong earthquake. The confirmed death toll is approaching 350 right now. At least one American is among the dead.

The initial jolt struck last evening and lasted a terrifying two minutes. The magnitude: 8.0. The quake toppled buildings and left roads into the region largely impassable.

Now the A.P. quotes the mayor of one town as saying that a church collapsed burying at least 200 worshipers that were inside. President Alan Garcia has declared a regional state of emergency as rescue teams struggle to get in there.

Now, a flight from Lima arrived this morning at Miami International Airport, and here are first accounts of several passengers who felt the quake far from the epicenter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Well, it feels like the floor is, like, about to break. It feels like all shaky. And it just, like -- everything starts shaking, and it feels like you're, like, going to feel -- like, sink in. It just -- it doesn't feel good.

UNIDENTIFIED MALE: You know, like, you heard -- everything was shaking, and the windows were shaking and everything. So you went downstairs, and you felt like you were surfing. It was pretty cool, but it was kind of scary.

(END VIDEO CLIP)

LEMON: Joining us now from Lima, he's originally from Texas, Brian (sic) Brumbaugh, who works in Peru.

The ground doesn't shake like that in Texas, does it?

DAN BRUMBAUGH, EARTHQUAKE SURVIVOR: No, sir, not quite. It's Dan Brumbaugh, and no, Don, it does not shake like this in Texas.

LEMON: Yes. I'm so used to saying Don, because that's my own name. So excuse me for that, Dan Brumbaugh.

You were -- were you walking down the street, and you said you were on the sidewalk and it started to shake like waves?

BRUMBAUGH: Actually, I was on the 14th story, on the roof of our building, as I go up every night to walk down the 14 flights of stairs and get some exercise.

And I was headed back down, and I was about halfway down, and I felt the little bit of the first tremor, and kind of thought, well, that might be something other than a big truck going by.

And I got back down to the second floor, where my office is, and I was standing in the door of my office, asking my secretary and a worker that was in here if they had felt anything. And they said, "Yes, but don't worry about it. It's no big deal."

And I -- at that moment, it really started for real, and we were -- although nothing fell off the walls, there were cracks that were opening up, little, bitty cracks. And it was moving, it seemed like, a foot back and forth. And so at that moment, we turned and ran down the stairs into the street.

I have a Nextel with the international radio. So I was calling my father in Houston as this was happening, and I was getting out of the building and out from where I thought it was going to fall.

And I got across the street. And I was standing there, talking to my father on the Nextel, and it was -- literally, the ground was shaking so hard that I almost had to go to my knees to avoid falling.

I mean, the kid that just was on a second ago mentioned surfing. I used to surf, and it's exactly how it was, as if waves were going through the ground and moving you up and down. And it was actually -- absolutely terrifying.

LEMON: I think I know your answer to this. So what was the mood? What were people on the streets doing? Was it kind of a calm, because they thought maybe, you know, it was going to be over soon? Or were people panicked?

BRUMBAUGH: No, no. I was one of the first out into the street, being a gringo and not really used to that kind of movement. And within a minute after I hit the street, everybody came out of all the buildings.

I'm in the central financial district of Lima, and thousands of people were coming out into the streets. And it was not calm by any stretch of the imagination. It was pure panic. People were screaming and crying, and everybody, it seemed, was on their cell phone, trying to call their family.

LEMON: Right.

BRUMBAUGH: But, no, we all stood out in the street for a good half hour after it was over, and it was utter chaos.

LEMON: Yes. And you know, we're sort of laughing here because you're OK, but very serious situation in Lima, Peru, there with this -- this earthquake that happened this morning.

Dan Brumbaugh. Dan, again, who is from Texas, we appreciate you joining us. We're glad that you're OK. Take care of yourself and be careful, OK?

BRUMBAUGH: Thank you very much. Please, everybody, help the people that are damnified (ph) in this. Thanks.

LEMON: All right. Dan again, thank you very much.

If you're looking for a way to make a difference for the victims of the Peru earthquake, impact your world by logging onto CNN.com/impact and click on "natural disasters" to learn how you can become part of the solution. PHILLIPS: Churning in the open Atlantic and looking set to become extremely dangerous. Hurricane Dean, the first hurricane of the Atlantic storm season, is aiming for the Caribbean. And after that, it's anybody's guess.

The Islands of Dominica and St. Lucia are already under a hurricane warning.

Now what's left of a Tropical Storm Erin is soaking a chunk of Texas. It whipped ashore this morning just north of Corpus Christi, dumping a ton of rain on places that certainly don't need any more.

On the other hand it just may have washed the stingray problem in Galveston back out to sea. Nat Sandlan (ph) of Amarillo was among the many people who rode out the storm. And he said, "Unless I see a shark or a whale go flying by, I'm good."

That's the only way to put it in perspective, right, Chad Myers?

CHAD MYERS, CNN METEOROLOGIST: Really, it's not much of a storm, Kyra. And it never really was. This is going to be more of a freshwater flood maker, than it ever was going to be a saltwater flood maker, saltwater flood meaning pushing water from the ocean onto the land with a storm surge.

As this thing kind of moves into Texas and into the hill country, that's when rain is going to continue to come down. It's going to continue to come down in places that have had 14, 20 inches above normal rainfall for the year so far. So they don't need any more. It's all going to be running off.

Now by Thursday and into Friday, it does move away. So this low is not going to sit in one spot, like Hurricane Agnes did back in the 1972, I think it was, just sat there over the Alleghenies and the Catskills and all the way back down the Susquehanna River Valley. And that flood just went for days down that Susquehanna River.

This thing continues to move. That's some good news. It is still moving northwest at 15 miles per hour.

This is the storm -- this is -- this is the storm we're really concerned about, because this has a lot of potential. A lot of room to run, a lot of things to hit. From the Leeward Islands right up to the Virgin Islands, all the way through into Puerto Rico...

PHILLIPS: Chad, sorry. Got to take it to Utah.

MYERS: Don't. Don't. So go.

PHILLIPS: We're hearing about the rescue effort for the miners. Let's listen in.

RICHARD STICKLER, CHIEF, MINE HEALTH AND SAFETY ADMINISTRATION: ... from the bore hole No. 3 that was made last night.

I wanted to make a comment about some of the volunteers that we have working here. I know that I've spoken to you in the past about how important it is to have a team effort, and we've talked about MSHA and the families and the state and the county, everybody working together as a team.

But I also want to point out there are hundreds of other individuals, volunteers, that are part of this team. Many of them are giving their own personal time and assets and support services. Interpretation, church congregations, pastors, local businesses, all working behind the scenes to help support this operation. So I want to recognize them and thank them for their help and support.

As far as an update on the activity here, we continue to draw air samples out of bore hole No. 1, and the latest reading on that air sample was 7 percent oxygen, and 33 parts per million carbon monoxide.

The No. 2 bore hole, we're using that now to pump compressed air into the mine. Approximately 9,000 cubic feet per minute is being directed down that bore hole into the mine.

The No. 3 bore hole, that's where we made the most recent video recordings last night. We're now drawing air samples out of that hole. We have a 1.25 inch threaded pipe from the surface all the way down to the mine.

And the most recent air analysis was 16.8 percent oxygen and 21 parts per million carbon monoxide coming out of No. 3 hole.

We're in the process of getting ready to start drilling the No. 4 bore hole. They've been working early this morning, moving the drill rig to that location and getting it set in place, and it should be drilling very soon.

As far as the underground rehabilitation work in No. 1 entry, we've advanced a total of 826 feet. That work continues to be slow. We're working hard with the mine operator to refine plans and do everything we can to accelerate that work but, at the same time, provide for the safety of the rescue workers.

And with that, I'm going to turn it over to Mr. Murray for comments.

BOB MURRAY, CEO, MURRAY ENERGY: I would say our report this morning is both good and bad. On the bad side, we have not recovered our fellow miners. We have not for certain located them.

The underground effort is going disappointingly slow. I just left a meeting with my entire staff who's heading up that effort.

We had seismic activity just now that stopped the advancement again, just five minutes before I came down the mountain. We had seismic activity last night at 9. When that happens, that stops our recovery. We must start again.

At 9 p.m. last night, about half of the continuous miner was covered up by rib outbursts as we advanced. This one that just happened was small, and we're back in -- going to be back in operations shortly.

The morale of the rescue teams is exceptionally good, and I'm pleased to tell you that. I've got many times more management and people up there than we need, which is getting everybody relief, and the morale is very, very good.

But I'm so sorry, ladies and gentlemen, to tell these families that we're not making better progress underground. And it's strictly due to the fact that the mountain is still alive, and the mountain is not allowing us to advance as rapidly as we would like to.

The families, we have been at a meeting with them. They're doing marvelously. As I said before, their strength comes from their faith, and I tell you, folks, that they're giving me strength at this time, as strong as they are. We're trying to meet their every need and have been, and I'm so proud of them.

We showed them a movie this morning, which I'm going to show you. Now, this movie is much longer, and I asked the MIS team to bring it down to seven minutes. It shows you what we saw with the second camera in the No. 3 bore hole.

You will see the open cavity in there. That's part of the good news, and if you heard Mr. Stickler say, the oxygen readings are 15.8 to 16.9. That will sustain life very easily. You may have -- your heart rate may pick up a little bit, and you may slow down a little bit, but that will sustain life indefinitely.

And so if the men did go to this area that's open, the air is there, the water is there. Everything is there to sustain them indefinitely until we get to them. If they did it. We just don't know that.

And that's why we're drilling the fourth hole right now at the location. It's being set up on hole 143. It will go into 142, because we think that, if they barricaded themselves, it's more likely that we would like to intercept the coal seam at 142, but we're setting up on 143.

So at this time, I'll play the tape, and then Mr. Stickler and I can answer any questions that you have.

Again, the good -- the bad news is we haven't found them and we haven't recovered them. The good news is we have found a cavity where they could be alive and -- if they went there. And the families are holding up very, very well.

The seismic activity underground has been just relentless. And the mountain is still alive. The mountain is still moving. And we cannot endanger the rescue workers as we drive towards these trapped miners, for whom I take total responsibility.

I'm no more important in this organization than they are. I have my job to do in the company -- sell the coal, get the financing -- but I don't mine a pound of coal. I physically couldn't anymore, and these men mine all the coal. And I'm no more important than they are, because we've been a team, and it's totally important to rescue them.

Go ahead and play the tape, please. We'll answer your questions after we play the tape, please.

UNIDENTIFIED MALE: Bob, is this from the third portal?

MURRAY: This is from the third hole, sir. This is water pouring down. You can see the wire mesh. We didn't give you all of it down the hole when we -- when we beam it up to your satellite for you, to use on your networks, it will be much longer.

But we -- you can see the cavities in here. These are posts that supported the cavity. These are wire mesh roof supports. You can see roof bolts. You can see -- now all of this is water flowing down the hole, but you can see the cavity is open.

And as Mr. Stickler has reported, there are 16 -- 15, 16 percent, almost 17 percent oxygen in there. Almost to normal atmosphere.

There's some cables, power cables that were in the hole. You can see the posts. You can see that there's been no roof fall. There's been no outburst of the ribs. You can see that for yourself. The cavity has not been damaged by the seismic activity.

UNIDENTIFIED MALE: Are we looking down the entry, rather than the prospect?

MURRAY: You're looking down the bore hole horizontally off of the bottom of the bore hole.

UNIDENTIFIED MALE: Into the entry?

MURRAY: Into the entry, 360 degrees from the camera that went down the bore hole. It's looking out 360 degrees.

UNIDENTIFIED MALE: Can you see the cord (ph) from anywhere? The cord (ph), safety (cord)?

MURRAY: No. That was in another picture, sir. It's not in this one.

UNIDENTIFIED MALE: How many (UNINTELLIGIBLE) from the other hole?

MURRAY: I don't know. Richard or Robbie (ph), I'd say we're probably seeing 30 feet there, maybe 40.

UNIDENTIFIED MALE: Are you saying -- are you saying we're not going to see this curtain in this video?

MURRAY: That's right.

UNIDENTIFIED MALE: But it was -- the curtain video was taken, the same hole, the same place?

MURRAY: Yes, at an earlier time there was a curtain. I haven't seen one.

UNIDENTIFIED MALE: The curtain was taken in the No. 2 bore hole.

MURRAY: No. 2 bore hole.

UNIDENTIFIED MALE: It looks like a lot of water is coming in? Can you address that?

MURRAY: That's water IS coming down the bore hole. That's not water flowing in the mine naturally. That's from our activity drilling into the mine. We use water in the drilling process. That's how we get down there and pump the cuttings back up. So now the water is flowing down the hole, all from the drilling.

UNIDENTIFIED MALE: Could you clarify, the curtain, you didn't see the curtain?

MURRAY: No. There is no curtain here, but there's no significance to that either.

UNIDENTIFIED MALE: But I thought you'd said that you saw a curtain in bore hole No. 3? Now you're saying you actually saw it...

MURRAY: Bore hole No. 2 is what he just said.

UNIDENTIFIED MALE: That's in another chamber.

MURRAY: That's at another bore hole location. What we saw in this No. 3 is what you see. Posts, the roof support. The cavity is open, no rib outbursts. And Mr. Stickler has reported that it's 15 to 16 percent air. Oxygen.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) the sounds that you've heard? Water?

MURRAY: Those sounds could have been anything, and we've said that from the beginning. Anything from water to somebody walking on the surface to an animal to thunder, which was going on at the same time yesterday. It could be anything.

UNIDENTIFIED FEMALE: Have you picked up any other sounds since yesterday?

MURRAY: No.

UNIDENTIFIED MALE: Besides the water coming down the hole, were you able to determine if there was water there before?

MURRAY: We know there would have been water there. We can't tell from this. But we know there had been water -- there would be water to drink there. And it's all potable water. That's important.

UNIDENTIFIED MALE: How large is this cavity?

MURRAY: You can see maybe 30, 40 feet, 360 degrees here. The cavity's much larger. We just don't know how far it extends, because the light disappears down the entry.

UNIDENTIFIED MALE: Bob if the fourth drill comes up with nothing as the previous ones have come up, what is the next step? Where do you go from here?

MURRAY: As we've said on the drilling, the purpose of the drilling is to try to locate the miners and then keep them alive until the underground rescue can get to them.

What we find on No. 4 hole, and we'll be setting the collar on that hole within the hour, we had some difficulty last night due to the rains. We had -- and the steep mountainside. We had a lot of landslides. And with that big, heavy rig, we couldn't endanger the drillers through the night. So we had to wait until daybreak to continue to set the drill. And it will be setting the collar within the hour.

Now, that hole, we had told you from preliminary estimates, will be 1,717 feet. It's going to be 1,586 feet. We didn't tell you that before. Fifteen eighty-six, hole No. 4 will be 1586. See, we do our preliminary engineering, and then we do our final engineering. We just had the final depth at about 7 a.m. this morning, 1586.

We'll be guided, sir, for the fifth hole, if there is one, based on what we find in fourth hole.

Very honestly, as Mr. Stickler said, it's a priority basis. I perhaps very crudely call it trial and error. But that's basically what it is. We're guided by what we find as to where we think the miners might be and put the next hole there. And we do that often. The last hole we drilled and the holes before that.

Underground, not so. We've been on the same plan from the beginning for nine days, ten days. We've sought advice on that plan from virtually every expert in the country, inside government universities, in private sector, and they all agree us with. Our original plan was the right one, stay on it, and that's what we've been doing.

But the seismic activity keeps slowing us down, and it's just going disappointingly slow.

UNIDENTIFIED MALE: Mr. Murray, in the last video, the last bore hole, the No. 2 bore hole, there were signs of tools and other equipment. Any signs of tools or anything left in there?

MURRAY: I don't see them there. And what you saw in the last video were belt slices for conveyer belts. They were hanging in a bag on a post. That is the only tools you saw.

UNIDENTIFIED FEMALE: How long do you think it will take to get through on bore hole No. 4?

MURRAY: Two days. Now, they've been getting better on every hole. Could be as short as a day and a half. But let's figure on two days. UNIDENTIFIED MALE: And the underground effort, any idea how long it will take?

MURRAY: Well, we've only gone 826 feet, in, what, nine days? We took a day to mobilize or so. Got 1,200 feet to go.

But I still believe that if the seismic activity will give us a chance, we should proceed about double the rate we have been, to triple that rate.

These new additional managers that I brought in the last two days, having 500 years of mining experience among them, is -- is going to help in providing instant communication underground, so that we don't miss -- don't miss a beat, if you will. That our -- our progress is as efficient as it possibly can be.

We've got management stationed all the way up and down the recovery area. They're on -- they communicate with radios and telephones. And we're -- we're trying hard not to let a minute -- lose a minute in the recovery effort.

LEMON: All right. You're listening to Bob Murray, the co-owner of the Crandall Canyon mine, explaining what they're doing now. Still pumping 9,000 cubic feet of air into that.

He finally explained that water that you see there. Of course, if you know anything about drilling, they use water in the drilling process to keep that drill bit cool.

Bad news, he says, they haven't gotten to these six missing miners. The good news, the good news, and you're looking at this new video that they're showing now at the press conference. The good news is there's a cavity there which is believed to have enough water, and the oxygen levels should be fine enough for survivors.

And of course, we heard yesterday that they've heard something. They heard at least some motion or sound for about a couple of minutes but haven't heard anything else.

We're going to continue to follow this developing story, right here in the CNN NEWSROOM.

PHILLIPS: Just getting in some new video right now from one of our affiliates out of Texas, KPRC. Now I'm being told it's live pictures. Here you go.

What you are seeing are the after affects from Tropical Depression Erin. High waters there in Houston, Texas. One of our affiliates has a chopper up in the air, showing just tough conditions to get through there on Interstate 640. Obviously, some of the cars getting stuck.

We'll follow what's happening there. And we're also going to have another update on Hurricane Dean. Chad Myers is following all the severe weather for us throughout the nation.

We're going to take a quick break. More from the CNN NEWSROOM, straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Continuing to track those live pictures from our affiliate out of Houston, Texas, KPRC, coming from their helicopter there. This is water pumping out, obviously, of a dam right close to Interstate 640, where high waters are the result of Tropical Depression Erin that has hit that state. It's a tough time for drivers right now as they're trying to get through certain areas, some of them flooded out.

(WEATHER REPORT)

LEMON: We're following the weather. We're also following a developing story, the Jose Padilla trial, and also the markets, what's happening on Wall Street. As I said, the verdict is due shortly in the case of Jose Padilla, on trial in Miami, on charges of supporting terror groups. And we learned just a short time ago that a verdict is in. It is to be read to the federal judge at 2:00 p.m. Eastern.

And here's a closer look at Jose Padilla and the events that led up to today. Our reporter now, Susan Candiotti.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): Building the case against Brooklyn-born Jose Padilla took five long years. At first the Bush administration called a dirty bomber, who wanted to set off radioactive bombs again fellow Americans.

In 2002, he was declared a military enemy combatant and held for 3 1/2 years in a Navy brig. During that time, Padilla claims he was tortured and drugged under intense interrogations. The government denies it. Then Padilla was flown by the military to Miami, where the case against him began in a civilian court. The Justice Department never charged him with being a dirty bomber. Instead, they added Padilla to another ongoing case, accusing him and two others with conspiring to commit murder overseas, and providing material support to Islamic extremist groups. Padilla has pleaded not guilty.

The strongest evidence against Padilla might be his fingerprints on a mujahdeen form obtained by the CIA. The defense claims the prints are only the first page, and argue Padilla did not fill out the form.

KENDALL COFFEY, FMR. U.S. ATTY.: It's not a huge amount of sizzling direct stuff against Jose Padilla, but plenty of alleged conspirators', hearsay testimony, that in many cases are enough to secure conviction.

CANDIOTTI: Over defense objections, jurors were allowed to hear a rare exclusive CNN interview with Osama bin Laden, shot before September 11th.

OSAMA BIN LADEN (through translator): We declared a jihad, a holy war, against the United States government, because it is unjust, criminal and tyrannical.

CANDIOTTI: Frank Rubino is a criminal defense attorney.

FRANK RUBINO, CRIMINAL DEFENSE ATTY.: Legally, it's not evidence against the defendant, but wow, it's an absolutely wonderful way to smear him and convict him for something he can't defend himself about. They walk into that courtroom clothed with a presumption of guilt. That's not the law, but that's the real world.

CANDIOTTI: Prosecutors labeled Padilla as the star recruit of a U.S. terror cell. The government played what it claims are coded telephone conversations between Padilla and one of his codefendants.

JOSE PADILLA: There was a rumor here the door was open somewhere. I wrote a letter telling her to tell my mom to send me an Army jacket, a book bag and a sleeping bag.

CANDIOTTI: In closing arguments, Padilla's lawyers argued he never spoke code. His voice is heard on only seven of 300,000 taped conversations. Padilla's defense team did not call any witnesses. They claim Padilla went overseas to study Islam, not to murder.

(END VIDEOTAPE)

LEMON: And that was Susan Candiotti reporting. She's in Florida, and she will be on top of this verdict when it's expected at 2:00 p.m. Eastern. We'll bring it to you live right here in the CNN NEWSROOM.

(NEWSBREAK)

PHILLIPS: Politicians and the public can talk about the war all they want. But for soldiers in Iraq, the mission doesn't stop. We're going to get details on one of the newest offensives, Operation Lightning Hammer.

LEMON: Plus this, A desperately ill woman in desperate financial straits. You'll be stunned to hear what happened next.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: Live pictures now right into the CNN NEWSROOM. We're looking at a rescue here. It was right there. What looked like a river. We don't have control of this helicopter picture. But we'll try to roll that tape back for you. This is -- there it is, KPRC Houston.

Kyra, you spoke with Chad just a bit ago with the tropical depression and all the water that it's bringing. Houston, very flat. Doesn't run off quickly.

PHILLIPS: That's right, Erin. You're seeing the leftovers of what that tropical storm that turned into a depression once it hit land, Erin, causing this kind of destruction. As you can see, it's hard for the elderly and the older folks when they got trapped into waters.

This is I-640 there that goes through Houston, Texas. These pictures coming to us from our affiliate KPRC. And this is isn't the first rescue that's had to be made. These are actually other drivers that have gotten out to try to help folks as cars have gotten stranded there in the flooding conditions. But high water throughout many parts of that city, and of course Chad Myers is following all these conditions across the nation. Particularly in Texas, as we're starting to see the after-effects of what's happened.

LEMON': Look at the traffic and look at al of that. We're looking at live pictures again, and folks trying to drive through this.

And I'm sure if Chad is listening, he'll tell you, you should never try to drive through these areas. And of course sometimes when you flash flooding like this, you really can't avoid out on the roads.

Look at these live pictures here, Chad and Kyra, and it's obviously dark, and just from that spinning satellite that we saw there, it looks like it's just getting off -- there it is -- looks like it's just getting off the coast of Texas, right near Louisiana.

(WEATHER REPORT)

(NEWSBREAK)

PHILLIPS: Unable to care for his seriously ill wife, a Kansas city man accused of doing the unthinkable. Police say that he threw his wife off a balcony to her death.

Reporter Craig Nugrell (ph) of CNN affiliate KCTV on the scene just moments after the incident.

(BEGIN VIDEOTAPE)

CRAIG NUGRELL (ph), KCTV REPORTER: This was the scene outside the Plaza Point apartment complex, a woman dead on the concrete after plummeting from a fourth-floor balcony. Prosecutors say it was murder.

UNIDENTIFIED MALE: It's tragic, and that's not typical here.

NUGRELL: This is video we shot moments after the tragic death. That's her husband on the stretcher being taken to the hospital. He appeared to be somewhat dazed. Police identified him as 51-year-old Stanley Reimer (ph). Investigators became suspicious of Reimer when he initially told them something bad happened to his wife.

Later, police got a call from the deceased woman's caregiver, who told them the woman had health issues that affected her brain and legs, that she could barely walk, that she couldn't possibly climb over the railing on the balcony.

After that call, police say they questioned Stanley Reimer, and they say he told them he was in financial difficulties because of his wife's medical conditions, that he walked to his wife to the balcony, kissed her, picked her up, and threw her off. This woman lives on the same floor. She asked that we not show her face.

UNIDENTIFIED FEMALE: That's not an excuse.

UNIDENTIFIED MALE: Meaning.

UNIDENTIFIED FEMALE: That not an excuse to commit a crime. I mean, having financial difficulties is no excuse to commit a crime and kill somebody.

(END VIDEOTAPE)

PHILLIPS: The husband, Stanley Reimer, is being charged now with second-degree murder.

LEMON: New Iraq combat operations in the air and on the ground. The target -- insurgents and their weapons. We're live with an army General who is right there. That's coming up, in the CNN NEWSROOM.

(COMMERCIAL BREAK)

LEMON: Well, of course, the market turmoil today. Let's get a look at the Big Board. The stock market is down in triple digits. I won't even bother with the numbers, because our Susan Lisovicz is going to be here in just a bit. She's going to give us an update on the numbers. She'll also speak to a trader on the floor about what's behind these negative numbers.

COLLINS: The fight for Iraq. U.S. and Iraqi forces set several new operations in line this week. They're targeting not only insurgents, but the flow of bombs, and weapons and supplies that keep them in business.

It's also a time when we're hearing words from U.S. generals we've rarely heard, words like "genocide" and "ethnic cleansing."

Brigadier General Mick Bednarek is the deputy commander of the Multi-National Division North. He joins me now from Baquba.

General, thanks for being with us. Tell us about Operation Lightning Hammer and what you've been able to establish.

BRIG. GEN. MICK BEDNAREK, DEP. CMDR., MULTI-NATL. DIVISION-NORTH: Yes, Kyra, thanks.

Lightning Hammer is ongoing. We started this approximately three days ago. It's part of a larger Multi-National Core Iraq in Phantom Strike, where we are maximizing our surge forces across the country. Specifically, in Lightning Hammer, in the Diyala River Valley, and other areas, focusing against al Qaeda.

PHILLIPS: I was able to look at video of you there, meeting with villagers and talking to the locals, something that's proved extremely important in this fight in Iraq. What did they tell you? How did you quell their fears? And are they getting involved in the fight to fight fundamentalists that are tied to al Qaeda?

BEDNAREK: Yes, Kyra, that has been one of the significant successes, not only of Lightning Hammer that's ongoing now, but Arrowhead Ripper that was a preceding operation the past several months here in Diyala Province and in the city of Baquba, which is the provincial capital.

And you're exactly right. Getting the tribes, the tribal sheiks, the local citizens involved and engaged, and part of their own security is making a huge difference. They are ready to fight back. They're sick and tired of al Qaeda. They don't want it anymore. They've seen the horrific acts of violence, even as highlighted two days ago in Nineveh Province, but this is making a difference for Lightning Hammer.

PHILLIPS: And as you know, General Petraeus came forward saying that's what was working in al Anbar Province was the fact that these tribal leaders were picking up arms, fighting al Qaeda instead of targeting U.S. troops. So, is this a sign that it's working now in other areas, including where you are commanding?

BEDNAREK: Yes, it is. We have had several significant tribal engagements with the -- the paramount (ph) sheiks in many of the areas here in Diyala Province and across Multi-National Division North.

What we're talking about here is where you have a significant number of different tribes coming together and agreeing to stop the violence, stop the tribal infighting, the sectarianism, and also deciding to be a part of the legitimate government. The provincial government support to the Iraqi security forces, both the police and army. Clearly a strong vote of confidence of the way ahead in the future for the country.

PHILLIPS: General, we also heard from General Ben Mixon yesterday, it was in response to that horrendous set of bombings in northern Iraq. Possibly up to 500 people dead, it's back and forth on the numbers right now. But he basically came forward and said look, this is Islamic fundamentalists, tied to al Qaeda, bottomline, ethnic cleansing. Let's take a listen to what he said.

(BEGIN VIDEO CLIP)

MAJ. GEN. BENJAMIN MIXON, CMDR., MULTI-NATL. DIVISION NORTH: This is an act of ethnic cleansing, if you will, almost genocide, when you consider the fact of the target they attacked, and the fact that these Yazadis are really out in a very remote part of Nineveh Province where there is very little security and really, no security required up until this point.

(END VIDEO CLIP)

PHILLIPS: Sir, is that what you're seeing as well along with General Mixon, genocide and actual ethnic cleansing in these areas?

BEDNAREK: Yes, let me give you an update, Kyra, as to that horrific act of terrible violence at the hands of al Qaeda. The Yazadis up in the very remote areas in western Nineveh Province, relatively peaceful area, very, very remote as I've highlighted, and you're exactly correct.

The numbers of casualties will continue to ebb and flow in the days ahead. Our current estimates as of a couple of hours ago, 212 killed, approximately 650 wounded. Of that number specifically, a vast majority, approximately 400 very minor treatments of cuts, bruises, et cetera.

But the focus and the point is, again, another despicable act of violence, targeting directly to the Yazidis, which is a people, an ethnic group there, only about 100,000 or so in the western Nineveh Province, that very much stays to their own in that area.

But here's some good news, and I want to highlight this because this is very important. Significant of what has happened, the government of Iraq has stepped forward. Today, we had the Deputy Prime Minister, Boram Salah (ph), visit that region, along with Minister of Interior and the Minister of Health in the past day, to provide for the people, to reassure them that they are there to assist them, to include the provincial governor, Governor Kasmulah (ph), and the mayor in the area, bringing hope to the people and know that they are not alone in this tough fight.

PHILLIPS: Well, you got quite a tough fight on your hands, and we'll follow it.

Brigadier General Mick Bednarek, thank you so much for your time, sir.

LEMON: All right, two developing stories we want to bring you here in the CNN NEWSROOM. First off, we want to take you to Florida. This is a look at the federal courthouse where Jose Padilla, the verdict is expected to be read at the top of the hour in just about five minutes.

Our Susan Candiotti is on it. That's pictures there, you're looking at Jose Padilla in custody for three years before this was coming to trial. So we should find out that verdict is very shortly.

Also, more from Texas, those floodwaters that have taken over a big part of the city there. You're looking at live pictures from the interstate, and just look at the traffic and all the water.

More coming up, CNN NEWSROOM. You are watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Boy, tough day for Texans if they're heading out to work or whatever they wanted to head out to this afternoon. You can see here, the flooding around I-610 there in Houston. These pictures coming to us from our affiliate KTRK. Helicopter tracking it at the highway and outside roads, as you can see, flooded out those high waters from that Tropical Storm Erin which, once it hit landfall, became a depression, but not an easy day for travelers. Already, we've seen a lot of people get stranded there on the roads.

LEMON: Yes, we saw a rescue earlier here in the CNN NEWSROOM. Folks trying to drive through this water. And I'm not sure, Chad, if they -- were they trying to drive through it or did this pop up all of a sudden, they were stuck there in the middle of the road?

CHAD MYERS, AMS METEOROLOGIST: Yes, the rain started about 9:00, 9:30. Loop 610 was just -- just became a mess right away. These areas here, I'm kind of looking at some of the latest radars out of Houston and downtown Houston, now. I'm seeing some numbers approaching eight inches in about four to five hours. University Place as well -- Kyra?

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