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More Freezing Rain for Midwest; CIA Tapes Controversy; Fed Lowers Key Interest Rate Quarter Point

Aired December 11, 2007 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Well, the ice is everywhere -- on the roads, in the trees and on power lines. Schools and businesses are closed across the Midwest, and so are some airports. At least 22 deaths are blamed on this huge ice storm that extends all the way to Illinois.
A third of Oklahoma is without electricity. President Bush has declared an emergency in every county in that state and put FEMA in charge of disaster relief.

It's been hard, if not impossible, to get around parts of Missouri, too. Our Jacqui Jeras is in Kansas City, where the icy conditions could get even dicier.

(BEGIN VIDEOTAPE)

JACQUI JERAS, CNN METEOROLOGIST: It's been an ugly day here in Kansas City, Missouri, with freezing rain last night all through this morning. A period of rain had settled in, and now as temperatures drop tonight more ice is expected.

You can see the accumulation. Everything has been on elevated surfaces. We've got a quarter of an inch or so of ice which is on the sidewalks, which is on the tree branches, on the power lines, causing them to sag and bringing power out to tens of thousands of people here in the Kansas City metro area.

The big concern now, as the winds pick up and the temperatures drop tonight, we could see as much as an additional quarter of an inch of ice. And then with the winds picking up as strong as 20 miles per hour, more power outages concern.

On top of that, look at the roadways here. The streets here have really filled up with water. Temperatures down to 21. It's going to freeze all of that tonight and make travel extremely hazardous.

Much of Missouri is dealing with the grips of this ice storm. Up to the north we're dealing with bigger problems on the north side of the Kansas City metro, where temperatures have been 32 to 31 degrees, so the ice has been heavier there.

Also trying to travel around at the airport. Big problems there. A few flights have made it in and out, but more than 100 have been cancelled.

I'm Jacqui Jeras for CNN, in Kansas City, Missouri. (END VIDEOTAPE)

(WEATHER REPORT)

PHILLIPS: Well, shattered lives and shattered glass, bullet holes and a frightening picture. It's still coming into focus for us of the gunman who killed four people at a church and a missionary traing center in Colorado. Police are still trying to figure out why Matthew Murray carried out Sunday's shooting spree, and the church is trying to move beyond those terrifying moments.

These comments from the pastor just a short time ago.

(BEGIN VIDEO CLIP)

REV. BRADY BOYD, NEW LIFE CHURCH: But the reality is we live in a world that's filled with evil and violence. And we need to be prepared for it.

We can't bury our head in the sand and say that violence and evil will never come on our campus just because we're a church. We have to assume that we're going to be a target and prevent it every way we can. To live with wisdom and prudence, but not be fearful.

We will not live in fear at New Life Church. We're not going to get here -- come here on Sunday looking over our shoulders wondering if we're going to be attacked. We're going to come here and be a people of faith and trust God to protect us

(END VIDEO CLIP)

PHILLIPS: Five people were also wounded in Sunday's attack.

Jeanne Assam is the volunteer security guard who probably prevented a much bigger tragedy. She shot Matthew Murray as he shot up the New Life Church in Colorado Springs. The day after she talked about those terrifying moments.

(BEGIN VIDEO CLIP)

JEANNE ASSAM, CHURCH SECURITY GUARD: This has got to be God because he's -- because of the firepower that he had versus what I had, was God. And I did not run away and I didn't think for a minute to run away.

I just knew that I was given the assignment to end this before it got too much worse, and I just prayed for the Holy Spirit to guide me. I just said, "Holy Spirit be with me." My hands weren't even shaking.

I have been on patrol before and had many calls with weapons, but I've never had a situation where it was so loud and it was inside a large building. And it was scary. I'll tell you, it was scary.

(END VIDEO CLIP)

PHILLIPS: Assam had experience on her side. She's a former law enforcement officer.

He didn't even work there at the time but now he's the boss. So CIA Director Michael Hayden is going before the Senate Intelligence Committee today in private to tell members why the agency destroyed tapes of controversial al Qaeda interrogations. It sparked an uproar on Capitol Hill and calls for an independent investigation now.

CNN's Brianna Keilar joins us live from Washington with more -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Hi there, Kyra.

This is a closed-door hearing, so we're not going to be allowed inside. But that certainly hasn't stopped members of the media and even some protesters behind me from showing up, awaiting the arrival of CIA Director Michael Hayden.

Now, Democratic and Republican congressional soldiers tell me that they're going to pepper him with questions during this hearing, like why were these tapes destroyed? Who made the decision to destroy them? And then who was told about it and who was left out of the loop? We're also told he's going to be asked if these tapes were destroyed to bury evidence of possibly illegal interrogation tactics.

Now, at this point, as you may recall back when this story broke last week, Hayden said that before these tapes were destroyed in November of 2005, the CIA informed leaders of congressional oversight committees about their plan. Well, Democratic -- some Democratic and Republican leaders of those committees say that's not true, and that's why there's a discrepancy here. And it would be very interesting to be a fly on the wall in this hearing. The first hearing on this topic of the destruction of the CIA tapes -- Kyra.

PHILLIPS: Well, there's also been some talk of, well, calling for a special counsel to investigate this, right? But is that a widespread call on Capitol Hill?

KEILAR: Not really. This is something that we've heard from Senator Joe Biden. We're certainly not hearing it from the Republican side. And even many Democrats indicating that Biden certainly isn't speaking for them at this point.

At this point, eyes are on Senate Majority Leader Harry Reid, looking to see just how far he goes in putting this under the microscope. And this morning on the floor, on the Senate floor, he stopped short of calling for special counsel, of calling for that investigation that's independent of Congress and the White House -- Kyra.

PHILLIPS: All right. Brianna Keilar, we'll continue to follow it with you throughout the afternoon.

And a former CIA interrogator calling criticizing the decision to destroy those tapes. John Kiriakou says that they had value -- well, they had value on both as possible evidence -- value that there was evidence, rather, in the future terror probes, and it was as a historical record to do that.

On CNN's "AMERICAN MORNING," Kiriakou also talked about the use of waterboarding on al Qaeda suspects. While he now feels it is torture, he recalled getting some useful intel from one of al Qaeda figures.

(BEGIN VIDEO CLIP)

JOHN KIRIAKOU, FMR. CIA AGENT: The information that he provided was vetted and it was corroborated, so we were able to point to specific cases where we were able to disrupt terrorist attacks based solely on the information that he provided.

JOHN ROBERTS, CNN ANCHOR: Yes. So how valuable was the information that the CIA gleaned through waterboarding?

KIRIAKOU: I have no doubt that the information gleaned from Abu Zubaydah in those early days stopped terrorist attacks and saved lives.

ROBERTS: Did it also lead you to other suspects?

KIRIAKOU: It did. It did, indeed. He talked a lot about al Qaeda's leadership structure and mentioned people who we really didn't have any familiarization with, told us, you know, who we should be thinking about, who we should be looking at, who was important within the organization.

(END VIDEO CLIP)

PHILLIPS: Kiriakou said that he himself was waterboarded as part of a training exercise but he never used it on any suspects that he questioned.

Smoke, rubble, death and devastation. Dozens of people are feared dead in what's believed to be twin car bombings in Algeria's capital. And the interior minister is now blaming an al Qaeda-linked group.

The blast struck U.N. and Algerian government buildings, including the offices of the U.N. high commissioner for refugees. There are reports that more than 60 people are dead, including at least five U.N. staffers.

(BEGIN VIDEO CLIP)

RON REDMOND, SPOKESMAN, UNHCR: It's absolutely incomprehensible to us for the U.N. in general and for UNHCR to be targeted in such a blast. It's just outrageous. UNHCR makes itself available to the poorest of the poor, to refugees, to people who have been victims of violence and persecution and victims of terror. That's our job, is to help these victims.

(END VIDEO CLIP)

PHILLIPS: At least 14 other U.N. staffers are still missing. Your mortgage, your credit cards, having trouble paying them off? Well, the Fed might make it easier for you just minutes from now.

And she's a political pioneer. She has the president's ear. Now we're learning some undiplomatic details about Condi Rice.

A single dad raising triplets, but thanks to you he doesn't feel completely alone.

You're live in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Slicing and dicing at the Fed. We're expecting important money news for you any moment now. For the third time this year, Federal Reserve chairman Ben Bernanke is posed to slash a key interest rate.

Stephanie Elam and Ali Velshi watching the markets for us.

What do you think, guys? It's supposed to happen any second now.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, we actually have a few seconds to go here before we get the numbers out. It's widely expected that we're going to get a quarter of a percentage point, but there were some people holding out, hoping that we might actually get 50 basis points, so half a percentage point cut here. So we'll be looking for that.

I can give you some perspective. This whole process of cutting rates, it began back in September. September 18th was the time that we saw the rates cut for the first time in this -- in this current trend right now.

We're about flat compared to that against the Dow. The Dow at the time closed that day at 13,739. Right now we're at 13,763.

Interesting to note that in the last few minutes we've actually seen the Dow starting to move higher as we've been waiting to see what the Fed's report was going to be. We've been trading in this narrow range, dancing a little bit below the flat line -- a little bit above it. So seeing a little bit of a trend higher here as we get closer to this.

Now, the second rate cut came through on Halloween, and at that point -- we're now 200 points lower than we were on that time versus that day. So we're seeing a little bit of a change. But over the last two weeks we've gained 1,000 points, and that's interesting to note because a lot of it has to do with the speculation that we would see a rate cut coming today.

So we're still waiting to hear what's that going to say.

Ali, what are you seeing?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes, I think 25 is what we're going into this expecting, a quarter of a percentage point, but we've been wrong so many times on this one. We went in in September thinking it was a quarter and the Fed gave us a half a percent. Then we went in last time on October 31st thinking nothing and the Fed gave us a quarter.

At this point it doesn't make any difference to those people with debt. While it's a discount, you're not going to notice that discount. People are not going to the shopping malls right now. This is a big concern.

We are seeing more and more indications of the possibility that people stopped spending.

Let's take to back to Stephanie down on the floor of the New York Stock Exchange. I think she's got the news.

ELAM: Yes. Ali, we got a quarter point cut here, and this is affecting both the Fed Funds Rate and the discount rate. Both rates cut by a quarter percentage point. So that's going to take us down now to...

VELSHI: Beautiful. Beautiful. Thank you.

ELAM: ... to 4.25 percent here, for the Fed Funds Rate. We've seen already the Dow slipping now negative. The Dow off 39 points, 13,687, off about a third of a percent.

They're saying that they see a slowing of an economy here, and the intensification of the mortgage crisis also affecting these numbers here. So obviously it looks like the markets were hoping for a larger cut here, but also taking a look at these notes and seeing that the mortgage issue, also inflation, which is the Fed's main concern, is still something that they are monitoring here. And this is weighing on those comments and that's why we're seeing the markets tank -- Ali.

VELSHI: Yes, it's remarkable. We've been watching that market all day, Stephanie. You and I have been joking about the fact that we haven't seen that tight a range on the stock market for a long time because nobody wanted to be surprised again. And there's something in that statement that is causing investors to say this is not a good sign. This is not what markets wanted to hear.

They knew the cut was coming, so you'd think that the markets would celebrate that a little bit. The fact that you're seeing that market sell off now, Stephanie will tell you this is early trading. You never really want to judge based on the first couple of minutes, but something in there about the Fed saying that they are concerned about the economy is what is causing this market to be uncertain.

At this point we have Morgan Stanley and Merrill Lynch saying we're going to hit a recession next year. And there's some calculation of the economic data that's out there that actually says that we've got negative growth right now in the fourth quarter. That's the kind of stuff that gets that recession talk going. So what you're seeing right now is a market that is not satisfied with what the Federal Reserve has said about the economy, and that's why you're seeing this moving the other way

ELAM: Yes. And Ali, this is also just coming out. It was not a unanimous vote this go-around. One person actually wanted a half a percentage basis point cut there.

VELSHI: Yes.

ELAM: So this is showing that there was a little bit of a disagreement on how bad the situation actually was.

Take a look at what we've seen over the last couple of months. I mean, in September, it was a half a percentage basis point cut that we saw there. October, a quarter. So there's been a little bit of movement around on how this has been affecting it, and overall some also worried about what this is going to do to the dollar, whether or not if the rate cut coming through again is going to make the dollar weaker and that could raise inflation concerns as far as things like oil.

VELSHI: Right.

The issue here, Stephanie and Kyra, is what exactly are people going to do with their money based on the information they have got here? Recessions are caused when businesses don't spend money, when consumers don't spend money and don't go out there.

Do you think your future is brighter than it looks right now? Because if you do, you'll go and you'll take more credit. You'll refinance your house. You'll go on with your plans.

If you think that there's a big storm cloud gathering, you're going to pull back. And when you pull back, stores don't sell goods, they don't hire more people, there aren't more people out there shopping. And that's the kind of stuff that slows the economy down.

You've still got those high oil prices. Stephanie, we've seen oil jump more than $2 today. So at the moment -- now, you see that market? It's starting to come back

ELAM: It's starting to come back, exactly.

VELSHI: So people are reading it and trying to make sense of it, but for now this doesn't seem like a cure-all. The Fed concerned

ELAM: And I still think that a lot of it here, people are bouncing out the economics. As we've seen with the jobs report recently, it wasn't that bad, it was better than expected. Sure, we saw a slowing of jobs, but still we're seeing here that there's more to come out of this report since now the markets are starting to come back a little bit. But still down 57 points -- Kyra.

PHILLIPS: Guys, I think we just don't want to see any more foreclosures. You know, we'll deal with our mortgages, we want to pay off our credit cards.

Bottom line?

VELSHI: There will be a lot more, unfortunately, one way or the other.

PHILLIPS: Yes.

All right. Stephanie Elam and Ali Velshi, appreciate it. Thanks, guys.

VELSHI: OK.

ELAM: Thanks.

PHILLIPS: So long saggy, bye-bye baggy. Atlanta's school board tells students, see ya.

(NEWSBREAK)

(COMMERCIAL BREAK)

PHILLIPS: 2:30 Eastern time, here are three stories we're working on in the CNN NEWSROOM. It's the news Wall Street -- that wanted to hear. Just minutes ago, the federal reserve cut interest rates by a quarter percentage point. It's the third cut in recent months and comes amid a continuing mortgage crisis and credit crunch. And the federal reserve statement says that economic growth is slowing which is probably why we're seeing that drop on the big board right now. The Dow Industrial is down 159 points.

At least three states under a state of emergency right now as a massive ice storm has frozen out a big chunk of the nation. Hundreds of thousands of people are without power.

Workers are now sifting through the rubble-filled streets of Algeria's capital where dozens of people are feared dead after two suspected car bombs struck government and U.N. buildings. Algeria's interior minister blames an al Qaeda-linked group.

Wall Street is reacting to the Fed's decision to cut a key interest rate, just minutes ago. The cut may help some homeowners in danger of defaulting on their mortgages. Already the White House has brokered a voluntary pledge among some lenders to freeze some loans due to the reset next year. We wondered what you think. A new CNN opinion research poll found 51 percent in favor of some kind of help for subprime borrowers, 46 percent oppose it. And do you think that people who are defaulting on their mortgages are victims of predatory lending practices? Forty-six percent of you say yes, but more than half say it's their own fault.

The Fed, no doubt, hopes that today's rate cut puts the brakes on the skidding economy. But what about the mortgage meltdown? The government has set up this homeowner hotline number, 888-995-HOPE. Our Gerri Willis is looking into how it's working. She joins us now from New York. Hey Gerri.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey Kyra, good to see you. You know last week the president calling on people who were in trouble to call this hotline number for help. We heard that this hotline was really being overwhelmed, so we went and checked it out.

(BEGIN VIDEOTAPE)

MICHELLE DIMAURO: Thank you for calling 995-HOPE. My name is Michelle. How can I help you?

WILLIS: Michelle Dimauro's phone has been ringing constantly. She's a housing counselor with NOVADEBT, one of six non-profit agencies that handles calls to a national foreclosure hotline 888-995- HOPE. The hotline has been flooded with calls since President Bush mentioned it Thursday as part of a larger plan to help borrowers facing foreclosure.

DARLA KEEGAN, HOUSING SUPERVISOR, NOVADEBT: It has been overwhelming but we're doing it one day at a time. Our counselors have been fantastic, they are working overtime.

WILLIS: The Home Ownership Preservation Foundation, which runs the hotline, says it received 15,000 calls Thursday, ten times its usual number.

DIMAURO: Are you current on the mortgage right now?

WILLIS: Many callers have already missed mortgage payments, making them ineligible for President Bush's plan. Others are worried that they won't be able to make the payments when their loan's interest rate resets in the next few months. The foundation offers advice and helps homeowners work with their lenders to keep their homes.

Darla Keegan, a supervisor at NOVADEBT says the Bush plan won't necessarily be the new solution callers are looking for

KEEGAN: I don't know if the Bush plan is actually opening up anything new. This is something that we've just been doing for many years now.

WILLIS: While the government tries to work out a big fix for the problem, counselors like Dimauro keep working the phones trying to help mortgage holders deal with the situation they are in right now.

DIMAURO: Even if it's saving one person's home, it means the world to them. So it definitely makes a difference

...and see how we can assist you.

(END VIDEOTAPE)

PHILLIPS: Well, Gerri, has the hotline been able to keep up with all the calls?

WILLIS: They have had a lot of calls and wait times are certainly longer. The folks who run the hotline tell us, if you couldn't get through last week, try again this week because these folks are desperately trying to get to everybody. But I have to tell you, Kyra, it's a tough thing.

They have 180 people answering these lines right now. They'll be 250 by the end of the year. And the expectation is that rates on 2.3 million loans will reset next year. That's a lot of people ultimately who could call this phone line and it will be a struggle to serve all of them.

PHILLIPS: All right. Gerri Willis, thanks so much.

WILLIS: My pleasure.

PHILLIPS: Gerri covers the mortgage meltdown every week on OPEN HOUSE. Be sure to watch it Saturday at 9:30 Eastern right here, on CNN.

Revealing Rice. It's a new biography of the secretary of state. And it details what relationships worked and whom she had to fight the hardest for respect at the White House. We're going to talk with the author straight ahead in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Topping our political ticker, a surge by Mike Huckabee in his bid for the Republican presidential nomination. The latest CNN Opinion Research Corporation Poll shows the former Arkansas governor now trailing front-runner Rudy Giuliani by only two points. Republican hopeful Fred Thompson is pulling out of New Hampshire to focus on the Iowa caucuses. A new Mason Dixon poll of Republican primary voters shows the former senator from Tennessee in fifth place in New Hampshire.

A revelation from Bill Clinton as the former president campaigns for his wife in Iowa. He says he was so impressed by Hillary when the two started dating, that he told her she should dump him and focus on a political career of her own.

Time is winding down and the races are heating up. For the freshest polls, the latest fights, the political ticker and blog and more, check out cnnpolitics.com.

And this programming note to tell you about. CNN will have live coverage of the Des Moines register Iowa debate. The Republicans face off tomorrow at 2:00 p.m. Eastern, and the Democrats Thursday also at 2:00 p.m. Eastern.

As you know, we've been following these ice storms all over the country, specifically in states like Kansas. This is McPherson, Kansas this, video just in. You can actually see the cleaning up from the ice storm there and how -- well as you know about the thousands of people that went without power. Still crews out there trying to bring it back up for all the people in that area.

Chad Myers, I'll tell you what, this has not been an easy time in parts of the Midwest.

CHAD MYERS, AMS METEOROLOGIST: No. You're talking from Lawrence to Topeka to McPherson, all the way down to Hutchinson, it was just an ugly night last night. It just rained and it was 28 degrees. I even saw, Kyra, I saw a couple of events where there was thunder and lightning, less than 32 degrees happening there.

PHILLIPS: And that's triggered -- by the way I thought it was McPherson. I apologize, McPherson, right?

MYERS: What were you saying?

PHILLIPS: I said McPherson. It's McPherson?

MYERS: No, it's McPherson.

PHILLIPS: McPherson, Kansas. So I apologize to all those in McPherson.

MYERS: That's OK. I lived in Nebraska, I got all these names down.

PHILLIPS: When we talked to the...

MYERS: Look at that.

PHILLIPS: ...the mayors and the governors yesterday and all these various states, they were getting flooded, not only with 911 calls to police but to fire. This has been triggering fires throughout the state.

MYERS: We had reports of literally trees on fire. Because the trees, you now, they're dormant now. The sap is down in the bottom, they're still green obviously. But some of the trees that are green, that were dead in the first place, were leaning on the power lines, those power lines were sparking and those trees were catching on fire. And people were afraid that those trees were going to catch their homes on fire Kyra.

It literally was -- this is as bad of a scene as can I remember for a long time. The one worst obviously was one up into Canada, where actually all of the hydro lines, the big tension lines, the high tension power lines came down. But that was a longer term event. This is just a couple of days, and look what has happened to these -- the chainsaws are going to go forever here. The insurance and adjustors are going to be going.

The big thing right now today, is to make sure you keep yourself warm without risking a carbon monoxide poisoning in your home. Because we lose people all the time where they leave their oven on thinking it's OK and it's a gas oven. Well that natural gas will put carbon monoxide in the air. It's not made to heat your home. It's made to cook a turkey and you can't heat your entire home with a gas range. Just because it still works doesn't mean it's safe, Kyra

PHILLLIPS: All right, Chad Myers. We'll continue to talk with you but we've got developing news in right now about that shooter out of Colorado Springs, Colorado.

T.J. Holmes working the details for us over there on the national desk. I've got something, too, from our folks over here at CNN Wires and cnn.com about the coroner's office. Is that right T.J. ...

HOLMES: That is correct.

PHILLIPS: ...that report?

HOLMES: He killed himself is the word.

PHILLIPS: So the security guard didn't kill him? She got shots in him...

HOLMES: She got several shots in him, apparently, is the word from the coroner. Is that yes, that woman there, Jeanne Assam, that we've been hearing from, certainly being called a hero, and not to take away anything from her because she didn't fire the fatal shot. But she apparently hit him several times, Matthew Murray, but according to the coroner he fired the single shot and took his own life after she hit him multiple times and took him down.

Of course, Matthew Murray, the young man who killed four people at two different areas, one that mega-church out in Colorado and then another, a missionary training center as well, some 80 miles away. But there's the lady who has been called a hero. And again the coroner saying, yes, she did her job, she did a good job and she hit him several times and stopped him in his tracks. And still, Kyra, they are saying this could have gone on. So she still did her job and did a good job of stopping him, but still he was the one that fired the fatal blow or the fatal shot that took his own life according to the coroner, that young man Matthew Murray. So that's the word from the coroner today -- Kyra?

PHILLIPS: You got it. T.J. Holmes, appreciate it.

HOLMES: All right.

PHILLIPS: Scary sight for holiday shoppers yesterday at a New Jersey mall. An 18-year-old staggers in with a knife in his neck and collapses. Police say he was stabbed just outside one of the entrances. He lost a lot of blood but he is expected to survive. Cops arrested a suspect overnight and he's being charged with attempted murder.

And if you've got a kid in Atlanta public schools, you may want to stick a couple of belts in their Christmas stocking. The city's board of education has voted unanimously to ban saggy pants, about time. What is attractive about that? Just please tell me. In part, officials say they want to better prepare students for the work force. That's true, I wouldn't want to hire a kid with his pants down to his knees. The decision is earning an F with many kids. And they say the school board has only a loose idea of what is fashionable. Folks, that is not fashionable, and if you knew what it stood for in the prisons you would pull your pants up.

Fighting crime and terrorism. Meet a police officer with an incredible skill and, oh, yes, he's blind.

(COMMERCIAL BREAK)

PHILLIPS: She was reading by age three, giving her first piano recitals at four and taking private French lessons at eight. Today at 53, Condoleezza Rice is the first African-American woman to be secretary of state. She's a member of President Bush's inner circle and a new book details that relationship and uncovers some of the conflicts Rice has had with other major players at the White House. The book is called "Condoleezza Rice, An American Life." It's author, "New York Times" correspondent Elisabeth Bumiller. She's in our Washington Newsroom.

So good to see you Elizabeth.

ELISABETH BUMILLER, NY TIMES CORRESPONDENT: Thanks for having me.

PHILLIPS: I love the -- you know as a journalist we always love the personal tidbits and the behind-the-scenes stories and the things we never get to know about people that are in public eye. And I love the story that Condi's dad talks -- tells you with regard to walking by the White House when she was a little girl. Tell us that story.

BUMILLER: Well that was the summer of 1963. The Rices had just come up from Birmingham to see Washington. And there's a wonderful picture of her outside the White House. She's in a beautiful little dress, with a charm bracelet and little patent leather shoes. And according to her father -- her father passed away a number of years ago, but he told this story to every journalist who would listen until then -- that Condi Rice said at the time I'm going to work in that house some day.

It was a great story and it has followed her around. But when I asked her about it she said you know, I have no memory of ever saying that. She said, sounds good, maybe it's true, maybe it's something my dad just made up and wanted to happen

PHILLIPS: It works well for your book, I must say. Now you also, of course, talk about her many talents. I mean, I mentioned the French lessons, the piano, the ice skating. She was such a well- rounded kid. Why was that important to her parents and how do you think that started to formulate this pretty remarkable woman?

BUMILLER: Well, she grew up under segregation in Birmingham, Alabama. And the phrase in the neighborhood was that she grew up in a middle class black neighborhood. The phrase was that everyone had to be twice as good, that meant twice as good as the white children because they had -- black children had -- to prove themselves doubly.

And the goal was that when segregation ended as the Rices believed that it would, she would be ready to compete in the big world out there, and she certainly was ready. Her parents made her their number one project. She was an only child, and as you mentioned, she had French lessons, ice skating lessons, piano lessons, etiquette class.

PHILLIPS: Oh, my gosh.

BUMILLER: She did everything.

PHILLIPS: What amazing parents, bottom line right there, goes to show when your parents are so involved with you what can happen. But they also wanted to shield her from the racial tensions at that time. Right?

BUMILLER: That's right.

PHILLIPS: Why did they want to shield her from that?

BUMILLER: Well I think any parent would have wanted that for a child at that point in Birmingham's history. It was a very, very ugly city. There was a lot of violence against the African-American community at the time. This was the spring of 1963 when Martin Luther King had arrived in town, and he was staging children's marches in the streets. And this was when the Birmingham police and the fire department turned hoses on black children and let dogs loose on black children. Up until then, and then that's -- that September there was the Ku Klux Klan that bombed a venerable black church in Birmingham, the 16th Street Baptist Church and killed four little girls. And one of the girls was a playmate of Condi Rice's

PHILLIPS: And that was Denise, right? Denise McNair?.

BUMILLER: Denise McNair, yes.

PHILLIPS: So here -- so all of a sudden she was given this reality check. She had to learn about the racial tensions because now, it had come home, and she lost her best friend.

BUMILLER: Well, she wasn't her best friend but she was a friend, and I think the reality check was just that -- was with fear. And she talked -- and when I interviewed her -- about what it was like growing up being constantly afraid that spring and summer and fall of 1963, and how that changes your childhood and really changes your life.

PHILLIPS: You know, you would think that going through all of that is what really gave her so much of the strength and discipline that she has brought into the White House. Because she -- well, we'll talk about her relationship in a minute, but let's just talk about Rumsfeld.

It's so obvious that these two had some serious tension. I don't know how we describe it, intense, hostile, controlling -- what was going on. Can you give us any insight to what was going on with these two?

BUMILLER: We'll you're talking about the former Defense Secretary Donald Rumsfeld. At one point I described it as a relationship of mutual loathing. But Condi Rice, on the record said to me, you know, look, I kind of like Don Rumsfeld. But the reality was, was that Rumsfeld viewed Condi Rice as little more than a glorified Russian studies graduate student. And bear in mind she had only two years of mid-level White House experience when she joined -- when she became national security advisor. She had been two years in the president's father's White House.

Rumsfeld, of course, had been secretary of defense already, had decades of experience in government, and as had Vice President Dick Cheney. So that -- she basically in the first term I would argue was rolled by Rumsfeld and Cheney and they -- the main source of her power in those years was as the president's close advisor and friend. She saw that as how she was going to make -- to get anything done in the White House

PHILLIPS: Do you think the fact that she was so close with the president, they had such a good -- or they still do, obviously have -- such a good relationship, that that hurt them?

BUMILLER: I think in some ways it did. I think that because of her devotion to the president, she was unwilling to challenge him and push him certainly on raising questions about the Iraq war. And because of the president's devotion to Condi Rice and his loyalty he was reluctant to push her harder to do the job that he needed her to do, which was to bring some cohesion to his foreign policy team. On the other hand, you know, you have to figure the president got the national security advisor he wanted.

PHILLIPS: Well, you know, I have to ask this before we wrap up, and that's her love interest, Gene Washington. I mean, she's a catch. When you're someone like Condi Rice, you have to be very particular. What's going on with this man? Who is he? And tell us about their relationship, to the extent that you can.

BUMILLER: Well to the extent that I can, he's the Director of Football Operations for the National Football League in New York. And he's been an on again, off again friend and relationship for 25 years. They have dated in between his marriages, and he -- comes to visit her in Washington. People see him publicly as an escort for White House state dinners. But he's also spent a weekend with her at Camp David over Thanksgiving.

And he says -- I spoke to him for the book and -- he says there's more to the relationship than meets the eye. But it's been 25 years.

PHILLIPS: That's a long time.

All right. We'll have to read between the lines there. Elisabeth Bumiller, the book is "Condoleezza Rice An American Life." Appreciate you sharing it with us. Thanks, Elisabeth.

BUMILLER: Thank you.

PHILLIPS: Well he sees no evil but he can hear it. And what a blind police officer hears on wiretaps of crime suspects in Europe is a lot more than you or I might hear. CNN's Paula Newton got an earful in Brussels.

(BEGIN VIDEOTAPE)

PAULA NEWTON, CNN CORRESPONDENT: That's the sound of a new age cop walk his beat. Alain's career is snatched from the stories of superhero strength. Can't show his face, he works undercover as a Belgian cop, hearing what most people can't. His job is to listen and interpret every note and noise from secret wiretap evidence. He nurtured his sharp hearing, he says, because he had to for his own survival. Alain is blind.

TRANSLATOR FOR ALAIN, WIRETAP SPECIALIST: When I'm in the street, all the surrounding sounds in the environment are important for me. To know when I'm on the sidewalk that there's a trash collector or something else, I need to know what it is before getting to it.

NEWTON: And so surrounding sounds that are so important for wiretap evidence. It's background noise to most, but not Alain who can figure out the floor where an elevator has stopped just by listening to the gears, make out most of what's being typed out on a computer just by hearing the top of the key.

We put Alain to the test with recorded conversations, first in a train station. Lots of people, he told us. They're not stopping, he guessed either an airport or a train station.

He got this next location right away. It's a cafe, and he correctly picked up on people drinking wine nearby and a baby in the restaurant.

UNIDENTIFIED WOMAN: OK, and then we'll meet to go over that, yes?

NEWTON: And then to this conversation in a moving car. He said it was not a standard vehicle, it had to be a truck or a car with a large cab. In fact, it was a London taxi.

It may all sound like trivial information, but especially in wiretap evidence, it is anything but. Pieced together it helps police track and tail a suspect's every move. Now more important than ever as wiretaps play a crucial role in counterterrorism. Belgian police say this pilot program could be a crime-fighting coup for police forces around the world.

GLENN AUDENAERT, BELGIAN COUNTERTERROR CHIEF: Technology is as well an opportunity as a threat. We need to seek out the edge of technology to identify what kind of threats come to us from that edge or what kind of opportunities to us to develop counter-strategies.

NEWTON: Alain says he's more surprised than anyone to be one of Belgian's newly minted cops. He hopes his acoustic talents will serve the public just as it has him.

Paula Newton, CNN, Brussels.

(END VIDEOTAPE)

PHILLIPS: As we go to break let's take a look at the big board. Right now Dow Industrials down 166 points. It just slashed interest rates a quarter percentage point. We're going to explain how that affects your bills, straight ahead.

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