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Salim Hamdan Found Guilty of Conspiracy; 11 People Indicted in Identity Theft Case; Senator Obama Talks Energy in Indiana; Still Looking for Missing Madeleine McCann

Aired August 6, 2008 - 10:00   ET


HEIDI COLLINS, CNN ANCHOR: Finding Madeleine McCann, her family sorting through possible new leads this morning kept secret by police. The little girl spotted in the Netherlands looking for her mom, was it Maddie? Our Phil Black is live in London now with the very latest on this story.
Good morning, Phil.


Now that the police investigation has officially closed into the disappearance of Madeleine McCann, without having achieved any significant results. Portuguese authorities have released a 30,000- page case file detailing that investigation now. They have long been concerned about the caliber of the police work. There is some information within this file that could perhaps justify some of those concerns.

Let's talk through some of them now. We know that Madeleine's parents, Kate and Jerry were at one point named official suspects in this case based on police evidence, DNA evidence. The file now tells us that that the DNA evidence was known at the time to be inconclusive. The file also contains images assembled from witnesses statements of men who were said to be behaving suspiciously around the place and time that Madeleine went missing. Those images were never released publicly. Madeleine's parents never saw them nor were there shown CCTV images captures across Portugal of Madeline's look- alikes. They never saw those either.

But perhaps the most compelling story is that told by a witness in the Dutch city of Amsterdam who says she had a conversation the month that Madeleine was taken with a little girl who told her, her name was Maddie. She also told her, she says, that she was taken while on holiday with her parents. We can hear from that witness now about her experience with a little girl that she is pretty sure was Madeleine McCann.


ANA STAM, EYEWITNESS: I stopped to ask where her mommy was, and she couldn't tell me that. And I wanted to give her a balloon, but she didn't want that. She only wanted her mommy, she said. And she said that these people took her from her mommy.

(END VIDEO CLIP) BLACK: It is a compelling story, there are, however, a couple of facts against that this woman says that the young girl had dark hair and Madeleine's parents insists she would have never referred to herself as Maddie. But what they don't know is to what extent the Portuguese police went to eliminate this particular possible sighting from the investigation. It's now one more thing that their private investigators must now look into -- Heidi.

COLLINS: Well, exactly what are police saying about that? So what is their defense in not following up that lead, they didn't find it credible?

BLACK: Well, we know that this woman spoke to Dutch police once possibly twice. What we don't know is what the Portuguese reaction was to that. This particular detail isn't found within the case file. We don't know if they believed the sighting was credible. We don't know if they were able to eliminate it, for whatever reason. And so, as I say, it is now one more fact along with so many others that the private investigators and lawyers hired by the McCanns are now studying very closely as they go through these 30,000 odd pages in the hope that some new detail could lead to a better result for them.

COLLINS: Yes. And meanwhile, that clock just keeps on ticking, too. CNN's Phil Black coming to us live from London this morning.

And coming up in our next hour, a McCann family spokesman will be talking with us live. He's going to tell us a little bit more about where the investigation stands this morning.

TONY HARRIS, CNN ANCHOR: In Florida, prosecutors charge a young mother in the disappearance of her toddler. Caylee Anthony has been missing since June, but police say her mom waited a month before reporting it.

Our Randi Kaye has that story.


RANDI KAYE, CNN CORRESPONDENT (voice-over): Where is Caylee Anthony? Is the two-year-old Florida girl alive or dead? And is her mother hiding anything about her disappearance? Authorities are convinced Casey Anthony knows much more than she is telling them. Prosecutors in Florida formally charged the 22-year-old single mother with child neglect and making a false statement. This is what Casey says happened.

On June 9th, she dropped Caylee off at a baby-sitter. When she returned, Casey and the sitter were gone.

KAYE (on-camera): Instead of contacting police or her family, Casey says she went searching for Caylee herself, vanishing for five weeks before returning home without Caylee but with a story Caylee's grandmother had a hard time believing.

Here is Cindy Anthony's call to 911.


CINDY ANTHONY, GRANDMOTHER OF MISSING TODDLER: I told you my daughter was missing for a month. I just found her today. But I can't find my granddaughter. She just admitted to me that she's been trying to find her herself. There's something wrong. I found my daughter's car today and it smells like there's been a dead body in the damn car.


KAYE: Investigators also reported that a strong odor of human decomposition in the trunk of the car. They described Casey's claims as a web of deceit and say the apartment where she claimed the sitter lived had been vacant for months. Casey was arrested for child neglect and held on $500,000 bail. Authorities say she has not been cooperative.

SGT. JOHN ALLEN, ORANGE COUNTY SHERIFF: She has the right to not talk to us, but certainly as a mother I would hope that she would be willing to give us whatever information, you know, that she had to help us find her child.

KAYE: But in a taped jailhouse conversation with a friend called Christina on July 16th, Casey denied she was lying.


CHRISTINA, FRIEND OF CASEY ANTHONY: If anything happens to Caylee. Casey, I'll die. Do you understand? I'll die if anything happens to that baby.

CASEY ANTHONY, MOTHER OF MISSING TODDLER: Oh, wow. Oh, my god. Calling you guys is a waste, huge waste. Honey, I love you. You know I would not let anything happen to my daughter. If I knew where she was, this wouldn't be going on.


KAYE: Now Caylee's grandparents are defending their daughter saying Casey has told them Caylee is alive, even that she could help find her if she's released.

UNIDENTIFIED FEMALE: And there's certain things that the family can't say. There's certain things that we do know, there are certain things that Casey knows that she can't tell. But you know, frankly, there's not a whole lot of people that we trust.

GEORGE ANTHONY, CAYLEE'S GRANDFATHER: She knows who has her daughter. She knows her daughter's safe. You know, I've got to believe her that she knows everything is OK.

KAYE: Meanwhile, new photographs of Casey have emerged. They show her at a local club partying and smiling to the camera. The photographer says they were taken after Caylee went missing. Her attorney disputes that. And for the little girl at the center of this mystery, all everyone can do is wait, hope, and pray. Randi Kaye, CNN, Atlanta.


HARRIS: Now, in her first primetime interview since the formal charges, Caylee's grandmother spoke to our Nancy Grace. She says she believes her daughter is innocent 100 percent.


CINDY ANTHONY: Your expert witness who has some, you know, experience in this doesn't have the exact experience that I have, and, you know, I understand that he has a perspective that a lot of people don't have, but, too, compare Casey to O.J. Simpson, that she had no way out. Casey had a way out if she wanted to not be a mom anymore. Casey lived in a loving family and so did Caylee. Casey knew at any time she had any opportunity and obviously, if you guys have photographs of her over the last few years going out and enjoying her life as a 22-year-old and a 20-year-old and a 21-year-old and a 19- year-old normally would, she had that opportunity.

So someone needs to step back for a minute and think, what changed? What would make sense? Well, what we've been saying all along, that someone took her daughter. Casey is not an irresponsible mother.


HARRIS: So Cindy Anthony says her daughter is the kind of mother who went out of her way to keep Caylee safe.

COLLINS: The feds say it's the largest computer hacking and identity theft case they have ever handled -- 11 people indicted. They are accused of stealing more than 40 million credit and debit card numbers.

Alina Cho reports now that it may have happened at a store where you shop.


MICHAEL MUKASEY, ATTORNEY GENERAL: They caused widespread losses by banks, retailers and customers.

ALINA CHO, CNN CORRESPONDENT (voice-over): How much? The Feds say it may be too hard to add it all up. Maybe tens of millions of dollars from people who shopped at places like Office Max, DSW, Barnes & Noble, Sports Authority, Forever 21, even Boston Market. All they do is sit outside with a laptop, wait for customers to make a purchase, then use a so-called sniffer program to get into a store's wireless network.

MICHAEL SULLIVAN, U.S. ATTORNEY: This allowed the defendants to remotely capture sensitive information such as the card numbers, passwords and account information. CHO: The hackers allegedly stole that personal information or used it themselves. Some numbers were stored on magnetic strips of blank cards and used to draw tens of thousands of dollars from ATMs.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: This is a sampling of what I guess you would describe as a white collar crime probably the biggest challenges we face in the 21st century. Huge amounts of money moved over the Internet.

CHO: Many people whose numbers were stolen may not realize they're victims yet. But Homeland Security Secretary Michael Chertoff says they're working with stores to close the cyberhold.

CHERTOFF: The international system is safe, but I have to tell you the bad guys are smart, too.

CHO: This is believed to be the largest hacking and identity theft case ever prosecuted by the Justice Department. The investigation took three years and the scheme allegedly stretched over five years in several states with the ripped off money spent all over the world. And authorities say the key suspect was actually double dealing, giving the Secret Service tips, ripping off the public at the same time.

Alina Cho, CNN, New York.


HARRIS: And once again we want to get to the breaking news from the top of the hour. A Pentagon jury has now reached a verdict in the case of Osama bin Laden's former driver and alleged bodyguard, Salim Hamdan.

Our senior Pentagon correspondent Jamie McIntyre at Guantanamo Bay Naval Base and he has the very latest for us. He's on the phone with us.

Jamie, good morning.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Tony, the headline is we don't yet know what the verdict is. There are two charges against Salim Hamdan, the alleged driver and bodyguard for Osama bin Laden. The first trial in this system of military commissions and we were just told that after basically a day and a half of deliberations, the military jury, six officers on the panel, has apparently reached a verdict, reporters are now being called into the courtroom to see what that verdict is. There are 10 separate specifications on two different counts. Basically conspiracy to commit murder and conspiracy to aid a terrorist organization.

Salim Hamdan was captured in November of 2001 with a couple of service to air missiles in the back of a car. His defense argues that he's just a low-level driver, that he borrowed the car and was returning it, that he wasn't providing support to a terrorist organization and that he may be a criminal but not a war criminal. The prosecution is using this as its first test of its ability to prosecute people held at Guantanamo under this new revised military commission, and the eyes of the world are really on this trial to see whether or not a verdict can be reached that can be seen as fair and impartial. We should know that verdict probably in the next half hour or so -- Tony.

HARRIS: And Jamie, just another note here. The prosecutors have claimed, am I right, that Hamdan actually helped Osama Bin Laden execute a number of terrorist plots, including the September 11th attack, correct?

MCINTYRE: Well, I think the prosecutors have alleged that he overheard conversations about the September 11th attack and that he knew about aspects of September 11th immediately afterwards that would indicate he was in Osama Bin Laden's inner circle. But they have not been able to make a direct connection to September 11th.

In fact, you know, the crux of this case here is whether or not he was just a low-level foot soldier in al Qaeda or whether he was, in fact, somebody who was a key part of the inner circle who was, in fact, aiding and abetting these terrorist attacks. And we'll see what the military jury thinks probably in just a few minutes from now.

HARRIS: OK. Our senior Pentagon correspondent Jamie McIntyre on phone with this.

Jamie, appreciate it. Thank you.

COLLINS: Also we want to talk a little bit more about the legal aspects of this. We want to get to our senior legal analyst Jeffrey Toobin who is on the phone with us right now to talk about this.

Jeff, as Jamie has been telling us straight from Guantanamo, we don't know the verdict yet, but apparently it has been reached.

Talk to us a little bit about, you know, if he is found guilty or if is he found not guilty. What's going to happen next here?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, this is not a death penalty case so he cannot be executed for this crime. However, if he is acquitted, he will not necessarily be released.


TOOBIN: What one of the many complaints that civil libertarians have about the commission system is that if anyone -- they still are returned to Guantanamo and held as enemy combatants. So the stakes here are not freedom -- for Hamdan. He may become eligible for a long prison sentence, but he is not going to be free even if he's acquitted. That's the stakes for him.

COLLINS: Yes, that certainly is the question, it would seem. Why not? I mean, you're talking about an enemy combatant and the whole idea or definition of what that is, whether or not it pertains to Salim Hamdan.

TOOBIN: Well, an enemy combatant according to the administration is a soldier in an irregular army, not a prisoner of war in the customary way we think of them. So that they are not entitled to the same kind of protections as prisoners of war. And enemy combatants can be held until the end of hostility, which means the end of the war on terror, which as we all know could be many, many years. That is one of the peculiarities of the system in place now.

But if he is, in fact, found guilty and I think probably most people think he will be found guilty, then he will be sentenced to a formal term of prison. Although at the end of that prison term he may yet still be considered an enemy combatant, but that's jumping a good deal ahead.

COLLINS: Yes. It's very interesting, too, when you talk about him possibly being held until the war on terror is over. I mean, who determines that?

TOOBIN: The president of the United States does, as simple as that. That is something that President Bush has said that he is the judge of when hostilities will be concluded so it will be obviously up to President Bush's successor or maybe his successor's successor, given how long this war might take. This is one of the many -- trials have been controversial.

And even if there is a verdict today, this verdict, there is a process in place for military commissions that it is also possible that Hamdan will try to get into the American legal system as well -- or file a writ of Habeas Corpus -- the legal environment of the -- prisoners in Guantanamo, it's still very unsettled. So today's decision is very important but it's very, very -

COLLINS: Well, Jeff, unfortunately, your phone is breaking up a little bit. We sure do appreciate you calling in and talking a little bit more about what this could all mean. So obviously we're going to be watching this case very closely and check back in also with our senior Pentagon correspondent Jamie McIntyre who is there at Guantanamo Bay and will let us know about the verdict that apparently has been reached just as soon as we know.

HARRIS: And last hour we told you that a federal prosecutor had arrived at a U.S. courthouse to begin the process of unsealing documents in the investigation of the anthrax mailings that killed five people. The investigation over the course of seven years. Our Homeland Security correspondent Jeanne Meserve has additional information on this and may have actually obtained a few of those documents. We will talk to Jeanne Meserve in just a couple of minutes right here in the NEWSROOM.


COLLINS: Quickly want to take you to Elkhart, Indiana, where we have Senator Barack Obama at the podium talking energy. And yes, he was introduced by Senator Evan Bayh. More about that in a moment.


SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: ... back then you were paying about $900 for heating oil to get you through the winter. This winter you're likely to pay nearly $2,500. I'm going to help you. Elkhart, this did not happen by accident. It happened because for too long we've had a real energy problem but no real energy solutions.

We haven't had an energy plan. We've got an oil company plan. We got a gas company plan. We haven't had a plan that makes sense for the American people. So if Senator McCain wants to talk about how Washington is broken. That's a debate I'm happy to have because Senator McCain's energy plan reads like an early Christmas list for oil and gas lobbyists. It's no wonder because many of his top advisers are former oil and gas lobbyists.

Instead of offering a plan with significant investment in alternative energy, he's offing a gas tax gimmick that will pad oil company profits, promises to give you 30 cents a day for 90 days. That's about $28, in savings, half a tank of gas. But in reality, that assumes that gas companies, oil companies, are actually going to pass those savings to you. Do you really believe that's going to happen?

No. That's why Washington's broken, because we offer gimmicks instead of solutions. Instead of supporting my plan to use the windfall profits of oil companies to help you pay rising costs, John McCain's offering $4 billion in additional tax breaks to oil companies like ExxonMobil.

Now, keep in mind ExxonMobil made the largest quarterly profit in the history of the United States last quarter, almost $12 billion. That's why Washington's broken. Instead of offering a comprehensive plan that will lower gas prices, the centerpiece of his entire energy plan is more drilling. Now, George Bush's own Energy Department will tell you that you will not see rising -- you won't see a drop of oil from offshore drilling for seven years. Seven years. And that even when full production is going, 20 years from now, it would make just a marginal difference in terms of the price of gas. But nevertheless, John McCain stood in a building somewhere and he said, we're going to drill here and drill now. I don't know what he knew was below there.

But I tell you it's not going to help lower gas prices for you, but it has produced a gusher for John McCain because after he announced his drilling proposal to a room full of oil executives in Houston, the industry ponied up nearly a million dollars in contributions. That's the kind of special interest-driven politics that has stopped us from solving our energy crisis and that's why Washington's broken. So I know that Senator McCain likes to call himself a maverick, and the fact is there have been times where in the past he did show some independence, but the price he paid for his party's nomination has been to reverse himself on position after position and now he embraces the failed Bush policies of the last eight years.

The politics that helped break Washington in the first place. And that doesn't meet my definition of a maverick. You can't be a maverick when politically it's working for you and then not a maverick when it doesn't work for you and you're seeking your party's nomination. By the way, while we're on the subject of Senator McCain contradicting himself, a few days ago somebody asked me what they could do personally to help America save energy. So I said something that some of you have heard, which is, all of us could get better gas mileage and save oil in the process just by keeping our tires inflated. Turns out the experts agreed. It turns out that we could save three to four percent on our total oil consumption just by keeping our cars tuned up, inflating our tires.

Senator McCain and the Republican National Committee, though, mocked the idea. They've been going around sending tire gauges to reporters saying "Barack Obama's energy plan." Well, you know, that sounded clever except last night after all that Senator McCain actually said he agreed that keeping our tires inflated was a good idea. Which makes sense because it turns out Nascar, which knows something about tires, apparently said the same thing, so did the AAA.

So in the coming days it's going to be interesting to watch this debate between John McCain and John McCain.

COLLINS: Senator Barack Obama talking energy today, a town hall meeting as you can see there, in Elkhart, Indiana. There was some question about whether or not Senator Evan Bayh who has been spoken about as possibly being on the short list of VP candidates for Barack Obama, whether or not he would introduce him. And yes indeed, we'll let you know, he did introduce him.

Our Candy Crowley is there, and we'll talk with her later on.

HARRIS: Presidential politics an the energy plans competing for your vote. One driving force -- hybrid cars. But are the McCain and Obama plans promising something the car makers can't deliver? We're going to take a break. When we come back we will have the latest. OK. Let's take a break. We're back in the NEWSROOM in just a moment.


HARRIS: And breaking news into CNN right now, a military jury has convicted Osama bin Laden's former driver in the first Guantanamo war crimes trial. We're talking about, of course, Salim Hamdan. Again, a Pentagon jury has found Salim Hamdan guilty of conspiracy and with supporting terrorism. Hamdan will now likely spend the rest of his life in prison.

Prosecutors have called Hamdan an al Qaeda warrior. The defense had maintained that Hamdan was a low-level bin Laden employee who stayed with him only for a $200 a month salary. But, again, a military jury, Pentagon jury, at the Guantanamo Bay Naval Base in Cuba has convicted Osama Bin Laden's former driver, Salim Hamdan of war crimes, again, of conspiracy and supporting terrorism.

And we will get more on this story in just a couple of moments from our senior Pentagon correspondent Jamie McIntyre who is reporting from Guantanamo Bay Naval Base.

COLLINS: Quickly we want to get this out to you as well. Another story we're following in the NEWSROOM, new developments in the 2001 anthrax attack investigation. Important documents are being unsealed right now. CNN's Homeland Security correspondent Jeanne Meserve has the story for us and is joining us now from Washington.

Hi there, Jeanne.


Victims of the anthrax attacks and families of victims have arrived at the FBI Building this morning. According to sources familiar with the day's events, they're expected to get a briefing that will last about an hour and a half on this investigation. The FBI director Robert Muller is expected to participate in that. As you mentioned, documents in this case were unsealed this morning by a federal judge. They are expected to be made public later today.

We do know from sources familiar with the investigation that DNA is a part of the evidence they have against Bruce Ivins. He is the U.S. Army scientist who worked at Fort Dietrich who was about to indicted in this case when he took his own life. We know that DNA is part of it, that they have trace anthrax used in this attack to a vial that was in Ivins' office. However, we do also think that laboratory equipment may also be discussed. Here's more on that.


MESERVE (voice-over): This is a lyopholizer, a machine like this can convert wet anthrax, the kind used at Fort Dietrick into a dry powder, a powder was used in the anthrax letters. Lyopholizers are not usually used at Fort Dietrick where Bruce Ivins worked, but in the fall of 2001 around the time of the anthrax attacks, Ivins borrowed a lyopholizer to do authorized research, according to a source familiar with the investigation who did not want to be identified because it is ongoing. The machines are widely used and easy to get.

DR. PETER HOTEZ, G.W. UNIV. MICROBIOLOGY CHAIRMAN: I wouldn't necessarily make the conclusion that just because he had access to a lyopholizer and used a lyopholizer, that that provides a smoking gun that he must be using this for sinister purposes.

MESERVE: Richard Sperzel, a leading anthrax researcher goes further. He tell CNN there is no way a lyopholizer could have been used to create the fine anthrax spores used in the 2001 letters. Sperzel says another advanced machine would be needed. And he says, there is no way anyone could produce such high-quality anthrax in secret.

The skepticism in scientific circles about the case against Ivins, is putting additional pressure on the Justice Department to lay out its evidence, all of it, soon says a former prosecutor.

ANDREW MCBRIDE, FMR. FEDERAL PROSECUTOR: I think the public and the survivors of the victims of the anthrax attacks are entitled to see the evidence before the grand jury. And if there was a draft indictment and they were ready to indict Mr. Ivins, to see that as well. (END VIDEOTAPE)

MESERVE: And that IS exactly what the Justice Department plans to do. That is why those documents have been unsealed, why the FBI is meeting with family members and victims this morning. And why they will meet with the press this afternoon.

Back to you.

COLLINS: All right. We'll look forward to even more information coming up later on.

Jeanne Meserve, thanks.

HARRIS: And the verdict is in.

Let's get to our senior Pentagon correspondent Jamie McIntyre at Guantanamo Bay Naval Base in Cuba.

Jamie, if you would, share with us the verdict from this Pentagon jury.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, the military commissioners have come back and returned a verdict of not guilty on the first count against Salim Hamdan. That is conspiracy to aid a terrorist organization. That was the most serious count.

Then on the second count, which is providing material support to terrorism and terrorist organizations, he was found guilty on five of the eight specifications. There were 10 specifications altogether, he's been found guilty on half of the 10. Two of those related to the first count in which he was found not guilty.

So, a split verdict here. And I think both sides of this, that is to say, human rights advocates who have criticized this process and the military prosecutors who say it's been a fair and impartial proceeding, are going to see something in this verdict that they can point to.

What happens now is that Hamdan's trial goes to the sentencing phase because he has been found guilty on this charge of material support to terrorism. Five of those counts. That involves the driving, transporting of those SA-2 missiles he was captured with in November of 200. And providing aid to Osama bin Laden's al-Qaeda organization.

So, he has been convicted on those. The first count, which got to the heart of the matter of whether or not Salim Hamdan was guilty of a war crime, is a count on which the judge yesterday, admitted he may have misinstructed the jury. He may not have explained the law on international law of armed conflict adequately. And that may account for the reason that the jurors found Salim Hamdan not guilty on that count.

We'll wait and see what the defense or prosecution attorneys say when they talk to the press after the trial is over. Again, one of the ironies here is that if he was acquitted -- if he was convicted and he has been convicted on some counts, he faces up to life in prison. But, even if he were acquitted on all of the counts, which he was not, he still could potentially face an indefinite term in prison because he can still be held as an enemy combatant.

But right now, the trial will then move this afternoon, into the sentencing phase this afternoon for Salim Hamdan. Again, not guilty of conspiracy but guilty of material support to terrorism.

That's the verdict here in Guantanamo today -- Tony.

HARRIS: OK. And Jamie, I think maybe you just summed it up in the best way possible. Because I've got to tell you, it's been confusing to sort of rifle through all of the wires on this verdict. And some of the information's been a little confusing.

And I'm going to ask you to do this once again, if you would. Tell us again what the jury has determined.

What is this verdict so we can all be on the same page on this?

MCINTYRE: Well, there are two counts. Not guilty on one count, guilty on the second count.

The first count is conspiracy. That means you intend to do something. You have to improve that you intended to do something. The government didn't improve -- prove -- that Salim Hamdan intended to harm Americans and others in a terrorist act.

But, what they did find him guilty of is material support. That involves him driving these missiles around, which the prosecution says he was driving to the battlefield, to be used against American forces. And other ways in which he aided the al-Qaeda organization. It's the less serious, easier to prove charge than the other conspiracy charge.

So, guilty on one count, not guilty on the other. And as I said, I think advocates on both sides of this issue are going to see something to point to on this case.

HARRIS: And I apologize for having you do that to you, but we just had a bit of confusing information on the screen. I just wanted to sort it all out for folks.

Our senior Pentagon correspondent Jamie McIntyre for us.

Jamie, appreciate it. Thank you.

COLLINS: The candidates, the energy plans. One driving force -- hybrid cars.


HARRIS: A political promises. You know, it used to be chicken in every pot. Now it's more like a hybrid car in every of driveway.

Here's Barack Obama on the subject. (BEGIN VIDEO CLIP)

OBAMA: First, commit ourselves to getting 1 million plug-in hybrid cars on the road, getting 150 miles per gallon. We're going to do that within six years. We'll do that by investing in research and development, providing billions of dollars in loans and tax credits to the auto companies so they can retool their factories to build these cars. And by giving consumers a $7,000 tax credit to buy them.


HARRIS: And here's John McCain with his idea in June.


SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I further propose we inspire the ingenuity and resolve the American people by offering a $300 million prize for the development of a battery package that has the size, capacity, cost, and power to leapfrog the commercially available plug-in hybrids or electric cars.


HARRIS: Let's talk about it. Let's talk about the auto industry and whether it is ready for any of these proposals and plans.

Automotive expert Lauren Fix has some thoughts. She has written several books, we love her on this program. And she is known as the car coach.

Lauren, do you believe that a lot -- and not all of U.S. consumers -- but a lot have made a decision where it makes financial sense now to switch out of these gas guzzling vehicles for more fuel efficient vehicles and that the candidates -- there is another part to this -- the candidates are shaping their plans to match public sentiment right now?

LAUREN FIX, AUTOMOTIVE EXPERT: Well I'm sure that they're shaping their plans to meet the public sentiment right now, and many of us are in vehicles or in leases we can't get out of, or we owe more than the vehicle is worth so we're not going to get rid of what we have. However, there's some phenomenal deals on lots right now for SUVs and I know people buying them. So you have kind of look at the big picture for those us that are saying, you know what, maybe I should look at a hybrid. Does it make sense that a million of them could be available by 2015? And it really doesn't make sense when you look at the numbers.

HARRIS: Now tell me why, tell me why, tell me why, tell me why.

FIX: OK. As of '07, we only sold 500,000 Priuss. Think of a million, I mean, that's a lot of vehicles and the technology isn't there. Those are gas and electric. You're talking about plug-in cars that have not hit the market. The first one to be the Chevy Volt in 2010.

How are we going know how quick production can ramp up even when they're built in the U.S.?


HARRIS: Great. Well Lauren, what if we reinstituted -- what is it, the rebate or whatever it is -- if you went out and bought one of these vehicles? Wouldn't that be a way to encourage more folks to buy these vehicles?

FIX: I wish it was a rebate, but it's a tax credit, which means -- so when you think about it, a $7,000 tax credit, you're not getting a check in the mail. You're going to have to take it to a accountant, if you're in that financial position, and have them figure it out in your taxes at the end of the year.

So there -- when you think about the bigger picture, better technology is going as fast as it can, whether McCain is saying $300 million -- it's going to cost a lot more than that. And even if someone did develop it today to ramp up, production is going to take time.

And the same is true on plug-in vehicles. We have the same issue. We have to look at technology. We've had hybrids available from Ford since '06. We've had them available from Toyota for quite a while, Honda as well and G.M. So everyone is bringing out hybrids, but full electric cars, I think we're asking for really big chunk. And experts in Detroit also agree that's going to take about $30 billion in order to ramp up production on that.

HARRIS: Got you.

Lauren Fix, I want some straight talk from you right here.

FIX: OK, all right.

HARRIS: Is there a tipping point? We're watching gas prices decline like 20 straight days of declines here. Is there a tipping point when the price of gas -- also a point where folks believe, well, you know what, the gas is coming down, why don't I -- I do need the extra space, instead of getting that hybrid, let me go ahead and get that bigger vehicle?

FIX: Well I think when we see the three as the first digit on the gas pump, and I'm starting to hear that amongst people and journalists say, oh, oh, gas is dropping, it's back into the $3 range, I might just keep it. That $4 range scared people, $5 is the maximum point where people say, you know what? I'm just going to walk, sell my vehicle, think about a horse. So I think when you're back down in the threes, people are thinking I'm just going to go back to that SUV. And I've got a lot of people that I talk to that are buying SUVs because there are great deals on the lots.


And one final question. Do you believe a fuller discussion of other alternatives, other energy fixes, is being stifled a bit by this back and forth with the candidates, with Congress, over offshore oil drilling?

FIX: Well I think one of the things that we're missing as consumers is that as of September of this year, all 50 states are going to have clean burning diesel cars available from Audi, VW, BMW and Mercedes, of which some of are being built here in this country, so you're giving for jobs. When you think about it, you're getting 30 percent better fuel economy by switching to clean burning diesel. Plus we've got hydrogen coming very soon. We've got all kinds of other biodiesels.

I'm not a huge fan of E-85, but I think the solution is of multiple different things. You're going to have E-85, you're going to have electric cars in big cities, you're going to have diesels because you cannot haul anything with electric, hydrogen, or hybrids. There's no towing capacity. And if you want to get your product to market, you're going to need a diesel.

HARRIS: You are terrific!

FIX: Thank you.

HARRIS: Lauren Fix, thanks for your time this morning.

FIX: Thank you, Tony.

COLLINS: I've got to tell you something super, super funny because yesterday the market closed up so high, my dad sent us an e- mail. He was like, I went out and I bought a hybrid. And we're like oh, my gosh, that's so great. It was a hybrid golf club, not a hybrid car.

HARRIS: Did he really?

COLLINS: But he's getting closer though.

HARRIS: I love it.

COLLINS: One step closer, right?


COLLINS: I hope it improves his game.

Freddie Mac and the mortgage crisis -- now it looks like it's getting worse. We'll tell you about it.


COLLINS: Another blow to the economy. A mortgage giant posts a giant loss.

Susan Lisovicz is at the New York Stock Exchange with Freddie Mac's latest problems -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Heidi, Freddie Mac lost more than $800 million in the last quarter. Wall Street expected a loss that was three times worse than the estimate. Freddie doubled provisions for credit loses to $2.5 billion. Why? Well, the culprits are familiar -- rising delinquencies and foreclosures while home prices continue to fall. The value of its mortgage securities in Freddie's portfolio, meanwhile, fell by $1 billion. Freddie is slashing its dividend by 80 percent to save cash. Sister company Fannie Mae is expected to report a loss on Friday -- Heidi.

COLLINS: Ouch. Well, we've seen other mortgage companies and banks post even bigger losses.

So remind us why Freddie, in particular, is so important.

LISOVICZ: Well, Freddie, and Fannie Mae for that matter, are crucial to the housing recovery because they own or back half of all outstanding mortgage debt. That's why it was important that Congress passed a rescue plan which includes temporarily loaning Freddie and Fannie unlimited amount of cash. Obviously everyone hopes it won't come to that.

Freddie Mac shares are down 15 percent right now, 75 percent decline year to date. Fannie is off by a similar amount.

Overall stocks, well they're under pressure but nothing like that. Yesterday, remember we had the best Dow gain of the year, more than 300 points. So we're getting a little bit back. The blue chips down 71 points, NASDAQ, meanwhile, is down about 12. So each down about half a percent -- Heidi.

COLLINS: Living in the past, that's what I like to do. Like just yesterday.

LISOVICZ: The rear-view mirror looks really nice right now.

COLLINS: All right, Susan, thank you.

LISOVICZ: You're welcome.

HARRIS: The presidential candidates, what they're saying about the energy drain on your wallet. Part of our day-long focus on CNN. It is issue No. 1.


HARRIS: President Bush is in Thailand right now. Criticism of China and Myanmar on his agenda before heading to the Olympic games in Beijing tomorrow. President Bush plans to deliver a speech expressing deep concerns about China's human rights record. He will also urge the communist nation to allow political freedoms for its citizens. The president will also denounce the military regime in Myanmar. First Lady Laura Bush will travel to Myanmar's border to visit refugees.

COLLINS: What the candidates are saying in their own words on the campaign trail. It is part of our continuing effort to help you make an informed choice in the election. You heard from Barack Obama a little bit earlier. Here now is John McCain talking about energy independence.


MCCAIN: I thank you all very much for that unique Sturgis welcome. As you may know, not long ago a couple hundred thousand Berliners made a lot of noise for my opponent. I'll take the roar of 50,000 Harleys any day. Any day, my friends!


May I say to you, is there anybody that's tired of paying $4 a gallon for gasoline? Is there anybody who is sick and tired of it? Is there anybody who wants to become energy independent?

Well, I'm telling you right now, we're sending $700 billion over a year and your Congress just went on vacation for five weeks. Tell them to come back and get to work. Tell them to get to work.


When I'm President of the United States, I'm not going to let them go on vacation. They're going to become energy independent and we're not going to pay $4 a gallon for gas because we're going to drill offshore and we're going to drill now. We're going to drill here, and we're going to drill now.


My opponent doesn't want to drill. He doesn't want nuclear power. He wants to inflate your tires. My friends, we need a commander-in-chief who will end the war in Iraq, but will win it the right now, and that's by winning it. And we're not going to be defeated. And my opponent wants to set a date to come home. I want us to come home with victory and honor so we will never go back again. We won't go back.

Thank you. Thank you.


And we owe -- my friends, we owe victory to the courage and love that this country by people who are here. You're the heartland of America. You're the heart and soul of America. You provide the men and women who serve our military. I'm honored to be in your company. And we will win this war and we will defeat al Qaeda. And America will remain the last best hope of man on earth.


So let me just close by saying thank you. Thank you for honoring the men and women who have served. Thank you for your service. My friends, I know it will be a good sign on Election Day if there are a lot of bikes parked outside the polling places of America. So don't let November 4th find you on the open road. I'm counting on you to show up, and I'm asking for your vote.

God bless you and God bless America. Thank you.


COLLINS: John McCain in his own words.

And you will hear more of what the candidates are saying next hour. Remember, for the latest on the presidential race go ahead and logon to our Web site, -- 24/7, it is the most politics on the web.

HARRIS: Well the tape is pretty intriguing. Is this Maddie McCann? And did police ignore a key clue in the missing girl's case? A family spokesman live in minutes.


HARRIS: And good morning again, everyone. You're informed with CNN.

I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins.

Developments keep coming into the CNN NEWSROOM on this Wednesday, August 6th. Here is what's on the rundown.

Breaking news, a verdict in the first war crimes trial at Guantanamo Bay. We have live coverage.

HARRIS: Is this Madeleine McCann on a security tape? Police accused of bungling a clue in the missing British girl's case. A family spokesman live, this hour.

COLLINS: Airlines charging for everything from pillows to peanuts. What's a passenger to do? Our guest knows. Flying for a fee in the NEWSROOM.