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New Book About Blackwater; Mayor of Los Angeles Not to Run for Governor; Update on the Deadly Metro Rail Crash in Washington, D.C.

Aired June 23, 2009 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Washington reels and investigators respond. What caused the deadliest subway crash in the capital's history?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The next thing I knew, everyone was thrown out of their seats.

UNIDENTIFIED FEMALE: There was smoke and other toxic smells coming out of the car in front.

UNIDENTIFIED FEMALE: The seats flew up. And...

UNIDENTIFIED FEMALE: The feet (INAUDIBLE) off the wall.

UNIDENTIFIED FEMALE: The windows was coming down.

UNIDENTIFIED FEMALE: And it pushed that and we flew. Everybody on our tracks flew.

UNIDENTIFIED FEMALE: It was horrible. The -- the second train, the first car was just absolutely shredded. Second train or the second car, the seats were out the window. It was awful.

UNIDENTIFIED MALE: I was just listening to my iPod and then we hit. It was literally like that.

(END VIDEO CLIP)

COLLINS: The death toll rises and the questions linger. What caused this crash and could it happen in a major metro area near you? We do have some new developments to tell you about this morning, too. Let's bring you up to the minute now on what we know.

Washington officials are saying the confirmed number of dead is seven. Among the dead, the driver of that second train that plowed into the back of another commuter car. At least 76 other people were treated for injuries and today investigators are looking for more victims and clues to what may have caused the crash.

Have Washington Metro officials done enough to protect their passengers? Some federal officials say the answer may be no. They say, and talking about the NTSB here. The transit authority has ignored their recommendations and that could loom large in this investigation. CNN's Jeanne Meserve is joining us now live from the crash scene. Jeanne, good morning, once again, to you.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Good morning, Heidi. The fire chief told me this morning that there is no telling how many people may be entombed in this train. They have brought in all kinds of heavy equipment, including cranes to tear the wreckage apart so they can do a more thorough search inside. Mayor Adrian Fenty went over and took a look at the recovery operation a short time ago. Here's a bit of what he had to say.

(BEGIN VIDEO CLIP)

MAYOR ADRIAN FENTY, WASHINGTON, D.C.: After this morning's briefing, we wanted to take another tour of the scene. If you take this tour and see the wreckage that we just saw, it really just brings home what an awful tragedy this was. There literally bodies trapped within that compressed space and the size of the train now is about one-third of what it started out before this accident. And it is in a very small area where there were at least three bodies and it was those three bodies added to the four that were pulled out yesterday that got us to the seven.

At 5:00 today, we're going to come back together, we'll know about the count of bodies that have been taken off and then the fire department will have wrapped up their rescue process and we'll be able to give you a final number. It is very likely that the number will increase between now and then, but the chief medical examiner's office, the fire department, the police department, the FBI, will all have to work together. Unfortunately and literally, to match body parts and make sure we've got identifications. I want to just continue to thank everyone, between the briefing and now.

(END VIDEO CLIP)

MESERVE: That was a bit of Mayor Adrian Fenty who just a short time ago went and took another look at this crash scene. As the recovery goes on, the investigation is under way. The National Transportation Safety Board arrived here on the scene last night and they had nine investigators here. They have found recorders, nine recorders on the train that was hit, but the second train that rammed it did not have any recorders on board.

The NTSB said that it had spoken to the Washington Metropolitan Transit Authority about putting recorders on all their trains but they have not done so. They also say they talked to them about making their cars more crash worthy, either retrofitting them or retiring them. But those older cars were still in service and that's one reason why they got so beat up in this crash yesterday, we believe. Back to you, Heidi.

COLLINS: Boy, every time we look at those pictures, it is unbelievable. You being there, even a better view there. So again, we will look forward to 5:00 and being updated once again from the mayor. We sure do appreciate that. Jeanne Meserve on the scene for us this morning.

Here's a quick rundown now on Washington subway system. The Metro is the second largest rail system in the U.S. and the fifth largest bus system. The rail and bus serves a population of 3.5 million passengers. Last year more than 215 million rode on the rail, 133 million took the buses. The routes include trips from D.C. to Maryland and Virginia.

He introduced Johnny, searched for stars and handed out giant checks that changed people's lives. Famed TV sidekick Ed McMahon is dead at the age of 86. McMahon suffered from a number of health problems in recent years, but his publicist said he was surrounded by loved ones at the end. Brooke Anderson takes a look back.

(BEGIN VIDEOTAPE)

ANNOUNCER: Here's Johnny!

BROOKE ANDERSON, CNN CORRESPONDENT: For 30 years, Ed McMahon was a fixture in American households as Johnny Carson's "Tonight Show" side kick. In that role, he played announcer and Carson set-up man.

ED MCMAHON: I hold in my hand, the last envelope.

ANDERSON: He was a loyal source of laughs. And always knew his place.

MCMAHON: You had to know how to do that. How to be the second man at it. To be in when you wanted to be and out when you weren't needed.

ANDERSON: McMahon got his start in radio and in the early 1950s hosted a number of TV shows in Philadelphia. His long association with Carson began in the late '50s culminating with their final "Tonight Show" together in 1992.

JOHNNY CARSON: I want to thank the gentleman who shared the stage with me for 30 years, Mr. Ed McMahon.

ANDERSON: Even before Carson retired McMahon had branched out with his own ventures, among them, hosting "Star Search." He co- hosted TV's "Bloopers and Practical Jokes" with Dick Clark.

MCMAHON: We got a lot of things planned tonight.

ANDERSON: While always genial on air, McMahon's personal life was not as charmed. He went through two divorces and in 2002 he sued after toxic mold was found in his house. In 2007, he broke his neck in a fall, leading to more lawsuits. With all the money he had earned over a lucrative career, it came as stunning news in 2008 that a lender started foreclosure proceedings on his house.

MCMAHON: If you spend more money than what you make, you know what happens. And it can happen. You know, a couple of divorces flown in, a few things like that and, you know, things happen.

ANDERSON: Notoriety from his mortgage problems did lead to some commercial opportunities, including a 2009 Super Bowl ad.

MCMAHON: Now's the time to send your unwanted gold for cash.

ANDERSON: McMahon will forever be remembered for his work in late night, which earned him a place in television history alongside Johnny Carson.

CARSON: Who did you take to the high school prom?

ANDERSON: Madeline Mason.

CARSON: You remember. That was before you did.

MCMAHON: All of a sudden you did 30 years and you got to look back and you see this monument you created and I helped put in some of those stones with him. It's wonderful.

ANDERSON: Brooke Anderson, CNN, Los Angeles.

(END VIDEOTAPE)

COLLINS: And of course, we want to know a little bit more about what you think, what your memories are of Ed McMahon. He was, obviously, on television for a very long time. We invite you to go to our blog and go ahead and post your comments. Cnn.com/newsroom and then just click on my name and you can post your comments there. We will share some of those thoughts and memories a little bit later on in the show.

Turning to Iran's disputed election now where the government is giving its strongest signal yet. It will not order a new vote. Here's what we know, the Guardian Council has ruled out the possibility of annulling the election results saying irregularities were reported before the balloting, not during or after.

Iranian state-run media reports President Ahmadinejad will be sworn in to a second term some time between July 26 and August 19. And a top Iranian judicial official says a special court has been set up to deal with detained protesters.

Iranian government restrictions on international media reporting in Iran is still making it very difficult to get the complete story out. But our Iran desk is working hard to bring that latest information to you. Ivan Watson standing by now for more on what we're hearing. Hi there, Ivan.

IVAN WATSON, CNN CORRESPONDENT: Hi, Heidi. A "Washington Times" reporter has been arrested in Tehran. Iason Athanasiadis, I'm worry if I messed up his name there. A "Washington Times" reporter, Greek- British national. Foreign media has been almost completely banned from working in Tehran, in Iran, been expelled and on top of that, Iranian journalists have been targets of the crackdown. The organization reported Sun Frontier(ph) out of Paris reporting that 23 Iranian journalists have been rounded up from at least four different Iranian cities since June 14th.

That's why we're coming to you here from CNN headquarters. Our reporters on the ground cannot work in Iran. Now some political developments from within Iran. Very interesting that the Iranian parliament committee, an Iranian parliament committee has announced the incumbent President Mahmoud Ahmadinejad, the official winner of these controversial presidential elections is to be sworn in between July 26th and August 19th despite criticism and complaint from all three opposition candidates accusing the regime of rigging these elections.

However, there is some debate going on within the ruling circles, prominent members have summoned the interior minister of Iran, asked him, dressing him down, basically, accusing him of lacking crisis management during nine consecutive days of nationwide turmoil and asking him to explain why there were raids by security forces on Tehran University and on private residences arresting people.

I'd like to show you some video now of a protest. We don't know exactly when this took place, presumably with the last week, from the southeastern Iranian city of Kerman. Now, this is important, Heidi, because the protest that we saw over the course of the last week have not just been in the Iranian capital, they have also been in several other key Iranian cities, Isfahan, Tabriz, to the northwest of Tehran, the city of Shiraz to the to the southwest.

Now, the number of demonstrators out on the streets seem to have decreased, particularly in Iran. It's very difficult for us to get a picture what is going on outside of Tehran, but we do know that this is not a phenomenon restricted to the Iranian capital. Heidi?

COLLINS: Yes. All right. Well, we're doing our very best and, Ivan, we sure do appreciate that from our Iran desk. Ivan Watson this morning.

Social media does continue to play a big role in the situation in Iran and we are watching it closely on the web. We're going to bring you the very latest coming up in that in just a few minutes.

And the heat is on in a number of states across the country this morning. Jacqui Jeras is joining us to talk a little bit more about that. Too early to be this hot, isn't it? Like 150 degrees out there.

JACQUI JERAS, CNN METEOROLOGIST: That's what it feels like almost, doesn't it? Yes, well, summer officially arrived last Sunday, right? So the heat came along with it and unfortunately, it's going to stick around for a while. The latest on that and some severe weather is coming up in your forecast.

(COMMERCIAL BREAK)

COLLINS: The Iran government has greatly restricted how CNN and other international media can cover events happening there. So Iranians are turning to the web now to help us keep you informed. Our senior editor from Middle East Affairs Octavia Nasr is here now. This is pretty incredible about how all of these information is coming in and then how we go through it and try to share with people at home so that we can get some sort of idea as to what's happening there. OCTAVIA NASR, CNN SENIOR EDITOR FOR MIDEAST AFFAIRS: That's right. You know, Heidi, there are people that we have been talking to via twitter and on the Internet for a while. This didn't start just today. People I've been talking to before the elections, we were talking about the campaigns. We know that they are in Tehran. We know them personally via the Internet and we are hearing all kinds of stories from them now. There is a lot of tension going on and people are fearing the situation. Kids are gone missing, you know, a lot of young people are going to these demonstrations every day and many of them are being arrested and parents are going to find out where the kids are. And they're not getting straight answers. Some people are told, oh, come back in a month and we'll let you know. They're very, very concerned. As a matter of fact - yes.

COLLINS: Just to be specific, we're talking about those that are linked or at least appear to be linked with the opposition, correct?

NASR: That's correct. The people who feel THAT their vote did not count. The people who are complaining. They believe that the elections were rigged. They believed that their candidate Mousavi was supposed to win the election and they are the ones going and demonstrating. On the other side, you have the government basically sending in massive, massive amounts of police and riot police and even some people are saying they're seeing military in the streets.

So, when we hear from people, we're hearing a lot of concern. As a matter of fact, I'm going to tell you, there was an expression that we're hearing a lot. It sounds like, a pudre pas (ph). It's like a powder of fear. People are feeling that a powder of fear is spread all over cities. They're afraid to go out. They're afraid to even go shopping. But with that in mind, you still have calls for people to go out and demonstrate.

As a matter of fact, people are quoting Mousavi as calling on people to go out. He's calling on them to go to the bazaar. They say, you know, go to the bazaar, pretend you're shopping. Don't wear the green color, which is synonymous of the opposition movement.

COLLINS: Right.

NASR: Wear regular clothes and take your kids with you. Pretend like you're going shopping and then let's demonstrate and then everybody looks like they're going shopping, but there's no shopping at all.

COLLINS: Yes, yes. Wow. All right. But we're doing the very best that we can to make sure that we keep the story covered in the most accurate way that we can too. Getting all these video in and the twittering. It's really been pretty incredible. We appreciate it very much. Octavia Nasr, thanks.

Take a moment now to head over to the severe weather center where Jacqui Jeras is standing by. So it's blowing, blowing hot, at least in Minneapolis and in Atlanta and guess where I came in from last night. Minneapolis.

JERAS: Well there you go. I know.

COLLINS: I'm hot. I'm still very hot.

JERAS: But it was a nice weekend there, wasn't it?

COLLINS: Yes. I guess. It's hot.

JERAS: And you know, Minneapolis is baking today, as well as much of the nation's midsection. We've got a big ridge of high pressure in place. Heat indices here between 105 to 115 degrees. So hot that it's been buckling roads, believe it or not, in parts of southern Minnesota and this ridge is going to kind of stay put for much of the week, unfortunately. Temperatures today are going to be well into the 90s, we have a number of records yesterday, even in Florida, Vero Beach, 102 yesterday. That's an all time record. Hottest that has been recorded in Vero Beach. Hattiesburg, Mississippi 100 as well as Mobile and Miami, even, at 98 degrees.

Check it out here, Boston, we have to cool you down now after all that, right? 63 degrees and rain. Don't you feel better now? Unfortunately, they would love to get in on a little bit of that heat and it's not going to happen probably until Friday. Now, we do have some stormy weather to talk about today. Severe thunderstorms across parts of Florida shooting down towards Miami. This is providing you some relief from all that heat, probably down to the low 90s today and we also have a complex of some strong to severe thunderstorms moving in across the tri-state area here from Sioux Falls towards Genkin (ph) and even into the Norfolk area.

At this hour, we're expecting much of the rest of the nation to stay a bit on the quiet side, at least in terms of showers and thunderstorms and, of course, hey, it's hurricane season. Don't forget about that in the Atlantic and the pacific and we're keeping our eye on tropical storm Andres which could become a hurricane before the day is done. Heidi.

COLLINS: Gee, is there anything else?

JERAS: You know, that's about it. Nothing going on today.

COLLINS: All right, Jacqui. We'll check back, of course, a little bit later on. Thank you.

JERAS: Okay.

COLLINS: Overhauling health care in the middle of a financial crisis, it might be possible, but it won't be easy. Five things President Obama has to do to get his reform.

(COMMERCIAL BREAK)

COLLINS: Right now, a house panel is holding a hearing on health care reform. It is considering a bill by democratic leaders to cover 95 percent of Americans. The problem is, there's no price tag and no plan to pay for it yet. The senate is working on its own version of the bill. Live pictures for you there. Now President Obama wants a health care reform bill on his desk by the fall, will it be ready by then? And what will he have to give up in order to make that work? Politico.com has some advice for him. Joining us now is Mike Allen from Arlington, Virginia, to talk a little bit more about this. He is Politico's chief political correspondent. Nice to see you, Mike.

So listen, you guys laid out five things that President Obama has to do in order to get health care reform complete, if you will, by the fall.

MIKE ALLEN, POLITICO, CHIEF POLITICAL CORRESPONDENT: Only five, it's just very early -

COLLINS: Come on, this is that boom, right? Number one, you guys say, put the bully pulpit to work. He should campaign for this thing like he campaigned during the presidency.

ALLEN: Yes, and you're seeing the White House do this. Health care will be a big topic of the president's press conference that we're going to see here on CNN at 12:30 and we're going to see the president traveling more to talk about it. The first lady today was on the air talking about the importance of health care, the specific part of it that she is talking about is wellness. So what democrats are saying is your re-election may well depend on it, so go ahead and act like it.

COLLINS: How much do you think we're going to see in this press conference today though at 12:30? I mean, obviously, Iran is at the forefront of that, as well.

ALLEN: It will. But the president is going to talk a lot about progress both on the climate bill, which amazingly, is coming to a vote in the house on Friday. Nobody thought that this would happen this quickly. And he's going to say that he's making progress on health care and going to argue that the times demand it.

COLLINS: All right. Let's go to the second one here and bear with me. Because you guys say keep that 999 billion, 999 million, 999 hundred thousands, 999.

ALLEN: That's very good. And that's a dollar less than a trillion.

COLLINS: Yes, come on.

ALLEN: So, Senate democrats are taking the idea from car dealers, furniture sales people, department stores and saying, you know, it's $99 sounds less than $100.

COLLINS: If you act now, you can get the Ginzu knife with it too?

ALLEN: Exactly, then that would be a bargain. And this is part of an effort to appeal to regular people. Another thing that you're seeing the White House do. And we're going to see some of this in the President's opening remarks today is talk about real people stories about health care. Last time the other side got Harry and Louise, the opponents of health care. So this time you're going to see the president and his supporters talking about how it would affect real people. So in other word, he (inaudible)

COLLINS: Quickly, we got three more to do here. I decide if bipartisanship matters. Does it?

ALLEN: I think they decided it doesn't.

COLLINS: Yes.

ALLEN: A lot of democrats, the White House won't tell you this, but a lot of democrats say that the quest for bipartisanship on this bill is fool's gold that you can chase it but you will find it. It's not worth the trouble. As you well know, they don't need the votes. The president wanted to try. It's in the president's interest to look like he's trying but they are not going to hesitate to go ahead with an all-democratic bill with just a couple republicans who voted for the stimulus, if they need to.

COLLINS: All right. Let's make a deal, industry addition. We're talking about the deal you made on drug costs, right.

ALLEN: Yes. Over the weekend, pharmaceutical makers chipped in $80 billion towards this. This isn't out of the goodness of their heart, of course. They benefit from this. And they benefit from the certainty of it. They know that bill is coming. This train is leaving the station and they want to be on it. And so by making a contribution, they get to help negotiate it. But the president hopes that success will mean that they can bring other industry groups on and it gives the White House a tougher hand. They can bargain harder.

COLLINS: All right. What about the last one. Decide what he truly wants, does he know?

ALLEN: Well, he certainly does. He hasn't said publicly. So there's going to come a point for bright lines. This is one of the big debates. How soon do you start cracking heads? You know, you watch your air and an interesting thing about this debate is democrats are all over the place, yet alone republicans. The president, the chief of staff Rahm Emanuel, they have ways of getting democrats on the same page and it's looking like they're going to need to use some of those leaders sooner. They would have preferred to wait until later but the president is now saying that he expects to sign a bill in October that is a very tight landing strip -

COLLINS: Yes.

ALLEN: Especially since Congress, unlike you, Congress doesn't work in August.

COLLINS: Yes. This is true. All right, well we will see how that all plays out, absolutely. Mike Allen, the chief political correspondent for politico.com. Thank you, Mike.

ALLEN: Have a healthy day.

COLLINS: Thank you.

Health care reform is sure to come up this afternoon when President Obama holds that news conference that we have been talking about. We will bring it to you live when it happens around 12:30 p.m. Eastern.

Its reputation has been soaked in scandal. Just what was Blackwater up to in Iraq? A new book helps answer that question. We'll chat with the author right here.

(COMMERCIAL BREAK)

COLLINS: Let's check the latest on the fallout from Iran's disputed presidential election now. Iranian media say authorities have arrested a reporter from "The Washington Times." No reason was given for that arrest.

Iranian guardian council has ruled out annulling the results of the election. Authorities say irregularities were reported before the vote, not during or afterwards.

And election protests have been held in Iranian cities beyond the capital. As far as we know, there are no rallies going on today in Tehran.

There's more mixed news on the housing front. Just minutes ago, we learned the sales of existing homes have increased 2.4 percent. But the bad news, prices continue to plunge. So, what does it all mean?

CNN's Stephanie Elam is joining us now live from New York, with a closer look at that.

Yes, what does this mean?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, that's what everybody wants to know, Heidi. It's like, what does this exactly mean to me?

Well, let's break it down here a little bit. When we're talking about existing home sales, obviously, those are homes that are already built, they're already on the market. Right now we take a look at the May numbers. That's what came out today. And home sales are on the upside by 2.4 percent. This is the first time that we've seen back- to-back monthly gains since September 2005. It's to an adjusted rate of 4.77 million homes that we saw move here.

Now, take a look at prices. They're down nearly 17 percent in May. That is compared to a year ago. But from April, they're actually up. So, they're actually doing better since last month -- or I should say April. So, that gives you an idea of how things are progressing slowly even though compared to a year ago, they're down. The median price for a home here in the United States right now -- $173,000. So, we are moving in the right direction. And there's a few things that are factoring in here. For one thing, a lot of first-time buyers were spurred to get into the market because of that $8,000 tax credit. That got people in. And interest rates being so low -- historic lows actually. That got a lot of other people to start saying, you know what, I can't take it any more. I've got to get in there, get that house right now.

So, things move in the right direction. And if you look at the housing inventory (INAUDIBLE) on the market right now, it actually decreased this month from April, as well. So that shows that people are steadily, slowly getting back into the market and buying homes. So, year over year still a rough comparison. But from month to month, things are looking better.

COLLINS: Yes. All right. Better is good.

ELAM: Yes, indeed.

COLLINS: Stephanie, thank you.

ELAM: Sure.

COLLINS: In this recession, we've gotten used to companies freezing salaries and cutting 401(k) contributions, but now some employers say those cuts will not be permanent.

(BUSINESS REPORT)

COLLINS: It's been part a scandals but veiled in secrecy, little known about it. We're talking about the enterprise formally known as the Blackwater Group. Bit a new book may help answer many of those lingering questions. Suzanne Simons is the author of "Master of War." She's also a CNN executive producer and she is joining us this morning from New York.

Suzanne, thanks so much for being with us.

This book has been highly anticipated. In fact, a lot of people really curious about this organization. You got incredible access. Tell us how you did it.

SUZANNE SIMONS, EXECUTIVE PRODUCER FOR CNN BASED IN ATLANTA: Yes. Well, I tell you, it took a while. Start to finish, the project lasted about three years. And one of the biggest projects I had was to try to convince them to let me, as a reporter, inside the company. And it wasn't easy to do.

But, you know, you've seen media has come down very negative on the company. They were frustrated that none of their positive messages were getting out. And ultimately that's probably why they granted me access and allowed me.

But you know, I travelled to Afghanistan, now, with Eric Prince, who is of course, the owner of the company, in 2007, right after that horrible shooting in Baghdad's Nisour Square, in which between 14 and 17 Iraqis were killed. That was really one of the things that he was weighing as he went overseas to try to see how radioactive his business had become, if you will. And to see just how tough it was going to be to continue to generate new business in the light of all these terribly negative headlines.

COLLINS: Yes, in fact, I found it pretty interesting because as I was looking through the book, I went to the very, very end. I wanted to see how you summed things up after everything that you learned. And I was pretty amazed to find what I did. In fact, I'm going to put it on the screen real quickly. Talking about Eric Prince, here.

You wrote, "He learned to loathe the media. It was the media that played a large role in the downfall of his company and he would never forget it."

Why do you think that happened the way that it did?

SIMONS: You know, I think if you learn about him in the course of reading a book -- and I really go into a lot of detail about his background and where he comes from.

COLLINS: Yes.

SIMONS: You kind of understand it was a very, very private person before he start doing this. He was a Navy S.E.A.L. when he decided to start Blackwater as a training organization only. And he really never has been -- went to the (INAUDIBLE) the headlines or to get any media attention.

And he --

COLLINS: He actually went to the academy, didn't he, but he didn't finish.

Is that right?

SIMONS: Yes. Exactly, exactly. Yes. He decided that wasn't for him. And there's a really interesting story in the book about why he decided that wasn't for him. But, he did go back to the Navy after and did become a S.E.A.L. and did serve as a S.E.A.L. for about three years.

The interesting thing though is that you know, he really -- he didn't like the media, but he realized at a certain point after that shooting in Fallujah, that he needed to use the media, too. He needed to get into the PR, he needed to be a little bit more embracing of the media. And I think -- you know, I've spelled out stories throughout the book that are very fascinating about how he came to that realization.

But, I think ultimately, that was the downfall of the company in a big, big way.

COLLINS: Yes. You have to wonder, though, and again, as you go through this incredible account that you were able to put together here of how the U.S. Military would have functioned without Blackwater at that point during this particular conflict.

SIMONS: Yes. Actually, I was shocked. When I was up at the State Department doing interviews there to hear that someone actually said that the State Department would not be able to carry out its diplomatic functions in Iraq, without Blackwater -- without this one company.

COLLINS: Yes.

SIMONS: And my big question was, how was it possible that the United States government becomes dependent -- so dependent on one company.

You'll remember that right after that shooting, Heidi, Blackwater was suspended in Iraq for a few days. But, in fact, they were reinstated and people were kind of scratching their heads going, well, if they're so terrible -- which it turns out that no charges were actually brought against the company for that shooting. But, if they're so terrible, why are they still there? I mean, that's a whole another question that I try to answer in the book, as well.

COLLINS: Yes. And also the awful tragedy that their own company suffered with four of their own men and then we all remember those terrible pictures that came out hanging from the bridge and all that. The story is very complex.

Before we let you go, Suzanne, where is this company going to be, which is now known as Z, right? (INAUDIBLE) That's what they changed the name to.

Does that mean they are sort of reinventing themselves? Where are they going to be in five years?

SIMONS: Well, it's a non-detectable gas. So, what does that tell you. If you want to go under the headlines that's the way to go. Get a nondescript name.

They're still around and they're still working for the Department of Defense in Afghanistan. You know, I talked to people in the Pentagon who say they're doing a great job over there. So, it's really hard to kind of label the company one thing or another. But I think when you read this book you're really going to understand the complexities of why it is.

COLLINS: All right. Suzanne Simons. We sure do appreciate it. Once again, let's put the book on the screen -- "Master of War." Congratulations to you.

Today is the first release, right?

SIMONS: That's right. I'm going to run down to the book store after this.

COLLINS: OK. Very good. Buy them all.

All right, Suzanne. Thanks so much. SIMONS: Thanks, Heidi.

COLLINS: The powder keg in Iran now. we'll look at how harrowing images are streaming out of the country and the citizens who are risking it all to share that view with the world.

(COMMERCIAL BREAK)

COLLINS: Iran says the results of its disputed election will stand. But will protesters remain silent? Harrowing images shot by Iranian citizens capture the most dramatic challenge to the regime in 30 years.

CNN's Tom Foreman has the story.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): A woman screams over her fallen child. On one street, protesters drive riot squads back. On another, police answer with bullets.

Even faced with official orders to stop and mounting police pressure, demonstrators fought through the weekend and they are at it still. The government admits voting problems in as many cities as 50 cities in the re-election of President Mahmoud Ahmadinejad. And officials say that is not enough to give the victory to Mir Hossein Mousavi, who continues protests in defiance of the supreme leader. Mousavi is keeping out of sight, but protesters, many of whom hide their faces, speak of organized resistance.

VOICE OF MOHAMMED, IRANIAN STUDENT, OPPOSITION MEMBER: Communication is very difficult, more than even you can imagine in Tehran. But I myself, haven't received any orders from our leader yet. But as soon as I get any order, I'm ready to participate in any demonstrations that they detail of.

FOREMAN: The killing of one young woman named Neda, widely publicized on the Internet has enraged what appears to be large numbers of female protesters. Like this one, who says she was only watching until the violence came to her.

VOICE OF UNIDENTIFIED FEMALE: He hit me and he was twice the size of me. He was so big and I said, you want to hit me? And he said, yes. And then he hit me.

FOREMAN: Some foreign affairs analysts believe Iran's top clerics are battling each other over how to resolve this matter. That speculation fueled by the unexpected arrest and sudden release of the family of former president Rafsanjani.

But with main stream media still banned from the streets, people with cell phones are sending a bewildering array of images and messages in which nothing seems clear. Many eyewitnesses say the number of demonstrations is dwindling but at night the rooftops ring with shouts of protests. And in the darkness, cries of suppression.

Tom Foreman, CNN.

(END VIDEOTAPE)

COLLINS: Day after day we're watching these dramatic images unfold from Iran. But how much of the current unrest there could be traced to economic unrest?

Alison Kosik has a breakdown now from New York.

And yes, this is clearly, Alison, a very big part of the problem in Iran.

ALISON KOSIK, CNN CORRESPONDENT: It really is, Heidi. You know, the economy was actually a major issue in the Iranian election that sparked all this outrage. President Mahmoud Ahmadinejad's rivals accused him of stoking inflation with too much spending on popular programs. Subsidizing food and increasing workers pensions made him popular with Iran's poor and lower-middle class. But it also wound up sending prices soaring.

Last year Iranian inflations soared at an annual rate of 28 percent. Political opponents contend that the country's oil revenues should have been invested in Iran's industrial base instead, to create jobs, especially since the country's unemployment rate is more than 15 percent. And many young people, Heidi, even those graduating from college can't find work.

COLLINS: Yes. And they're so dependent on oil, as well. Obviously, the decline in oil prices has been at the crux of all of this by way of hurting their economy.

KOSIK: Exactly. You know, revenues are down sharply and so is economic growth. The International Monetary Fund projects growth of just over 3 percent this year, down from 8 percent in 2007.

And even though Iran is a big oil producer turning out more than 4 billion barrels a day, it doesn't have any refineries. So, OPEC's second oil producer actually has to import nearly half the gasoline it needs -- Heidi.

COLLINS: And then you have to wonder what kind of impact the unrest, I mean, the violence that we're seeing could have on the economy overall, too.

KOSIK: Of course. You know, it's certainly not good for business. One expert we talked with says the big worry is a general strike. If oil production shuts down in Iran, it could damage the country's long-term capabilities. Of course, a disruption in oil production could also mean a spike in prices for the rest of the world. One energy analyst tells us you can't lose Iranian production and not have a massive impact.

Heidi, back to you.

COLLINS: Yes, this whole idea of a national strike still out there. So, we'll continue to follow as best we can from here in the U.S.

Thanks so much. Alison Kosik for us this morning.

COLLINS: As many of you know, Ed McMahon passed away early this morning. He was 86 years old. And we have asked you to share some of your thoughts and your stories and memories on Ed McMahon.

So we have been able to get quite a few of them in. Actually want to go ahead and read a couple of them to you now. This one from Bill Bowers in Toronto, Canada, says, "The day was not complete without watching the 11:30 'Tonight Show.' Carson and McMahon were the creators of this time slot..." -- I think that's what he meant to say there -- "...and nobody can come close. Their level of class to late night TV will never be replaced. I will miss them both and it truly is an end to an era."

Also, this one from D.J., "I grew up in the late '80s to '90s so I fondly remember Ed McMahon from watching 'Star Search' as child. When I look at shows like 'American Idol' today, I see them as cheap imitations. Ed McMahon was the original."

And this one also from Linda McKinny, "In producing a retrospect of Ed McMahon, please don't forget his wonderful work with Jerry Lewis on the MDA Telethons. That's right. He carried out Jerry's torch many times when Jerry was too tired to go on after staying up for hours on end. He did a wonderful job and will be sorely missed."

So once again, some of your thoughts and comments on the passing of Ed McMahon, We'll talk more about that a little bit later on.

Meanwhile, the new Housing and Urban Development secretary takes a trip to New Orleans just as hurricane season begins. His disturbing discovery in the Big Easy.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: We want to get you answers to your financial questions. Let's get straight to the Help Desk. Gary Schatsky is the president of objectiveadvice.com and Lynnette Khalfani-Cox is a personal finance author.

All right, guys, let's get to work.

Aleska (ph) asks, "I'm moving to London from the states and have several credit cards. I'm planning on canceling them before I move over, but wanted to know if that would adversely affect my credit rating, meaning my credit score?"

Gary?

GARY SCHATSKY, PRES. OBJECTIVEADVICE.COM: The answer is, yes it will. You know, one thing that they look at is the average amount of time you have your credit cards outstanding.

But the real -- there's two things here. First of all, you probably don't want to cancel all your cards. You want to have at least one or two outstanding. And certainly, if you're paying a fee on any of them, you're going to want to cancel it and your credit score will recover over time.

WILLIS: All right. So, limit those credit cards, but don't give them all away, that's for darn sure.

SCHATSKY: Absolutely.

WILLIS: All right.

The next question comes from Phil. He says, "I have over $30,000 in credit card debt and have had to rent out my home, which has a principal balance on the loan of $81,000 and a second mortgage of $24,000. Bankruptcy seems inevitable. Can I file for it while not living in my home if it's now a rental property?"

Lynnette, this is interesting. Very tricky situation.

LYNNETTE KHALFANI-COX, PERSONAL FINANCE AUTHOR: Right. You can file for bankruptcy. There's nothing that's going to prohibit you from doing that. Obviously we had bankruptcy reform. You have to see whether or not you qualify for Chapter 7 of 13. But in terms of protecting that home, you won't be able to stave off or keep that home if it's not your principal residence. That's not going to protect you in a bankruptcy filing scenario.

With regard to that credit card debt, yes, of course, if you qualify, that $30,000 in credit card debt you'll be able to wipe out. If you have the income to pay back something, though, the government will require you to pay back at least $50 or $100 a month. Whatever it is that you can actually afford.

WILLIS: And you know, what we've seen is that a lot of people are calling credit card operators and asking for forgiveness right now.

Is that a good idea, Gary?

SCHATSKY: Yes, that's certainly something you want to do is go that route rather than litigation. But one thing to note, you might still -- even if it was your primary residence -- if you're filing 7, you might lose the home in any event. And you'd have to ask yourself, what state are you in? Because some states have a homestead exemption, which if it was your primary residence, might protect it entirely.

WILLIS: All right. So devil in the details here. You need to know your state's laws before making these decisions.

SCHATSKY: Absolutely.

WILLIS: But get rid of that credit card debt. That's the moral of that story.

Well, the Help Desk is all about getting you answers. Send me an e-mail to gerri@cnn.com, or log-on to CNN.com/helpdesk to see more of our financial solutions. And the Help Desk is everywhere. Make sure to check out the latest issue of "Money" magazine on newsstands now. (COMMERCIAL BREAK)

COLLINS: It is hurricane season again. But suffering for Katrina victims has not ended.

Sean Callebs talked to the new HUD chief during a visit to New Orleans.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It's hard to imagine that just five weeks ago this New Orleans home looked like this.

KENNETH WILTZ, KATRINA VICTIM: (INAUDIBLE) than my wife, 47 years.

CALLEBS: For the last six months Kenneth Wilts and his wife, who has Alzheimer's disease, lived in this gutted out shell.

WILTZ: It was absolutely rough, tough. It's a hard thing to do. I don't recommend it.

CALLEBS: But after hurricane Katrina, the Wiltz's didn't have a choice. There was no other housing for them and if it wasn't for the St. Bernard Project, they would still be living in a shell.

Nearly four years after Katrina, there are still thousands of people like the Wiltz, people who fell through the cracks. We showed these pictures to HUD Secretary Shaun Donovan.

SHAUN DONOVAN, HUD SECRETARY: Frankly, I'm disturbed that more progress hasn't been made more quickly and that's exactly why I'm here today.

CALLEBS: Donovan spent the day volunteering, working on homes with the St. Bernard Project. Hurricane season is here and Donovan promises that the federal government is better prepared to provide temporary housing in the face of a catastrophic hurricane. Officials say, they don't want to make the same mistakes.

DONOVAN: In New Orleans, what we've seen is that there was not an adequate system in place to help people make the transition from emergency --emergency shelter to longer term housing for recovery.

CALLEBS: From the Carolinas to the Gulf Coast, hurricane season always brings anxiety. As someone who suffered horribly the last four years, Kenneth Wiltz implores the Obama administration.

WILTZ: Oh, my goodness. You know, they beat the path, help the people. The people you know, need help.

(END VIDEOTAPE)

COLLINS: this is the HUD secretary's second trip to the region since he joined the Obama administration. Coming up next, we'll have the very latest on the tragic accident. The D.C. subway and the very latest there in just a moment.

(COMMERCIAL BREAK)

COLLINS: No moving to Sacramento for the mayor of Los Angeles. Mayor Antonio Villaraigosa says he will not run for governor of California next year. He made the announcement yesterday on CNN's "SITUATION ROOM." The Democrat was elected to a second term in L.A. He says he wants to make good on the campaign promises he made.

A deadly rush hour crash between two trains in Washington, D.C. Could the crash have been prevented? The NTSB says it warned metro rail officials about keeping aging trains in their fleet years ago.

I'm Heidi Collins. Our coverage of the developing story continues in the CNN NEWSROOM with Tony Harris.