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American Morning

Bulldozer Terror Attack in Jerusalem Kills Three; Fed Expands Salmonella Probe to More Than Just Tomatoes; USS Cole Commander Waiting for Justice; Woman Ignored Until Dead in Kings County Hospital; Iraq Security Deal Lifts Immunity for Contractors

Aired July 02, 2008 - 07:00   ET

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


DAVID BRODY, CHRISTIAN BROADCASTING NETWORK: And you know, he's going to have to -- he's talking to evangelicals but he's also talking about the homosexual agenda he wants to have as part of a Barack Obama administration. That tap dance will be very interesting to watch the next few weeks.
JOHN ROBERTS, CNN ANCHOR: And we will keep watching it. David Brody, from the Christian Broadcasting Network, good to see you this morning. Thanks.

BRODY: Thanks, John.

KIRAN CHETRY, CNN ANCHOR: We have breaking news this morning of a bulldozer terror attack. This happened in Jerusalem. It's brand-new video that was captured by cameras as the attack occurred.

Here you see that bulldozer just plowing over cars, hitting a bus. Police in Jerusalem say that it was a Palestinian driver that went on this deadly rampage, plowing into a string of cars, pedestrians, killing at least two, possibly more, and wounding dozens more before officers shot him dead. There was no immediate claim of responsibility, but Israeli police did call the driver a terrorist.

Top of the hour now, and a manhunt for a suspect in a two-state murder spree is now over. The FBI says that Nicholas Sheley was arrested in Illinois just about 10 miles east of St. Louis last night. He's an ex-con who was wanted in the killings of at least eight people, one of them a child, all apparently beaten to death. So far, he's been charged only with the murder of one elderly man.

There's a new CNN/Opinion Research poll. It shows Barack Obama has a five-point lead over John McCain. Fifty percent say they'd vote for Obama. Forty-five percent chose McCain. There's a margin of error plus or minus 3.5 percentage points.

Oh, it's money on everyone's mind. The slumping stock market and an auto industry in critical condition.

John McCain is pushing free trade in Colombia. He says it's a win/win for Latin America and workers here in the U.S. Many blue collar voters say they've seen their factories vanish because of agreements like NAFTA.

Juan Carlos Lopez from our sister station CNN En Espanol is live for us in Washington with more about this trip. How much of it is about foreign policy, and how much of it is about the Hispanic vote?

JUAN CARLOS LOPEZ, CNN EN ESPANOL: It's probably a little bit of both, Kiran. And it's interesting to see the numbers that just came out, a Gallup poll showing where the Hispanic vote stands right now. And it favors Senator Barack Obama by 59 percent to 29 percent over Senator McCain.

Now it's interesting, when you look at these numbers you can think at a glance that they're solidly in Senator Obama's favor. But the Hispanic vote has traditionally voted Democrat and the highest vote by a Republican has been 42, 44 percent by President Bush in 2004. So it shows that there is a margin for John McCain to catch up and he's showing Hispanics in the U.S. that he's traveling to the region, that he cares about the region. So that it could be -- that could be very helpful for him.

CHETRY: And Juan Carlos, how has John McCain been received in Latin America?

LOPEZ: The security in Cartagena, a seaside city, has been the security for a head of state. But the Colombian government has been very careful to not portray this as a visit by a head of state. The Colombian president also praised Senator Obama, and they understand that they're going to need both Republicans and Democrats if that free trade agreement is going to be approved during the next administration.

CHETRY: All right. Juan Carlos Lopez for us in Washington this morning. Thank you.

ROBERTS: A health alert to report to you today. It is more than just tainted tomatoes. This morning new fear that the outbreak did not start with tomatoes and that other foods may be making hundreds of people ill.

CNN's Brian Todd has got more for us this morning from Washington.

BRIAN TODD, CNN CORRESPONDENT: Good morning, John and Kiran. Investigators tell us tomatoes are not off the hook. But as the number of victims continues to grow, they are now expanding their list of possible suspects.

(BEGIN VIDEOTAPE)

TODD (voice-over): Inside a massive investigation spanning two countries, mounting frustration and worries about mistaken identity. Since April, a salmonella outbreak has sickened nearly 870 Americans. And now, a state official involved in the probe tells CNN there's growing concern among investigators that tomatoes may not be solely to blame.

Federal inspectors have looked for weeks at tomatoes tracking them to what they thought might be potential sources, farms in Florida and Mexico. Still no trace of the original source. Now --

DR. DAVID ACHESON, FOOD AND DRUG ADMINISTRATION: The FDA has expanded its investigation into the cause of the salmonella St. Paul outbreak, and the expansion is going to include additional produce items that are commonly served in combination with tomatoes.

TODD: A state official says that could mean lettuce, jalapeno peppers, cilantro. That's because they found clusters of people affected who ate those ingredients together in dishes at restaurants.

Investigators are clear tomatoes are still the lead suspect. But if they turn out not to be the source, have officials from the Food and Drug Administration dropped the ball? Not necessarily. FDA officials and watchdog groups say the sources of these outbreaks are incredibly difficult to find. And --

UNIDENTIFIED FEMALE: FDA food safety programs really operate on a shoestring budget today. They're inspecting food processors once every five to 10 years. And they almost never get to farm fields unless an outbreak brings them there.

TODD: If tomatoes are the source, how do they get infected?

UNIDENTIFIED MALE: In most cases, it's related to water. Rather the water is contaminated in the packing house, and then contaminates the dirty water in the washing of the tomatoes ultimately contaminates the tomatoes, or in the field where it's contaminated irrigation water. And the salmonella will often come from fecal matter from animals.

(END VIDEOTAPE)

TODD: But again, tracking the source is very difficult. Shipments of tomatoes often don't have labels to tell you where they came from. Tomatoes from Florida and Mexico are often sent to other places for processing and distribution. Bottom line, investigators warn they may never find the source of this outbreak.

John and Kiran, back to you.

ROBERTS: Brian Todd this morning.

Health officials, by the way, say that more than half of the illnesses have been diagnosed in Texas, New Mexico and Arizona.

CHETRY: We have more now on the breaking news out of Israel this morning. A bulldozer driver plowing through downtown Jerusalem killing at least three people now. That number of dead has just risen in the past couple of minutes here, wounding dozens of others before finally being shot to death by police.

CNN's Ben Wedeman joins us now live from Jerusalem where he's been following the latest developments from the scene. Ben, what's the latest?

BEN WEDEMAN, CNN CORRESPONDENT: Yes, Kiran. We're here in Jaffa Road where the incident took place. And as you can see behind me, this was the first vehicle to be hit in this attack. An attack Israeli police are now describing as unplanned and spontaneous. They say the driver, a Palestinian from east Jerusalem, may have had a criminal record but he was employed by a construction company.

The driver of this vehicle in front of me, I saw his body. He was killed instantly. The bulldozer continued knocking over another car. It's been removed. But if we just turn around and go a bit further down the road, you'll see that the bus has been removed, but that bus was only slightly nicked by the bulldozer.

Further down the road is a bus that was actually knocked on its side. But we saw that Israeli television was able to capture the dramatic moments in which a motorcycle-borne Israeli police were able to kill the man. Basically what they did, one of the policemen jumped on to the cab of the bulldozer and shot the driver at point-blank range.

Now, the police are describing this as a terrorist incident. There's no indication if this man had any connection with the various radical organizations on the Palestinian side. But this incident happened on a very busy road at a very busy time of day. Israeli schools just let out day before yesterday, so there were lots of people in the street.

At this point just to recap, according to the Israeli police, three people killed in addition to the driver of the bulldozer. More than 30 people wounded -- Kiran.

CHETRY: Just astounding to see the video of that bulldozer that they actually captured it as it happened. Ben Wedeman for us on the streets of Jerusalem, thank you.

ROBERTS: A CNN exclusive for you now. As the Pentagon announces it will seek the death penalty for the man accused of plotting the attack on the USS Cole, the ship's commander, the ship's former commander breaking his silence, and he is not happy about the way the investigation has been going.

Our senior Pentagon correspondent Jamie McIntyre spoke with him.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, SENIOR PENTAGON CORRESPONDENT (voice-over): In his first television interview, the former commander of the USS Cole tells CNN he's still waiting for justice almost eight years after al-Qaeda attacked his ship.

MCINTYRE (on camera): Do you take this personally?

CMDR. KIRK LIPPOLD (RET.), FMR. COMMANDER, USS COLE: Yes, I do. Seventeen of my sailors were killed that morning; 37 were wounded. Absolutely, I take it personally.

MCINTYRE (voice-over): Kirk Lippold was skipper of the USS Cole in October 2000, when suicide bombers in an explosives-laden boat blew a 40-foot hole in the ship's hull in the Port of Aden (ph) in Yemen.

LIPPOLD: The immediate actions of the crew saved this ship.

BRIG. GEN. THOMAS HARTMANN, MILITARY COMM. LEGAL ADVISER: The office of the convening authority for military commissions has received sworn charges against Abd al-Rahim al-Nashiri, a Saudi of Yemeni descent.

MCINTYRE: The Pentagon is now seeking the death penalty against al- Nashiri who, it says, planned and directed the attack almost eight years ago.

MCINTYRE (on camera): How do you feel about how long this process has taken?

LIPPOLD: I think it's taken too long. Hopefully we will be able to get the conviction we need.

MCINTYRE: So how would you characterize al-Nashiri?

LIPPOLD: He is one of the worst of the worst. He worked with bin Laden himself to plan this attack. And he essentially is the mastermind behind pulling it off.

MCINTYRE (voice-over): The Pentagon is holding al-Nashiri in Guantanamo. But before that the CIA admits subjecting him to waterboarding, an interrogation tactic designed to simulate drowning. Al-Nashiri testified that's the only reason he admitted anything. But Lippold insists the FBI has a solid case without any coerced confessions.

LIPPOLD: Regardless of what he says, I believe that there's enough evidence to convict him.

(END VIDEOTAPE)

ROBERTS: That was CNN's Jamie McIntyre. At his hearing last year, the accused Cole mastermind acknowledged meeting with Osama bin Laden many times and said he received as much as $500 million for the operation.

CHETRY: Coffee to go. Latte, iced. Coming up at 7:11, Starbucks closing hundreds of stores in America. Ali's getting a latte now, and he's going to join us on the other side of the break with the skinny.

ROBERTS: That would be a skinny latte, then.

And it's 7:43, the magic of magic mushrooms. The trippy '70s era psychedelic. Does it really make you more spiritual?

CHETRY: At 7:48, a crash course in cultural sensitivity. An ad for Barack Obama that portrays him as a monkey?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You're trying to tell me nobody between its inception and the result said, whoa, whoa, whoa. Hey, guys.

UNIDENTIFIED MALE: Not really. I have to be honest. But now, of course, we know.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROBERTS: It's coming up now on 14 minutes after the hour. Ali Velshi here again with us this morning.

Car sales not looking good these days.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, it's sort of a routine --

ROBERTS: Turn this around.

VELSHI: There's a monthly sales report that came out yesterday. It tells you how many cars were sold in June. This used to happen every month. Then we sort of look at them and see trends. But the last few months have been devastating to see these numbers.

There are two trends going on. One is car sales are generally dropping in the United States as a result of the economy. And two, we're seeing a massive shift away from larger vehicles.

Now, first, let me just tell you about overall car sales. This is a mature market, the United States. It's not where the growth is. We're seeing a general decline in people driving and buying cars.

General Motors, the sales for June compared to the previous year, compared to June of last year down 18 percent, Ford 28 percent, Chrysler, big trouble of Chrysler, 36 percent. Toyota even, down 21 percent. Nissan down 18 percent. Honda was the only one that was up, and it was up by a paltry one percent.

Now, let's see how this breaks down in terms of the type of vehicles Americans bought in June. Car sales were down eight percent largely because people couldn't find the fuel efficient cars that they were looking for, because those are on waiting lists or not on the lots.

Cross-overs which are SUVs and cars mainly on a car platform down 17 percent. They're more fuel efficient than trucks and SUVs. Light trucks, which are typically pickup trucks, down 28 percent and SUVs down 38 percent.

In Ford's case, they were down more than 50 percent. Light trucks, by the way, the Ford F-series which has for decades been the best selling vehicle of all in the United States is not anymore. It's been taken over by small passenger cars.

So there has been a massive shift. You can't underestimate or overstate how big the shift is amongst American drivers. When gas hit $3.50 a gallon, Americans took it into their own hands to say, we are going to reduce our fuel consumption. So that's a big deal. Now, they're not driving the crazy cars.

CHETRY: Speaking of fuel consumption...

VELSHI: Yes.

CHETRY: ... how about the good old fashioned -- VELSHI: Body fuel.

CHETRY: Yes, good old fashioned coffee. Starbucks is having to close far more stores than they anticipated because of weak sales.

VELSHI: Yes. They're talking about 600 stores now with an average of about 20 people working at each one of those stores, so we're looking at over 10,000 people who are being put out of their jobs as a result of this.

Starbucks was such a massive growth story for so long that this has something to do with the economy and people sort of pulling back from buying expensive coffee. It's also got something to do with the fact that that run of growth at some point comes to an end.

We've been sort of talking about this about a year where --

CHETRY: The oversaturation.

VELSHI: Right. You know that they're there. It's not the same experience it used to be. They're trying to get back into what it was.

So I think it's again, it's like the auto companies. Is it fuel costs? No, because the auto companies have been sort of petering out over the years. Starbucks is just not in the growth phase that it was, you know, a few years back.

CHETRY: Now, the company is saying they're trying to reabsorb some of these workers to other places.

VELSHI: Yes. And they are a company that is very good to its workers, particularly part time workers. So that's the one thing about Starbucks. I can't bring myself to pay that much for coffee, but they're good to their workers.

ROBERTS: Not just more or any of us. A lot of other things take priority.

VELSHI: Right, right. Yes, there was a time when that would be OK to pay $5.

CHETRY: Still cheaper than a gallon of gas.

VELSHI: It is. Just about. Yes, almost.

CHETRY: Well, $8 billion could go to the dogs, literally. So-called Queen of Mean's latest curve ball from the grave. We're talking about Leona Helmsley.

ROBERTS: Coming up on AMERICAN MORNING, spaced out or a spiritual awakening.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a very beautiful feeling. I've not felt anything like that before.

(END VIDEO CLIP)

ROBERTS: Hallucinogenic mushrooms. The magic measured by researchers. What doctors are saying about tripping. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: Yes, burning up for Madonna there. But actually a stormy weather might be a more appropriate sign to be playing this morning for the folks in Tampa, where they go up to a high of 89 degrees today, and some storms in store this afternoon. But, hey, that's summer in Florida, right? It rains every day at 1:00?

CHETRY: Sure is. And it's gone as fast as it came.

Welcome back to the "Most News in the Morning." A quick look at some of the stories making news across the nation.

Up to $8 billion going to the dogs. "The New York Times" saying that late hotel queen Leona Helmsley wanted her entire trust to be used to care for her pets. She already had left $12 million for her dog, Trouble. The trustees may not have to agree to give it all away to the dogs since she did leave the ultimate decision up to them.

Well, getting harder to breathe in parts of California after 1,500 wildfires broke out in just a single month. Emergency rooms are saying they're now packed with people who are having trouble breathing because of all the smoke in the air. Meanwhile, officials have ordered 200 more people out of the Big Sur region of the Los Padres National Forest.

And there's a legal battle over guns in the terminal after a new state gun law took effect yesterday. We're talking about Georgia here.

It allows people to carry concealed guns in restaurants, parks and on public transportation. Officials at Hartsfield-Jackson International Airport in Atlanta say that they could arrest people who bring a gun inside. Gun advocates now filing a suit arguing that the airports qualify as public transportation. Plus, there are also places to eat in the terminal -- John.

ROBERTS: A shocking scene caught on tape. A woman ignored in a New York emergency room until she dropped dead. She collapsed from her seat almost a day after she came in for help. Hospital staff and security saw her but did nothing until it was too late.

CNN's Mary Snow joins us now from Brooklyn with more on this -- Mary.

MARY SNOW, CNN CORRESPONDENT: John and Kiran, nearly two weeks ago, a woman was brought to this hospital. The hospital saying she was suffering from agitation and psychosis. She had to wait nearly 24 hours for a bed. A spokesman for the city's hospital says it's investigating not only what you're about to see on this tape, but a discrepancy in her health records. (BEGIN VIDEOTAPE)

SNOW (voice-over): Had it not been for a surveillance camera inside the psychiatric emergency room at Brooklyn's Kings County Hospital, we may never have known what happened to 49-year-old Esmin Green in the moments before she died. As she struggles on the floor, several people walk by but no one does anything to help her. And it takes nearly an hour before a medical team arrives to treat her.

The New York Civil Liberties Union released this video tape showing Green falling to the floor in the emergency room around 5:30 on the morning of June 19th. About 20 minutes later, a security guard comes into view.

VOICE OF BETH HAROULES, ATTORNEY, NY CIVIL LIBERTIES UNION: He walks in. He stands there. We actually think there's a television up in the top. We think he's looking at the TV. But he's clearly got the patient in view and he walks away.

SNOW: Green was in the ER waiting for a bed to become available. At one point the woman can be seen struggling to free herself from the chairs. And at another point, she appears to make an effort to get up.

A copy of her medical records contradicts the tape. Listing her at the same time as being awake, up and about, even going to the bathroom. At about 6:10 a.m., lawyers say a second security guard enters the room.

HAROULES: Here he comes into the room. Checks her out. He can't even get himself off his chair. He sits there and then you'll see him wheel himself away.

SNOW: Finally, around 6:30 a.m., medical personnel arrive. Green is later pronounced dead.

The New York City Health and Hospitals Corporation released a statement saying, "We are shocked and distressed by the situation," adding that after it learned of the incident, the agency's president directed the suspension and termination of those involved. The city's mayor says the city will do everything it can to cooperate with the investigation.

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: I was horrified is much too nice a word. Disgusted, I think, is a better word.

(END VIDEOTAPE)

SNOW: This is not the first time the psychiatric unit at Kings County Hospital has been targeted. Advocates for the mentally ill filed a lawsuit in 2007 calling this a "shameful place with horrendous conditions." That lawsuit is still active.

The city's Health and Hospitals Corporation says it's put into place a number of reforms over the past year and now is putting even more reforms into place, including checking on patients in the psychiatric unit every 15 minutes -- John and Kiran.

ROBERTS: Mary Snow from Brooklyn for us this morning. The city medical examiner's office, by the way, said that it is still trying to find out how the woman died.

CHETRY: Upsetting story.

Well, Iraq opening its oil, lucrative oil fields, to foreign companies. So what does the government plan to do with the money?

CNN's Michael Ware is back from Iraq. He's talking to us this morning.

Also, a housing bill in limbo. Between now and the end of the 4th of July weekend, 50,000 more people could lose their homes. Congress, though, already gone, heading to their homes without passing a bill that would have helped struggling Americans. What happened?

You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING. New this morning, a security agreement between the U.S. and Iraqi forces is "almost finalized." That's according to Iraq's foreign minister. And as part of that deal, private security contractors in Iraq will no longer be immune to Iraqi prosecution. Immunity became a sticking point after a deadly shooting involving Blackwater contractors.

Joining me now with more on this, CNN Baghdad correspondent Michael Ware, who's actually here in New York for a change.

MICHAEL WARE, CNN BAGHDAD CORRESPONDENT: Happy to be so, yes.

CHETRY: On a one-month reprieve, if you will.

About this agreement that they were struggling to hammer out, it looks like they're now nearing an agreement on this. What does it mean on the ground there?

WARE: What it's going to mean is that in the broader sense of this agreement the Iraqis are very much taking more and more control of the war. And come the end of the year, America's mandate from the U.N. to run this war ends.

Now, the role of private security firms is one of many issues involved in this agreement. And we heard from the Iraqi foreign minister that on this issue they may have made some headway. What it's going to mean is that any of these former American soldiers, Australian soldiers, British soldiers, who now needs private security firms, when they're operating in Iraq as of next year they should be liable to Iraqi law.

And there's very little that America can do about that in many ways. Legally, Iraq is a sovereign state. It does not want armed gunmen running around its country for whatever purpose and have no control over them.

So this is something that's going to be difficult for America to resist. But it's going to have significant implications for the firms who need to contract the security officers to protect what they're doing. Infrastructure rebuilding, delivering aid, whatever it may be. It's going to change the nature of the whole environment for these security firms.

CHETRY: Well, I mean, you might be less likely to sign up if you fear that you...

WARE: Absolutely.

CHETRY: ... you could end up going the way of Saddam Hussein.

WARE: Absolutely. I mean, can you imagine your fate if you're thrust before an Iraqi court? What's the nature of the evidence? What's the onus of proof?

CHETRY: So what will we see? Will we see more Iraqis, perhaps, being contractors and security contractors? Will we see less American contractors there in these security roles?

WARE: Well, it's hard to say at this stage. I mean, certainly there's Iraqi security firms who would like to step up. But the question is, the western companies who are trying to go in there to do business, who are trying to get infrastructure contracts, who are trying to assist with government development, are they going to be happy with Iraqi security firms?

I mean, the police, the army, all the government institutions, they're infiltrated by the militias and the insurgents. So how is anyone going to trust a security firm?

CHETRY: Speaking of that, I want to ask you about, you talked about some of these firms getting in there and trying to help the Iraqis with their infrastructure. One big thing is this oil contracts.

WARE: Yes.

CHETRY: And there's been some controversy about the fact that many of these, at least short term contracts are going to U.S. and European oil companies. What is the rub with that? What's going on?

WARE: Well, according to the Iraqi government line, these are just stop gap measures. These are short-term contracts to just keep the oil infrastructure running. This is to repair and maintain. Now, the long-term contracts, which are much broader and would be the grand prize for these companies, are yet to happen.

The short-term contracts were awarded without bidding. Now, the full contracts are open to bids. There's 30-odd international companies, Russian, Asian, all sorts who shall be entering that bidding process. However, you would have to imagine that anyone who gets one of these short-term contracts will at least have a foot in the door when it comes time to play for the main game. Which will be those big, long- term contracts.

CHETRY: All right. So, we'll have to wait and see. A couple of weeks away. They're supposed to be preparing their bids at this point. So, we'll see what happens with that. Great to see you, by the way, Michael.

WARE: Glad to be here.

CHETRY: And I know you're here for a month and then you're headed back.

WARE: Yes. Well, it's always Iraq.

CHETRY: Thanks a lot, Michael.

WARE: Thank you, Kiran.

JOHN ROBERTS, CNN, ANCHOR: Welcome back. Good to have you here. Bottom of the hour now and here are some of the top stories we're following for you today. The man hunt for a suspect in a two-state murder spree is over. The FBI says Nicolas Troy Sheley was arrested in Illinois just about ten miles east of St. Louis. He's an ex- convict. He is wanted in the killings of at least eight people, one of them a child, all apparently beaten to death. So far he has been charged with the murder of one elderly man.

John McCain is traveling outside the United States to promote free trade. This morning he's in Colombia where he insists the issue will help U.S. workers and will restart the U.S. economy.

Wesley Clark not backing down. But he's still trying to clarify his comments on John McCain's wartime experience. On yesterday's "Situation Room," General Clark told me the coverage of his response to a question on "Face the Nation" Sunday lacked context.

(BEGIN VIDEO CLIP)

GEN. WESLEY CLARK (RET.), BARACK OBAMA SUPPORTER: I think if you'd seen the whole question and the whole interview in context, I think there's no issue with this. But I think it does show the - what can happen when an excerpt is taken and I noticed in some of the major news channels, and I don't want to point any fingers here, but they only showed my answer as though I made that up. This is like someone says, is the sun out? You could say yes, the sun is out. Or you could say yes. Or you could say the sky is blue. But I just happened to answer it exactly the way it was asked. And my point is that when we're about to select a president of the United States in a time of war and the national security is going to be a big issue in this campaign, the American people should look at the real qualifications. That includes John McCain's character and courage. I've never said anything dissing that. I will never dis the service of anyone who served in the United States Armed Forces. I did it for 38 years. I was a captain in Vietnam. I commanded and came home on a stretcher in a hospital with four bullet wounds in me. So, you know, I'm very sympathetic to John McCain. He's one of my heroes.

(END VIDEO CLIP)

ROBERTS: Clark said that as honorable as McCain's service in the military was it did not rise to a level of making war or peace decisions, what he calls executive experience.

CHETRY: President Bush is expressing confidence that Congress will pass a housing bill that he can sign. But he's also blaming lawmakers for leaving Washington without giving struggling homeowners the help they desperately need before starting the 4th of July recess. CNN's Ed Henry joins us from Washington. Ed?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, Kiran, vacationing lawmakers got hit with a blistering editorial in the "New York Times" which noted that between now and Monday when Congress is supposed to get back to work, another 55,000 people are likely to lose their homes.

(END VIDEOTAPE)

HENRY (voice-over): This is the sound of silence. Tour buses are rolling up to Capitol Hill to see their government at work. But the democratic controlled Congress is not here. Gone for a week-long July 4th vacation. They left before they passed a long-awaited bill to rescue homeowners trapped in the mortgage crisis.

GERALD CONNOLY, FAIFAX CO., VA. BOARD OF SUPERVISORS: As they're dithering at the federal level, thousands of homeowners have lost their homes. It is critical that the government step in and try to stabilize this situation.

HENRY: Just about 20 miles from the Capitol, in Fairfax, Virginia, grass grows wildly on foreclosed and now abandoned homes. Gerald Connoly, a democrat and chairman of the county board of supervisors, says in January a year ago there were just 74 foreclosures here. A year later, this January, there were 1,400.

CONNOLY: The situation is going to get worse before it gets better. People are hurting. People, you know, got stretched.

HENRY: So what's Washington doing? Not much. After months of delay, Senate democrats finally got a bill to the Senate floor last week. It would have given struggling homeowners new mortgages backed by the government. If lenders would also make concessions. Then a republican, Senator John Ensen stalled the bill by insisting it include unrelated renewable energy tax credits. Then came the siren song of a July 4th vacation back home during an election year as well as the predictable lashing from President Bush.

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: I think we can get us a bill. But it's going to require less politics and more focus. On keeping our minds on - on who we need to help. And that's the homeowner.

(END VIDEOTAPE)

HENRY: The President did not mention that a republican is blocking the housing bill. Or that he himself is vowing to veto the final product unless Congress includes the Federal Housing Administration reforms that he wants. In other words, a lot of finger pointing so far, but not a lot of action. John, Kiran.

ROBERTS: Ed Henry for us this morning. It's coming up on 36 minutes after the hour. A new CNN opinion research corporation poll shows for most Americans the economy is still issue number one. And even more so than it has been in recent months. Look at that. 58 percent of people saying the economy the number one issue for them followed by Iraq. Gas prices now number three. Health care and terrorism coming behind that. Ali Velshi also here watching the economy for you.

What are you talking about in "Issue number one"? I guess, a lot of what we've been talking about this morning.

ALI VELSHI, CNN, SENIOR BUSINESS CORRESPONDENT: Yes. A lot of it. We're talking about cars. But a lot of it is oil right now. The price of oil, we can't get it below $140 a barrel no matter what anybody said. CNN spoke to the Saudi oil minister who said this isn't about demand, it's about speculation. We're going to tell you what he said and tell you about the price of oil when we come back. You're watching AMERICAN MORNING. Stay right with us.

(COMMERCIAL BREAK)

CHETRY: You haven't just turned on nick at night. We're still on AMERICAN MORNING here on CNN. Our producer Brian is playing "Street beater" by Quincy Jones which you'll see Sanford and sons.

ROBERTS: I'm puzzled by this morning's musical selection.

VELSHI: Brian's off the wagon apparently.

CHETRY: Well, you know, you can't knock him for creativity.

We're placing the gas tank with a power pack? A couple drivers in Akron, Ohio have found the answer for gas prices at Wal-Mart. They say they've actually replaced the gasoline engine, listen to this, Ali, because you're in an energy hunt, in their '94 Honda with six volt batteries that they bought at the store.

(BEGIN VIDEO CLIP)

LARRY WILLIAMS, CREATED BATTERY-POWERED OPERATED HONDA: There's a lot of interest because of gasoline prices for sure. This is something almost anybody could do with a little bit of electrical-mechanical ability.

(END VIDEO CLIP)

CHETRY: And then I guess you've got to get a huge sign that says electric and paste it on your hood as well. They say it cost about three cents per mile to get where they're going. How fast? Well, that wasn't in the story.

ROBERTS: It makes you wonder why all of the auto manufactures gave up their ideas for electric cars.

VELSHI: Well, you know they're coming back, right? Ford in 2000, GM in 2010 will have -

CHETRY: Just in time.

VELSHI: Just in time.

ROBERTS: Timing is everything.

VELSHI: For city applications it's very practical. It's not necessarily practical if you drive 35 miles to work or you live in a rural environment. But I really think you're going to see a lot of this. Although somebody e-mailed me the other day after I talked about this and said, have you considered the - you know, I'm always talking about the unintended consequences like corn and ethanol.

CHETRY: Right.

VELSHI: The unintended consequences are already plugging their car in and increasing the cost of electricity potentially by doing that. Again, this is why it's important to keep talking about this. And because we can't keep talking about oil and gas record. We have another record for gas. Although you won't notice it because it's, you know, two tenths of a cent. $4.09. Oil prices still above $140 a barrel. Settling at $140.97 yesterday. And then up - that is a record, by the way. And then up above that, $141.22.

Charles Hodson, CNN's Charles Hodson is in Madrid for a meeting of oil producers. And he ran into the Saudi oil minister, asked him whether Saudi Arabia would be capable and interested in increasing its output from 9.7 million barrels a day to 11 million barrels a day. Here's how that exchange went.

(BEGIN VIDEOTAPE)

CHARLE HODSON, CNN CORRESPONDENT: Can you imagine any circumstances under which Saudi Arabia would increase oil production further? It's said you have a capacity of 11 million barrels a day.

ALI AL-NAIMI, SAUDI OIL MINISTER: Yes. Where is the buyer? Do you have a buyer? We will be very happy to sell it.

(END VIDEOTAPE)

VELSHI: He's saying where is the buyer. In other words, there's no demand.

ROBERTS: What about China? What about India? Why are oil prices almost $150 a barrel?

VELSHI: I would imagine that there's a buyer for every last barrel of oil that's out there but the Saudis are making the case that this is speculation that's driving the price up, not demand. They've said that if they see demand out there, they will increase production. The orders are starting to come in now for August oil. We'll see if that demand is there. But it's coming down to two worlds - there's two worlds there. There are people who think it's supply and demand and people who think it's speculation. I suspect we're going to be having this discussion for a few months, maybe even longer.

ROBERTS: In the meantime, the price of oil is going to keep going up.

VELSHI: It's going up.

ROBERTS: Thanks, Ali.

CHETRY: He doesn't bring his barrel out here anymore.

VELSHI: It's too much work. Too much exercise.

ROBERTS: He knows we'd put him in it and bury him in the Giant's Stadium.

CHETRY: We'll be right back.

(BEGIN VIDEOTAPE)

ROBERTS: Coming up on AMERICAN MORNING, spiritual awakening.

UNIDENTIFIED FEMALE: There was a tearing open of my heart. And then the feeling that we were all one.

ROBERTS: The power of the magic mushroom. How just one trip could change your behavior and life for the better. You're watching the most news in the morning.

(COMMERCIAL BREAK)

CHETRY: Did you just notice that? Flashback time for some people around here, I guess. Well, a spiritual benefit from magic mushrooms. That's a conclusion of a newly released --

ROBERTS: You're still caught up in the psychedelic, aren't you?

CHETRY: Johns Hopkins study.

ROBERTS: It messed your mind. For some patients their eye opening experience still lasts more than a year after the experiment. CNN's Carol Costello has got the study that you're going to want to hear about.

(BEGIN VIDEOTAPE)

CAROL COSTELLO, CNN CORRESPONDENT (voice-over): The whole John Hopkins study just seems just to hippy dippy '60s. It brings to mind Timothy Leery, the man who first widely touted the alleged magic in this tiny mushroom.

TIMOTHY LEERY: Five years ago by accident in Mexico, I took Mexican mushrooms.

COSTELLO: Leery, a Harvard researcher claimed his mushroom induced psychotic trip was so spiritual it led him and a generation to --

LEERY: Turn on, tune in and drop out.

COSTELLO: Until the federal government stepped in and made hallucinogenic drugs illegal. Fast forward to 2006 in this research room at Johns Hopkins. 36 volunteers took part in an initial study on whether psilocybin, the active ingredient in magic mushrooms really does have a lasting spiritual effect on people. Dede Osborn, a business consultant volunteered to find out.

DEDE OSBORN, MUSHROOM STUDY VOLUNTEER: It's a very beautiful feeling. I've not felt anything like that before.

COSTELLO: Osborne lying on this couch received one dose over an eight-hour period. She saw a kaleidoscope of colors. Then --

OSBORN: There was a tearing open of my heart. And then the feeling that we were all one.

COSTELLO: The effects of that single session are still with her 14 months later. And with other volunteers. The study says at two months the volunteers rated the experience as having spiritual significance. And sustained positive changes in behavior.

DR. ROLAND GRIFFITHS, JOHNS HOPKINS UNIV., STUDY AUTHOR: Most people had experiences that really looked quite indistinguishable from classically occurring mystical type experiences.

COSTELLO: The study is nothing like those done in the '60s. They're far more controlled. The goal is to explore whether this drug could prove therapeutic to those terminally ill.

GRIFFITHS: Volunteers who are under psychological distress secondary to a cancer diagnosis. And the thought here is that an experience of this type, primary mystical experience, might well alter the course or the perception that the individual has of their disease process and quality of life.

COSTELLO: As for those volunteers who took that long, strange trip on Johns Hopkins couch, the study says most have no regrets and feel their world is a better place because of it.

(END VIDEOTAPE)

COSTELLO: If you're saying where can I get some, don't. Magic mushrooms are illegal in the United States. And scientists say they can be dangerous if taken without strict supervision. John, Kiran.

ROBERTS: The study also said that more than a year after the experiment most patients still rate their mushroom trip as one of the five most meaningful and significant experiences in their lives. Ranking it as high as the birth of a child or the death of a parent.

CHETRY: We're watching breaking news out of Jerusalem right now. At least three people killed after a bulldozer driver plows through a crowded street, ramming cars and a bus. Israeli police are calling it a terrorist attack. A live report from the scene ahead.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the most news in the morning.

A Japanese cell phone company has pulled its latest commercial from the airwaves after using a monkey to portray Senator Barack Obama. The company says it had no idea there were racial undertones. Our Kyung Lah has got more on this from Tokyo.

KYUNG LAH, CNN CORRESPONDENT: Good morning, John and Kiran. Barack Obama certainly made a splash here in Japan, even seeping into popular culture. But a reference to him in a cell phone ad is raising allegations of racism.

(BEGIN VIDEOTAPE)

LAH (voice-over): The mobile phone commercial begins with the crowd rallying behind an inspirational speaker. Supporters hold signs that read "change." The company E-mobile says it is a nod at the worldwide popularity of U.S. presidential candidate Barack Obama. But here's the problem - the speaker at podium is a monkey.

UNIDENTIFIED MALE: It just made me go, oh, come on, guys, come on.

LAH: This group of mostly African-Americans who live in Japan could not believe what they were seeing on Japanese TV.

UNIDENTIFIED MALE: I don't think that anybody who deals on a world level doesn't understand the correlation between monkeys and black men, how they've been used historically as a symbol to dehumanize, as we are sub-human people.

UNIDENTIFIED MALE: They were totally inconsiderate of the cross cultural faux pas that it represented.

UNIDENTIFIED MALE: People's minds should be more open as world citizens.

LAH: The ad has outraged this group, and people in cyberspace, charges of a racist Japan dehumanizing a U.S. presidential hopeful.

UNIDENTIFIED MALE: Are you trying to tell me nobody between its inception and the result said, whoa, whoa, whoa, hey, guys!

UNIDENTIFIED MALE: Not really, to be honest. Now, of course, we know.

LAH: The president of E-mobile insists the firm simply had no idea. He points out the company's mascot is a monkey, an animal revered in Japan and used in previous E-mobile ads.

UNIDENTIFIED MALE: When they sold the idea the first time, hey this is actually, you're copying this idea from the presidential election in the U.S. and they said, yes, but that's how you make a presentation, how you know, make an impact. We thought it interesting.

LAH: We wondered if Tokyo commuters would find it interesting. Some thought it was cute, but none made a connection to the U.S. presidential candidate. Obama-san.

UNIDENTIFIED MALE: Oh! Obama=san.

LAH: But they should get it, says Temple University's director of Asian studies.

JEFFREY KINGSTON, TEMPLE UNVERSITY, DIR. OF ASIAN STUDIES: Cluelessness isn't really an excuse. Really Japan has to understand that public discourse here is not just a domestic discourse, it's international discourse.

(END VIDEOTAPE)

LAH: there's not a lot of diversity here in Japan. 98.6 percent of the people who live here are ethnically Japanese. The company says it's received no complaints from its Japanese customers but it still pulled the ad after a complaint from the group in our story and a call from CNN. One company's crash course in cultural sensitivity as a possible world leader breaks barriers on a global stage. John and Kiran.

ROBERTS: Fighting for your job. John McCain talks to us next hour. Why he says free trade could cure the economy.

Plus, it's better than your own skin.

UNIDENTIFIED FEMALE: If they don't wear it they're at a disadvantage.

ROBERTS: The Speedo U.S. swimmers are swearing by for the Beijing games. You're watching the most news in the morning.

(COMMERCIAL BREAK)

ROBERTS: It's coming up on 56 minutes after the hour. Welcome back to the most politics in the morning.

John McCain in Colombia today where it is about free trade as well as some other issues. He even has a new advertisement out on the issue. McCain says that free trade will spur economic growth. And it is one of his sharpest contrasts with Senator Barack Obama. Joining me now to talk more about this and more of the other issues that are out there on the campaign trail, McCain communications director, Jill HazelBaker, who's in Arlington, Virginia. Jill, it's good to finally get you on the show this morning. Glad to have you.

JILL HAZELBAKER, MCCAIN CAMPAIGN COMMUNICATIONS DIRECTOR: Good to be with you, John. Thank you.

ROBERTS: So, we've got some new polling out, CNN opinion research corporation polling that found 56 percent of Americans do not think that free trade is a good idea. Only one in four think that it's an engine for economic growth. How is the Senator going to convince people in hard-hit areas like Ohio, Pennsylvania, Indiana, that free trade is a good idea?

HAZELBAKER: Well, Senator McCain is in Colombia and Mexico today. He is meeting with the presidents of both countries. This is a very simple issue for John McCain. He wants to level the playing field and keep us competitive. And Barack Obama's going to have to explain while he's stands lockstep with the union. John, Senator McCain introduced his Lexington project last week which is his plan for strategic independence from foreign oil. And he was in places like Ohio, places like Michigan that have been hit hard by manufacturing losses. But let's be clear, we want to ship the goods overseas and keep the jobs here.

ROBERTS: But if the jobs are going overseas in manufacturing, how do you convince people who have lost jobs in, again, places like Ohio, Pennsylvania and Indiana that expanding free trade is going to be good for them?

HAZELBAKER: Well, part of it, John, 95 percent of the world's consumers are in markets outside of the United States. So we need to make sure that we're competitive in that global economy. We need to replace some of the jobs with the past, with jobs of the future. Green-collar jobs that would come from McCain's Lexington project. There are incredibly skilled workers in some of these places that you mentioned, and we need to transition them to being wind turbine manufacturers or solar panel manufacturers. Those are the jobs of the future.

ROBERTS: Jill, he's got more details on his economic plans he's going to be coming out with next week. Can you give us a preview of what we are likely to hear?

HAZELBAKER: Sure. John McCain's been traveling this country. He knows that Americans are hurting. He knows they are paying $4.50 for gasoline and that food prices are going through the roof. And he's got a jobs-first economic agenda. You know, the contrast is very clear between McCain and Barack Obama. John McCain wants to keep taxes low on small business, the drivers of the American economy. Barack Obama wants to tax them. So, we're going to be making the pitch to voters, and I think the choice is going to be very clear.

ROBERTS: So what's the new pitch?

HAZELBAKER: Well, John McCain, I'll let him discuss it with you next week. I don't want to step on his toes. He's going to be traveling through Colorado, Ohio, Michigan, battleground states talking to them about keeping their taxes low, decreasing the regulation on small business, how to provide more affordable health care for business and grow the American economy out of the rough patch it's currently in.

ROBERTS: Hey, you know, you folks have been spending an awful lot of time going after Wesley Clark for comments that he made over the weekend regarding Senator McCain and his war time experience. Wesley Clark, retired general, says that his war time experience, Senator McCain's, doesn't necessarily qualify him to be commander in chief. Let's listen to what he told me yesterday on that topic.

(BEGIN VIDEO CLIP)

GEN. WESLEY CLARK (RET.), FORMER NATO SUPREME ALLIED COMMANDER: I've seen stronger judgment from Barack Obama despite the fact that he doesn't have military experience, than I've seen from John McCain despite all his worldly travels, his Senate Armed serviceship and what he did as an outstanding younger officer in uniform for the United States Navy.

(END VIDEO CLIP)

ROBERTS: General Clark is saying he's not criticizing John McCain's war record, He's just saying it does not automatically qualify him to be commander in chief and that he sees better qualities in Barack Obama. So why are you going after him?

HAZELBAKER: Well, let's be clear, I think the depth of John McCain's foreign policy expertise and knowledge is well known to all Americans. But this is not about Wesley Clark. This is about Barack Obama. And let's drop the pretense that Barack Obama's going to raise the dialogue and elevate the debate in this election. If Barack Obama really wanted to do that, he would get Wesley Clark off the airways attacking John McCain's long record and legacy of service to the American people.