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State Department Investigating Breach of Barack Obama's Passport File; Michigan Meltdown; Baghdad Glamour; Killed by a Ray

Aired March 21, 2008 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Snooping into personal files. A big endorsement just hours away, and a shift in the polls, all hot topics in the presidential race this morning.
The State Department investigating a breach of Barack Obama's passport file. Three contractors working for the department accessed the file in a, quote, "unauthorized way." Obama picks up a coveted endorsement today. New Mexico governor Bill Richardson will back him at a rally in Portland, Oregon in about three hours. Live reports ahead on both developments.

The Richardson endorsement comes as several national polls now show Hillary Clinton pulling ahead of Obama. A Gallup survey gives Clinton a statistically significant lead for the first time since early last month. Clinton hoping the numbers will help her close the delegate gap with Obama.

Potential bad news for her, though. Michigan lawmakers adjourned without plans to re-doing the state's January primary. Earlier this week, Florida ruled out a second vote as well. Clinton won both states, but their delegates, as you know, were disqualified.

From London to Paris, Republican nominee-to-be John McCain meeting today with the president of France. McCain is part of a congressional delegation, but is also polishing his presidential image on the world stage.

TONY HARRIS, CNN ANCHOR: Obama's passport file. Were people simply snooping or something more? And what does the Richardson endorsement mean for Obama's campaign? We want to go a bit deeper on both of these stories with our correspondents.

State Department correspondent Zain Verjee in Washington. Zain, good morning to you, and Jessica Yellin in Indianapolis.

Let's begin with Zain. OK. Zain, what do we know about this breach?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: The State Department's scrambling, really embarrassed, too, and trying to get on top of all of these details. Basically we're being told this that on three separate occasions Senator Barack Obama's passport records were accessed when they were not authorized. They happened January 9th, February 21st and March 14th. This happened by three separate contractors in three different locations. Now, the system, the State Department tells us, did work in the sense that the breaches were detected immediately. We're told that two contractors were fired. One's been disciplined by its -- by that particular person's contracting employee. Senior management at the State Department is telling us, too, that they just learned about this yesterday, Tony. After a call by a reporter, they checked it out, they looked into it, and they were able to confirm it.

They're telling us that the lower level officers never told them, they never sent it up the command chain. So when the State Department senior management knew about it, they immediately contacted Barack Obama's Senate office, told them what was going on. Patrick Kennedy, a top official here at the State Department is going to be meeting with Obama's staff to explain themselves a little more.

HARRIS: Wow. Zain, any idea, I know you're digging. Boy, we really want to know. Any idea when we might get more information as to what's been uncovered in this investigation?

VERJEE: Well, the State Department is coming out with its details and shortly we're going to have another briefing by the State Department spokesman Sean McCormack.

HARRIS: Great. Great.

VERJEE: We'll have more -- but this is what we know.

HARRIS: Yes.

VERJEE: We know that there's been an ongoing review at the State Department. We're being told as well that the State Department has reached out to the acting inspector general, also to do a review.

Patrick Kennedy, the undersecretary for management here, told reporters that whatever steps the inspector general decides are appropriate is what's going to happen. He also said it's up to professional investigators to decide things like the records, the files...

HARRIS: Yes.

VERJEE: ...the e-mails, things like that, and they need to be protected and preserved as well.

The State Department's position, though, right now, Tony, on whether or not this was a politically motivated, because it's sensitive and volatile...

HARRIS: Absolutely.

VERJEE: ...they're saying this, this time it's our initial view that this was in prudent curiosity on the part of these three separate individuals.

So Tony, they're not being dismissive, they tell us about this whole thing, they're not ruling anything out, but that's the current stand.

HARRIS: Uh-huh. Curiosity, in January, curiosity again in February, and curiosity again in March. OK.

State Department correspondent Zain Verjee for us this morning.

Zain, thanks.

COLLINS: Both Obama and Clinton wanted it. Obama is getting it. New Mexico governor Bill Richardson endorsing Obama at rally just a few hours from now.

Jessica Yellin is live for us this morning from Indianapolis with more details.

Wow. So this was kind of a surprise, given the history with Bill Richardson?

JESSICA YELLIN, CNN CORRESPONDENT: It was, Heidi. You know Bill Richardson has been courted aggressively by both candidates and their surrogates since he left the race in January. But today he comes out with a statement to supporters saying, there are two reasons, really, why he's endorsing Barack Obama. First, he says it's time for Democrats to stop fighting amongst ourselves, and to prepare for the tough fight we will face against John McCain. Essentially wanting to unite the party and move on to a general election-type mode.

He also says, though, he was personally inspired and touched by Barack Obama's speech on race earlier this week, saying, quote, "He asked us to rise above our racially divided past. As a Hispanic, I was particularly touched by his words." As you say, Richardson is going to make the formal endorsement announcement this afternoon.

Really two profound effects of this. First, it stopped the stem of bad news -- stems a tide of bad news that Barack Obama has been dealing with for the last few weeks, which has been buffeting his campaign. At least now they can focus on something positive. And also, the big question will be: does this compel other undecided superdelegates to throw their lot in with Barack Obama at this point?

COLLINS: Right.

YELLIN: As you know, Senator Clinton's been making the case that these undecideds should wait for these next crucial states to vote, let the voters have their say before they decide. But could more people now preempt that and finally I should add that this just has to be a morale blow to the Clinton campaign.

COLLINS: Sure.

YELLIN: You know, one staffer described Bill Richardson as Hamlet, eternally undecided, not sure who to endorse, not willing to make up his mind.

COLLINS: That's dramatic.

YELLIN: A real disappointment for the Clinton campaign.

COLLINS: Yes. I imagine it is.

All right. Jessica Yellin, following the story for us.

Thanks so much, Jessica.

Hillary Clinton still trails Barack Obama in delegates, but some new opinion polls show her moving ahead of Obama now in national popularity among Democrat. The Gallup poll conducted between Friday and Tuesday gives Clinton a 49 to 42 percent edge. That's more than the sampling error of 3 percentage points. Gallup says it's the first statistically significant lead for Clinton since just after Super Tuesday.

HARRIS: Also, a big story this morning. Flooding in the nation's midsection. The water rises. The misery deepens. From Missouri to Kentucky, Arkansas, to Indiana, rivers are already spilling beyond their banks. But most alarming, many aren't expected to crest until this weekend. The devastation of power already staggering.

Watch this video. We've seen it about 10 times. Still just devastating. This is out of Calico Rock, Arkansas. A building is swept off its foundation and shattered against the bridge. Boy, throughout the region, raging rivers have swallowed entire neighborhoods, if you can believe it.

This is the scene in Fenton, Missouri. Residents there are scrambling to fill sandbags -- good luck with that. At least 16 deaths are blamed on the flooding triggered by as much as a foot of rain in some areas. Two people are missing.

COLLINS: We are following all angles, of course, on this developing story. CNN meteorologist Jacqui Jeras is in the flood- ravaged town of Eureka, Missouri which has been very, very hard hit and her colleague Wolf Reynolds looks at the bigger picture in our extreme - yes, is -- is it Wolf Reynolds or Reynolds Wolf?

HARRIS: It's Reynolds Wolf.

COLLINS: Well, I thought it was Reynolds...

REYNOLDS WOLF, CNN METEOROLOGIST: Yes. Real cool.

COLLINS: Hey, you know, we like to change it up here a little bit. I'm glad you're going with it.

HARRIS: (INAUDIBLE) there, Wolf.

COLLINS: But seriously, guys, this has obviously been a very, very big storm. A lot of effect.

Jacqui, want to go to you first from the pictures that we're seeing behind you there. Going to be dealing with this for many, many days to come? JACQUI JERAS, CNN METEOROLOGIST: Yes. Absolutely. And you know, the water has been rising so rapidly and affecting so many people and so many homes. It's hard to believe that we still have more than 24 hours to go before this river even crests. There're anywhere between 50 and 75 homes behind me that are covered with water. Most of these people have evacuated, but some of them have boats and they have decided to kind of wait it out.

We're along the Merrimack and Big Rivers, where the two come together. And you can't tell the difference between the two. In fact, you can't even tell the difference between people's yards and the roadways here. There are dozens and dozens of roads, which have been cut off by water. This is highway W, which runs through town and takes you to the main highway out to the interstate, and it is covered.

And just to give you an idea of how fast the water has been rising, we put this cone here at about 6:00 this morning, and look how far that water has risen upon the roadway. Unfortunately, this scene is becoming all too common across parts of the nation's heartland.

(BEGIN VIDEOTAPE)

JERAS (voice over): Raging rivers, washed out roads, topped levees. And in northern Arkansas, the white river did this. From Arkansas to Indiana, to Ohio, towns and homes, left under water, and people sent scrambling.

UNIDENTIFIED FEMALE: I don't have time for tears.

JERAS: Some were lucky enough to pack up and get out. Others left to salvage what they could.

UNIDENTIFIED MALE: Inside of all these homes, it's all at least waist high. You know, dark, dirty -- just stuff floating around.

JERAS: Many, like this woman, pulling a trailer full of furniture and pets in Missouri didn't quite make it. Or this woman pulled from her car, put on a canoe and then transferred to a rescue boat.

UNIDENTIFIED FEMALE: I tried to back up and my car just started floating away.

JERAS: She clung to a tree, called 911, and waited for help.

UNIDENTIFIED FEMALE: I was scared. I thought I was going to die.

JERAS: Rescue boats cruised neighborhoods picking up people and pets who stayed behind.

UNIDENTIFIED MALE: Come on, buddy, climb in.

JERAS: And down river, an all-out effort to brace for the worst.

UNIDENTIFIED MALE: We want to trust the levee but we can't afford to be wrong.

(END VIDEOTAPE)

JERAS: And they're not trusting the river here either in Eureka. More than 300 volunteers come out to fill up sandbags and try to protect the downtown area. The river is expected to crest at record levels tomorrow, and if it does that, the mayor says he expects about half of downtown to be covered in four to five feet of water.

People are waking up this morning as the sun comes up and are just shocked at how high the water is, and so many people's homes that are surrounded. We've got one of those residents joining us now. This is Skip Jones.

And Skip, I understand you own a lot of the property back here along the river. Tell us what the scene like at your house which is just back there.

SKIP JONES, FLOOD VICTIM: Yes, ma'am. I woke up this morning. The river was in the basement. And at this point in time, it's in the main house. Unfortunately there is not much I can do about it. Can't control mother nature, but it is taking out the old mansion that I have, and a historical site back in the 1800s and there's not a thing I can do about it.

JERAS: Now are you actually staying in your house or out and staying out?

JONES: I stayed in there last night anticipating being able to get out. I got out by boat today. Continue to monitor the situation, going back and forth in the boat, but from what I'm seeing and hearing, I believe it's going to come up a whole lot more, and probably take the whole house out.

JERAS: What about your neighbors? Have you spoken with them? What are they doing?

JONES: My neighbor, I have some renters back there. They are in the process -- right now, I just called them on the phone. They're coming across in their boat. They're bringing my dogs because they stayed in their place, which is a little higher than what mine is, and I'm anticipating them being here within the next 20 minutes.

JERAS: And where are people going? Where are they staying?

JONES: I guess everybody's going to go wherever they end up. I know the hotels around here are pretty well swamped. So you'll end up going wherever you go. I'm fortunate. I have girlfriend that going to allow me to stay with her tonight.

JERAS: Did you ever expect that you would wake up and things would be this bad this morning?

JONES: No. I've been here -- this is my third year here. I heard of the flood of '83 and '82, but I never anticipated anything like this. I know there were some levee work and some things done that supposedly this was not going to happen, unfortunately, it's happening right now, and there's not a thing we can do about it.

JERAS: All right. Skip, we wish you the best of luck and glad to know that at least you're here and you're safe. All right. Best of luck to you -- Heidi?

COLLINS: All right. CNN's Jacqui Jeras there with just one person who has been affected so deeply by all of the flooding there.

Jacqui in Eureka, Missouri this morning, thank you.

I'm not going to attempt to throw this over to this guy, because apparently I don't know his name.

HARRIS: Hey, Wolf Reynolds, good to see you. Hey, you know, what Reynolds...

WOLF: Yes there, Tony? Tony?

COLLINS: We already have a Wolf.

WOLF: Yes?

HARRIS: You know what's interesting? I mean I'm not real sure of the particular river that flows in through around Eureka. But we were talking about the Merrimack this morning.

WOLF: That's the Merrimack River.

HARRIS: It is the Merrimack River. OK.

WOLF: It's still Merrimack River.

HARRIS: And it's expected to crest in the next 24 hours or so?

(WEATHER REPORT)

COLLINS: I knew you're going to do that.

WOLF: Yes.

COLLINS: That's OK. I'll take Collin Heidi.

WOLF: Payback is tough.

COLLINS: All right. Thank you, Reynolds.

WOLF: Anytime, guys.

HARRIS: And still to come in the NEWSROOM this morning, can money buy happiness? Try giving it way. All right. Blissful wealth ahead in the CNN NEWSROOM.

ANNOUNCER: CNN NEWSROOM brought to you by...

(COMMERCIAL BREAK) HARRIS: Welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris. Tight credit, high gas prices, job insecurity, who has money to spend at the mall? Please, we browsed the stores at the mall of America.

(COMMERCIAL BREAK)

COLLINS: Short weeks, big gain, believe it or not. Wall Street ends the week up almost 3.5 percent, the first weekly gain in a month. Markets are closed today, of course, for Good Friday. Thursday's rally, though, wrapped up a breathtaking week that saw the collapse of Bear Stearns, triple-digit stock swings, and bouncing oil prices after months in free fall, the dollar rallied helped by a hectic Fed interest rate cut.

With oil pulling back from record highs you're paying a bit less at pumps, too. AAA puts the cost of a gallon of regular gas at $3.27 this morning. That's a drop, but a lot higher than the average of $2.57 you were paying at this time last year.

HARRIS: Money make you happy? Try giving it -- all right, that's better. Try giving it away. You might be downright delirious.

CNN medical correspondent Elizabeth Cohen is here with researchers, two cents worth.

Elizabeth, good to see you. How exactly do you measure happiness and spending? How do you do that?

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, what they did is these researchers looked at 600 people and they, well, asked them about their charitable giving and asked them how many times they bought gifts for friends versus how much they spent on themselves. And those who spent more on others, whether it was charity or just giving friends presents, were happier. And then they did a really interesting experience -- experiment. They took a group of kids and they gave them like $5 to $20 and said some of you have to spend this on yourself and some of you have to buy things for other people, and the kids who spent things on other people were happier.

HARRIS: Really?

COHEN: They rated their happiness and they were happier when they spent on others.

HARRIS: Do we know how much we should actually be spending on others to get this euphoric feeling here?

COHEN: Well, you definitely don't want to spend so much that you hurt your own...

HARRIS: OK.

COHEN: ...financial situation. You don't want to give away 90 percent of your income.

HARRIS: Right.

COHEN: That would be bad. However, there's a little bit of an indication of how much you should spend in order to be happy. Let's take this example. Researchers gave -- looked at people who got bonuses, for example, someone who got a $5,000 bonus. When someone gave away a third of that bonus they went up one point on a one to five happiness scale. So that's an interesting correlation there.

HARRIS: How about the science on this? Is there anything to suggest that our brains respond differently when we're giving?

COHEN: Yes, they actually measured that.

HARRIS: Oh come on.

COHEN: They really did.

HARRIS: OK.

COHEN: They hooked people up to machines and they looked at what happened in their brains when -- for people who are generous, for people who give things to others and they actually found a center of the brain that activated, that literally lit up, it's called the straitum -- you see it there. And it actually lit up for people were generous and gave to others. It's sort of a pleasure center in a way.

HARRIS: Nice.

COHEN: Yes.

HARRIS: OK. So there you go. There's the research, the information is in, and if you want to feel better, we're all open to all the charitable giving...

COHEN: What's your address?

HARRIS: Yes, there you go. Good to see you. Thanks, Elizabeth.

COLLINS: Rising food and energy prices. Real worries over the economy. (INAUDIBLE) to you. Cutting back on spending. A new CNN poll coming your way next.

(COMMERCIAL BREAK)

HARRIS: He confronted the controversy by challenging America to break its racial stalemate. Democratic presidential candidate Barack Obama making his mark this week. Obama came under fire for remarks by his longtime pastor. He responded with a speech Tuesday condemning the comments by the Reverend Jeremiah Wright but also urged Americans to take a closer look at race relations and to heal the racial divide.

And just another note, and that New Mexico governor, Bill Richardson, is expected to endorse Barack Obama today in a speech in Portland, Oregon.

COLLINS: A prominent economic institute says what you already know. A recession is, quote, "unavoidable."

Ali Velshi is in New York this morning now with more on that.

So Ali, really, unavoidable?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, and you know, Heidi, I say this because this isn't necessarily bad news. There are so many of us who've been thinking that a recession or a downturn is on its way. And you know, we've been talking over the last few months, why doesn't the Fed get on that? And why does the federal government if -- you know, once you admit you've got a problem, you can deal with it.

So I almost think that by saying that the recession is unavoidable now, it's done. This was -- a call made by the Economic Cycle Research Institute, ECRI, a longtime group of economist who do nothing but chart the economic cycles. What they do is they put all of the information we get. You know, when we talk about jobs and inflation, all that, they put it on to this one chart called the Weekly Leading Index. Now this goes back to 1974. Those gray bars up and down, those are recession. It also coincides with the green line going way down below that zero mark.

Now you'll see the last time we had one was in '01. Now you see where that -- that is the February, right of the screen, how that has gone all they way down. That's what allowed them this week to make the call that a recession is inevitable, it's unavoidable at this point. Could have been avoidable if policymakers had done something earlier according to the managing director.

Now we went out and we asked Americans in a CNN Opinion Research Corporation poll about how this economy is affecting their purchases. I think you're going to be talking to Poppy Harlow...

COLLINS: Yes.

VELSHI: ...out of the Mall of America. But look what this says. 61 percent of Americans said that the economic conditions have made them postpone major purchases like furniture or appliances. 39 percent said it's not affecting them.

Now we asked them what they've cut back on spending on in particular. 75 percent said leisure activities, 59 percent said clothing, a lot of clothing at Mall of America, 46 percent, look at this, cutting back on heat and electricity, 31 percent on TV, telephone and Internet, and 30 percent, that's the sad part, food and medicine.

COLLINS: Yes.

VELSHI: So it is affecting people, and I just assume say, here we are, we know where it's -- we're it's going. We know it's getting lower in the economy. Let's now start to have discussions about how you create jobs, how you create more opportunity. How people can invest in a way that allows to emerge from this thing relatively unscathed. COLLINS: Yes. And not to be really stuck on this point, because it is just a word, but when you say recession is unavoidable, does that mean that we are actually in one right now?

VELSHI: You know, I asked him and others about it. Again, a recession can only be seen from the back. So what the Economic Cycle Research Institute are saying the trend, I mean, when you see that trend, you see that line going down in February?

COLLINS: Yes.

VELSHI: It can't make a turn quickly and come back up. So it's going to go lower and stay there for a while. No idea of when it started. They last about 10 months on average in the United States and the last two recessions have been about eight months long.

COLLINS: OK. Wow. Interesting and good, too, obviously keep our eye on.

VELSHI: Yes.

COLLINS: Hey, you tell us, Ali, what's going to be coming up on "Issue #1" today, noon Eastern Time? Because you've been doing such a great job in talking about all of these concerns that people have about their money.

VELSHI: Thanks. And we're taking phone calls and -- we're taking e-mails on the show. So if you got questions, e-mail us at Issue1@CNN.com.

COLLINS: The topic today?

VELSHI: We're talking -- we're bringing a whole bunch of stuff in. We're talking about retail, we're talking about taxes.

COLLINS: OK.

VELSHI: We're talking about jobs.

COLLINS: All right. Whatever people want to know.

VELSHI: Yes.

COLLINS: It's so great that you have all the answers. I love that.

VELSHI: Well, we try.

COLLINS: Ali Velshi, thanks so much. We'll be watching for you at noon today here.

VELSHI: All right. Yes.

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

COLLINS: Good morning, everybody. I'm Heidi Collins.

HARRIS: And I'm Tony Harris. Welcome back, good Friday to you, to the CNN NEWSROOM.

Looks like there won't a do-over Democratic presidential primary in Michigan. What does that mean for the delegates scramble?

Here's CNN's Candy Crowley, part of the best political team on television.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice over): The campaign action this day is the inaction in Michigan, where a plan to hold a primary do-over was left for dead. Michigan now looks like Florida, which also stalemated in its effort to put on a second primary. It's a double barreled blow in camp Clinton and she has raised the stakes.

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I do not see how two of our largest and most significant states can be disenfranchised and left out of the process of picking our nominee without raising serious questions about the legitimacy of that nominee.

CROWLEY: As the Michigan plan fell apart, the Obama camp touted a press release by supporter and Senator Chris Dodd. He suggested the best outcome would be an arrangement where the delegates are apportioned fairly between Senators Obama and Clinton which is to say, divide the delegates in half, fair, Obama told Larry King, because the first primary cannot stand.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We were told it wasn't going to count, and so we didn't campaign there. In fact, my name wasn't on the ballot in Michigan, but I think it's important to make sure that the people of Michigan, the people of Florida, that their delegates are seated.

CROWLEY: Since seating Michigan delegates in accordance with the first results was a no go, she has focused the re-do and blames him for the spiral.

CLINTON: I do not understand what Senator Obama is afraid of.

CROWLEY: A revote would advantage her but he says the argument is about fairness in part because it bars people who may have voted Republican in the first primary, because they knew a Democratic contest wouldn't count. No revote means she loses her best chance to overtake his leads in pledged delegates and the popular vote, but she says it's about disenfranchisement. In the end, it may mean Michigan will end with no input at all.

UNIDENTIFIED FEMALE: I would like to see us resolve this. I think the fairest way to resolve is by having a vote. I think it would bring a huge amount of excitement to Michigan. Our issues would be raised on a national level. CROWLEY: And could well mean the Democratic National Committee will see a big fight at the summer convention in Denver.

Candy Crowley, CNN, Berkeley, West Virginia.

(END VIDEOTAPE)

HEIDI COLLINS, CNN ANCHOR: Fashion, on the rebound.

Catwalk of culture; Baghdad, glamour, and death threats.

(COMMERCIAL BREAK)

COLLINS: An economic slowdown, high gas prices, job worries, tight money has retailers wondering, will you keep buying?

Our Poppy Harlow is shopping for answers at the Mall of America.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Iowa.

UNIDENTIFIED FEMALE: We are from Wisconsin.

POPPY HARLOW, CNN CORRESPONDENT: From across the country.

UNIDENTIFIED FEMALE: I'm from South Dakota.

HARLOW: And around the globe, 40 million visitors spend more than $400 million a year at the Mall of America.

UNIDENTIFIED MALE: It's crazy.

UNIDENTIFIED FEMALE: We're spending more than I would normally spend.

HARLOW: As gas prices rise and job concerns grow, here at Mall of America, retailers see little evidence of an economic slowdown.

UNIDENTIFIED FEMALE: We've actually noticed an increase in traffic.

UNIDENTIFIED FEMALE: I feel very fortunate that we are squeaking ahead of last year's numbers.

HARLOW: Nationwide, February retail sales took a deeper plunge than expected, according to the commerce department. One reason Mall of America is steady, shoppers visiting from other countries.

UNIDENTIFIED FEMALE: When the dollar started to drop, we started to market overseas. If you have a destination, you can do that.

HARLOW: Tourists bank on the weak dollar to buy luxury goods and at Mall of America there's no sales tax on clothing.

UNIDENTIFIED FEMALE: You can absolutely save money by shopping at America now even after your plane ticket and hotel.

HARLOW: Another reason Mall of America is coasting along, retail sales aren't its only attraction.

UNIDENTIFIED MALE: Rides, ice cream.

HARLOW: A new theme park and restaurants are packed into the 4.2 million square foot mall.

UNIDENTIFIED MALE: We've got Ferris wheels. We've got roller coasters. We've got water rides.

HARLOW: But there are some signs of weakness. Sales are down slightly at the food court and some store owners are seeing a trend towards bargain shopping.

UNIDENTIFIED FEMALE: We've also probably sold a little more in our lower end.

HARLOW: While Mary Ann London is selling plenty of prom dresses, she senses potential trouble in the months ahead.

UNIDENTIFIED FEMALE: I'm ahead of last year's numbers but still nervous. The season isn't over.

HARLOW: Store owners hope once millions of Americans get their tax rebate check, the spring season will be in the bag.

(END VIDEOTAPE)

COLLINS: Poppy Harlow joining us now to tell us more about this.

Poppy, being a Minnesota girl, I have watched since the beginning of when the Mall of America opened. It's kind of been you know up and down a little. Very interesting to watch now. I'm wondering if it has to do with the weak U.S. dollar, because of its location to the Minneapolis-St. Paul Airport?

HARLOW: Yes. Of course you know, I'm a Minnesota girl here, too, born and raised here and I was here when it opened. I'm back here today.

Let's start out with what I heard from a Starbucks' employee this morning. He said to me if you told me there was a recession, I'd say, not here. That's what we're hearing from consumers.

Half of the money that comes in here each year and that's more than $400 million, is from tourists, and what's really interesting is a lot of the tourists are from Iceland, and also from Europe and Japan and the weak U.S. dollar is helping them out.

The Starbucks employee said people come in here and easily spend $25 on pastry, a few hundred at theme park. We're not seeing that tightening of the wallet here at the Mall of America. That's something that I didn't expect when I came to report here and it's very interesting. Another thing I want to note for you here is the Mall of America is planning a more than $2 billion expansion to make the mall twice the size.

COLLINS: Holy cow!

HARLOW: Yeah. What we're seeing --

COLLINS: It's not big enough right now?

HARLOW: Only 4.2 million square feet. So --

COLLINS: Go right ahead. I'm sorry.

HARLOW: I think it's an encouraging sign from all of that talk we've been hearing of a recession, that that's not so much the case here, because of all of those tourist dollars coming in. So you know maybe not. And some shop owners said, yeah. We're a little concerned about the months ahead, but right now we're OK.

COLLINS: Boy, that is really interesting. Isn't it? All right. My fellow Minnesota friend, Poppy Harlow, thanks so much. Poppy, appreciate it.

HARLOW: Of course. Sure.

TONY HARRIS, CNN ANCHOR: Well, with violence down in Iraq, we're seeing more efforts by Iraqis to return to normal lives through their culture, their heritage, even their fashion.

CNN's Kyra Phillips is in Baghdad for us.

And, Kyra in the teases, leading up to this segment this morning, we had pictures of beautiful Iraqi women on the catwalk, I'm curious.

KYRA PHILLIPS, CNN CORRESPONDENT: It's just for you, Tony.

HARRIS: Well about that. I'm familiar with fashion week in New York. I'm familiar with fashion week in Milan. Are we talking about fashion week in Iraq now?

PHILLIPS: Paris and, yes, now we're talking and that's funny. That's what the models say. They say you see it in Milan, you see it in Paris, well we have it in Iraq. And when I talked to them about the differences between the models in the U.S. and the models in Iraq, I asked them about you know how U.S. models are so wrapped up with body image, what they look like, the clothes could be so revealing and their reaction Tony, was very humbling. They said, Kyra, these fashion shows are not about the beauty of the woman but the beauty of the dress.

(BEGIN VIDEOTAPE)

PHILLIPS: Iraq's Osman period. The Abassid era, and modern day Baghdad. This is no ordinary fashion show. It's a catwalk of culture. HODA FAIEQ, IRAQ MODEL (through translator): Our fashion shows represent the old glamour, the folklore and history. Our beauty shows in the details of the dresses. You can see the art, the culture, the history and the calligraphy. Iraqi history is represented through our dresses. They're unique and amazing.

PHILLIPS: But this Baghdad beauty comes with a tremendous risk. For models like this 24-year-old Hoda Faieq, every stroke of makeup, every dress she dons, death threats are a part of this wardrobe.

FAIEQ (through translator): We get so many letters threatening us saying this is your last day. There are many Islamists here and Islamic groups who want to destroy us. They look at our success as a failure to them.

PHILLIPS: Ironically, that wasn't the case under Saddam Hussein. He loved beautiful things, and under him, what passed for Iraqi couture flourished. Now, the Iraqi fashion scene is struggling to return.

May Jospeh is director of Iraq's house of fashion. You were an electrical engineer. Why did you want to become a fashion director?

MAY JOSEPH, DIRECTOR, IRAQ'S HOUSE OF FASHION: Because I'm a lady.

PHILLIPS: And a strong lady at that. This is Iraq's only fashion house. It was bombed, burned and looted during the war. Now thanks to May and her staff, it's back.

So you just open up the history books and pick a story.

JOSEPH: Pick a story.

PHILLIPS: Pick some history and design a show.

JOSEPH: And design show.

PHILLIPS: Why do it that way?

JOSEPH: This is the easiest way to transfer our civilization to the world.

PHILLIPS: Not only showcasing the art of Iraqi dress, but artifacts.

JOSEPH: It is made of special type of stones which is expensive stone in this color.

PHILLIPS: Was this the Babylonian times?

JOSEPH: No, is Sumerian.

PHILLIPS: Wow.

These designers, artists, embroiderers and dressmakers are conserving ancient Iraqi culture.

JOSEPH: This is the symbols of the evil eyes.

UNIDENTIFIED MALE: n the south era. In Kuwait and --

PHILLIPS: So south Iraq here?

UNIDENTIFIED MALE: Yes.

JOSEPH: This is the evil eye dress.

PHILLIPS: So if you wear this dress, you ward off --

JOSEPH: We hope so.

PHILLIPS: So tell me how it feels to watch your models?

JOSEPH: This is a feeling of, let them live again.

PHILLIPS: Iraqi models, like Hoda Faieq.

FAIEQ (through translator): It's the inspiration inside of me. When I don't see the dresses on the runway I feel like a part of me is missing. This runway completes my personality. I find myself on this stage.

(END VIDEOTAPE)

PHILLIPS: And here's a look, Tony. This is a Hashami gown. Of course, the Iraqi models look much more beautiful. Take a look. Look at everything, it's handmade. OK? It's all embroidered, all stitched. The beads are hand painted. They have all the threads, all of this coming from Iraq. Look at just the intricacy. All this is hand-made, this material, but the sleeves. That's what's so amazing. The design and everything stitched. It's incredible.

And, Tony, they will not sell the dresses. They don't give them to anybody, won't sell them to anybody. Unfortunately, I have to return this beautiful Hashami gown, because they want to just preserve the culture and don't want money to be made off these dresses. They see each piece as a piece art that should be preserved in a museum.

HARRIS: We need to get some of that fashion on the red carpets here in the United States. Wouldn't that be a heck of statement?

And Kyra, just a quick question. We talk about violence being down in Iran, but not to say that the streets are completely violence- free. I'm just wondering, where are these shows?

PHILLIPS: Well, that's a great question. They want to perform more here in Iraq, but it's been really tough because of the security situation, even tougher to get out of this country. So right now they're trying to work on schedule and work with security teams to travel around to other countries and do these shows, but, you know, money is tight. They're trying to raise money while working on these dresses. The goal is by next year to actually be able to leave the country and do these shows.

HARRIS: Wow. Thanks again for takings us beyond the blast walls, and you look marvelous. Kyra Phillips in Baghdad.

PHILLIPS: I'll try to bring it back for your wife.

HARRIS: Do that! Appreciate it. Thanks.

COLLINS: Want to get you back to the situation in the central part of the country, because, boy, they are really dealing with it today.

Reynolds Wolf is standing by in the severe weather center talking about all of this flooding and what's going to happen over the next few days.

REYNOLDS WOLF, AMS METEOROLOGIST: You know what's so weird about this is we're talking about an event where the rain is not falling now. It fell days ago.

COLLINS: Right.

WOLF: And the sheer volume of it is just still mind-boggling. I mean think about over a foot of rainfall in parts of Missouri and the rivers, the creeks are all swollen. In fact, look at this map behind me. This Google Earth image shows all the river gauges we have all popped up across much of the landscape where we have many of them shaded in purple like in Eureka and Valley Park, some in red like Burnsville and Pacific, Missouri where we have extreme flooding, just incredible flooding.

We're expecting the flood rivers, actually the waters right along on the Merrimack River to rise to about 43 feet within the next 24 hours. So it is going to be extreme to say the least.

Just to give you bearings, here is St. Louis. Now from Missouri, we're going to travel a little bit further to the north like up towards the Twin Cities, back towards Chicago, to Milwaukee. You're going to notice we're seeing not just blue on radar, but some pinks popping up here and there and even some white. That indicates areas where we're seeing some snow beginning to develop. It could be heavy snow, anywhere from four to eight inches of snowfall.

We have a live image for you out of Chicago. I believe we've got a tower cam for you that's going to pop up in moments. Here you go. The heaviest snowfall again right there in the city. We're going to see pockets of that, not just on the expressways, not just in the downtown area, not just in the hinterlands but also at the airports. So I would certainly expect many, many delays right now at Chicago. You're going to have a wait at O'Hare for about 3 1/2 hours. Don't expect change any time soon. Back to you.

COLLINS: That is painful. Isn't it?

WOLF: Very much so.

COLLINS: All right, Reynolds. We'll check back a bit later on, thanks.

Strange story now; tragic, too, killed by a common sea creature. It's a ray that this was not a Steve Irwin-style death. We're going to tell you more about the collision at sea.

(COMMERCIAL BREAK)

COLLINS: New questions today about that deadly crane collapse in New York City, a building inspector under arrest. He's accused of filing a false report about inspecting the crane 11 days before the crash. Seven people died when the crane toppled last Saturday. The city building commissioner says even if the inspection had been done, it probably would not have prevented the accident. But inspectors are still rechecking dozens of cranes now after the arrest.

HARRIS: Allegations of sex for a green card; the "New York Times" reports a U.S. immigration officer arrest for demanding sex from a woman seeking citizenship, and she recorded the incident on her cell phone.

UNIDENTIFIED FEMALE: I don't know. He just told me, we going to have to be friends, have sex.

HARRIS: OK. The agent, himself an immigrant, has been suspended without pay while an investigation is underway. He pleased not guilty to federal charges of coercing a young woman to have sex.

Sandbagging to protect the house, that's if you still have a house. There is more flooding to come in the Midwest.

(COMMERCIAL BREAK)

HARRIS: You remember Steve Irwin's death by a stingray bar? A similar death now in the Florida Keys from a spotted eagle ray. Not from the barb but from a collision. Dave Cartunin from affiliate WSVN has details.

(BEGIN VIDEOTAPE)

JORGE PINO, FLORIDA FISH AND WILDLIFE: But to actually see a ray come out of the water and collide with a vessel or collide with a human being and cause somebody's death, that's unheard of.

DAVE CARTUNIN, WSVN REPORTER: It almost seems trite call this inexplicable tragedy a freak accident, but no one can put it into more appropriate terms.

PINO: Our investigators are dumbfounded that this happened.

CARTUNIN: And yet somehow a family of four from Michigan steered their rented 16-foot fishing boat directly in the path of this 75- pound spotted eagle ray and at that precise instant, the preacher leapt out of the ocean right in front of the face of 55-year-old Judy Zagorski.

PINO: If you can imagine, you're going 25 miles an hour. God knows how fast it was coming up. So that velocity of those two objects meeting was -- was quite tremendous. All indications are that she died as a result of the collision.

CARTUNIN: Spotted eagle rays are known to jump out of the water. They're passive brethren of stingrays and share an anatomical barb like the one that punctured the heart of famed crocodile hunter Steve Irwin in Australia in September 2006. In Irwin's case, the barb provided a natural explanation for his death. There is no such explanation in this case.

PINO: Our investigators determined that there was no visible puncture wounds on the body. There's nothing they could have done differently. They did everything they could do. It's quite astonishing.

CARTUNIN: That autopsy will take place near Key West on Friday. Wildlife officials took photos of the ray's barb and they have disposed of that animal at sea.

(END VIDEOTAPE)

HARRIS: The spotted eagle ray jumps above the surface to escape predators. It is generally not considered a threat to humans.

Taking no chances, crew in Minnesota are shutting down a busy Mississippi River bridge northwest in Minneapolis. They found problems with four steel plates. Those are the same type of plates believed to have played a role in last summer's deadly bridge collapse in Minneapolis. In that case, investigators say the plates may have been too thin. In this latest case, the plates appear to be bowing. Officials say the bridge will stay closed until it is fixed or can be rebuilt. It had been scheduled for replacement in seven years.

COLLINS: He wanted the job, but won't get it. Bill Richardson now wants you to hire Barack Obama. His endorsement, see it live in the NEWSROOM. The event begins at 12:30 eastern. CNN, your home for politics.

(COMMERCIAL BREAK)

COLLINS: Good morning, everybody. I'm Heidi Collins.

HARRIS: And good Friday to you everyone. I'm Tony Harris.

Stay informed all day in the CNN NEWSROOM.

Here's what's in the rundown.

Bill Richardson's choice, this one time Clinton and Obama rival will endorse one of them today. Which one will it be?

COLLINS: Communities across Missouri bracing for new flooding. A surge of water moving downstream and we're on the scene.

HARRIS: Buying a home, paying off debt, can you do it in this challenging economy? Personal finance editor Gerri Willis has your email today, Friday, March 21st.

You are in the CNN NEWSROOM.

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