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AMERICAN MORNING

Former White House Press Secretary Makes Bombshell Accusations About Bush Administration; Gas Price Up, Oil Price Down; Three Presidential Candidates Make Joint Statement on Darfur

Aired May 28, 2008 - 06:00   ET

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


JOHN ROBERTS, CNN ANCHOR: We begin with nothing less than explosive accusations from the former White House Press Secretary Scott McClellan. In a new memoir due out next week, the one-time staunch defender of the president from the podium now paints a scathing picture of an administration that relied on propaganda to support the war. He also slams the president's inner circle for deceiving him about the CIA leak case involving Valerie Plame.
Last night, Karl Rove, the president's former senior adviser, fired back calling McClellan "irresponsible and out of the loop." He also said the claims don't sound like his former colleague.

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER BUSH ADVISOR: This doesn't sound like, Scott. It really doesn't. Not the Scott McClellan I've known for a long time. Second of all, sounds like somebody else. It sounds like a left wing blogger.

Second of all, you're right. If he had these more qualms, he should have spoken up about them. And frankly, I don't remember him speaking up about this. I don't remember a single word.

(END VIDEO CLIP)

ROBERTS: Mike Allen of "Politico.com" broke the story late yesterday. He joins us now live from Washington. Mike, this is an extraordinary book and you could certainly tell by the level of pushback coming towards Scott McClellan from administration officials or former administration officials.

MIKE ALLEN, POLITICO.COM: Well, John, that's right. And you hear Republicans saying things like pathetic and even making fun of the title, saying that instead of being called ""what happened" it should be called "what happened?"

ROBERTS: He claims that President Bush used "propaganda to sell the war." Let's look at what he says in the book.

"And his advisers confused the propaganda campaign with the high level of candor and honesty so fundamentally needed to build and then sustain public support during a time of war."

He finally articulates what we all came to believe, Mike, and further goes on to say that this war was unnecessary. ALLEN: Well, John, I think that's right that these aren't particularly novel observations. But -- and as you and Karl suggested, who knew that there would be coming from Scott. And that's the power of them is that they come from someone that was no one who's closer to the president.

He's taken closer personally, as you know, was one of the first to come with the president from Texas, was with him since '99, traveled with the president on the campaign plane in 2000.

But, John, now Scott has put on a new hat. He's put on a historian's hat. He's not in the administration flak anymore, and that's why there's such great unhappiness with him, and people saying that he's given up the only good quality that he had in their view which was loyalty.

ROBERTS: Right. He's getting ripped not only by Karl Rove but by Fran Townsend, the former national security adviser to the president, or the Homeland Security adviser to the president rather. She's now a CNN contributor. Let's listen to what she said last night about this.

(BEGIN VIDEO CLIP)

FRAN TOWNSEND, FMR. BUSH HOMELAND SEC, ADVISER: People need to understand that as an adviser to the president, I or Scott have an obligation, responsibility to voice concerns on policy issues. Scott never did that on any of these issues as best I can remember, and as best I know from my White House colleagues. So for him to do this now, frankly, strikes me as self-serving, disingenuous, and unprofessional.

(END VIDEO CLIP)

ROBERTS: Mike, not only is he being thrown under the bus, but they're backing up the bus and they're running over him again.

ALLEN: But we did see in this book glimpses of things that we might have imagined but nobody had seen. For instance, in here Scott says that he is the one who told the president this was definitely an undesirable task, who informed the president that the Chief Economic Adviser, Larry Lindsey, remember in the run-up to the war had told the "Wall Street Journal" that it could cost $100 billion to $200 billion.

Now, that turns out to be the low ball of all low balls but at the time it was heresy. And he says the president was steamed, clearly irritated. And, John, when they say the president is clearly irritated, you know what they're talking about there.

ROBERTS: Yes. He also rings in, Mike, on the Valerie Plame leak, and we all remember in October 2003, he stood up there before the White House press corps. You were in it. I was in it at that point, saying that Scooter Libby, Karl Rove, Elliott Abrams had nothing to do with this leak. Now here is what he writes in the book.

"I had allowed myself to be deceived into unknowingly passing along a falsehood. It would ultimately prove fatal to my ability to serve the president effectively. I didn't learn that what I'd said was untrue until the media began to figure it out almost two years later."

So he's basically saying that they gave him bad information to go out there and tell us. He's saying it wasn't his fault. Was it his fault?

ALLEN: Well, John, he takes a little blame himself and he says that he was at best misled is the way he put it, but as you said in that quote, he allowed himself to be deceived. And so, there are -- this is not a one dimensional portrait.

He does still say that he believes the president is authentic and genuine. He does say that he still likes and respects the president, but he says that things got terribly off track. And he says the president also was deceived in the Valerie Plame matter.

So you can see in the book how wounded Scott feels by the way he was treated and by the fact that he went in front of the press, and frankly embarrassed himself when the facts came out at the trial.

ROBERTS: All right. Mike Allen for us this morning from "Politico" in Washington, D.C. this morning. Mike, thanks very much.

We should point out we hope to hear from Scott himself a little bit later on this week here on AMERICAN MORNING. And also, in just a few minutes' time we'll be taking with Richard Clarke, the former national security expert, anti-terrorism expert there at the White House, who himself was thrown under the bus a few years ago. We'll ask him more about this -- Kyra.

KYRA PHILLIPS, CNN ANCHOR: Well, also new this morning. John McCain raising an estimated $3 million in a rare closed door GOP fund- raiser with President Bush in Phoenix. The president and Senator McCain were seen together briefly on an airport tarmac. It was their first public meeting since the presumptive GOP nominee visited the White House back in March.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Endless war, endless war, endless war, endless war.

(END VIDEO CLIP)

PHILLIPS: Earlier in the day, McCain was heckled by anti-war protesters during a foreign policy speech there in Denver and he fired back.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: You know --

AUDIENCE: John McCain, John McCain, John McCain. MCCAIN: This may turn into a longer speech than you had anticipated. And, by the way, I will never surrender in Iraq, my friends. I will never surrender in Iraq.

(END VIDEO CLIP)

PHILLIPS: President Bush holds two private fund-raisers for John McCain in Utah today. McCain has a town hall meeting also in Reno, Nevada.

Now, Barack Obama used the closed Bush/McCain fund-raiser to hammer his presumptive opponent and drive home the Bush/McCain connection.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Today John McCain is having a different kind of meeting. He's holding a fund-raiser with George Bush behind closed doors in Arizona. No cameras, no reporters, and we all know why. Senator McCain doesn't want to be seen hat in hand with the president whose failed policies he promises to continue for another four years.

(END VIDEO CLIP)

PHILLIPS: Meantime, Obama's campaign is trying to set the record straight over remarks that he made during Memorial Day speech, when he mistakenly said that his uncle helped liberate Auschwitz during World War II. The Obama campaign says that the error was a simple mistake and the actual location was actually a smaller concentration camp in Germany.

ROBERTS: New this morning, Indonesia says it will pull out of OPEC at the end of this year. Thousands of people in Indonesia protesting a recent oil price increase there. Now the country's energy minister says Indonesia is no longer exporting more oil than it's bringing in. Indonesia is the only Southeast Asian country in the 13-nation OPEC oil cartel.

Mass evacuations in central China continuing this morning; 160,000 people are being moved downstream from a fast-rising earthquake-created lake before the dam lets go. We're going to take you live to a refugee camp coming up this hour there in Sichuan province.

A massive jump in wartime cases of post-traumatic stress disorder. Pentagon records show the numbers of troops diagnosed with the illness jumped by roughly 50 percent in 2007, the most violent year so far in the conflicts in Iraq and Afghanistan. The Department of Defense says nearly 40,000 troops have been diagnosed with PTSD since 2003.

PHILLIPS: Dell computer guilty of deceptive business practices. A New York judge ruled that Dell deceived customers in a massive bait and switch scheme to increase sales of its computer and electronic products. Well, State Attorney General Andrew Cuomo sued Dell in 2007 on behalf of hundreds of customers who claimed that the electronics company lured them into buying products with promises of attractive deals and promotions. Cuomo will join us in the next hour at 7:15 Eastern time.

And the strongest link yet between the effects of childhood lead exposure and adult crime. Researchers tracking more than 250 people for the past 20 years found that the more lead in a child's blood from birth to age 7, the more likely he or she was arrested at least once as an adult.

ROBERTS: Wow.

Coming up, with oil prices going through the roof, America clamors for more sources of the black gold. When we come back, Ali Velshi takes a look at prospecting oil offshore. That's ahead.

And three presidential candidates finally agree on something. Find out why Barack Obama, John McCain and Hillary Clinton are teaming up to make a rare joint statement.

Coming up on AMERICAN MORNING, blown away.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh, what just happened?

(END VIDEO CLIP)

ROBERTS: The free fall fiasco. The inside scoop on what brought down a record-breaking sky dive. And the new plans to take flight. Ahead on this AMERICAN MORNING.

(COMMERCIAL BREAK)

PHILLIPS: Hey, no surprise, gas prices, another record -- I had to see --

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I think it's going to stop.

PHILLIPS: Yes, right.

VELSHI: No, what did I tell you? June --

(CROSSTALK)

PHILLIPS: You said June 8.

ROBERTS: When we run out of money.

PHILLIPS: No, June 8.

VELSHI: No, but let's listen to this. I jokingly said June 5th or June 8th.

ROBERTS: June 8. VELSHI: $3.94 is what we have today, OK, for a gallon of self- serve unleaded. We have this little thing here, right? Where is it? I'm really bad at this. OK.

Now, the thing is that it takes 10 days usually to two weeks after oil stops hitting records. You know, the gas price lags the oil price. The oil price, you got to see this.

A barrel of oil, they are giving it away right now. Take a look at this. Oil closed down $3 and change to $128.85 yesterday. It's down even further. It was in the $126 range today.

That means we got a $5 drop-off within 24 hours which as we saw a $5 gain within 24 hours last week. So I'm thinking, and if this holds for a few days, if we stop breaking oil records, we might stop breaking gas records in about 10 days from now, which would put us right around that June 5th that I said we would be. Now, much of the oil we get in this country -- Kyra is just looking at me with this look like you're --

(CROSSTALK)

PHILLIPS: Because you keep changing the date. First you said June 8th, but that's OK.

VELSHI: One of those days is a Sunday and I wanted it to be a week day when it stops so I can be here to enjoy --

ROBERTS: He's already revising.

VELSHI: I can be...

PHILLIPS: Go ahead, guru.

VELSHI: ... the hairless prophet of joy.

Let's talk a little about the oil that we do get in this country. About a quarter of the oil that we use comes from offshore drilling. You're all familiar with these rigs that we see particularly after Hurricane Katrina hit because so many of those were affected, and it affected the flow of oil into the United States.

Offshore drilling, if it's relatively shallow offshore drilling, under 10,000 feet deep, costs between $20 and $60 a barrel to produce. So again at $130 a barrel, $126, we're very profitable for those companies. About 26 percent of the production in the United States comes from offshore. Most of that in the Gulf of Mexico.

There is some offshore in the Atlantic and the Pacific, but most of this is offshore. There are an estimated 86 billion barrels undiscovered in the ocean. So obviously with the prices of oil high, people will continue to look at it. That's just one of the places we get oil.

I'm going to sort of tell you about a few more of those places so that instead of just telling you about record gas prices, I don't know, you can go to work and tell people where it comes from.

PHILLIPS: Learn something new.

VELSHI: Let's learn something new. Exactly.

ROBERTS: One day the hairless prophet of doom will be the bald Buddha of joy.

VELSHI: The bald Buddha of joy. I love it. Do I have to be shirtless when that happens?

ROBERTS: Your choice.

VELSHI: Perhaps next time.

ROBERTS: More on our top story, Scott McClellan blasting his former boss, President Bush. We're going to talk with another strong critic of the administration, former counterterrorist czar, Richard Clarke, coming up.

And underwater, heavy rain turns a stream into a raging river blocking the only way in or out of a small Texas town. Our Rob Marciano is tracking extreme weather, next on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: It's coming up on 17 minutes after the hour now, and Rob Marciano here with us in New York tracking extreme weather in Texas. Good morning to you.

ROB MARCIANO, AMS METEOROLOGIST: Yes, guys. You know, we've been talking so much about tornadoes. We have Texas flooding.

Also, some breaking news yesterday afternoon. Storm surveyors deciding just how strong that tornado out of Parkersburg, Iowa, was. They're saying now it was an EF-5. That's one of -- the last time we had an EF-5 was back in -- well, last year in Greensburg.

Just to give you an idea of how strong EF-5s, how rare they are, since 1950 we've had about 50,000 tornadoes reported. Only 52 of them have been rated EF-5. So that makes having an EF-5 the percentage of tornadoes, 1/100 of a percent. Certainly an extraordinary event.

All right, let's talk flooding now. In Denton County, Texas, they had over six inches of rainfall. This is Hickory Creek. It separated a lot of families there yesterday as this thing came up and over its banks. A lot of rain in a short period of time. They'll see a little bit more rain today, but most of it has moved off to the east.

From rain we go to snow. Can you believe this? The Black Hills of South Dakota around about Mount Rushmore and Deadwood, Spearfish area. They had some snow yesterday. Average high temperature for Rapid City, by the way, this time of year is 71 degrees. They got up to 44 yesterday. Frost and freeze warnings are posted for parts of the Upper Midwest including the Great Lakes. Temperatures there in some spots below freezing, including spots across the Adirondacks and Upstate New York.

Temps in Chicago and places like Milwaukee dropped 30 degrees from Monday to Tuesday from a daytime high of about 80 down to about 50 degrees. Right now, it's 43 degrees in Chicago.

Threat for severe weather today is going to be across parts of northern Alabama. So far, guys, we have seen reports in May of 480 tornadoes. That is extraordinary, and so far we've had a total number of tornadoes this year that would be the total number of an average year. So we're only about halfway through. It could be the worse year ever. Certainly going to be up there in the history books.

ROBERTS: It's been a tough season for a lot of these folks.

MARCIANO: Yes.

ROBERTS: Rob, thanks.

MARCIANO: You got it.

PHILLIPS: On the move in China, tens of thousands of people have been evacuated over fears that an earthquake created a lake -- well, it created a lake that could burst rather. We're on the ground in the storm zone.

(BEGIN VIDEO CLIP)

KYUNG LAH, CNN CORRESPONDENT: I'm Kyung Lah in China's earthquake devastated zone where all these people, 160,000 of them, have been evacuated not once, but twice. That story coming up.

(END VIDEO CLIP)

ZAIN VERJEE, STATE DEPARTMENT CORRESPONDENT: I'm Zain Verjee in Washington. The three presidential candidates making a very rare joint statement. I'll tell you what they all agree on, next on AMERICAN MORNING.

(COMMERCIAL BREAK)

PHILLIPS: John McCain, Barack Obama and Hillary Clinton rarely agree on anything nowadays, but today they're actually releasing a joint statement. It's a warning that the U.S. will keep the pressure on Sudan to end the atrocities in Darfur, no matter who becomes the next president.

State Department correspondent Zain Verjee joining us now live from Washington. Good morning, Zain. So tell us, this is a big moment, the fact they're all agreeing on one thing. What are they saying?

VERJEE: Well, yes, exactly. I mean, we know what they disagree on. You can pick almost any topic, Kyra, but this is amazing unity by the three presidential candidates. Even they admit it, calling it an uncommon step.

People are waking up just now to see this very, very rare newspaper ad that says this. "We stand united and demand that the genocide and violence in Darfur be brought to an end."

Now, it's really striking. You can see the signatures of Senators McCain, Clinton and Obama, on the same page in agreement. According to rights groups, hundreds of thousands of civilians have been massacred in Darfur with the government's green light.

Now, the three candidates, Kyra, are calling the killings unacceptable, and they're warning the Sudanese government that it would be a huge mistake for the Khartoum regime to think, and this is what they say, that they will benefit by running out the clock on the Bush administration. They say whoever becomes president will keep up the heat.

According to one political scientist at the University of Virginia, Kyra, this extraordinary show of unity by presidential candidates in this way hasn't actually happened since the 1940s when foreign policy advisers of the candidates back then issued a joint statement and they resolved to end World War II. So this is a pretty big deal, Kyra.

PHILLIPS: I would hope, too, that everybody would come together and just look at what's happening in that country and just the human rights abuses, among other things.

Now the Bush administration, a lot of similarities, even with the current administration on what these three candidates want to do.

VERJEE: Right, exactly. I mean, the Bush administration has been really heavy though on diplomatic engagement. That's been their policy. Some experts are saying -- are critical in saying, well, the administration has really done more carrots than sticks, but the U.S. has really had some successes in southern Sudan. This administration was way out in front calling the horrors in Darfur genocide back in 2004, and the president himself has been really personally active and outspoken, Kyra.

But the truth is the time is up for his administration, whatever happens in the next six months.

PHILLIPS: State Department correspondent Zain Verjee. Zain, thanks -- John.

ROBERTS: It's 23 minutes after the hour. There have been studies around the world about the dangers of cell phones. Last night, Larry King hosted a round table discussion about the topic which included doctors and Attorney Johnnie Cochran's widow.

She suspects that the tumor that killed her husband was caused by his heavy cell phone use. Our own in-house brain surgeon Dr. Sanjay Gupta was part of that discussion. He joins us coming up at our next hour to explain all of the theories around it.

And that brings us to this morning's "Quick Vote" question. Do you believe that using cell phones causes cancer? Cast your vote at CNN.com/am.

A bombshell from a lone star loyalist. The president's former spokesperson says his old boss ran a White House lacking in candor and competence. Now, the administration is firing back.

And flood worries in China. Tens of thousands of people evacuated. Engineers say a dam and a lake created by this month's earthquake could rupture. We're live on the ground in the storm zone coming up next.

Coming up on AMERICAN MORNING, blown away.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh, what just happened?

(END VIDEO CLIP)

ROBERTS: The free fall fiasco. The inside scoop on what brought down a record-breaking sky dive. And the new plans to take flight. Ahead on this AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Our top story this morning, former White House Press Secretary Scott McClellan blasting his former employers. McClellan now says the Bush administration relied on propaganda to sell an unnecessary war in Iraq, and he called the handling of Hurricane Katrina one of the biggest disasters in the Bush presidency.

Karl Rove, a former senior adviser to the president, blasted back at McClellan.

(BEGIN VIDEO CLIP)

KARL ROVE, FORMER BUSH ADVISOR: This doesn't sound like, Scott. It really doesn't. Not the Scott McClellan I've known for a long time. Second of all, sounds like somebody else. It sounds like a left wing blogger.

Second of all, you're right. If he had these more qualms, he should have spoken up about them. And frankly, I don't remember him speaking up about this. I don't remember a single word.

(END VIDEO CLIP)

ROBERTS: Joining us now is Richard Clarke. He is the former White House counterterrorism czar. He's the author of his own new book called "Your Government Failed You: Breaking the Cycle of National Security Disasters." He's in Washington this morning.

Rick, good to see you this morning. Let me ask you, first of all, what's your reaction to the way that the White House is responding to Scott McClellan's new book? You were -- you yourself were thrown under the bus when you came out with your post administration book "Against All Enemies" several years ago.

RICHARD CLARKE, AUTHOR, "YOUR GOVERNMENT FAILED YOU": About four years ago, John, and I can show you the tire tracks. They're saying some of the exact same things about McClellan that they said about me. I think the difference with McClellan's book is that he's now telling us something that we all know, that the war with Iraq was a disastrous war, was sold with deception.

It's a little different when you say something as I did and a few other people did four or five years ago when the war was popular, and when we were unpopular for saying what we said.

ROBERTS: Let me turn to your new book now "Your Government Failed You." It's a very interesting read about all of the breakdowns in national security and intelligence. When we look at this year's election campaign, which of the candidates do you trust to fix the inherent problems in the system to put this country back on the right track?

CLARKE: Well, what I'm trying to say is it's not about the president so much. It's not about Bush and Cheney, for example. People think all of these disasters are their fault.

The system is broken. And the president alone, no matter how good that president is, the president alone can't fix it unless the system is changed. What I'm trying to do in "Your Government Failed You" is to ask why these national security failures happened over and over again. What's the systemic reason for the failures and how can we fix them? Because just changing the president is not enough.

ROBERTS: But certainly the president would be the one to initiate these changes. President Bush tried to initiate some changes, bring the intelligence community together. Between Barack Obama, John McCain and Hillary Clinton, who do you trust to issue the call to make those changes and make sure that they take place?

CLARKE: Well, I think they've all talked about some of the changes necessary. I think Senator Obama has spent more time talking about the need for structural changes because if you don't change the system, if you only change the president, the kinds of mistakes we've had in intelligence and global warming and cyber security, homeland security, terrorism, will continue.

ROBERTS: Right. In your book post 9/11, you talk about hopes that the security problems of this nation will be fixed. You say, "I was consoled by my colleague Roger Cressey who noted that now, finally, all of our plans to destroy al-Qaeda and its network of organizations would be implemented. The nation would deal seriously and competently with the problem. I assumed he was right and got back to work. It turned out that he was wrong and credibly after 9/11, our government failed us even more, much more."

What were the biggest post-9/11 failures in your estimation? RICHARD CLARKE, AUTHOR, "YOUR GOVERNMENT FAILED YOU": Well, John, the biggest post-9/11 failure was not just fully destroy al Qaeda. Bin Laden is alive. U.S. Intelligence says that al Qaeda is now stronger than it has been since 2003 and is training terrorists to go out around the world and commit attacks again.

We should have kept our eye on the ball. We should have gone after Bin Laden and al Qaeda, destroyed it entirely, and we didn't. We paid attention for about six months and then we went off to Iraq.

ROBERTS: How high of a priority should that be for the incoming president?

CLARKE: It's not existential. It's one of the major issues. It's one of the top five or six issues that the president should look at in national security. But they're using terrorism in these last several years to scare us into voting one way or the other. They're using it as a political wedge issue. And when I say in "Your Government Failed You," is we got to get out of this business of using national security for political purposes.

ROBERTS: Got you. Richard Clarke, author of "Your Government Failed You." Dick, it's good to see you. Thanks for coming in this morning.

CLARKE: Thank you, John.

ROBERTS: Appreciate it.

Kyra?

KYRA PHILLIPS, CNN ANCHOR: Well, more breaking news right now. China may be forced to evacuate more than 1 million people, we're told, over fears of an unstable lake right now. You know, this month's earthquake formed a dam which in turn created a lake that's rising six feet per day.

You can see from these pictures already, 158,000 people had to flee, but engineers are worried about a catastrophic surge of that water. China's vice premiere says that the country -- this is the most urgent task at the moment.

Kyung Lah joins us now live from Myangying (ph), China.

What are the engineers doing right now?

KYUNG LAH, CNN CORRESPONDENT: Well, Kyra, what we can tell you what is happening in this quake lake area is that there is a frantic effort happening right now. What they are trying to do, the military that is, is actually trying to helicopter in some heavy earth moving equipment, these giant tractors. What they're doing is lifting them from the ground and they are taking them to the quake lake directly so they can start digging there.

Now, why are they lifting them? Because this is an earthquake devastated area. The ground is unstable. The hills difficult to navigate. So they're hoping to expedite it. When they get there, they're going to try to dig some spillways and then try to dynamite some of those quake lakes so they can relieve some of that water pressure that you're talking about.

What you're seeing here is this is one of the places where those 160,000 people were evacuated to, and this is a site that's seen all through the Sichuan province. You mention 160,000. 1.3 million may be how many end up having to evacuate. So the 160,000 may be the tip of the iceberg and these folks say they are simply exhausted.

They had to move once because of the earthquake when it leveled their homes and killed family members and just in the last couple of days they had to pull up stakes and move again here.

Kyra?

PHILLIPS: We'll continue to follow the story. Kyung Lah, appreciate the update from the refugee camp there. Meanwhile, Alina Cho joins us now with other stories making headlines right now.

ALINA CHO, CNN CORRESPONDENT: Hey, there, good morning. Good morning, everybody. And new this morning, less than a week before the Democratic rules committee meets to decide what to do about those unseated delegates in Michigan and Florida, a Democratic Party memo obtained by the Associated Press says only half the delegates can be seated. And that's as far as the committee can legally go.

Hillary Clinton is counting on all of those delegates to be seated, but it still would not be enough to overcome Barack Obama's overall lead. The rules committee meets on Saturday. Michigan and Florida were punished for holding their primaries too early.

We have contact. NASA has restored communication with its new Lander on Mars. Earlier, a probe orbiting the red planet that's used to relay commands shut its radio off. NASA thinks the problem was a cosmic ray. So NASA hit the reset button last night. It was just that simple. And promptly began getting new pictures from the surface. One showed the deck of the Lander bearing an American flag and a DVD inscribed with 250,000 names of Mars enthusiasts.

Well, high gas prices have many Americans saving by not driving as much. Others are taking more drastic measures and it's illegal. Police say many thieves are now stealing gas by drilling holes in tanks. They're siphoning it. That's the more simple way of describing what's happening. An illegal way to get around $4 a gallon gas prices, but the concept is not new. Some say it's giving them flashbacks to the gas siphoning of the 1970s.

And the red carpet was pink last night for the New York premiere of the highly anticipated film "Sex and the City." The fab four on hand at Radio City Music Hall for the big premiere. Sarah Jessica Parker -- that's Kristin Davis (INAUDIBLE). There Sarah Jessica. And Kim Cattrall was there as well. Cynthia Nixon, there she is.

All in fab gowns, if you saw. Dripping in diamonds from Fred Leighton. So how was the movie? Our Lola Ogunnaike was there. She's talking to Pat Field who was the stylist. She's going to have a preview of the film in our 8:00 hour. Ask me anything. I know everything about this stuff.

PHILLIPS: Did you see the movie?

CHO: I didn't see the movie. I was there in spirit.

PHILLIPS: I wonder if the guys are going to go.

ROBERTS: Some good reviews and some not so good.

CHO: That's right.

(CROSSTALK)

PHILLIPS: Are you going to go, Ali?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Unless I were chained and dragged to it.

ROBERTS: We're going to go have a beer and watch an ultimate fighting championship.

VELSHI: Exactly.

(CROSSTALK)

CHO: So Kyra and I will go to the movie and then we'll compare notes.

PHILLIPS: I got to tell you. I would be happy to go shopping, though. To keep up with her. That's right. Miss fashion plate over here. I can't wait to see the movie. That's a great show. Come one, everyone love that show.

ROBERTS: There she goes this afternoon.

VELSHI: Let us know when you're going so we can plan the ultimate fight.

CHO: Well, it opens nationwide on Friday. So we'll have to wait.

ROBERTS: A lawsuit over dolls is not just child's play. Two companies battling over the rights to Bratz in a case that could be worth millions. Our Sunny Hostin is going to be here to explain, coming up.

Plus, Ali Velshi is here and a big story to tell you about the Dell Computer company.

VELSHI: That company used to be the biggest computer company in the world, accused now and found guilty of deceiving customers in a bait and switch. I'm going to tell you about that. You may have a Dell. What you need to know about it coming up after this break. Stay with us. (COMMERCIAL BREAK)

VELSHI: And welcome back to AMERICAN MORNING. I'm Ali Velshi. Dell Computer has been found guilty by a U.S. -- by a New York State Supreme Court judge of deceptive practices. New York State Attorney General Andrew Cuomo brought the case. A judge has found that Dell deceived customers in its advertising of attractive financing when, in fact, the customers who bought the computers didn't get that financing that was advertise.

In its advertising of technical support and warranty programs and in its advertising of rebate programs. However, the judge did say there's not enough information just yet to determine how many people will qualify for some money back, but you might. The ruling said that Dell has engaged in repeated misleading, deceptive, and unlawful business conduct including false and deceptive advertising.

In about half an hour, we're going to hear from New York Attorney General Andrew Cuomo. The judge in the case says that they will hold further proceedings to determine what customers might be entitled to. Dell has responded by saying we don't agree with this decision, and we will be defending our position vigorously. Our goal has been and continues to be to provide the best customer experience possible.

So this will continue but there are probably in excess of 1,000 people at a minimum who are qualified. You will hear more about this from Andrew Cuomo. I would be interested to hear what they were doing and what he thinks people can get back as a result of it.

ROBERTS: (INAUDIBLE). Ali, thanks.

VELSHI: OK.

PHILLIPS: Oh it's Barbie versus Bratz. The rivals on store shelves and now rivals in court. We're going to tell you why the makers of Barbie think that they are owed millions of dollars, coming up.

And he saw his chance to free fall from the stratosphere go up, up and away. But apparently the daring skydiver has been undeterred. Rob Marciano is going to have more on that.

PHILLIPS: But apparently the daring skydiver has been undeterred. Rob Marciano is going to have more on that.

Hey, Rob.

ROB MARCIANO, CNN METEOROLOGIST: Hi, Kyra. We saw this happening live on the air yesterday morning. That balloon just floated away. It was going to be an extraordinary feat. We'll talk about the extraordinary man that has yet to give up. We'll be right back.

(COMMERCIAL BREAK)

MARCIANO: Well, one minute it was all systems go for French skydiver Michel Fournier. The next, he saw his chance for a record- breaking free fall just float away. Well, after decades of preparation for the big jump, the 64-year-old Fournier isn't about to let a freak accident keep him down.

(BEGIN VIDEOTAPE)

MARCIANO (voice-over): Up, up and away. Just like that Michel Fournier's hopes to set four world records including longest and fastest free fall were shattered, at least for now.

VOICE OF MURRAY OLIVER, CTV NEWS: What a heart-breaker for Michel Fournier. It's just so sad. Everything seemed to be going all right. Suddenly, the balloon just slipped away and ascended into the sky.

MARCIANO: The one-ton balloon that was to carry him nearly 25 miles high in the sky broke loose and drifted into the air prematurely. The exact reason, still unknown.

FRANCINE LECOMPTE, GITTINS TEAM SPOKESWOMAN: A bit of a freak accident. You might call it -- it's bad luck.

MARCIANO: After 20 years and nearly $20 million invested, Fournier couldn't get off the ground.

MICHEL FOURNIER, FRENCH SKYDIVER (through translator): It was like having a hammer over his head. He did not think about anything.

MARCIANO: The trip was supposed to be a two-hour journey to the outskirts of the stratosphere. With a special spacesuit and parachute, he would race back toward the ground falling faster and longer than any human before him.

This was Fournier's third attempt at setting the record. He says his next chance will be in August when the jet stream is a little weaker for such a dangerous jump.

(END VIDEOTAPE)

MARCIANO: Hopefully, he'll be able to make that jump. You know, I guess one of the goals here, other than breaking the record, is to maybe be able to rescue astronauts or have them a way to get down if something goes wrong up there. The space shuttle travels about -- I guess, six times that height. Either way, you know, the French, even in a spacesuit, looks pretty stylish.

PHILLIPS: Well, you bring up a good point. I mean, he's not just a daredevil, but this is a guy that was in the French military. He was a paratrooper and he's trying to do something beneficial for the future of NASA.

MARCIANO: We certainly want to see this happen.

PHILLIPS: I thought we're going to see you free fall. Weren't you going to give us a little show and tell for today? What happened?

MARCIANO: No, I would pale in comparison. But maybe I'll jump out of a plane some time.

ROBERTS: I don't understand why anyone would jump out of a perfectly good airplane?

PHILLIPS: We do it everyday on this morning show.

(CROSSTALK)

ROBERTS: That's taking a high dive off the cliff. It's a little different.

PHILLIPS: Well, some say that the Republican Party is on the ropes. Talk about being on the edge. Steadily losing congressional seats and facing more losses in November. Coming up -- a former member of the Bush administration tells us what he thinks John McCain, the GOP have to do to turn things around.

ROBERTS: Coming up on AMERICAN MORNING, doll wars. The billion- dollar brawl that pits Barbie against the Bratz. The very grown-up fight over a billion-dollar empire, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

PHILLIPS: Breaking news now coming out of Israel. Israel's defense minister speaking out in just the last few minutes. CNN's Atika Shubert has been following that press conference.

What exactly happened, Atika? What's the headline?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, Ehud Barak, of course, is not only Israel's Defense Minister, he is also the head of the Labor Party, a key coalition partner. And he has asked for Israel's Prime Minister Ehud Olmert to step aside, either temporarily or to resign, because of a continuing corruption investigation into the prime minister.

Now, he also said in this press conference he just had that it should be the decision of Olmert's own political party, the Kadima Party, as to what happens next. He said that Labor will -- the Labor Party will continue to partner with Olmert's coalition, but only if they agree with the resolution that happens next. If they do not agree, they say they will call for early elections.

So, the headline there is that Israel's defense minister and the head of the Labor Party is asking for the prime minister to resign. So far, we have not had any comment from the prime minister just yet.

Kyra?

PHILLIPS: And just quickly, you know, this is a corruption case that's been plaguing him for a number of months now. It involved bribery. Just a quick background.

SHUBERT: That's right. It's a corruption case against him. And just yesterday, American businessman Morris Talansky testified that he gave more than U.S. $150,000 to Olmert not just for campaign funds but also personal expenses, hotel bills and vacations, envelopes stuffed with cash, personal expenses on his credit card. So, these are the kinds of allegations that Olmert is facing.

PHILLIPS: We'll continue to follow it. Atika Shubert with the breaking news at Israel. Thanks.

John?

ROBERTS: It is a doll fight between sophisticated Barbie and hip streetwise Bratz. Mattel, which has been making Barbie since the late 1950s wants a piece of the popular Bratz line, which is made by MGA Entertainment. Opening statements began yesterday in the copyright infringement case potentially worth hundreds of millions of dollars.

Joining me now with more AMERICAN MORNING legal analyst Sunny Hostin.

Looking at these two dolls, they couldn't look more unalike. So what's the copyright infringement?

SUNNY HOSTIN, CNN LEGAL ANALYST: The copyright infringement, it depends on when these were designed. The designer that designed Bratz and let's remember this is a $2 billion franchise worth for Mattel. So we had an employment contract, anything he invented, anything he designed belonged to Mattel.

He is saying that he did not design them when he worked for Mattel but he designed them when he was on hiatus from Mattel. He was visiting his parents, saw some high school students coming out with sort of bare bellies and short skirts and came up with this, $2 billion.

ROBERTS: So it's all about the timing here, right?

HOSTIN: It's all about the timing and it's big, big bucks. Mattel is very serious. Barbie wants a piece of Bratz. No question about it. No question about it.

ROBERTS: They're also searching -- they're searching through forensic evidence here? What kind of forensic?

HOSTIN: They are. It's CSI meets Bratz, meets Barbie. Bottom like is they took sketches and they had tested them to determined when the sketches were made them. Were they made when he worked -- Carter Brian, the designer --

ROBERTS: What are they doing carbon dating on sketches?

HOSTIN: They are. Did they sketch when he was working for Mattel or did he sketch when he was working for MGA and Bratz. So I think it's fascinating. You know, I'll play with dolls. I'll admit it. But they want a piece of each other.

ROBERTS: All right. Well, we'll keep following this case. I want to see if you know when these sketches were drawn.

HOSTIN: Absolutely. $2 billion at stake.

ROBERTS: All right. Sunny, thanks.

HOSTIN: Thanks.

ROBERTS: Kyra?

PHILLIPS: I want to get back to Sunny playing with dolls. What's that about?

HOSTIN: Love it, love it.

PHILLIPS: Smart women need some sort of distraction to take them down a level, you know, now and then.

PHILLIPS: All right. Now to today's "Quick Vote" question. Do you believe using cell phones cause cancer? Right now, it's a tie. 50 percent of you say yes, 50 percent of you say don't think so. Cast your vote at cnn.com/am. It's a subject matter we'll be talking about throughout the morning.

ROBERTS: Grand old problem. The party that's won the past two elections behind in campaign cash and gasping for air time. How conservatives can pull off a comeback.

Plus, delegate situation.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: They deserve to have those votes counted.

(END VIDEO CLIP)

ROBERTS: A Florida election controversy heads to court again. Whether a lawsuit could seat the delegates this summer, ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

PHILLIPS: Always may not be the best of times for the Republican Party. A slumping economy, an unpopular war, long time congressional seats, a number of them going to Democrats. So can Republicans do anything to turn it around before November?

Our next guest always got a few ideas. David Frum is a former speechwriter for President Bush. And the author of "Comeback: Conservatism That Can Win Again." He joins us live from Washington.

Good to see you, David.

DAVID FRUM, AUTHOR, "COMEBACK: CONSERVATISM THAT CAN WIN AGAIN": Thank you.

PHILLIPS: Well, we've talked about this subject matter with you before. And what brought my attention to it once again is this article in the "New Yorker Magazine" that followed conservatism. What do you think? Is this era of American politics really dying before our eyes?

Well, a chapter is closing. The article, which began at William F. Buckley's funeral in New York just a few weeks ago, surveyed how Republicans rose to power in the 1970s by offering powerful answers to the problems of the '70s. Inflation, slow growth, Soviet Union, crime. Those problems have largely been solved or at least solved as much as politics can solve anything. And now we have a new generation of problems -- well, we've got the old generation of answers.

PHILLIPS: Well, let's talk about what George Packer writes. He says "Bush expanded the size of government and created huge deficits. Allowed Republicans in Congress to fatten lobbyist and stuffed budgets full of earmarks; tried to foist democracy on a Muslim country. Failed to secure the border and thus won the justified wrath of the American people."

Now, you worked in the Bush White House. Should President Bush take the majority of blame for a tarnished and troubled Republican Party?

FRUM: He should take some of it, of course, but remember the Republicans had many of these problems in the 1990s. The reason George Bush got the Republican nomination in 2000 to begin with was precisely that he said I have an answer to this trouble that we find ourselves in in the late 1990s.

Our government shut down and the disaster of the 1998 congressional elections where it suddenly seemed, you know, we've really lost touch with the country. He seemed to offer an answer. It turned out not to be the right answer, but he had the right diagnosis of the problem. So, no, we can't blame him entirely.

PHILLIPS: Well, Tom Coburn also writes, and this was in the "Wall Street Journal" recently. He says that many Republicans are waiting for a consultant or a party elder to come down from the mountain in a Moses-like fashion, deliver an agenda and talking points on stone tablets, but the burning Bush so to speak is delivering a blindingly simple message -- behave like Republicans.

So David, how do Republicans need to behave? What's your advice?

FRUM: Well, the problem with that kind of advice from something like Tom Coburn, it says, "If people don't like what you're saying, just say it again only louder and slower." And I don't think that's adequate.

Look, here is the thing that's driving this election. Wages have been stagnant for the past eight years. The average American, the median American, earns no more today than the year 2000. Why? Because of the rising cost of health care. We have to have a health care policy that is adequate to the needs of country. We don't. We have to deal with incomes of middle class Americans, which are under pressure from changes in global economy, from immigration.

PHILLIPS: So is John McCain the Republican to turn this image around? Is he the one that can be the warrior to change face?

FRUM: He's got the right style. He's got the right attitude. He's ready for reform. Now he just needs the right content. He needs a message that is equal to his own life story, and I think that's something that people who work in the party have to try to give him.

PHILLIPS: David Frum, "Comeback: Conservatism That Can Win Again."

FRUM: Thank you.

PHILLIPS: We'll continue to talk about this. I'm sure all the way up to the end of the election. Thanks, David.

FRUM: Thanks, Kyra.

PHILLIPS: John?

ROBERTS: Two minutes now to the top of the hour. Explosive charges today from a former press secretary at the White House. Scott McClellan blasting his own boss charging deception and denial ran deep inside the Bush White House. It's all spelled out in his new memoir.

The one time lone star loyalist who served the administration for more than five year says President Bush manipulated public opinion when it came to Iraq. And the president's inner circle misled him about the CIA leak case. So far no official comment from the administration, but McClellan's former colleagues have already fired back.

Mike Allen from politico.com broke the story late yesterday.

(BEGIN VIDEOTAPE)

ROBERTS: He claims that President Bush used, quote, "Propaganda to sell the war." Let's look at what he says in the book -- quote -- "And his advisers confused the propaganda campaign with the high level of candor and honesty so fundamentally needed to build and then sustain public support during a time of war."

He finally articulates what we all came to believe, Mike, and further goes on to say that this war was unnecessary.

MIKE ALLEN, POLITICO.COM: Well, John, I think that's right. These aren't particularly novel observations, but -- and as you and Karl suggested, who knew that they would be coming from Scott.

And that's the power of them is that they come from someone -- there was no one who is closer to the president. He's taken closer personally -- as you know, was one of the first to come with the president from Texas, was with him since '99. Traveled with the president on the campaign plane in 2000.

But John, now Scott has put on a new hat. He's put on historian's hat. He's not an administration flack anymore. And that's why there's such great unhappiness with him and people saying that he's given up the only good quality that he had in their view, which was loyalty.

ROBERTS: Right. He's getting ripped not only by Karl Rove, but by Fran Townsend, the former national security adviser to the president -- or the homeland security adviser to the president rather. She's now a CNN contributor. Let's listen to what she said last night about this.