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CNN Live At Daybreak
Recapping Yesterday's Testimony by Amber Frey; Fighting Between U.S. Forces, Militiamen Loyal to Muqtada Al-Sadr
Aired August 11, 2004 - 05:00 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.
CAROL COSTELLO, CNN ANCHOR: You've been hearing gunfire in the Iraqi city of Najaf right now. Is a violent final showdown on the horizon?
It is Wednesday, August 11.
This is DAYBREAK.
And good morning to you.
From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news, how to take the 9/11 Commission's report from paper to the real world. That's what House law makers will be discussing about four hours from now. They're holding more hearings on the recommendations of the 9/11 panel.
U.S. jet fighters are flying overhead and Iraqi police are out in force. It's happening this morning in Najaf, where U.S. forces have been fighting Shiite militants for days.
Donald Rumsfeld has just gotten to Afghanistan. Earlier, the defense secretary visited Oman. In Afghanistan, he's holding talks with government officials. He'll also tour a U.S.-led rebuilding project.
And take a look at this. It's a view from outer space of tropical storm Bonnie. Florida officials are keeping a wary eye on the storm, along with another one that could also be heading our way, as is our own Chad Myers.
But Bonnie's weakening, isn't she?
CHAD MYERS, CNN CORRESPONDENT: It weakened overnight, but now it's flaring back up again, Carol. This is kind of that typical, it's almost a freeze/thaw cycle for hurricanes. They do get stronger in overnight hours. There is less wind out there for them to get mixed up with and so there's a little bit of a flare-up here.
This storm is really headed right to Panama City, the same track that we had it on yesterday. It could turn left or right a little bit. But right now all of the models, literally five of them, take it right into the Florida Panhandle.
Farther down to the south than that, this is Charlie, a much larger and more dangerous storm headed over to Jamaica. Here it's just south of Haiti at this point. But a much stronger, although we don't have any pressure with that, don't have an aircraft hunter in that storm right now. I suspect the winds are very close to hurricane strength now in Charlie. And that is forecast to go right over around between Port Charlotte and Tampa, Florida in the next couple of days.
(WEATHER REPORT)
COSTELLO: First up this hour, Amber Frey has plenty to say. Scott Peterson's former mistress will return to the stand today for what may be a week's worth of testimony.
Want to hear it?
Here's CNN's Kimberly Osias.
(BEGIN VIDEO TAPE)
KIMBERLY OSIAS, CNN CORRESPONDENT (voice-over): For the first time in months, the public got its first glimpse of Amber Frey, Scott Peterson's former mistress. Frey testified that he lied about not being married, where he lived and where he traveled, once even calling to say he was in France.
GLORIA ALLRED, AMBER FREY'S ATTORNEY: It's going to be difficult because we have Scott's own words on the tape recordings. "Hi, Amber. Miss you. I'm at the Eiffel Tower."
OSIAS: Frey allowed police to record their conversations after she learned that he was married to the missing Laci Peterson. Those tapes are the basis for her testimony this week.
Earlier, Frey took jurors back to their first date, a month before Laci went missing, saying Peterson wooed her and that they were intimate. Jurors saw photos of them on their last date at a Christmas party in mid-December. That same night, a pregnant Laci went to another Christmas party alone.
Frey says Peterson said he was going away until the end of January.
MICHAEL CARDOZA, LEGAL ANALYST: Why would he tell Amber he's not going to be around in January unless he was planning something? That will be the D.A.'s argument -- the malice, the aforethought.
OSIAS: Ten days later, Laci was missing. Scott Peterson's sister dismisses Frey's testimony as irrelevant to the case.
SUSAN CAUDILLO, SCOTT PETERSON'S SISTER: We all know he had an affair. That's not the issue here, you know? The issue is about Laci. And I don't think the two are connected whatsoever.
OSIAS (on camera): Amber Frey is expected to be on the witness stand throughout next week.
Kimberly Osias, CNN, Redwood City.
(END VIDEO TAPE)
COSTELLO: And we'll have more on Amber Frey's appearance coming up in the second half hour of DAYBREAK.
Legal analyst Kendall Coffey will join us for some "Coffey Talk" with a look at just how damaging the testimony may be to Scott Peterson.
Here are some other stories making news across America this Wednesday.
Kobe Bryant's accuser wants at least $75,000 from the NBA star. She filed a civil lawsuit in federal court asking for that amount in compensatory damages. Experts believe the civil suit could derail the criminal case, which is scheduled to start August 27. veteran newsman Mike Wallace is a dangerous man. At least that's what New York traffic officers thought when they arrested the 86-year-old man in front of a New York restaurant. Wallace was cited for disorderly conduct after officers say he lunged at them over a double parking incident. This is Mike Wallace from "60 Minutes" we're talking about. Other witnesses say Wallace was mishandled by police.
Denver voters have decided against a measure that would have banned using animals as entertainment. A 15-year-old girl got the referendum on the ballot because she was upset with reports of abuse at the circus.
House law makers are still trying to hash out how to implement the 9/11 Commission's recommendations. Two House panels are holding hearings today on the commission's final report. The 9/11 panel has been pushing law makers to take action.
The report calls for creating a new post, which would be national chief of intelligence. At a hearing, some law makers questioned whether that post is really needed.
And authorities have a lot of questions about a man they arrested recently in North Carolina. They want to know why he was taking pictures of the Charlotte skyline.
CNN's homeland security correspondent Jeanne Meserve has more for you.
(BEGIN VIDEO TAPE)
JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Does this man have terrorist ties, or not? Right now, investigators simply do not know, but they are taking a very close look at Kamran Shaikh, also known as Kamran Akhtar.
The Pakistani was arrested in Charlotte, North Carolina on July 20.
OFFICER ANTHONY MAGLIONE, CHARLOTTE-MECKLENBURG POLICE: Observed a gentleman taking videos of the skyline. Once I slowed down to take a closer look at him, he started acting a little irrational, turned away from me, tried to become evasive. I stopped my vehicle; he started to walk away.
MESERVE: Maglione says Shaikh made inconsistent statements about what he was doing.
According to an affidavit unsealed Tuesday, Shaikh was videotaping the headquarters of the Bank of America and Wachovia Bank in Charlotte. And he had other tapes featuring downtown Atlanta, Austin, Houston, Dallas, and New Orleans public transportation systems in some of those cities, and what appeared to be the Mansfield Dam in Austin.
The police chief in Dallas said the tape of his city appeared fairly innocuous.
CHIEF DAVID KUNKLE, DALLAS POLICE: It was really just scanning various buildings and facilities. And it didn't appear to be directed looking in any vulnerabilities of any particular buildings or access points.
MESERVE: Shaikh, who lives in Elmhurst, New York is being held on immigration charges while the investigation into whether he has terrorist connections continues.
(END VIDEO TAPE)
COSTELLO: Limo and taxi drivers could be getting a closer look. The FBI warns that terrorists may want to use limos and other vehicles to carry out attacks. The New York governor's office wants to expand background checks for the drivers. But the New York City's mayor's office says extra screening might not make any difference at all.
Bail is denied for the imam and a member of a mosque in Albany, New York. Both men have pleaded not guilty to charges of conspiring to launder money and promote terrorism.
They were arrested in an FBI sting. It involved a fake plot to purchase a shoulder-fired missile to kill Pakistan's ambassador to the United Nations.
To the race for the White House now. Both candidates are in the West today. John Kerry campaigning in Nevada, while George Bush leaves his Texas ranch this morning for Albuquerque, New Mexico. Later on, he'll head to Phoenix, Arizona.
The talk on the campaign trail is swirling around Iraq. John Kerry told a Las Vegas crowd he was consistent when he voted to, as he says, "stand up to Saddam Hussein."
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: My question for President Bush is why did he rush to war without a plan to win the peace? Why did he rush to war on faulty intelligence?
(END VIDEO CLIP)
COSTELLO: It's a tit for tat world.
Here's what George Bush had to say about Kerry's comments.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent has found a new nuance, knowing everything we know today, he would have voted to go into Iraq and remove Saddam Hussein from power. I want to thank Senator Kerry for clearing that up.
(END VIDEO CLIP)
COSTELLO: And that brings us to our e-mail Question of the Morning. Is there any real difference between John Kerry and George Bush? We mean policy wise, foreign policy wise. Tell us what you think. The address, cnn.com; daybreak@cnn.com.
Our correspondents in Iraq say these last 24 hours have been extremely tense. There are expectations of a major confrontation between the militia of a radical Shiite cleric and U.S. and Iraqi forces.
These are new pictures just into us this morning. Iraqi officials say 57 people were killed between Tuesday and today. Close to 20 people, 120 people, have been wounded.
Matthew Chance has more on this continuing conflict.
(BEGIN VIDEO TAPE)
MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): The deserted streets of Najaf, for weeks a battleground, now it's beleaguered residents urged by the U.S. and their Iraqi allies to leave. There's speculation of a final push in the holy city. U.S. forces are now patrolling its outskirts in peace but the sacred center near the mosque of Imam Ali remains at war.
UNIDENTIFIED MALE: The Iraqi citizens are fed up with Sadr's militia and for some reason he chose to attack us. We're not quite sure why, what instigated this, but obviously as long as this militia is in town, even without the coalition conducting offensive operations there really is no true peace in Najaf.
CHANCE: But this is a battle the Mehdi Army loyal to the radical cleric Muqtada al-Sadr seems to relish. The fact it's raging around one of Shia Islam's most sacred sites is for his supporters a rallying call.
UNIDENTIFIED MALE (through translator): The Iraqi people received the Americans with flowers but with God's will they will now greet them with rockets, bombs and bullets.
CHANCE: Across southern and central Iraq violence has spiraled in recent days. Developments in Najaf could spell disaster.
(on camera): U.S. military officials here in Najaf insist they're sensitive to the fact that any U.S. led assault against such a holy mosque could inflame passions against them. If it were an Iraqi force that carried out any attack that might be different. But now, both for the U.S. military and the Iraqi interim government, who both want this matter brought to an end, patience is running out.
Matthew Chance, CNN, Najaf in southern Iraq.
(END VIDEO TAPE)
COSTELLO: Problems in Iraq are affecting oil prices around the world. Oil at an all time high. The question this morning, will it go even higher? We're live in London in five minutes.
Plus, corporations are buying access to law makers. Do you have a problem with that? We'll look at the practice at the bottom of the hour.
Also ahead, find out more about the man President Bush wants to be the new CIA chief and why there's so much controversy surrounding that choice. That's at 35 minutes past the hour.
And will the elephants be welcomed in Denver? Find out how the city voted on a proposal to ban circus animals.
But first, here's a look at what else is making news this Wednesday morning.
(COMMERCIAL BREAK)
COSTELLO: Will this be another good day for Wall Street? Here's a look at the closing numbers. Stocks were on the up and up. The Dow closed with a 130 point gain. The Nasdaq was up 34 points. The S&P 500 added nearly 14 points, closing at 1079.
Trading in Tokyo also up. The Nikkei rose almost 1 percent. But the European markets are not faring so well. Shares are trading down right now.
In London, the FTSE is down 2/10 of a percent.
And the Paris CAC Index is trading down, as well.
I think we're going to head live to London now. Is that right?
The price of oil is now at a record high and we want to talk about that.
So let's head live to London and check in with Diana Muriel for more -- good morning.
DIANA MURIEL, CNN CORRESPONDENT: Good morning, Carol.
We're getting news this morning from OPEC about how much spare capacity they've got to produce more oil. And the numbers are fairly worrying. OPEC's effective sustainable spare capacity shrunk in July to 600,000 barrels per day as the cartel raised its output. What this means is that there's effectively less than a 1 percent cushion in the world markets should the world start to draw down more oil. There simply just isn't enough oil out there in the market.
From the United States today, we're going to get some figures as to the fuel supplies, the stocks of fuel supplies in the United States. If the market senses that that has been tightened, that there's been a big draw down in that, we might see that oil price spike even higher. It breached that $45 a barrel mark on Tuesday, trading.
If we see that number tightened for the fuel stocks in the U.S., we could see it go up perhaps to $50, say some analysts, perhaps even to $60, and that's when we start talking about a world recession, if you see oil trading at around $60 a barrel. We haven't reached that yet, but the market is watching that number very, very carefully in the United States today.
In addition, we've got all sorts of supply problems. We've had a sabotage attack in Basra on the pipeline there on Monday. That's been fixed, we understand, and Iraq is back pumping 1.3 million barrels per day. But that's 30 percent down on what it normally produces, 1.9 million barrels per day.
We've got ongoing problems in Russia with Yukos. That situation has still not been resolved. This tax bill outstanding that the Russian government wants $3.4 billion in back taxes. But it's frozen the company's assets. The company warning that it might not be able to continue producing oil. And it produces 2 percent of world oil.
And also problems in Venezuela, where there's a referendum on the rule of President Hugo Chavez. If you remember back to 2002, there was a two month strike there where we saw the country come pretty much to a standstill as opposition supporters took to the streets and brought the country to its knees. And people are very concerned. Again, there are demonstrations taking place in Venezuela in the last few days ahead of that referendum as to what might happen there.
One analyst described to me that the situation for the supply side for oil is like a perfect storm. And, indeed, there is a perfect storm brewing off the Gulf of Mexico. The market watching that very carefully. That's an oil producing area. And were that storm to hit, it could seriously disrupt oil production and oil supply in that region -- Carol.
COSTELLO: So you're saying to us everything must happen at the same time in that perfect storm for the price of a barrel of oil to go up to $60, which was -- which is incomprehensible to most of us.
MURIEL: It's absolutely terrifying. But it's not that far away. We've already breached $45, and that's the problem. And all of these problems, these -- the sabotage in Iraq, the problems with Russia, even the Venezuela problem, they haven't yet been resolved. And the market would like to see some of these problems get resolved and some sense that our strategic reserves are at a comfortable rate.
Now, the International Energy Agency has a division that consults with its 26 nations on their energy supplies and their energy stocks, and they have stepped up those consultations. So the worry is around the world there simply isn't enough oil in the market -- Carol.
COSTELLO: Diana Muriel live in London this morning.
Thank you.
Your news, money, weather and sports.
It's 5:18 Eastern.
Here's what's all new this morning.
Amber Frey will be back on the stand today in the Scott Peterson trial. Peterson's former mistress is recounting lies he told her both before and after Laci Peterson's disappearance.
Georgia voters one step closer to sending their first African- American woman to the Senate. Congresswoman Denise Majette won the Democratic runoff election. The vote in November is to replace Democrat Zel Miller, who is retiring.
In money news, interest rates on the move. For the second time this summer, the Fed raised the lending rate by a 1/4 percent. That's the rate lenders refer to when they set their own interest rates.
In culture, will NASA send a repair robot into space to save the Hubble telescope? A decision on the robot plan could be made by next summer. The plan would likely cost at least a billion dollars.
In sports, Team USA beat Turkey. For the second straight time and their last tune-up before the Olympics, Tim Duncan led the Americans with 25 points, as the team finished 5 and 1 in its exhibitions. Their first game in the Olympics will be Sunday against Puerto Rico -- Chad.
MYERS: Good morning, Carol.
We want to talk about tropical storm Bonnie and, obviously, tropical storm Charlie. Obviously Charlie will be hurricane Charlie before it actually hits land.
But tropical storm Bonnie, max winds right now 45 miles per hour and hurricane watches -- or, I'm sorry, tropical storm watches in effect for northwest Florida to the Swannee River to the Alabama/Florida border.
Moving you ahead to Charlie, a much stronger storm now. And now hurricane warnings for the Cayman Islands. Hurricane watches even for the Florida Keys, from the Dry Tortugas all the way up to Craig Key.
There's Bonnie in the Gulf of Mexico there.
(WEATHER REPORT)
COSTELLO: Thank you, Chad. Those are the latest headlines for you this morning.
Coming up next on DAYBREAK, Jessica Simpson would to go near them. But Buffalo wing lovers prepare to turn out in droves. We'll tell you why things are about to heat up in the Big Apple.
And keep 'em coming. The e-mail Question of the Day, is there any real difference between John Kerry and George Bush policy wise? The address, daybreak@cnn.com. And you are watching DAYBREAK for a Wednesday morning.
(COMMERCIAL BREAK)
COSTELLO: Time to check out our Web clicks this morning, what stories are getting your attention right now on our Web site.
So let's go to cnn.com.
First up, this is the first most clicked on story on our Web site. Four family members arrested in the Philippines for killing and eating a relative during a wedding reception. It's a disgusting story, but you clicked on it most. Apparently a relative tripped and inadvertently touched the bottom of the bride. Well, her relatives got upset and murdered the man and then did the rest. I can't even go into it because it's so disgusting.
The second most clicked on story on our Web site, CBS news veteran Mike Wallace was arrested outside of a New York City restaurant for disorderly conduct. He's 86 years old. Apparently he was getting take out and his limousine service was waiting outside for him. It was double parked.
Well, the traffic police came up and wanted Mike Wallace's people to move the limo. Mike Wallace became upset or the traffic police became upset and there was a scuffle. Mike Wallace was taken off in handcuffs, thrown in jail, we think for a day. But he's at home now and I'm sure some kind of legal action will be taken.
The third most clicked on story, Scott Peterson's ex-lover Amber Frey tells of their first date, which happened a month before Laci Peterson disappeared. And we'll be talking a lot more about Amber Frey and the Peterson case on DAYBREAK.
It is time now for our DAYBREAK "Eye Opener."
Meet T.J. He's a bona fide hero in his Phoenix, Arizona community. The 13-year-old came to the rescue of a 5-year-old autistic boy who had fallen into an irrigation canal. T.J. jumped in and pulled Arled Malcolm (ph) out of the rushing water. He then jumped in again to pull out the small boy's dog. Wow.
A scary moment for singer Gloria Estefan. Take a look. During a show in Houston, an over zealous fan jumped onstage and rushed Estefan as she sang. Ooh. But the startled singer did not miss a beat and the fan was removed. Estefan is in the middle of her farewell tour. They're planning a real wing ding in Buffalo. The Third Annual National Buffalo Wing Festival gets under way in early September. And, no, the highlight is not the Miss. Buffalo Wing contest. That honor is reserved for the bobbing for Buffalo wings competition.
Here's what's all new in the next half hour of DAYBREAK.
Special interest groups and lobbyists are spending millions to get in good with the government. But what do political donors want in exchange for their dollars?
And the president taps a former spy to be the nation's top spook. Could his choice trigger political controversy?
And a controversial vote turns Denver into a circus act, literally.
This is DAYBREAK for Wednesday.
(COMMERCIAL BREAK)
COSTELLO: In Najaf and Baghdad's Sadr City and elsewhere, Iraq is a nation on edge. Is a showdown on the horizon?
It is Wednesday, August 11.
This is DAYBREAK.
And good morning to you.
Welcome to the second half hour of DAYBREAK.
From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news, our correspondents in Iraq say there is renewed fighting this morning in Najaf. Fighting has been going on there since Thursday. Militia loyal to a radical Shiite cleric have told residents there to stay indoors.
How to protect Americans from terrorists -- the House Armed Services Committee meets three and a half hours from now to talk about that. The panel will hear testimony about the implications of the 9/11 Commission's recommendations.
U.S. Secretary of State Donald Rumsfeld -- secretary of defense, rather, Donald Rumsfeld, is in Kabul, Afghanistan this hour. He arrived there about two hours ago. He'll meet with President Hamid Karzai and with U.S. military leaders there.
And in the Gulf of Mexico, residents of Florida and Alabama are keeping an eye on tropical storm Bonnie and another tropical storm, as well.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired August 11, 2004 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: You've been hearing gunfire in the Iraqi city of Najaf right now. Is a violent final showdown on the horizon?
It is Wednesday, August 11.
This is DAYBREAK.
And good morning to you.
From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news, how to take the 9/11 Commission's report from paper to the real world. That's what House law makers will be discussing about four hours from now. They're holding more hearings on the recommendations of the 9/11 panel.
U.S. jet fighters are flying overhead and Iraqi police are out in force. It's happening this morning in Najaf, where U.S. forces have been fighting Shiite militants for days.
Donald Rumsfeld has just gotten to Afghanistan. Earlier, the defense secretary visited Oman. In Afghanistan, he's holding talks with government officials. He'll also tour a U.S.-led rebuilding project.
And take a look at this. It's a view from outer space of tropical storm Bonnie. Florida officials are keeping a wary eye on the storm, along with another one that could also be heading our way, as is our own Chad Myers.
But Bonnie's weakening, isn't she?
CHAD MYERS, CNN CORRESPONDENT: It weakened overnight, but now it's flaring back up again, Carol. This is kind of that typical, it's almost a freeze/thaw cycle for hurricanes. They do get stronger in overnight hours. There is less wind out there for them to get mixed up with and so there's a little bit of a flare-up here.
This storm is really headed right to Panama City, the same track that we had it on yesterday. It could turn left or right a little bit. But right now all of the models, literally five of them, take it right into the Florida Panhandle.
Farther down to the south than that, this is Charlie, a much larger and more dangerous storm headed over to Jamaica. Here it's just south of Haiti at this point. But a much stronger, although we don't have any pressure with that, don't have an aircraft hunter in that storm right now. I suspect the winds are very close to hurricane strength now in Charlie. And that is forecast to go right over around between Port Charlotte and Tampa, Florida in the next couple of days.
(WEATHER REPORT)
COSTELLO: First up this hour, Amber Frey has plenty to say. Scott Peterson's former mistress will return to the stand today for what may be a week's worth of testimony.
Want to hear it?
Here's CNN's Kimberly Osias.
(BEGIN VIDEO TAPE)
KIMBERLY OSIAS, CNN CORRESPONDENT (voice-over): For the first time in months, the public got its first glimpse of Amber Frey, Scott Peterson's former mistress. Frey testified that he lied about not being married, where he lived and where he traveled, once even calling to say he was in France.
GLORIA ALLRED, AMBER FREY'S ATTORNEY: It's going to be difficult because we have Scott's own words on the tape recordings. "Hi, Amber. Miss you. I'm at the Eiffel Tower."
OSIAS: Frey allowed police to record their conversations after she learned that he was married to the missing Laci Peterson. Those tapes are the basis for her testimony this week.
Earlier, Frey took jurors back to their first date, a month before Laci went missing, saying Peterson wooed her and that they were intimate. Jurors saw photos of them on their last date at a Christmas party in mid-December. That same night, a pregnant Laci went to another Christmas party alone.
Frey says Peterson said he was going away until the end of January.
MICHAEL CARDOZA, LEGAL ANALYST: Why would he tell Amber he's not going to be around in January unless he was planning something? That will be the D.A.'s argument -- the malice, the aforethought.
OSIAS: Ten days later, Laci was missing. Scott Peterson's sister dismisses Frey's testimony as irrelevant to the case.
SUSAN CAUDILLO, SCOTT PETERSON'S SISTER: We all know he had an affair. That's not the issue here, you know? The issue is about Laci. And I don't think the two are connected whatsoever.
OSIAS (on camera): Amber Frey is expected to be on the witness stand throughout next week.
Kimberly Osias, CNN, Redwood City.
(END VIDEO TAPE)
COSTELLO: And we'll have more on Amber Frey's appearance coming up in the second half hour of DAYBREAK.
Legal analyst Kendall Coffey will join us for some "Coffey Talk" with a look at just how damaging the testimony may be to Scott Peterson.
Here are some other stories making news across America this Wednesday.
Kobe Bryant's accuser wants at least $75,000 from the NBA star. She filed a civil lawsuit in federal court asking for that amount in compensatory damages. Experts believe the civil suit could derail the criminal case, which is scheduled to start August 27. veteran newsman Mike Wallace is a dangerous man. At least that's what New York traffic officers thought when they arrested the 86-year-old man in front of a New York restaurant. Wallace was cited for disorderly conduct after officers say he lunged at them over a double parking incident. This is Mike Wallace from "60 Minutes" we're talking about. Other witnesses say Wallace was mishandled by police.
Denver voters have decided against a measure that would have banned using animals as entertainment. A 15-year-old girl got the referendum on the ballot because she was upset with reports of abuse at the circus.
House law makers are still trying to hash out how to implement the 9/11 Commission's recommendations. Two House panels are holding hearings today on the commission's final report. The 9/11 panel has been pushing law makers to take action.
The report calls for creating a new post, which would be national chief of intelligence. At a hearing, some law makers questioned whether that post is really needed.
And authorities have a lot of questions about a man they arrested recently in North Carolina. They want to know why he was taking pictures of the Charlotte skyline.
CNN's homeland security correspondent Jeanne Meserve has more for you.
(BEGIN VIDEO TAPE)
JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Does this man have terrorist ties, or not? Right now, investigators simply do not know, but they are taking a very close look at Kamran Shaikh, also known as Kamran Akhtar.
The Pakistani was arrested in Charlotte, North Carolina on July 20.
OFFICER ANTHONY MAGLIONE, CHARLOTTE-MECKLENBURG POLICE: Observed a gentleman taking videos of the skyline. Once I slowed down to take a closer look at him, he started acting a little irrational, turned away from me, tried to become evasive. I stopped my vehicle; he started to walk away.
MESERVE: Maglione says Shaikh made inconsistent statements about what he was doing.
According to an affidavit unsealed Tuesday, Shaikh was videotaping the headquarters of the Bank of America and Wachovia Bank in Charlotte. And he had other tapes featuring downtown Atlanta, Austin, Houston, Dallas, and New Orleans public transportation systems in some of those cities, and what appeared to be the Mansfield Dam in Austin.
The police chief in Dallas said the tape of his city appeared fairly innocuous.
CHIEF DAVID KUNKLE, DALLAS POLICE: It was really just scanning various buildings and facilities. And it didn't appear to be directed looking in any vulnerabilities of any particular buildings or access points.
MESERVE: Shaikh, who lives in Elmhurst, New York is being held on immigration charges while the investigation into whether he has terrorist connections continues.
(END VIDEO TAPE)
COSTELLO: Limo and taxi drivers could be getting a closer look. The FBI warns that terrorists may want to use limos and other vehicles to carry out attacks. The New York governor's office wants to expand background checks for the drivers. But the New York City's mayor's office says extra screening might not make any difference at all.
Bail is denied for the imam and a member of a mosque in Albany, New York. Both men have pleaded not guilty to charges of conspiring to launder money and promote terrorism.
They were arrested in an FBI sting. It involved a fake plot to purchase a shoulder-fired missile to kill Pakistan's ambassador to the United Nations.
To the race for the White House now. Both candidates are in the West today. John Kerry campaigning in Nevada, while George Bush leaves his Texas ranch this morning for Albuquerque, New Mexico. Later on, he'll head to Phoenix, Arizona.
The talk on the campaign trail is swirling around Iraq. John Kerry told a Las Vegas crowd he was consistent when he voted to, as he says, "stand up to Saddam Hussein."
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: My question for President Bush is why did he rush to war without a plan to win the peace? Why did he rush to war on faulty intelligence?
(END VIDEO CLIP)
COSTELLO: It's a tit for tat world.
Here's what George Bush had to say about Kerry's comments.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My opponent has found a new nuance, knowing everything we know today, he would have voted to go into Iraq and remove Saddam Hussein from power. I want to thank Senator Kerry for clearing that up.
(END VIDEO CLIP)
COSTELLO: And that brings us to our e-mail Question of the Morning. Is there any real difference between John Kerry and George Bush? We mean policy wise, foreign policy wise. Tell us what you think. The address, cnn.com; daybreak@cnn.com.
Our correspondents in Iraq say these last 24 hours have been extremely tense. There are expectations of a major confrontation between the militia of a radical Shiite cleric and U.S. and Iraqi forces.
These are new pictures just into us this morning. Iraqi officials say 57 people were killed between Tuesday and today. Close to 20 people, 120 people, have been wounded.
Matthew Chance has more on this continuing conflict.
(BEGIN VIDEO TAPE)
MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): The deserted streets of Najaf, for weeks a battleground, now it's beleaguered residents urged by the U.S. and their Iraqi allies to leave. There's speculation of a final push in the holy city. U.S. forces are now patrolling its outskirts in peace but the sacred center near the mosque of Imam Ali remains at war.
UNIDENTIFIED MALE: The Iraqi citizens are fed up with Sadr's militia and for some reason he chose to attack us. We're not quite sure why, what instigated this, but obviously as long as this militia is in town, even without the coalition conducting offensive operations there really is no true peace in Najaf.
CHANCE: But this is a battle the Mehdi Army loyal to the radical cleric Muqtada al-Sadr seems to relish. The fact it's raging around one of Shia Islam's most sacred sites is for his supporters a rallying call.
UNIDENTIFIED MALE (through translator): The Iraqi people received the Americans with flowers but with God's will they will now greet them with rockets, bombs and bullets.
CHANCE: Across southern and central Iraq violence has spiraled in recent days. Developments in Najaf could spell disaster.
(on camera): U.S. military officials here in Najaf insist they're sensitive to the fact that any U.S. led assault against such a holy mosque could inflame passions against them. If it were an Iraqi force that carried out any attack that might be different. But now, both for the U.S. military and the Iraqi interim government, who both want this matter brought to an end, patience is running out.
Matthew Chance, CNN, Najaf in southern Iraq.
(END VIDEO TAPE)
COSTELLO: Problems in Iraq are affecting oil prices around the world. Oil at an all time high. The question this morning, will it go even higher? We're live in London in five minutes.
Plus, corporations are buying access to law makers. Do you have a problem with that? We'll look at the practice at the bottom of the hour.
Also ahead, find out more about the man President Bush wants to be the new CIA chief and why there's so much controversy surrounding that choice. That's at 35 minutes past the hour.
And will the elephants be welcomed in Denver? Find out how the city voted on a proposal to ban circus animals.
But first, here's a look at what else is making news this Wednesday morning.
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COSTELLO: Will this be another good day for Wall Street? Here's a look at the closing numbers. Stocks were on the up and up. The Dow closed with a 130 point gain. The Nasdaq was up 34 points. The S&P 500 added nearly 14 points, closing at 1079.
Trading in Tokyo also up. The Nikkei rose almost 1 percent. But the European markets are not faring so well. Shares are trading down right now.
In London, the FTSE is down 2/10 of a percent.
And the Paris CAC Index is trading down, as well.
I think we're going to head live to London now. Is that right?
The price of oil is now at a record high and we want to talk about that.
So let's head live to London and check in with Diana Muriel for more -- good morning.
DIANA MURIEL, CNN CORRESPONDENT: Good morning, Carol.
We're getting news this morning from OPEC about how much spare capacity they've got to produce more oil. And the numbers are fairly worrying. OPEC's effective sustainable spare capacity shrunk in July to 600,000 barrels per day as the cartel raised its output. What this means is that there's effectively less than a 1 percent cushion in the world markets should the world start to draw down more oil. There simply just isn't enough oil out there in the market.
From the United States today, we're going to get some figures as to the fuel supplies, the stocks of fuel supplies in the United States. If the market senses that that has been tightened, that there's been a big draw down in that, we might see that oil price spike even higher. It breached that $45 a barrel mark on Tuesday, trading.
If we see that number tightened for the fuel stocks in the U.S., we could see it go up perhaps to $50, say some analysts, perhaps even to $60, and that's when we start talking about a world recession, if you see oil trading at around $60 a barrel. We haven't reached that yet, but the market is watching that number very, very carefully in the United States today.
In addition, we've got all sorts of supply problems. We've had a sabotage attack in Basra on the pipeline there on Monday. That's been fixed, we understand, and Iraq is back pumping 1.3 million barrels per day. But that's 30 percent down on what it normally produces, 1.9 million barrels per day.
We've got ongoing problems in Russia with Yukos. That situation has still not been resolved. This tax bill outstanding that the Russian government wants $3.4 billion in back taxes. But it's frozen the company's assets. The company warning that it might not be able to continue producing oil. And it produces 2 percent of world oil.
And also problems in Venezuela, where there's a referendum on the rule of President Hugo Chavez. If you remember back to 2002, there was a two month strike there where we saw the country come pretty much to a standstill as opposition supporters took to the streets and brought the country to its knees. And people are very concerned. Again, there are demonstrations taking place in Venezuela in the last few days ahead of that referendum as to what might happen there.
One analyst described to me that the situation for the supply side for oil is like a perfect storm. And, indeed, there is a perfect storm brewing off the Gulf of Mexico. The market watching that very carefully. That's an oil producing area. And were that storm to hit, it could seriously disrupt oil production and oil supply in that region -- Carol.
COSTELLO: So you're saying to us everything must happen at the same time in that perfect storm for the price of a barrel of oil to go up to $60, which was -- which is incomprehensible to most of us.
MURIEL: It's absolutely terrifying. But it's not that far away. We've already breached $45, and that's the problem. And all of these problems, these -- the sabotage in Iraq, the problems with Russia, even the Venezuela problem, they haven't yet been resolved. And the market would like to see some of these problems get resolved and some sense that our strategic reserves are at a comfortable rate.
Now, the International Energy Agency has a division that consults with its 26 nations on their energy supplies and their energy stocks, and they have stepped up those consultations. So the worry is around the world there simply isn't enough oil in the market -- Carol.
COSTELLO: Diana Muriel live in London this morning.
Thank you.
Your news, money, weather and sports.
It's 5:18 Eastern.
Here's what's all new this morning.
Amber Frey will be back on the stand today in the Scott Peterson trial. Peterson's former mistress is recounting lies he told her both before and after Laci Peterson's disappearance.
Georgia voters one step closer to sending their first African- American woman to the Senate. Congresswoman Denise Majette won the Democratic runoff election. The vote in November is to replace Democrat Zel Miller, who is retiring.
In money news, interest rates on the move. For the second time this summer, the Fed raised the lending rate by a 1/4 percent. That's the rate lenders refer to when they set their own interest rates.
In culture, will NASA send a repair robot into space to save the Hubble telescope? A decision on the robot plan could be made by next summer. The plan would likely cost at least a billion dollars.
In sports, Team USA beat Turkey. For the second straight time and their last tune-up before the Olympics, Tim Duncan led the Americans with 25 points, as the team finished 5 and 1 in its exhibitions. Their first game in the Olympics will be Sunday against Puerto Rico -- Chad.
MYERS: Good morning, Carol.
We want to talk about tropical storm Bonnie and, obviously, tropical storm Charlie. Obviously Charlie will be hurricane Charlie before it actually hits land.
But tropical storm Bonnie, max winds right now 45 miles per hour and hurricane watches -- or, I'm sorry, tropical storm watches in effect for northwest Florida to the Swannee River to the Alabama/Florida border.
Moving you ahead to Charlie, a much stronger storm now. And now hurricane warnings for the Cayman Islands. Hurricane watches even for the Florida Keys, from the Dry Tortugas all the way up to Craig Key.
There's Bonnie in the Gulf of Mexico there.
(WEATHER REPORT)
COSTELLO: Thank you, Chad. Those are the latest headlines for you this morning.
Coming up next on DAYBREAK, Jessica Simpson would to go near them. But Buffalo wing lovers prepare to turn out in droves. We'll tell you why things are about to heat up in the Big Apple.
And keep 'em coming. The e-mail Question of the Day, is there any real difference between John Kerry and George Bush policy wise? The address, daybreak@cnn.com. And you are watching DAYBREAK for a Wednesday morning.
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COSTELLO: Time to check out our Web clicks this morning, what stories are getting your attention right now on our Web site.
So let's go to cnn.com.
First up, this is the first most clicked on story on our Web site. Four family members arrested in the Philippines for killing and eating a relative during a wedding reception. It's a disgusting story, but you clicked on it most. Apparently a relative tripped and inadvertently touched the bottom of the bride. Well, her relatives got upset and murdered the man and then did the rest. I can't even go into it because it's so disgusting.
The second most clicked on story on our Web site, CBS news veteran Mike Wallace was arrested outside of a New York City restaurant for disorderly conduct. He's 86 years old. Apparently he was getting take out and his limousine service was waiting outside for him. It was double parked.
Well, the traffic police came up and wanted Mike Wallace's people to move the limo. Mike Wallace became upset or the traffic police became upset and there was a scuffle. Mike Wallace was taken off in handcuffs, thrown in jail, we think for a day. But he's at home now and I'm sure some kind of legal action will be taken.
The third most clicked on story, Scott Peterson's ex-lover Amber Frey tells of their first date, which happened a month before Laci Peterson disappeared. And we'll be talking a lot more about Amber Frey and the Peterson case on DAYBREAK.
It is time now for our DAYBREAK "Eye Opener."
Meet T.J. He's a bona fide hero in his Phoenix, Arizona community. The 13-year-old came to the rescue of a 5-year-old autistic boy who had fallen into an irrigation canal. T.J. jumped in and pulled Arled Malcolm (ph) out of the rushing water. He then jumped in again to pull out the small boy's dog. Wow.
A scary moment for singer Gloria Estefan. Take a look. During a show in Houston, an over zealous fan jumped onstage and rushed Estefan as she sang. Ooh. But the startled singer did not miss a beat and the fan was removed. Estefan is in the middle of her farewell tour. They're planning a real wing ding in Buffalo. The Third Annual National Buffalo Wing Festival gets under way in early September. And, no, the highlight is not the Miss. Buffalo Wing contest. That honor is reserved for the bobbing for Buffalo wings competition.
Here's what's all new in the next half hour of DAYBREAK.
Special interest groups and lobbyists are spending millions to get in good with the government. But what do political donors want in exchange for their dollars?
And the president taps a former spy to be the nation's top spook. Could his choice trigger political controversy?
And a controversial vote turns Denver into a circus act, literally.
This is DAYBREAK for Wednesday.
(COMMERCIAL BREAK)
COSTELLO: In Najaf and Baghdad's Sadr City and elsewhere, Iraq is a nation on edge. Is a showdown on the horizon?
It is Wednesday, August 11.
This is DAYBREAK.
And good morning to you.
Welcome to the second half hour of DAYBREAK.
From the CNN Global Headquarters in Atlanta, I'm Carol Costello.
Now in the news, our correspondents in Iraq say there is renewed fighting this morning in Najaf. Fighting has been going on there since Thursday. Militia loyal to a radical Shiite cleric have told residents there to stay indoors.
How to protect Americans from terrorists -- the House Armed Services Committee meets three and a half hours from now to talk about that. The panel will hear testimony about the implications of the 9/11 Commission's recommendations.
U.S. Secretary of State Donald Rumsfeld -- secretary of defense, rather, Donald Rumsfeld, is in Kabul, Afghanistan this hour. He arrived there about two hours ago. He'll meet with President Hamid Karzai and with U.S. military leaders there.
And in the Gulf of Mexico, residents of Florida and Alabama are keeping an eye on tropical storm Bonnie and another tropical storm, as well.
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