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Coalition Authorities Transfer Power to Iraqi Government Two Days Ahead of Schedule

Aired June 28, 2004 - 08:30 ET

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

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

BILL HEMMER, CNN ANCHOR: Welcome back, everyone. 8:30 here in New York and a busy Monday morning here on AMERICAN MORNING - bit of a surprise, too. I think everybody can say that, for the most part.
Iraq's first steps into the future, quiet ones today. The new leadership and the coalition authorities surprising everyone by transferring power two days ahead of schedule. We're watching the breaking angles out of Iraq today -- a number of angles, too. In a few moments: back to Baghdad -- Anderson Cooper is working the story here, Jeff Greenfield on the political fallout in a moment here, in New York, as we were talking about earlier.

SOLEDAD O'BRIEN, CNN ANCHOR: Absolutely. In fact, Jeff, will talk about a little bit about what happens here politically in the aftermath of this handover, and then also he'll take a look at the independent candidate Ralph Nader and a potentially significant development that's happened in the election. It's a decision by the Green Party -- could trigger a very interesting chain reaction. Jeff's going to tackle all of that this morning in just a few moments.

HEMMER: One story that's a little bit below the radar, given all of the events of today.

Also in a moment, "90-second Pop" -- a bit later, politics and entertainment. We'll talk about the number-one film at the box office, "Fahrenheit 9/11," nearly $22 million in ticket sales. What about the momentum? What does it mean for those going to see this film, et cetera?

We'll get to all those questions...

O'BRIEN: One has to wonder, would it have done as well if in fact, there hadn't been any controversy over releasing the film? So, we'll see.

But first, a surprise move -- the U.S.-led Coalition Authority officially transferred sovereign to an interim Iraqi government just hours ago. The ceremony was scheduled for Wednesday but, was secretly moved to today. Anderson Cooper is live for us in Baghdad with much more on this. Anderson, good morning.

ANDERSON COOPER, CNN CORRESPONDENT: Good morning, Soledad.

Well, about an hour ago we had the handover. Several hours ago -- about an hour ago -- there was an actual swearing-in ceremony, a signing-in ceremony in which the four top members of the Iraqi government: the prime minister, deputy prime minister, the new president and the deputy president, as well as the chief judge, swore in. They all made some brief remarks, in particular, the prime minister. He's the man who is in charge of trying to crack down on these foreign fighters, these insurgents who have been wreaking such havoc in this country for the last several months, and in particular, the last several days. He came out strong today. He didn't go into many details, but he said it is time to crackdown on foreign terrorists.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQI PRIME MINISTER (translated): The Iraqi people are asked to tackle those challenges by scrutinizing any suspicious activity and informing the government and the police. Those mercenaries that came to Iraq from different countries to attack the Iraqi people, we, God willing, and with the support of our people, we will be on the lookout for them and we will chase them and bring them to justice to get their fair punishment.

(END VIDEO CLIP)

COOPER: Of course now the United States is putting a big emphasis on trying to retrain their Iraqi police, retrain the Iraqi army,outfit them with Kevlar vests, outfit them with RPGs, weapons that they can actually use to fight back because up until now they really have not been able to,and back in April when this insurgency really took off, many of the Iraqi police simply abandoned their posts or even went over to the insurgent side.

So there is a lot of work that remains to be done. The U.S. will be here for some time to come, though, now, it is all in Iraqi hands. Officially the handover of power has happened. The U.S. administrator Paul Bremer left earlier today, boarded a helicopter and then a plane out of Baghdad airport, flew off. The new American ambassador,John Negroponte,is due here any time in the next several days--Soledad.

O'BRIEN: Anderson Cooper in Baghdad for us this morning. Anderson, thanks. We're going to continue, of course, to check back in with you throughout the morning. Let's get to London and Mahmoud Othman, who joins us. He's a former Iraqi governing council member joining us this morning. Nice to see you, sir. Thanks for being with us.

First question involves security, which is what everyone seems to be talking about this morning. Can the interim government actually control security in Iraq?

MAHMOUD OTHMAN, FORMER IRAQI GOVERNING COUNCIL MEMBER: Well, I think they can, to a degree at least, because they have to follow two lines -- and I think they are doing that. One of them is to be tough with the insurgents and people who came from outside the territories or the people who are way-pro Saddam, and they are continuing their terror against the people, against the population also. But they have, at the same time, tried to make reconciliation with the rest of Iraqis. Maybe the Iraqis who are not satisfied of with this situation or not satisfied with the occupation, they wanted an end to occupation and they were not satisfied with the measures taken by militaries -- American militaries in the last year. So I think they have to try to reconcile those people, try to have reconciliation: general amnesty for everybody, of course concentrate on the criminals and the ones who want, really, to create crimes here and there, whatever happens, and be soft with others and make reconciliation.

So, by making being tough with the criminals and having reconciliation with the others, I think they will go forward in a good way and hopefully they will succeed.

O'BRIEN: This morning we heard the Prime Minister Allawi said that over the next several days he'd make decisions about how he would clamp down on law and order in Iraq. Is martial law or emergency law an option there?

OTHMAN: Well, I think -- I don't know. It's for the government to decide. But, still, I think we are in state of war, almost. And that's why in such cases, even other governments, any country, they could take measures -- special measures in special areas, really, and possibly they will take measure.

I will -- I think they may take measures because they need tough measures in some areas. But hopefully those measures will not influence, very much, human rights and the rights of individuals because these are very important. But nevertheless, I think some tough measures possibly would be taken in some areas where you have to face insurgency on the security problems.

O'BRIEN: In addition, though, to the risks to civil liberties, which you have just mentioned, do you actually have the troops and manpower to be able to impose some kind of martial or emergency law?

OTHMAN: Well, for the time being this is a defect because, unfortunately, in the whole last year the security file was in the hands of the Americans. We tried very hard with CPA in the last -- in the last year to create, to have the security file for the towns and to be given to the Iraqis and for the Iraqis to have their own security authority and so on. They were not given and they were kept in the hands of the Americans. So now they will be given gradually, the security authority will be given to the Iraqis.

I think the Iraqis -- it will take time until the Iraqis will have full security authorities and security forces. They may recruit some of the old army or police (INAUDIBLE). So, it takes some time. But for time being, I think they need the help of the American forces, multinational forces, and hopefully together they could do -- they could start some steps that would solve the security problem, which is the main challenge and problem number one.

O'BRIEN: Mahmoud Othman is a former member of the Iraqi governing council, now dissolved. Thank you very much. Bill.

HEMMER: Soledad, back here in New York, our senior analyst Jeff Greenfield joins us now -- the political ramifications of what we're all watching today. We'll call it the next chapter for a reason, because a lot of us don't know what's going to happen next. How do you size it up politically, at this point?

JEFF GREENFIELD, CNN SENIOR ANALYST: Oh, this is very easy. If you can tell me whether the Shiites will permit the Kurds enough autonomy so they don't bold from the new government, if you can tell me whether or not this government will get the loyalty of people who have traditionally, for centuries, been more loyal to ethnic or tribal or religious lines, if you can tell me whether the security will be strong enough so that Iraqis will fight for their own government so that Americans will begin to think that the investment that was made in lives and treasure was worth it, I think I can tell you what the political impact will be in the fall. Your turn.

HEMMER: Has not been written, just yet. I think you took it as far as we could, at this point. You wonder what the impact is, perhaps, emotionally on the Iraqi people -- if tomorrow, or a week from now, we see the violence that we saw last Thursday, and the Wednesday before last Thursday.

GREENFIELD: Well, one of the reasons why, if we keep this on politics, which I actually think I know something about as opposed to the ethnic and tribal strains in Iraq, which I don't. The support for this effort began to flag as the promised -- we greet them as liberators, we're off on a new chapter -- didn't emerge. And the more there are acts of violence, the more Americans who die, the more Iraqis who die in these what seem to be endless suicide bombing -- I think the more Americans have come to think, did the Bush administration know what it was doing? And the test for me politically over the next few months is, the more the new Iraqi government does take hold, the more Americans who were on the fence are going to think, well, maybe this worked out.

If it continues chaotic and violence the issue is going to be, I think, not mendacity, although that's a problem with the weapons of mass destruction explanation, but competence -- are these the grownups -- because that was the strongest argument the Bush administration has had in the war on terror in Iraq.

HEMMER: Let's keep it on politics, now. You came in to talk about a completely different matter, Dave. The Green party over the weekend making news. It named its nominee for president. It's not Ralph Nader. David Cobb, an attorney from Texas, accepting the nomination at the convention on Saturday in Milwaukee. The move could be a key factor, or not come early 2000. The significance then is what?

GREENFIELD: Well, just in pure logistical terms, the Green Party was on the ballot in almost half of the states in the country. Had Nader been their nominee, as he was in 2000, he automatically gets ballot access. Now he has to fight, state by state.

His effort is lagging in Pennsylvania, that's a key battleground state that's very close. He finally got 1,000 people to turn out in Oregon, but the Democrats are challenging that. Whether that was valid to get him on the ballot, in that close state.

Clearly, both sides care. There are two conservative groups who have encouraged their members to sign petitions to get Nader on the ballot, knowing it would hurt John Kerry. And I think it's in Arizona where the Democrats are challenging Nader's ballot. So they -- both sides actually think it matters.

HEMMER: I guess ultimately it doesn't matter? We're not going to know that for some time.

GREENFIELD: We know in 2000 it mattered. Nader got quarter of a million votes in Florida, a state that was decided by 537 votes. The exit poll, when you massage the numbers, suggest the net gain to Al Gore in Florida from an absence of Nader would have been about 40,000 to 50,000 votes. So, clearly that state would have mattered. That would have changed the occupant of the White House. It might have cost Gore New Hampshire and it kept him -- it almost cost him Wisconsin, Iowa, Minnesota. If all these states remain close, it could matter.

HEMMER: Do we really know about this one, at this point?

GREENFIELD: No, and the reason we don't is, let's say -- look at Pennsylvania. Quinnpiac poll says Kerry is up by six in a one on one with Bush -- only up with one with Nader on the ballot, and it gives Nader 7 percent of the vote. Now, do I think that a man who pulled 3 percent of the national vote in 2000 is going to pull 7 percent in a battleground state when people know the impact of Nader? I don't.

The problem is, if it really is as close in these states as the polls say, if it remains that way, then Nader could be marginalized down to 1 percent or 2 percent -- it could change who wins the state. So, people think it matters. My own hunch, it's going to matter less in November than we think it does now.

HEMMER: Thank you, Jeff. Good to talk to you.

GREENFIELD: Okay.

HEMMER: Soledad.

O'BRIEN: Coming up in just a little bit, the big "if" as Iraq makes a big step into the future. We're going to take a look at that, as well.

Also, on a much lighter note Christina Aguilera gets the royal treatment. Andy Serwer is "Minding Your Business." AMERICAN MORNING is back right after this.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody. "Question of the Day" -- Jack for that.

JACK CAFFERTY,CNN ANALYST: Thank you, Bill. With the handover of power in Iraq complete now, the major tasks of the new government will be many, i.e. prepare for elections by the end of next January, handle the day to day running of the country, work with the U.S.-led multinational force, restore services and some sort of quality life to the people, and try to do it all while security remains very much a question and terrorists continue to wage their attacks daily.

The question we're asking is, how will the handover change things in Iraq. Here's some of what you've written. Matt in Columbia, South Carolina, "So the U.S. occupation of Iraq is officially over, eh? Sort of like the way major combat in Iraq was officially over 14 months ago. The more things change, the more they stay the same -- as more misled American troops and innocent Iraqi civilians perish."

Connie in Molino, Florida is the mother of a soldier who has been in Baghdad for over a year. "I'm not expecting miracles just because they've run a flag up a pole and had a ceremony."

And Christopher in Sante Fe, New Mexico writes, "The changeover in Iraq is akin to calling a dog a cat and then expecting it to use the litter box."

HEMMER: A little cynicism there.

CAFFERTY: Well, a touch, yes. But I like that.

HEMMER: Well, the proof will play out in the coming weeks and months. Thank you, Jack.

CAFFERTY: Well, you're most welcome.

HEMMER: You got it. Good to have you back, by the way.

CAFFERTY: Thank you.

O'BRIEN: Here's a question for you -- Will the early handover of power to Iraq boost the market this morning? Andy Serwer is "Minding Your Business." Hello.

ANDY SERWER, FORTUNE MAGAZINE: Hello, it appears that it will, Soledad -- at least at the outset. Futures are up pretty strongly this morning. Also economic news to tell you about -- crossing the tape. Personal spending and income for the month of May, up very, very strongly. Personal spending in particular, the biggest increase since October of '01 when we had a bump up after 9/11. So that's some very positive news. Also good news on the oil front as well -- It appears the price of oil is falling. Price of gasoline down. Let's check out what happened last week:

Kind of a mixed couple of days there for the markets. Dow was down. Nasdaq was up. And it appears we'll continue that trend now because the tech stocks, in particular, are moving sharply. One stock that looks like it may come under a little pressure, this morning, though, Soledad, is Wal-Mart saying that sales were not so strong in the month of June -- particularly around father's day -- because of the bad weather. And they had some cool weather, so they didn't sell all the air conditioners and pool supplies that they were hoping to sell at the world's largest store. O'BRIEN: I guess the summer is only just beginning. You really can make that up.

SERWER: You can.

O'BRIEN: Andy, thanks.

Still to come this morning-- much more on the surprise of the day. Iraq gets an early start on its sovereignty. Stay with us. You're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Right about 12 minutes before the hour. Back to Betty Nguyen, looking at the news making headlines today -- and again, Baghdad is the story. Good morning, Betty.

BETTY NGUYEN, CNN REPORTER: Well, good morning to you. And, of course, it is.

We begin in Iraq with the story we've been following all morning long. Iraq making history with the transfer of power two days ahead of schedule.

New president Sheikh Ghazi Al-Yawar being formally sworn earlier in this morning -- and the new leadership expressing its thanks to coalition officials and to troops. More on the handover throughout the show.

The family of a U.S. Marine missing in Iraq is pleading for his safe release.

An Arabic language news network broadcasting video of the man yesterday, he is believed to be Corporal Yousef Ali Hassan, missing from his unit since June 20th. Al Jazeera said insurgents are threatening to behead the man unless the U.S. releases Iraqi prisoners.

Turning now to U.S. politics -- the wife of Democratic presidential hopeful John Kerry is in the spotlight.

"The Los Angeles Times" reports that Teresa Heinz Kerry controls a family fortune worth about, get this, $1 billion. That's double the estimate in 1995. If Kerry becomes president, they would be the wealthiest couple to ever occupy the White House.

And on a health note -- cell phones may be affecting men's fertility. Researchers in Hungary found a man who walks around with his cell phone on can be reducing sperm count by 30 percent. But critics say the study doesn't take into account many other factors such as a man's lifestyle and his age. So, Soledad, you may want to tell Bill to turn off that cell phone.

O'BRIEN: Alright, Betty. Thanks.

Still to come this morning -- seems like everybody in Hollywood has joined the table. What is it that has Ben Affleck and so many other stones -- stars, rather -- jonesin' for some poker. We're going to get our fix in "90-Second Pop," just ahead on American Morning.

(COMMERCIAL BREAK)

O'BRIEN: Look at you all just chit-chatting on the couch. Do we hear enough Kenny Rogers in our life?

SARAH BERNARD, "NEW YORK" MAGAZINE: Never.

TOURE', ROLLING STONE: No, we don't. That is a great record.

JESSICA SHAW, ENTERTAINMENT WEEKLY: Never enough.

O'BRIEN: Never enough. Absolutely. Welcome back, everybody. Time for another edition of "90-Second Pop." Today, of course, the question, know when to hold them. "Fahrenheit" also heats up at the box office and Britney Spears. Oh my God, we're talking about her again.

TOURE': Oops.

O'BRIEN: Blada, blada, blada. We'll discuss what's going on in her life. Here are contributors this morning: Sarah Bernard , still contributing editor for New York Magazine, Toure, who is a contributing editor for "Rolling Stone" and Jessica Shaw of Entertainment Weekly. I'm wiped out already.

(LAUGHTER)

I feel like we've done this segment. We're done.

Well, let's start with poker. Poker, poker. What is the draw of poker, Sarah?

BERNARD: Well, it's gotten really popular.

O'BRIEN: Thank you. Thank you very much -- and back at 11.

BERNARD: It's gotten real popular in the celebrity world. There is a world tournament this weekend and Ben Affleck almost made it in. He's going to be in next year.

O'BRIEN: He won like $350,000 in it...

BERNARD: He did.

TOURE: Like he needs it.

BERNARD: And it's funny because I think that there is a reason why celebrities are attracted to this. It is all about performance and acting, if you think about it. I mean, some of it is about your cards, and more of it is about bluffing and trying to show that you have something you don't.

O'BRIEN: Thank you, Dr. Bernard.

BERNARD: Exactly. But I think it's directly -- it's inversely proportional to how well your career has gone.

O'BRIEN: Ah.

TOURE: Oh.

BERNARD: Ben Affleck, not so good in the real world, but he's doing well in poker.

SHAW: Do you think Ben Affleck has a gambling problem...

TOURE: Nothing to lose.

SHAW: ... and he went into therapy for it, though?

BERNARD: And now he's gotten really good at it. So, they totally fix it...

SHAW: Yes.

TOURE: But if you want to see...

O'BRIEN: It wasn't that he needed to quit, he just needed to get better.

BERNARD: Yes.

SHAW: He just wanted to win some more money.

TOURE: But if you want to see real, real poker, the World Series Of Poker is on ESPN - starts this week. Real players -- they are playing for...

SHAW: But is it going to be as interesting without the celebrities there?

TOURE: ... they are playing for $5 million.

BERNARD: Okay. That's interesting.

O'BRIEN: Interesting.

TOURE: These are the real guys who are really, really good at it.

O'BRIEN: And women, as well.

TOURE: They are very, very few...

SHAW: They are actually all guys in the top 6.

BERNARD: There are women.

TOURE: ... there are very, very few women in the tournament. O'BRIEN: "Fahrenheit 9/11," Toure, you've seen it.

TOURE: Um hmm.

O'BRIEN: And...

TOURE: It's great fun. As Bill says, it's crack for liberals.

(LAUGHTER)

TOURE: You just watch it and you feel good, baby.

O'BRIEN: It's done very well at the box office, too.

TOURE: Is it going to affect the election? I don't think so. Because there's -- We're only talking about, what, the 10 percent of undecideds in the 10 states.

O'BRIEN: People say it's like preaching to the choir.

TOURE: This is like the most emotional election we've had in my lifetime. If you haven't already figured out who you like, what are you thinking about? Like who are you?

It might do it for them.

BERNARD: Tell Toure (INAUDIBLE).

SHAW: A lot of people are undecided, still...

BERNARD: Do you know what's interesting?

SHAW: ... and it might do it for them.

BERNARD: What's really interesting about it is it's the ads. I mean now the conservative groups are starting to complain that the ads for the movie should be classified as political ads.

SHAW: It's political...

BERNARD: And that means they should be...

SHAW: ... too close to the conventions and they should be pull off.

BERNARD: Because then that means they'll have to stop airing them 30 days before the convention. I don't think that's going to happen.

SHAW: Never. I would agree with you.

Still, are they going to get people to register to vote? I mean, people may think, oh, Bush is horrible, but they're still not going to vote.

O'BRIEN: Let's talk -- I mean, I think we were saving the most important topic for last.

SHAW: Britney?

BERNARD: Forget that -- Britney.

O'BRIEN: Blah, blah, blah.

(LAUGHTER)

O'BRIEN: I like Britney Spears. I've met her, interviewed her several -- She's a lovely young woman.

SHAW: She is lovely.

O'BRIEN: Now, she's engaged 27 minutes after getting divorced from the guy she was married to...

TOURE: She's only one behind J-Lo.

BERNARD: Exactly. And by the time this segment is over, her and Jason might be over.

TOURE: So this is her second. J-Lo is on her third.

O'BRIEN: Who was her first husband?

(CROSSTALK)

SHAW: Jason Alexander.

TOURE: Jason Alexander.

SHAW: This one is Kevin Fetterling (ph). Otherwise known as Chris Judge. We need a whole support group for these guys. Two months their together...

TOURE: What. What.

SHAW: It's big news.

O'BRIEN: She's 22 years old. For all these women, it's like you're 22. Don't get married yet.

SHAW: Right. Well, it's something with celebrities. They sort of think you can date someone for 10 minutes and that means lifelong partner.

TOURE: The thing it sad to me is that gay people, who understand love and commitment, can't get married -- don't get anywhere near the altar, but Britney can just flit around get married to whoever, whenever. It doesn't make any sense.

BERNARD: You know what it is...

O'BRIEN: The bigger social impact of Britney Spears getting married. I never thought we'd actually find one. And yet, Toure', somehow, has managed to make it more relevant than it is, actually.

BERNARD: I think it's all about not going to high school. A lot of these celebrities just skip that whole thing.

O'BRIEN: They miss the whole middle.

SHAW: So this is more a prom thing when you put on the wedding dress?

BERNARD: There are all these things between being a child and being married.

O'BRIEN: Dr. Bernard and Dr. Shaw, this morning. It's all about missing your prom. You guys, we're out of time. So, I'm sure in the next few days we'll have more to talk about Britney.

SHAW: The social implications, absolutely.

TOURE: The sociological perspectives.

O'BRIEN: Absolutely.

BERNARD: We're going to stay on the story.

O'BRIEN: We're going to dig -- we're digging deep because it's an important topic. The handover and Britney. Those are our big stories today. Thank you guys. As always, appreciate it. Bill.

HEMMER: Alright, Soledad. Three minutes before the hour. From Istanbul, we expect do expect to hear from President Bush and the British prime minister Tony Blair regarding Iraq and the handover.

Also in a moment, how will the handover affect Arab perception of America. Back in a moment here -- a whole lot to talk about the handover. Top of the hour here on American Morning.

(COMMERCIAL BREAK)

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Aired June 28, 2004 - 08:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Welcome back, everyone. 8:30 here in New York and a busy Monday morning here on AMERICAN MORNING - bit of a surprise, too. I think everybody can say that, for the most part.
Iraq's first steps into the future, quiet ones today. The new leadership and the coalition authorities surprising everyone by transferring power two days ahead of schedule. We're watching the breaking angles out of Iraq today -- a number of angles, too. In a few moments: back to Baghdad -- Anderson Cooper is working the story here, Jeff Greenfield on the political fallout in a moment here, in New York, as we were talking about earlier.

SOLEDAD O'BRIEN, CNN ANCHOR: Absolutely. In fact, Jeff, will talk about a little bit about what happens here politically in the aftermath of this handover, and then also he'll take a look at the independent candidate Ralph Nader and a potentially significant development that's happened in the election. It's a decision by the Green Party -- could trigger a very interesting chain reaction. Jeff's going to tackle all of that this morning in just a few moments.

HEMMER: One story that's a little bit below the radar, given all of the events of today.

Also in a moment, "90-second Pop" -- a bit later, politics and entertainment. We'll talk about the number-one film at the box office, "Fahrenheit 9/11," nearly $22 million in ticket sales. What about the momentum? What does it mean for those going to see this film, et cetera?

We'll get to all those questions...

O'BRIEN: One has to wonder, would it have done as well if in fact, there hadn't been any controversy over releasing the film? So, we'll see.

But first, a surprise move -- the U.S.-led Coalition Authority officially transferred sovereign to an interim Iraqi government just hours ago. The ceremony was scheduled for Wednesday but, was secretly moved to today. Anderson Cooper is live for us in Baghdad with much more on this. Anderson, good morning.

ANDERSON COOPER, CNN CORRESPONDENT: Good morning, Soledad.

Well, about an hour ago we had the handover. Several hours ago -- about an hour ago -- there was an actual swearing-in ceremony, a signing-in ceremony in which the four top members of the Iraqi government: the prime minister, deputy prime minister, the new president and the deputy president, as well as the chief judge, swore in. They all made some brief remarks, in particular, the prime minister. He's the man who is in charge of trying to crack down on these foreign fighters, these insurgents who have been wreaking such havoc in this country for the last several months, and in particular, the last several days. He came out strong today. He didn't go into many details, but he said it is time to crackdown on foreign terrorists.

(BEGIN VIDEO CLIP)

AYAD ALLAWI, IRAQI PRIME MINISTER (translated): The Iraqi people are asked to tackle those challenges by scrutinizing any suspicious activity and informing the government and the police. Those mercenaries that came to Iraq from different countries to attack the Iraqi people, we, God willing, and with the support of our people, we will be on the lookout for them and we will chase them and bring them to justice to get their fair punishment.

(END VIDEO CLIP)

COOPER: Of course now the United States is putting a big emphasis on trying to retrain their Iraqi police, retrain the Iraqi army,outfit them with Kevlar vests, outfit them with RPGs, weapons that they can actually use to fight back because up until now they really have not been able to,and back in April when this insurgency really took off, many of the Iraqi police simply abandoned their posts or even went over to the insurgent side.

So there is a lot of work that remains to be done. The U.S. will be here for some time to come, though, now, it is all in Iraqi hands. Officially the handover of power has happened. The U.S. administrator Paul Bremer left earlier today, boarded a helicopter and then a plane out of Baghdad airport, flew off. The new American ambassador,John Negroponte,is due here any time in the next several days--Soledad.

O'BRIEN: Anderson Cooper in Baghdad for us this morning. Anderson, thanks. We're going to continue, of course, to check back in with you throughout the morning. Let's get to London and Mahmoud Othman, who joins us. He's a former Iraqi governing council member joining us this morning. Nice to see you, sir. Thanks for being with us.

First question involves security, which is what everyone seems to be talking about this morning. Can the interim government actually control security in Iraq?

MAHMOUD OTHMAN, FORMER IRAQI GOVERNING COUNCIL MEMBER: Well, I think they can, to a degree at least, because they have to follow two lines -- and I think they are doing that. One of them is to be tough with the insurgents and people who came from outside the territories or the people who are way-pro Saddam, and they are continuing their terror against the people, against the population also. But they have, at the same time, tried to make reconciliation with the rest of Iraqis. Maybe the Iraqis who are not satisfied of with this situation or not satisfied with the occupation, they wanted an end to occupation and they were not satisfied with the measures taken by militaries -- American militaries in the last year. So I think they have to try to reconcile those people, try to have reconciliation: general amnesty for everybody, of course concentrate on the criminals and the ones who want, really, to create crimes here and there, whatever happens, and be soft with others and make reconciliation.

So, by making being tough with the criminals and having reconciliation with the others, I think they will go forward in a good way and hopefully they will succeed.

O'BRIEN: This morning we heard the Prime Minister Allawi said that over the next several days he'd make decisions about how he would clamp down on law and order in Iraq. Is martial law or emergency law an option there?

OTHMAN: Well, I think -- I don't know. It's for the government to decide. But, still, I think we are in state of war, almost. And that's why in such cases, even other governments, any country, they could take measures -- special measures in special areas, really, and possibly they will take measure.

I will -- I think they may take measures because they need tough measures in some areas. But hopefully those measures will not influence, very much, human rights and the rights of individuals because these are very important. But nevertheless, I think some tough measures possibly would be taken in some areas where you have to face insurgency on the security problems.

O'BRIEN: In addition, though, to the risks to civil liberties, which you have just mentioned, do you actually have the troops and manpower to be able to impose some kind of martial or emergency law?

OTHMAN: Well, for the time being this is a defect because, unfortunately, in the whole last year the security file was in the hands of the Americans. We tried very hard with CPA in the last -- in the last year to create, to have the security file for the towns and to be given to the Iraqis and for the Iraqis to have their own security authority and so on. They were not given and they were kept in the hands of the Americans. So now they will be given gradually, the security authority will be given to the Iraqis.

I think the Iraqis -- it will take time until the Iraqis will have full security authorities and security forces. They may recruit some of the old army or police (INAUDIBLE). So, it takes some time. But for time being, I think they need the help of the American forces, multinational forces, and hopefully together they could do -- they could start some steps that would solve the security problem, which is the main challenge and problem number one.

O'BRIEN: Mahmoud Othman is a former member of the Iraqi governing council, now dissolved. Thank you very much. Bill.

HEMMER: Soledad, back here in New York, our senior analyst Jeff Greenfield joins us now -- the political ramifications of what we're all watching today. We'll call it the next chapter for a reason, because a lot of us don't know what's going to happen next. How do you size it up politically, at this point?

JEFF GREENFIELD, CNN SENIOR ANALYST: Oh, this is very easy. If you can tell me whether the Shiites will permit the Kurds enough autonomy so they don't bold from the new government, if you can tell me whether or not this government will get the loyalty of people who have traditionally, for centuries, been more loyal to ethnic or tribal or religious lines, if you can tell me whether the security will be strong enough so that Iraqis will fight for their own government so that Americans will begin to think that the investment that was made in lives and treasure was worth it, I think I can tell you what the political impact will be in the fall. Your turn.

HEMMER: Has not been written, just yet. I think you took it as far as we could, at this point. You wonder what the impact is, perhaps, emotionally on the Iraqi people -- if tomorrow, or a week from now, we see the violence that we saw last Thursday, and the Wednesday before last Thursday.

GREENFIELD: Well, one of the reasons why, if we keep this on politics, which I actually think I know something about as opposed to the ethnic and tribal strains in Iraq, which I don't. The support for this effort began to flag as the promised -- we greet them as liberators, we're off on a new chapter -- didn't emerge. And the more there are acts of violence, the more Americans who die, the more Iraqis who die in these what seem to be endless suicide bombing -- I think the more Americans have come to think, did the Bush administration know what it was doing? And the test for me politically over the next few months is, the more the new Iraqi government does take hold, the more Americans who were on the fence are going to think, well, maybe this worked out.

If it continues chaotic and violence the issue is going to be, I think, not mendacity, although that's a problem with the weapons of mass destruction explanation, but competence -- are these the grownups -- because that was the strongest argument the Bush administration has had in the war on terror in Iraq.

HEMMER: Let's keep it on politics, now. You came in to talk about a completely different matter, Dave. The Green party over the weekend making news. It named its nominee for president. It's not Ralph Nader. David Cobb, an attorney from Texas, accepting the nomination at the convention on Saturday in Milwaukee. The move could be a key factor, or not come early 2000. The significance then is what?

GREENFIELD: Well, just in pure logistical terms, the Green Party was on the ballot in almost half of the states in the country. Had Nader been their nominee, as he was in 2000, he automatically gets ballot access. Now he has to fight, state by state.

His effort is lagging in Pennsylvania, that's a key battleground state that's very close. He finally got 1,000 people to turn out in Oregon, but the Democrats are challenging that. Whether that was valid to get him on the ballot, in that close state.

Clearly, both sides care. There are two conservative groups who have encouraged their members to sign petitions to get Nader on the ballot, knowing it would hurt John Kerry. And I think it's in Arizona where the Democrats are challenging Nader's ballot. So they -- both sides actually think it matters.

HEMMER: I guess ultimately it doesn't matter? We're not going to know that for some time.

GREENFIELD: We know in 2000 it mattered. Nader got quarter of a million votes in Florida, a state that was decided by 537 votes. The exit poll, when you massage the numbers, suggest the net gain to Al Gore in Florida from an absence of Nader would have been about 40,000 to 50,000 votes. So, clearly that state would have mattered. That would have changed the occupant of the White House. It might have cost Gore New Hampshire and it kept him -- it almost cost him Wisconsin, Iowa, Minnesota. If all these states remain close, it could matter.

HEMMER: Do we really know about this one, at this point?

GREENFIELD: No, and the reason we don't is, let's say -- look at Pennsylvania. Quinnpiac poll says Kerry is up by six in a one on one with Bush -- only up with one with Nader on the ballot, and it gives Nader 7 percent of the vote. Now, do I think that a man who pulled 3 percent of the national vote in 2000 is going to pull 7 percent in a battleground state when people know the impact of Nader? I don't.

The problem is, if it really is as close in these states as the polls say, if it remains that way, then Nader could be marginalized down to 1 percent or 2 percent -- it could change who wins the state. So, people think it matters. My own hunch, it's going to matter less in November than we think it does now.

HEMMER: Thank you, Jeff. Good to talk to you.

GREENFIELD: Okay.

HEMMER: Soledad.

O'BRIEN: Coming up in just a little bit, the big "if" as Iraq makes a big step into the future. We're going to take a look at that, as well.

Also, on a much lighter note Christina Aguilera gets the royal treatment. Andy Serwer is "Minding Your Business." AMERICAN MORNING is back right after this.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everybody. "Question of the Day" -- Jack for that.

JACK CAFFERTY,CNN ANALYST: Thank you, Bill. With the handover of power in Iraq complete now, the major tasks of the new government will be many, i.e. prepare for elections by the end of next January, handle the day to day running of the country, work with the U.S.-led multinational force, restore services and some sort of quality life to the people, and try to do it all while security remains very much a question and terrorists continue to wage their attacks daily.

The question we're asking is, how will the handover change things in Iraq. Here's some of what you've written. Matt in Columbia, South Carolina, "So the U.S. occupation of Iraq is officially over, eh? Sort of like the way major combat in Iraq was officially over 14 months ago. The more things change, the more they stay the same -- as more misled American troops and innocent Iraqi civilians perish."

Connie in Molino, Florida is the mother of a soldier who has been in Baghdad for over a year. "I'm not expecting miracles just because they've run a flag up a pole and had a ceremony."

And Christopher in Sante Fe, New Mexico writes, "The changeover in Iraq is akin to calling a dog a cat and then expecting it to use the litter box."

HEMMER: A little cynicism there.

CAFFERTY: Well, a touch, yes. But I like that.

HEMMER: Well, the proof will play out in the coming weeks and months. Thank you, Jack.

CAFFERTY: Well, you're most welcome.

HEMMER: You got it. Good to have you back, by the way.

CAFFERTY: Thank you.

O'BRIEN: Here's a question for you -- Will the early handover of power to Iraq boost the market this morning? Andy Serwer is "Minding Your Business." Hello.

ANDY SERWER, FORTUNE MAGAZINE: Hello, it appears that it will, Soledad -- at least at the outset. Futures are up pretty strongly this morning. Also economic news to tell you about -- crossing the tape. Personal spending and income for the month of May, up very, very strongly. Personal spending in particular, the biggest increase since October of '01 when we had a bump up after 9/11. So that's some very positive news. Also good news on the oil front as well -- It appears the price of oil is falling. Price of gasoline down. Let's check out what happened last week:

Kind of a mixed couple of days there for the markets. Dow was down. Nasdaq was up. And it appears we'll continue that trend now because the tech stocks, in particular, are moving sharply. One stock that looks like it may come under a little pressure, this morning, though, Soledad, is Wal-Mart saying that sales were not so strong in the month of June -- particularly around father's day -- because of the bad weather. And they had some cool weather, so they didn't sell all the air conditioners and pool supplies that they were hoping to sell at the world's largest store. O'BRIEN: I guess the summer is only just beginning. You really can make that up.

SERWER: You can.

O'BRIEN: Andy, thanks.

Still to come this morning-- much more on the surprise of the day. Iraq gets an early start on its sovereignty. Stay with us. You're watching AMERICAN MORNING.

(COMMERCIAL BREAK)

HEMMER: Right about 12 minutes before the hour. Back to Betty Nguyen, looking at the news making headlines today -- and again, Baghdad is the story. Good morning, Betty.

BETTY NGUYEN, CNN REPORTER: Well, good morning to you. And, of course, it is.

We begin in Iraq with the story we've been following all morning long. Iraq making history with the transfer of power two days ahead of schedule.

New president Sheikh Ghazi Al-Yawar being formally sworn earlier in this morning -- and the new leadership expressing its thanks to coalition officials and to troops. More on the handover throughout the show.

The family of a U.S. Marine missing in Iraq is pleading for his safe release.

An Arabic language news network broadcasting video of the man yesterday, he is believed to be Corporal Yousef Ali Hassan, missing from his unit since June 20th. Al Jazeera said insurgents are threatening to behead the man unless the U.S. releases Iraqi prisoners.

Turning now to U.S. politics -- the wife of Democratic presidential hopeful John Kerry is in the spotlight.

"The Los Angeles Times" reports that Teresa Heinz Kerry controls a family fortune worth about, get this, $1 billion. That's double the estimate in 1995. If Kerry becomes president, they would be the wealthiest couple to ever occupy the White House.

And on a health note -- cell phones may be affecting men's fertility. Researchers in Hungary found a man who walks around with his cell phone on can be reducing sperm count by 30 percent. But critics say the study doesn't take into account many other factors such as a man's lifestyle and his age. So, Soledad, you may want to tell Bill to turn off that cell phone.

O'BRIEN: Alright, Betty. Thanks.

Still to come this morning -- seems like everybody in Hollywood has joined the table. What is it that has Ben Affleck and so many other stones -- stars, rather -- jonesin' for some poker. We're going to get our fix in "90-Second Pop," just ahead on American Morning.

(COMMERCIAL BREAK)

O'BRIEN: Look at you all just chit-chatting on the couch. Do we hear enough Kenny Rogers in our life?

SARAH BERNARD, "NEW YORK" MAGAZINE: Never.

TOURE', ROLLING STONE: No, we don't. That is a great record.

JESSICA SHAW, ENTERTAINMENT WEEKLY: Never enough.

O'BRIEN: Never enough. Absolutely. Welcome back, everybody. Time for another edition of "90-Second Pop." Today, of course, the question, know when to hold them. "Fahrenheit" also heats up at the box office and Britney Spears. Oh my God, we're talking about her again.

TOURE': Oops.

O'BRIEN: Blada, blada, blada. We'll discuss what's going on in her life. Here are contributors this morning: Sarah Bernard , still contributing editor for New York Magazine, Toure, who is a contributing editor for "Rolling Stone" and Jessica Shaw of Entertainment Weekly. I'm wiped out already.

(LAUGHTER)

I feel like we've done this segment. We're done.

Well, let's start with poker. Poker, poker. What is the draw of poker, Sarah?

BERNARD: Well, it's gotten really popular.

O'BRIEN: Thank you. Thank you very much -- and back at 11.

BERNARD: It's gotten real popular in the celebrity world. There is a world tournament this weekend and Ben Affleck almost made it in. He's going to be in next year.

O'BRIEN: He won like $350,000 in it...

BERNARD: He did.

TOURE: Like he needs it.

BERNARD: And it's funny because I think that there is a reason why celebrities are attracted to this. It is all about performance and acting, if you think about it. I mean, some of it is about your cards, and more of it is about bluffing and trying to show that you have something you don't.

O'BRIEN: Thank you, Dr. Bernard.

BERNARD: Exactly. But I think it's directly -- it's inversely proportional to how well your career has gone.

O'BRIEN: Ah.

TOURE: Oh.

BERNARD: Ben Affleck, not so good in the real world, but he's doing well in poker.

SHAW: Do you think Ben Affleck has a gambling problem...

TOURE: Nothing to lose.

SHAW: ... and he went into therapy for it, though?

BERNARD: And now he's gotten really good at it. So, they totally fix it...

SHAW: Yes.

TOURE: But if you want to see...

O'BRIEN: It wasn't that he needed to quit, he just needed to get better.

BERNARD: Yes.

SHAW: He just wanted to win some more money.

TOURE: But if you want to see real, real poker, the World Series Of Poker is on ESPN - starts this week. Real players -- they are playing for...

SHAW: But is it going to be as interesting without the celebrities there?

TOURE: ... they are playing for $5 million.

BERNARD: Okay. That's interesting.

O'BRIEN: Interesting.

TOURE: These are the real guys who are really, really good at it.

O'BRIEN: And women, as well.

TOURE: They are very, very few...

SHAW: They are actually all guys in the top 6.

BERNARD: There are women.

TOURE: ... there are very, very few women in the tournament. O'BRIEN: "Fahrenheit 9/11," Toure, you've seen it.

TOURE: Um hmm.

O'BRIEN: And...

TOURE: It's great fun. As Bill says, it's crack for liberals.

(LAUGHTER)

TOURE: You just watch it and you feel good, baby.

O'BRIEN: It's done very well at the box office, too.

TOURE: Is it going to affect the election? I don't think so. Because there's -- We're only talking about, what, the 10 percent of undecideds in the 10 states.

O'BRIEN: People say it's like preaching to the choir.

TOURE: This is like the most emotional election we've had in my lifetime. If you haven't already figured out who you like, what are you thinking about? Like who are you?

It might do it for them.

BERNARD: Tell Toure (INAUDIBLE).

SHAW: A lot of people are undecided, still...

BERNARD: Do you know what's interesting?

SHAW: ... and it might do it for them.

BERNARD: What's really interesting about it is it's the ads. I mean now the conservative groups are starting to complain that the ads for the movie should be classified as political ads.

SHAW: It's political...

BERNARD: And that means they should be...

SHAW: ... too close to the conventions and they should be pull off.

BERNARD: Because then that means they'll have to stop airing them 30 days before the convention. I don't think that's going to happen.

SHAW: Never. I would agree with you.

Still, are they going to get people to register to vote? I mean, people may think, oh, Bush is horrible, but they're still not going to vote.

O'BRIEN: Let's talk -- I mean, I think we were saving the most important topic for last.

SHAW: Britney?

BERNARD: Forget that -- Britney.

O'BRIEN: Blah, blah, blah.

(LAUGHTER)

O'BRIEN: I like Britney Spears. I've met her, interviewed her several -- She's a lovely young woman.

SHAW: She is lovely.

O'BRIEN: Now, she's engaged 27 minutes after getting divorced from the guy she was married to...

TOURE: She's only one behind J-Lo.

BERNARD: Exactly. And by the time this segment is over, her and Jason might be over.

TOURE: So this is her second. J-Lo is on her third.

O'BRIEN: Who was her first husband?

(CROSSTALK)

SHAW: Jason Alexander.

TOURE: Jason Alexander.

SHAW: This one is Kevin Fetterling (ph). Otherwise known as Chris Judge. We need a whole support group for these guys. Two months their together...

TOURE: What. What.

SHAW: It's big news.

O'BRIEN: She's 22 years old. For all these women, it's like you're 22. Don't get married yet.

SHAW: Right. Well, it's something with celebrities. They sort of think you can date someone for 10 minutes and that means lifelong partner.

TOURE: The thing it sad to me is that gay people, who understand love and commitment, can't get married -- don't get anywhere near the altar, but Britney can just flit around get married to whoever, whenever. It doesn't make any sense.

BERNARD: You know what it is...

O'BRIEN: The bigger social impact of Britney Spears getting married. I never thought we'd actually find one. And yet, Toure', somehow, has managed to make it more relevant than it is, actually.

BERNARD: I think it's all about not going to high school. A lot of these celebrities just skip that whole thing.

O'BRIEN: They miss the whole middle.

SHAW: So this is more a prom thing when you put on the wedding dress?

BERNARD: There are all these things between being a child and being married.

O'BRIEN: Dr. Bernard and Dr. Shaw, this morning. It's all about missing your prom. You guys, we're out of time. So, I'm sure in the next few days we'll have more to talk about Britney.

SHAW: The social implications, absolutely.

TOURE: The sociological perspectives.

O'BRIEN: Absolutely.

BERNARD: We're going to stay on the story.

O'BRIEN: We're going to dig -- we're digging deep because it's an important topic. The handover and Britney. Those are our big stories today. Thank you guys. As always, appreciate it. Bill.

HEMMER: Alright, Soledad. Three minutes before the hour. From Istanbul, we expect do expect to hear from President Bush and the British prime minister Tony Blair regarding Iraq and the handover.

Also in a moment, how will the handover affect Arab perception of America. Back in a moment here -- a whole lot to talk about the handover. Top of the hour here on American Morning.

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