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American Morning

Bill Richardson Endorses Obama; Breach in Obama's Passport Files; Deadly Deluge: Disaster in Illinois Counties; Recession Unavoidable

Aired March 21, 2008 - 06:00   ET

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

KIRAN CHETRY, CNN ANCHOR: And he's been heavily courted by both Obama and Hillary Clinton since he decided to drop out of the presidential race. Now, I spoke with him about a month ago, and Richardson said he was not ready at that time to say who he was going to support.
(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON (D), NEW MEXICO: I'm trying to decide. I have, as I said, enormous respect for both candidates. I know Senator Clinton very well. I've gotten to know Senator Obama well. Both candidates have exceptional qualities.

With Senator Clinton, you get tremendous experience, tremendous knowledge. With Senator Obama, he's a transformative figure. And as I've been talking to him on the phone lately, quite a bit, I get to know them better, but I'm not quite ready yet.

(END VIDEO CLIP)

CHETRY: Well, I guess now he is ready, because he e-mailed supporters this morning saying, "My affection and admiration for Hillary Clinton and President Bill Clinton will never waiver. It is time, however, for Democrats to stop fighting amongst ourselves and to prepare for the tough fight we will face against John McCain in the fall."

Richardson will be with Barack Obama to announce that endorsement. It will be happening at a campaign event in Portland, Oregon, this afternoon.

And CNN's Candy Crowley is with Obama on the campaign trail. She joins us on the phone from Charleston, West Virginia, this morning. Good to have you with us, Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL ANALYST: Thanks, Kiran. You know ...

CHETRY: The impact of this endorsement, what do you think?

CROWLEY: Well, I think this is an endorsement that your initial reaction would be, oh, perhaps this will help Obama with Latino voting bloc, where Hillary Clinton has really just pounded Obama in that particular demographic. But this is an endorsement aimed at superdelegates, Richardson himself is one. It comes after a just really lousy two weeks for Barack Obama.

So this is a signal. Here's this establishment guy. He held two really high-profile posts during the Clinton era. He's mainstream democratic, and he's putting his sort of nod to Barack Obama, saying he's OK, he's my guy, he's once in a lifetime to kind of try to steady what has been such a rocky time for Obama.

So I think this is a superdelegate message. I think you saw that. In fact, in the e-mail that Richardson put out to his former supporters under the "Richardson for president" e-mail, saying, you know, listen, it's time to put the fighting behind us. Richardson also noted in that that he was very moved by Obama's speech on race as a Latino American. He's been very upset about the talk of illegal immigration, which he considered overly harsh.

So this is an endorsement that may help with the Latino voting bloc around the edges. But honestly, if that were Richardson's target, he probably would have done this before New Mexico, before Texas, both of which Obama lost largely due to the Latino vote. So this is a larger message to those elected officials and to those party officials, who in the end may well decide who the nominee is going to be, Kiran.

CHETRY: So what is the potential for Richardson to sway superdelegates? What type of pull does he have there?

CROWLEY: Well, again, it's a signal, and I think it sort of says to maybe the rest of the superdelegates who were maybe about to go with Obama, and then watched this whole week unfold, thinking is he untested? Are there more things to come out? This is a pretty high- profile guy, a New Mexico governor, former Energy secretary, former U.N. diplomat. He's been around the block. He's inside the party, and he's very close to the Clintons.

So this is a break for Richardson. He spent Super Bowl Sunday with Bill Clinton. The courtship has been very, very hard. So this sends a signal from the heart of the party, this guy's OK. He called him a once in a lifetime candidate.

CHETRY: Candy Crowley for us on the phone this morning. We'll be checking with you later as well. Thanks.

CROWLEY: Thanks, Kiran.

ROB MARCIANO, CNN ANCHOR: There has been a security breach involving Barack Obama's confidential passport. The State Department says it's trying to figure out whether three contract workers had a political motive for looking up Barack Obama's file three years ago. Each incident happened within hours or days of a primary contest. Two of the government employees have been fired, a third suspended. Obama's campaign is demanding a full investigation for what it calls an outrageous invasion of privacy.

CNN's State Department correspondent Zain Verjee is live in Washington, D.C., this morning. Zain, what kind of information are actually in these passport files? ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Hi, Rob.

Well, typically, a passport file, anyone, yours or mine or any citizen, will have things like scanned images of passport applications, people's birth dates, just basic bio information, probably citizenship information as well, things like records of passport renewal. It usually has passport photographs, Social Security numbers.

It's not exactly clear what else may have specifically been in Senator Obama's file. But clearly, the State Department embarrassed about this and is scrambling and we'll probably get more details later.

MARCIANO: Any word on who these three guys or girls, contractors are?

VERJEE: No, the State Department isn't saying. What they did say is that two contracting companies are involved, but they're not disclosing those details.

MARCIANO: All right. Certainly a developing story. We'll be checking back with you. Zain Verjee, our State Department correspondent. Thanks, Zain.

CHETRY: Well, it's a big newsday for Senator Obama. As we just mentioned, he picked up Bill Richardson's endorsement. Also finds his personal information accessed. So what is the potential political impact of all of this?

CNN political analyst John Dickerson joins me now from our Washington bureau this morning. We'll get to the news overnight and that was the e-mailing of an announcement to all of the -- to many people out there from Bill Richardson, saying I've made my choice. I'm going to go ahead and endorse Barack Obama. What type of impact is that going to have on the campaign trail?

JOHN DICKERSON, CNN POLITICAL ANALYST: Well, I think it has sort of a medium impact. Candy zeroed in on a very important thing here, which is in that message from Richardson, he says, you know, now is the time to get behind our candidate. And, you know, the Republicans have a bit of an advantage right now, so it's time for us to get behind Barack Obama.

Superdelegates who are still on the fence, the Obama campaign is arguing to them, basically, look, Obama has the pledged delegate lead, and that's going to be the case going all the way to the convention, so let's just get behind him now.

And I think Richardson really throws an important endorsement in that context. So that's a big deal. And also, it's been a bad couple of weeks for Barack Obama, so it's nice to end on a positive note here for him.

CHETRY: Now, he had to decide who he was backing because he's a superdelegate, but he didn't have to endorse anyone, did he? DICKERSON: No. He didn't have to endorse anyone. On the other hand, if you want to be a player in politics, you have to do something. And so, he chose not a bad moment here to come out and endorse Obama after this sort of rocky period for Obama, but also because Richardson has often talked about his role in the Hispanic community and bringing the different races together.

Coming on the heels of Obama's speech, which Richardson also mentioned in that e-mail to supporters, that adds another grace note here. That it was probably pretty good timing for Richardson, who, like all superdelegates, is trying to maximize his political power by making his endorsement at the right moment.

CHETRY: All right. Let's talk a little bit about Barack Obama's speech on race and the fallout from that. It's been discussed all week. He did some interviews yesterday about it, and he was asked in one of these interviews about some comments he made about his grandmother, his white grandmother, who he said he loved her, but at times, things she said made him cringe, and at times she was scared of African-Americans.

Let's hear what he said in that interview.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The point I was making was not that my grandmother harbors any racial animosity. She doesn't. But she is a typical white person.

(END VIDEO CLIP)

CHETRY: All right. Now, he explained himself on "LARRY KING" by saying what he was trying to highlight is the fears that are in our culture, even in his diverse family. What will be the fallout from those comments?

DICKERSON: Well, it's hard to say. The problem -- it's interesting. In Barack Obama's nearly 5,000-word speech, he called on all of us to not take little snippets out of context. Good luck with that, Senator. This is the problem with a campaign.

You make a complex argument about a very complex issue in a delicate way, and the problem is that then when he has to talk about it in tiny little snippets, it can get taken out of context, or he can say something that doesn't give the full meaning of what he was trying to say.

So this -- I'm not sure this will be a huge blowup. One of the good things about the Richardson endorsement is that it probably takes these other stories out of the news for a little bit, but it is the kind of thing in this conversation he's going to be having for the rest of this campaign, how he has to tread incredibly lightly, even though he puts such consideration into that speech.

CHETRY: All right. John Dickerson for us this morning, CNN political analyst, "Slate.com," thanks for being with us. DICKERSON: Thank you.

MARCIANO: Well, the delegate battle in Michigan isn't over yet. Democratic leaders are trying to figure out how to seat their delegates at the convention, since the Michigan legislature adjourned without passing a bill for a do-over primary. Barack Obama's campaign suggests an even split of Michigan's 156 delegates. Hillary Clinton's camp rejects that idea. Florida is also trying to figure out how to seat their delegates.

Well, now there's a link between the Clintons and Barack Obama's pastor, Jeremiah Wright. A picture from a blog written by Wright's supporters shows Wright meeting with President Clinton at the White House in 1988. He was invited to a prayer breakfast during the Monica Lewinsky sex scandal. "The New York Times" says they got the same picture directly from the Obama campaign.

Last night on "LARRY KING LIVE," Barack Obama again defended his relationship with Reverend Wright.

(BEGIN VIDEO CLIP)

OBAMA: Given that Reverend Wright was retiring, I had no reason to leave the church. And what I also have tried to point out is that had I known that many of these comments were being made, I would have confronted Reverend Wright directly, and if he had continued to argue these points or if I had heard them in the church, I might have left, but that's not what happened.

(END VIDEO CLIP)

MARCIANO: Obama made a major speech on Tuesday on the racial divide in America, partly prompted by Wright's remarks.

Well, John McCain's campaign suspended a low-level staffer for sending out a YouTube link to a video that raises questions about Barack Obama's patriotism. The video shows snippets of Obama's speeches and interviews and links them to his controversial former pastor, Reverend Jeremiah Wright.

The McCain campaign issued this statement saying, "We have been very clear on the type of campaign we intend to run, and this staffer acted in violation of our policy. He has been reprimanded by campaign leadership and suspended from the campaign." Obama's campaign has not yet responded.

CHETRY: And still ahead, you're watching the most news in the morning. A story developing overnight. Nancy Pelosi meeting with the Dalai Lama. She talks about that meeting this morning.

Also, extreme weather. We're still tracking it for you, and the fallout still continues. Look at that. Homes destroyed by the rising floodwaters, swamping the heartland.

And there is a new warning for the region this morning. Yes, that video is amazing. We'll show you a little bit more of that when we come back. Homes literally washed away. A live report coming up.

(COMMERCIAL BREAK)

MARCIANO: Now to the extreme weather saturating the country this morning. In Arkansas, the rains have stopped, but the water still very dangerous. Check this out, in Calico Rock, this home was swept from its foundation and carried downstream, but the current is so swift that the roof actually just completely sheared off by that bridge. Unbelievable video there. It's definitely scary.

Well, two days of pounding rains and more than a foot of water pushing levees to their breaking point in Missouri. Southwest of St. Louis, the swollen river's now smashing through small levees, flooding downtowns and swamping streets and homes.

And it looks the same in Illinois. Nearly two dozen counties there declared disasters, and CNN's Jacqui Jeras is live in Eureka, Missouri, with the latest from your location.

Good morning, Jacqui. I assume there's water, water everywhere.

JACQUI JERAS, AMS METEOROLOGIST: Everywhere, Rob. It's nearly impossible to travel around here from the interstates to the highways to the back roads. Roads are closed. They are cut off. Travel is nearly impossible.

Three hundred people have been working on efforts of sandbagging, and dozens and dozens of people have been evacuated from their homes. This is the Merrimack River, well up on the road where we stand here, and it is rising very, very rapidly. It's already 16 feet above flood stage, and it's forecast to crest overnight tonight into early tomorrow morning at 43 feet.

If it does that, that will break the record from back in 1982. As we've been watching the river rise, check this out, Rob. Do you see this stick here? We put this thing down here about 15 minutes ago, and now you can see the water has risen that rapidly. So we're talking maybe a foot of water rising in about a 30-minute timespan.

This scene is common all across parts of Missouri, from Arkansas on through Missouri, through Illinois, Indiana, even into Ohio and Kentucky. So this is broad, just very widespread throughout parts of the Midwest. The reason is not because of snowmelt. The reason is because of all the heavy rain that came from Monday through Wednesday, anywhere between six inches and a foot of rain has come down, more than a foot in Cape Girardeau, Missouri.

Now, the big question is, is there going to be any more rain in the forecast? And the good news is no, not in the immediate future. We do have a clipper-type system that's moving across the Midwest bringing snow through the Great Lakes. Chicago, one of the hit cities, getting hit hardest with five to eight inches of snow, and you know that's going to be a big travel nightmare there at Chicago O'Hare Airport.

That front will move through here into parts of Missouri, but it's really just going to bring in some cloud cover and some gusty winds. And that wind's certainly not a bad thing for our forecast here to kind of help dry things out. So at least we're not adding insult to injury, but a very dangerous situation. We're also hearing reports that I-44, a major thoroughfare that runs through the St. Louis area, may be shut down today. Several lanes have already been blocked off -- Rob.

MARCIANO: Certainly alarming to hear you say how quickly the waters are rising and the fact that we really haven't seen much rain in the last day and a half tell you how much rain we've had all week.

JERAS: Yes.

MARCIANO: All right, Jacqui, we're going to check back with you in a half an hour.

JERAS: Absolutely.

MARCIANO: I know you have a story to talk about as far as the dramatic water rescues that have been flooding those areas. Of course, when the weather is the news, trust CNN.

CHETRY: Well, Veronica De La Cruz is here now as well with some stories making news this morning, including a little visit overseas from the House speaker.

VERONICA DE LA CRUZ, CNN INTERNET CORRESPONDENT: That's right. The Dalai Lama, you're right about that. Kiran, good morning to you. And good morning to you, Rob. And good morning to all of you out there.

Here's what's new this morning. House Speaker Nancy Pelosi met with the Dalai Lama in India today. Pelosi condemned China's crackdown on recent anti-government protests in Tibet.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), HOUSE SPEAKER: But speaking for myself, I would say that if freedom-loving people throughout the world do not speak out against China's oppression in China and Tibet, we have lost all moral authority to speak on behalf of human rights anywhere in the world.

(END VIDEO CLIP)

DE LA CRUZ: She hopes her visit will send a signal to China that it must begin talking with the Dalai Lama. His supporters have staged violent protests in Tibet over the past week.

Well, Arabic TV network Al Jazeera has aired what it says is a new audio tape from Osama bin Laden. It is the second tape in as many days. The al-Qaeda leader spent Palestinian talks with Israel and says Iraq should be used as a base to fight in Palestine. Wednesday's tape is raising concern for the safety of Pope Benedict XVI, especially today, Good Friday, and throughout the Easter weekend. That message accuses the Pope of being behind a new crusade against Islam. It points to a cartoon that disparages the Muslim prophet Muhammad. The cartoon was reprinted in Danish papers last week.

To Iraq now, where the top U.S. commander is expected to recommend a so-called troop pullout pause. CNN has learned General David Petraeus will tell President Bush on Monday there should be a four to six-week pause in additional troop withdrawals after the last of the surge brigades leaves in July. He wants to see what happens to the violence level with a smaller force. Defense Secretary Gates is weighing proposals from senior military officials.

And a freak accident to tell you about now in the waters off the Florida Keys. A woman was sunbathing on the deck of a boat when a 75- pound eagle ray jumped out of the water, slammed into her and killed her. Investigators say the impact caused her to fall back and hit her head on the deck. They say she didn't appear to have any puncture wounds from the ray's barb.

Wildlife crews say eagle rays are not aggressive, but they do tend to leap from the water. And you might remember a similar incident led to the tragic death of crocodile hunter Steve Irwin. The Australian wildlife expert died after his chest was pierced by the barb of a stingray back in 2006.

Well, are you heading to the Olympics in Beijing? Beware of "Big Brother." That's the warning from the State Department this morning. In a newly released 2008 Olympics fact sheet, officials tell Americans visiting China to expect their room and offices to be bugged and searched while they're out. The State Department also warns travelers they may not be able to access portions of the U.S. Embassy's Web site because of Internet restrictions in China.

And that is what is new this morning. I'll send it back to Rob and Kiran. I can't believe ...

CHETRY: We've got a lot of stuff going over there.

DE LA CRUZ: Yes. But I can't believe the Olympics again, already right around the corner. I've always wanted to attend the games. It's definitely on my list of things to do before I die.

MARCIANO: Well, if you go, just make sure you're fully dressed in your hotel room, because it looks like they're going to have some cameras.

(CROSSTALK)

CHETRY: Yes, exactly. Not only that. You have to bring your glass with me to (INAUDIBLE). You have to bring your mask with you because the air quality is so bad. Some of the athletes are waiting until the last possible second.

DE LA CRUZ: Or maybe not the Olympics in Beijing, though.

MARCIANO: Well, we'll find some good news for the Olympics before it gets here.

CHETRY: Thanks, Veronica.

MARCIANO: Thanks, Veronica.

CHETRY: So are high gas prices and worries about the economy forcing you to curb back on your spending? Ali Velshi will be here with a look at how Americans are changing their spending habits, coming up.

And some Starbucks baristas said they've been getting a really bad deal, and they think they deserve $100 million in tips. They think that's coming to them. Why? We'll talk about it coming up.

(COMMERCIAL BREAK)

CHETRY: A look now at the most popular story on CNN.com this morning. A judge is ordering Starbucks to pay its baristas in California more than $100 million in back tips. And this was a lawsuit filed in 2004 from a former Starbucks barista in La Jolla who complained that shift supervisors were getting a share of their tips. A judge says that is in violation of a state law prohibiting managers and supervisors from sharing in employee tips. So the money could be spread among as many as 100,000 former and current baristas in California. What do you think?

MARCIANO: How does this affect our economy, you know, when we're separating tips like that?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, the wage levels are higher for supervisors. I completely agree with that law.

CHETRY: Right. So if they have to give them to 100,000 current and former employees, they still get a percent.

(CROSSTALK)

VELSHI: No. They're just getting a few. You know, it will widdle down.

MARCIANO: I have a feeling lawyers are going to make a few pennies off this, too.

VELSHI: Yes. Yes.

CHETRY: That's true.

MARCIANO: What do you have for business this morning?

VELSHI: Well, I have something interesting for you. Yesterday, I was speaking to a prominent economist I know that doesn't get everybody going. But they're from the Economic Cycle Research Institute, ECRI. And the reason that's interesting is ECRI does nothing but take all these statistics that we talk about and all these, you know, job numbers, inflation numbers. They put them all together, and they measure where we are going in the economy. We've been following with Lakshman Achuthan. He's the managing director there, whether we're going into a recession. We sort of block out all the noise of polls and various economists, and we pretty much only listened to what ECRI says.

Here's what Lakshman said to me.

(BEGIN VIDEO CLIP)

LAKSHMAN ACHUTHAN, MANAGING DIRECTOR, ECRI: So recession is unavoidable at this point. So if policymakers had been quick in stimulating the economy, say late last year, we could have had a nice pause in the slowdown, which might have given us some time to avert the recession.

(END VIDEO CLIP)

VELSHI: Take a look at the chart that he puts together that shows us why he thinks there's a recession. This chart goes all the way back to the 1970s. And if you look at it, if I were to see it, I would tell you more about it, but if we're not going to see it then I won't -- there we go.

You can see that where the lines go below zero, there's some shaded borders around that. The borders are recession that you can see over time. There are more time goes on beyond recessions, and the recessions do tend to be shorter. While the average is 10 months, they seem to have been eight months the last two.

But look at right on the right side of your screen, you see where that line has gone from above the middle point all the way down?

MARCIANO: Yes.

VELSHI: That's telling them that a recession is coming. We have some new numbers from our CNN/Opinion Research poll of Americans and the economy. We asked whether or not the economic conditions are making people postpone major purchases like furniture or appliances.

Sixty-one percent said yes, 39 percent said no. I think that's not bad. There are still 39 percent of people carrying on with their purchases. But, look at what we asked them about what they cut back on, what they cut back on because of the economic conditions. Seventy-five percent say leisure activities. Again, expected, 59 percent saying clothing.

Here's where it starts to become troublesome. Forty-six percent are cutting back on heat and electricity. Now, that's fine if you've been otherwise not good with your heat and electricity. Thirty-one percent TV, telephone, and Internet, and 30 percent, food or medicine.

So, it is definitely affecting people. You don't want to have people having to cut back on food or medicine because of the economy. We'll continue to follow that, and I'll have other news for you over the course of the morning.

MARCIANO: All right. Thanks, Ali.

VELSHI: OK.

CHETRY: Thanks.

MARCIANO: Breaking political news overnight. Senator Barack Obama picks up an endorsement of New Mexico Governor Bill Richardson. Why did Richardson wait so long before giving up his support? That story is coming up.

And while many Americans are feeling the pinch from high gas prices, retailers are getting hit by the slowdown, too. We sent Poppy Harlow to the Mall of America. We'll get a live story from her. That story and today's headlines when AMERICAN MORNING returns.

(COMMERCIAL BREAK)

MARCIANO: Welcome back to AMERICAN MORNING. It's half past the hour.

I'm Rob Marciano. John Roberts is on the last day of his week off.

CHETRY: That's right. He'd better enjoy the last of Costa Rica, because he's going to say adios in just a day.

MARCIANO: Be back here Monday.

CHETRY: I'm Kiran Chetry. Thanks for being with us.

We have more on political news that broke overnight and that's Senator Barack Obama picking up a key endorsement. New Mexico Governor Bill Richardson, his one-time former rival will make the announcement this afternoon at a rally in Portland. CNN will carry the event live.

Richardson, a superdelegate and the nation's only Hispanic governor, has been courted by both Obama and Hillary Clinton, but he says he believes Obama can unite the nation and would be a "once in a lifetime leader." CNN's Jessica Yellin joins us on the phone with more on this news.

Jessica, tell us about the impact not only for the Obama campaign, but also for the Clinton camp, since Bill Richardson has enjoyed a very close friendship with both Bill and Hillary for years.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Kiran.

That's right. Bill Richardson himself has said he feels a great deal of personal loyalty to Senator Hillary Clinton. That administration, her husband's administration gave him very high- ranking political jobs, and you know, Bill Clinton was there watching Super Bowl with him this year. He has been assiduously courted by both sides, taking calls from the candidates and their surrogates. He says every single day someone's calling him. And so this is a morale blow to the Clintons. It will be deeply disappointing. It's unknown yet how this really will impact the rest of the superdelegates. That is the big question.

CHETRY: How about the impact on voters? A lot was made of the fact that perhaps Richardson, a Hispanic, could help court the Hispanic vote, where Hillary Clinton's been doing very well, actually probably two to one in some states over Barack Obama.

YELLIN: You're absolutely right, and this is a good boost for Barack Obama in the Hispanic community. The problem is that the states yet to vote, with the exception of Puerto Rico, aren't heavily Hispanic. This would have helped a lot more say pre-Super Tuesday, but it really does do something else -- the potential impact on voters really has to do with the change of tone.

Does it shift sort of energy, enthusiasm, momentum to Barack Obama after a couple of weeks of some bad news, bad breaks? And it's yet to be seen if this sort of changes media coverage, changes the attitude for the Obama campaign and then makes voters more receptive to Obama again and gives him more momentum. That's the big question.

CHETRY: Jessica Yellin for us this morning, thanks.

We also want to hear your take on the news this morning, Governor Bill Richardson backing Senator Barack Obama. So will this impact the Democratic race? What type of impact do you believe an endorsement from another candidate has on one of the candidates? Cast your vote, CNN.com/am, and we'll get a tally later in the hour.

MARCIANO: Now to the other breaking news involving Senator Barack Obama and his passport file. Two State Department workers have been fired for accessing it. A third worker has been suspended.

The State Department calls it a case of "imprudent curiosity," but Obama's campaign wants to know why the incidents took so long to be revealed. The first breach happened January 9th, the day after the New Hampshire primary, the next on February 21st, two days after the Hawaii caucuses and the Washington and Wisconsin primaries, and the third happened a week ago on March 14th.

Passport files contain things like scan images of applications, basic biographic information and photos. A similar incident happened during the 1992 presidential race when workers combed through Bill Clinton's file. The State Department said workers were trying to prove Clinton sought citizenship in another country to avoid the draft.

Former U.S. attorney Joe Digenova investigated the passport breach of Bill Clinton in 1992. He joins us now live by phone.

Joe, how serious is this breach and as a prosecutor, how do you go about investigating what happened?

JOE DIGENOVA, FORMER INDEPENDENT PROSECUTOR: Well, it's very serious. These passport files now enjoy a sanctity that they didn't have when I first investigated this matter back in 1992. They have actually set up systems and put them in place, electronic systems, where they can find out if files have been breached, and that's how these three incidents were discovered.

The problem is, once they were discovered, it wasn't passed up the chain of command to higher-ups, according to the information we have thus far, and that is really a very serious management flaw that occurred here and really has to be investigated seriously.

Since two of these employees have already been fired, the inspector general of the department of state has no authority to interview them now. The only way these people could be interviewed is if they voluntarily agree or if they get a grand jury subpoena.

MARCIANO: Should they have not been fired? I mean should we have just taken a couple deep breaths here, maybe started with the management? I mean shouldn't the finger be pointed at the management first?

DIGENOVA: I don't think there's any question the finger should be pointed at management. This obviously happened in the consular office, which handles passports. If you remember, this is the office that couldn't process passports last summer, and thousands of people weren't able, when all these new procedures were coming into place.

There's been historically very bad management in certain parts of the State Department, and this is just the latest example of it. It would have been better if these folks had been interviewed before they were fired. Obviously, when you have control over people, legal control, you have the ability to compel certain information in an administrative hearing.

Now again, it's another example of very, very bad management, and there's going to have to be a very thorough investigation of this, because we're talking about a presidential candidate's file, just for Secret Service reasons and security reasons, you don't want things like this happening.

MARCIANO: Certainly, security's an issue, but also politics, coming up on the big election. They're calling this imprudent curiosity, but considering the timing, one seemingly coming after the other after a primary, and the last one actually coming out after the reverend's curious remarks. Do you buy that it's just curiosity or do you think it's politically motivated?

DIGENOVA: Well, I think that when you have three separate incidents, it raises the level now of concern about what the motivation was. We obviously at the moment don't know, and the labeling this as imprudent curiosity is fine for the moment, but it is insufficient for purposes of making an assessment about whether or not other people need to be fired or held accountability in the civil service, not just political.

There's no evidence right now that any political appointees were involved in this. There is evidence that civil servants were involved in this. And as you know, in the American government, civil servants never get fired. It will be interesting to see whether any civil servants get fired in this case, because the contractors were not civil servants, they were just that, they were contractors, hired by the State Department to carry out certain tasks.

MARCIANO: All right, Joe Digenova, you have a history with this and we may well be tapping you as a resource as this story continues to develop. Thank you, Joe.

CHETRY: Well, the two campaigns, Hillary Clinton and Barack Obama, locked in a new struggle over Michigan's delegates. Democratic leaders in Michigan are still trying to figure out how to seat their delegates at the convention, since the Michigan legislature adjourned without passing any bill for a do over primary.

Barack Obama's campaign suggests an even split of Michigan's 156 delegates. Hillary Clinton rejects that idea.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I have, as the Democratic National Committee has, come out in favor of an effort to revote in Michigan. I do not understand what Senator Obama is afraid of.

(END VIDEO CLIP)

CHETRY: Now the fate of Michigan and Florida's delegates as well appear to be in the hands of the Democratic National Committee.

MARCIANO: Days of rain pushing swollen rivers over their banks, and the concern, like the water, is definitely rising. More than 250 communities in at least a dozen states are dealing with high waters.

So far, flooding has been blamed for at least 16 deaths. Federal disasters have been declared up and down the heartland, and the muddy waters are still continuing to push past levees. Levees are leaving fields under water and homes and businesses surrounding.

It's not just residents feeling the fatigue from all this. The national guardsmen are working around the clock. It's so far from over, officials say it may still be days before water levels return to normal.

Reynolds Wolf is tracking the extreme weather. He is at the weather update desk there in Atlanta, where it's not quite raining as hard as it used to be, but certainly the waters continuing to rise.

Hi, Reynolds.

REYNOLDS WOLF, AMS METEOROLOGIST: Absolutely right. We'll be seeing the water rise along many of the rivers.

In fact, behind me, Rob, this is a look at Google Earth and we're going to zoom in on some key locations. Notice on this map you're going to see some reds and some purples pop up in places like Valley Park and Eureka, which is just to the southwest of St. Louis. These are areas where you have the flood gauges right along the river at extreme heights, and we're expecting the waters to rise even more in Eureka.

In fact, take a look at this chart. You'll notice the river expected to crest right around 43 feet, 43 feet! And it should do so late night as we get into Saturday and into early Sunday morning. So it's going to be an interesting time to see. We're going to see more flooding as the waters continue to rise.

Now, why do these waters rise? Well, because of the incredible rainfall they've had there. In fact, in parts of Missouri, they've had over a foot of rain, especially in spots like Cape Girardeau, Missouri but here in areas like say Arkansas, back into Indiana, even into Ohio, they've had a foot of rain in some locations. Some places, anywhere from seven to even four inches of rainfall. The rain has stopped, but still, all the water will seep into the tributaries and rivers and the water will steadily rise.

That's not the only precipitation that we're seeing, though. There is more action a little bit farther to the north in places like Chicago, back into Milwaukee. Not mainly rain, but rather, snowfall. Some locations south of Green Bay, near Sheboygan, into Milwaukee and back to Chicago, could see anywhere from four to even eight inches of snowfall. That's going to cause some widespread delays. Already on the map you see plenty of warnings, plenty of advisories. A nasty day for much of the upper Midwest and western great lakes.

Let's send it back to you, Rob.

MARCIANO: Right on the map for a winter storm threat now, Reynolds.

WOLF: In spring, in spring! Go figure.

MARCIANO: The first full day of spring. All right. Reynolds, keeping you busy. Thanks.

WOLF: You bet.

CHETRY: You know, in fact I did feel some snow on the way in this morning.

MARCIANO: We had a few flurries here.

CHETRY: I didn't want to throw you guys off, because first day of spring yesterday and it's the last thing you meteorologists want to see.

MARCIANO: Can't handle that. Thank you for thinking of us.

CHETRY: Sure.

Well, with gas prices soaring and home prices falling, Americans feel like they have less money to spend on other things, so what kind of impact is that drop in spending having on retailers? CNNmoney.com's Poppy Harlow joins now from the Mall of America, the huge mall in Bloomington, Indiana, with more on the pain the retailers are feeling as well.

Hi, Poppy.

POPPY HARLOW, CNN CORRESPONDENT: Hey there, Kiran.

We're actually in Bloomington, Minnesota, a few snowflakes here this morning as well, but you can see this mall has a lot more than just shops. A huge amusement park here behind me, a roller coaster, a Ferris wheel, more than 500 stores. To give you some perspective, for you Yankee fans out there, you could fit seven Yankee Stadiums in here.

We talked to a lot shoppers yesterday to see how the economic downturn is impacting them and how it's affecting stores and restaurants, et cetera. And what we heard was pretty surprising. This mall has 40 million visits a year, and a lot of money comes through here. And stores are not feeling the pinch this year.

Take a listen to what some consumers told us about the money that they're spending.

(BEGIN VIDEO CLIP)

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

UNIDENTIFIED MALE: Maybe within the last three or four days about $1,500 to $2,000.

UNIDENTIFIED FEMALE: I don't think it's much different for us, is it?

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: No, not really.

(END VIDEO CLIP)

HARLOW: You know this came as a real surprise to us. But keep in mind, more than half of the money that's spent at this mall is from tourists, people coming from abroad and really cashing in on that weak U.S. dollar, Kiran. So it's pretty interesting to see. It seems like this mall, of course, one of the largest malls in the country, is really skirting the economic downturn.

CHETRY: And are people coming here, as you talk about the tourism, because we've talked about the weak dollar as well, they can get more for their money if they come over to the U.S. and spend it?

HARLOW: Well, exactly. That's what the representatives here at the mall are telling us. People are coming, a lot of people from Japan and England, and all over Europe, because they're cashing in, again, on that weak dollar, picking up things with no tax on clothing. And also, they're really finding a difference here versus the rest of America when it comes to those big department stores. To give you an idea what I mean, Nordstrom is here. Nordstrom nationwide saw sales fall almost 6 percent last month, but the Nordstrom here is one of the best performing in the country. Same story with Gap, Gap seeing strong sales here, whereas nationwide it saw sales fall 6 percent last month. So some encouraging news here from Minnesota, from the Mall of America.

CHETRY: Poppy Harlow, thanks for joining us this morning. We appreciate it.

Also a reminder, the economy, issue number one, you can join Ali Velshi and Gerri Willis today at noon eastern for "ISSUE # 1." Be sure to check out CNN.com as well for more news about your money.

MARCIANO: And a freak accident in Florida. An eagle ray leaps from the water and collides with a woman, killing her. Questions this morning about whether it can happen again. That's coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: This is AMERICAN MORNING.

You're looking at video of eagle rays, a protected species of fish in the waters off Florida, the type of ray known for being able to jump several feet out of the water, but not known for being aggressive. Yet, another freak accident involving rays.

A 75-pound eagle ray is being blamed for the death of a woman who was boating in the Florida Keys. Witnesses in that boat say this ray jumped up out of the water and knocked the woman down to the deck of the boat.

Dave Cartunin of our affiliate WSVN in Miami has more on this story now.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: 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 to call this freak incident an accident, but no one can put it into more appropriate terms.

UNIDENTIFIED MALE: Our investigators are dumbfounded that this happened.

CARTUNIN: Yet, somehow, a family of four from Michigan steered their rented 16-foot fishing boat directly into the path of this 75- pound spotted eagle ray, and at that precise instant, the creature leapt out of the ocean, right in front of the face of 55-year-old Judy Zegorski. UNIDENTIFIED MALE: If you can imagine, you're going 25 miles per hour. God knows how fast it was coming up. So that -- the velocity of those two objects meeting 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 of 2006. In Irwin's case, the barb provided a natural explanation for his death. There is no such explanation in this case.

UNIDENTIFIED MALE: Our investigators determined that there was no eligible 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)

CHETRY: That was Dave Cartunin of our affiliate WSVN.

How much of a danger, though, do stingrays and eagle rays really pose for humans? Could this happen again? Coming up in the next hour, we're going to talk live with Ray Davis. He's the senior vice president of zoological operations at the Georgia Aquarium.

MARCIANO: It's just crazy that all this has happened in just the last few years. A lot of tourists will swim not with these specific kind of rays, but you've done it, right, swim with these big rays?

CHETRY: That's right. Also feeding them in some of those excursions after cruises. You go into the waters and you feed them. They're quite docile, but in both instances, people said how rare it was. I mean, the Steve Irwin thing as well. There are people who may take a barb in the leg, but exactly where it hit in his heart is what killed him.

MARCIANO: Beautiful, graceful animals, and that's just a tragic accident.

CHETRY: Sure are.

MARCIANO: Well, floodwaters are still rising in the Midwest, closing down lanes of a major interstate. A live update from the flood zone, that's coming up on AMERICAN MORNING. Stay with us.

(COMMERCIAL BREAK)

MARCIANO: Rivers in the Midwest are still rising, and at least 15 people have been killed across several states.

Jacqui Jeras now joins us from Eureka, Missouri, where the waters continue to rise there.

Hi, Jacqui. What's the latest?

JERAS: Hi, Rob.

The water's rising so fast here, it's unbelievable. We're talking about a foot maybe in the last 30 minutes. I'm on a roadway, though you can't tell, and just over to the side here is where the Merrimack River and the big river come together. But you can't really differentiate between the two any longer.

There are numerous homes down here which already have been evacuated. This area, while it's quiet here this morning, was bustling yesterday with people getting out of their homes, taking their belongings out, and also several high-water rescues took place here yesterday.

While most people have gotten out, there's a group of people that live up here on the high water, or up on the high area into a hill, and they're trying to wait out this storm and hoping for the best, that they won't have to evacuate, but they're going to get cut off before you know it, because the Merrimack River kind of makes a loop around the city of Eureka, so they're getting closed in on both ends.

Now, I spoke with the mayor, Kevin Coffey, last night, and he said they're not taking any chances. More than 300 volunteers have been out sandbagging, trying to protect the downtown area as well.

The river is expected to crest at 43 feet late tonight into tomorrow morning, and if that happens, he said half of the businesses could be covered with four to five feet of water.

And I also want to show you, check in, as we've been tracking how high the river has been rising. When we first saw you near the top of the hour, we put a heavier log now, so it won't float away, here on the road. And look at how far the water's been progressing. Before the start of my live shot, we stuck this cone here, and look how far the river has gone up here. We might actually end up having to move ourselves up to higher ground.

More efforts taking place throughout the afternoon and throughout the morning today. They're expecting to fill up some more sandbags and hopefully protect the city -- Rob?

MARCIANO: OK, Jacqui. We'll continue to check back with you as those waters continue to rise.

Well, we could see more deadly flooding as we head into the weekend and possibly next week. Heavy snowpacks from the winter will melt as the rains come down. That's combining with some rains causing rivers to crest more than 20 feet over their banks in some cases. Missouri getting hit with as much as 12 inches of rainfall. The Merrimack River in Missouri is expected to crest on Saturday at 26 feet above flood stage, and the Mississippi River at more than 12 feet on Sunday -- Kiran?

CHETRY: All right, thanks a lot, Rob.

We're following breaking political news this morning. Senator Barack Obama picks up the endorsement of New Mexico Governor Bill Richardson. So what impact will that have on the campaign trail? We'll have more on that coming up at the top of the hour on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: Breaking news, Bill for Obama. A man who ran against him now stands with him.

Plus, who's been peeking into Obama's passport files? The most politics in the morning.

Washout, The flood's furry and life-saving rescues.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I'm just hanging onto a tree, just screaming "help, help, help!"

(END VIDEO CLIP)

CHETRY: As the water keeps rising.

And death ray, a tourist killed in a freak attack.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: She was just at the wrong place at the wrong time.

(END VIDEO CLIP)

CHETRY: We go up close with a flying sea creature, on this AMERICAN MORNING.

MARCIANO: Good morning. It's the top of the hour.

I'm Rob Marciano in for John Roberts.

Tons of news breaking overnight in the last 12 hours alone.

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