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Utica, Illinois, Picks Up After Tornado; Saudi Security Forces Find Almost is Not Enough; According to Critics & Dems, IRS Site Showed Political Messages

Aired April 21, 2004 - 13:57   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.


KYRA PHILLIPS, CNN ANCHOR: A bloody day in Iraq, from Basra to Fallujah. Suicide bombers killed dozens of people while fighting intensifies.
The president gets a date for his sit-down with the 9/11 Commission.

John Kerry's military records released, will anything in his past come back to haunt him?

Tornado season opens with a vengeance in the Midwest. We'll take you there live.

From the CNN Center in Atlanta, I'm Kyra Phillips. This hour of CNN's LIVE FROM... starts right now.

We begin this hour with the deadly force of nature. In much of the U.S., it's an unwelcome rite of spring, tornadoes with devastating consequences. Case in point, Utica, Illinois. At least four people dead in the aftermath of yesterday's twister that flattened a century- old building that housed a tavern and upstairs. Five people were rescued, many others may still be trapped in the rubble. Four Illinois counties are being dubbed state disaster areas. And parts of northern Indiana were hit as well, though with much little damage. For now, folks in Utica are getting by with a little help from their friends.

(BEGIN VIDEO CLIP)

MAYOR FRED EDMOND, UTICA, ILLINOIS: It's a very serious disaster. We've had people from all over here to help, volunteers, Chicago, Skokie, Aurora. We're not going to get in -- we're going to thank them all later.

(END VIDEO CLIP)

PHILLIPS: Those twisters showed up loud and clear on the Doppler radar. And forecasters have their eyes glued for the rest of the week, that includes CNN meteorologist Jacqui Jeras.

Jacqui, what's the latest?

JACQUI JERAS, CNN METEOROLOGIST: Well, Kyra, more severe storms are going to be pretty likely later on this afternoon and this evening. And we could see another significant outbreak, compared to what we had yesterday. In all, more than 100 severe weather reports yesterday, more than half of them were tornadoes, 31 touched down in the state of Illinois.

These were all what we call supercell-type thunderstorms. They're isolated storms. It's not a huge convective line that moves on through. It's single cell storms. And this is the one that touched down in Utica. And you see a little bit of a hook right here. And that is where the tornado was as it pushed on through. And that happened around 6:00 last night.

And there's another isolated supercell thunderstorm. We may see more of the same later on today. Right now just garden variety showers and thunderstorms. Little Rock even getting a lot of rain throughout the day, and also a lot of lightning. But so far nothing severe.

Conditions are going to be destabilizing this afternoon. We have warmth and moisture flowing in from the south, dry air is pushing in from the west, and cooler air coming in from the north. Put all of these things together and that spells the recipe for severe weather, including the threat of tornadoes.

We're especially going to be concerned with what's going to happen later today in Oklahoma City, across eastern Oklahoma and western parts of Arkansas. That's the highest threat area that we're going to be seeing, the threat of tornadoes. And then we have a slight risk extending all the way through the Tennessee Valley into the Ohio Valley and even into parts of the Great Lakes. Even Detroit may see some severe thunderstorms later on today.

We need to have upper level support. The jetstream needs to be moving in on -- across on top of you in order to support these storms. It is moving in right across this region. And no big budges in the jetstream for the next three days, Kyra. And that means more severe weather the next three days. Back to you.

PHILLIPS: All right, Jacqui, you're going to be a busy woman. We'll check in with you. Thanks.

Bombs and bullets across Iraq, checking the latest developments: 68 people are killed in a series of five suicide car bombings in southern Iraq. Eighteen school children are among the dead. They were in minivans being driven to school during morning rush hour when the bombs exploded. Security threats are expected to pose many challenges as the June 30 handover approaches.

(BEGIN VIDEO CLIP)

PAUL BREMER, U.S. CIVILIAN ADMINISTRATOR: These threats will not go away on June 30 when Iraq gets a sovereign government. They will still be here. And the Iraqi security forces will, in the next few months, play an increasingly important role in defending Iraq, but I think we recognize that they will not be ready to defend Iraq entirely on their own.

(END VIDEO CLIP) PHILLIPS: Farther north in the volatile Sunni Triangle, dawn rose on a fierce firefight as insurgents attacked U.S. Marines in Fallujah. The marines say the rebels are trying to sabotage a cease- fire agreement reached with local Iraqi leaders.

U.S. Predator drones are now being used to hunt down insurgents. The U.S. Air Force says the remotely controlled drones are equipped with Hellfire missiles. They've been used to track and target a number of suspected insurgents.

The body of a Danish businessman who had been missing for several days in Iraq has been found. Authorities believe he was kidnapped by Iraqi militants.

Eyewitnesses say a suicide bomber blew himself apart as a powerful explosion shattered the general security building in Riyadh, Saudi Arabia. Hospital officials there say more than 10 people were killed, 130 wounded, including several children. An interior ministry official says that authorities had been tipped off to six planned explosions and managed to defuse five of the bombs.

Earlier on LIVE FROM..., CNN's Caroline Faraj described the scene.

(BEGIN VIDEOTAPE)

CAROLINE FARAJ, CNN CORRESPONDENT: Still they're saying that they're trying to enter all the areas and all the damage, and trying to find bodies, if there's any, all the injured to take them to hospital.

Still, the whole the area, Kyra, is closed and sealed by security forces. And they're trying to basically help as much as possible. We were also told that a lot of damage had also affected some of the buildings nearby, in the (UNINTELLIGIBLE) neighborhood. I was told about 50 families are now homeless because they were asked to evacuate their buildings. And these people are Arab expatriates living in the neighborhood.

The area is mainly, Kyra, for government buildings. And it is -- it was so crowded at that time because it was 2:00 which is the end of the work day, if you like, and people were preparing for the weekend. This is the (UNINTELLIGIBLE) weekend that starts at sunset (ph) tonight. The area is still sealed, as I said, the ambulances are working all the time. And still they're trying to figure out who was behind it up to now.

(END VIDEOTAPE)

PHILLIPS: And just this week, the U.S. warned of terrorist threats and ordered nonessential employees and their family members out of the kingdom.

PHILLIPS: Now live to Washington, D.C., the president of the United States taking questions from newspaper editors. Let's listen in. (LIVE EVENT)

PHILLIPS: I wish you could see the faces of those newspaper editors and see who the president was joking around with. Maybe our Suzanne Malveaux knows. She's live from the White House.

The president having a bit of fun there with fellow journalists -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: A rare moment, I suppose. But interestingly enough, too, saying that he wasn't going to dodge a couple of questions, the president getting some criticism after last week's press conference on a number of questions that he did not answer. But the president clearly making his case on a broad number of issues: the economy, to make the tax cuts permanent, homeland security, to renew the Patriot Act, and, of course, the war on terror. That being the focus here. The strategy of the White House is two-fold, essentially for the president, for the White House to acknowledge that there are some difficulties as well as progress inside of Iraq, and at the same time, that the coalition, that the allies are still willing to stand by the president.

(BEGIN VIDEO CLIP)

BUSH: They attacked today in Basra. There was a terrorist act today. They just blew up innocent Iraqis. They attacked in Riyadh, Saudi Arabia, today. And they attack all the time. They would like to attack us again.

(END VIDEO CLIP)

MALVEAUX: It is part of the White House strategy, of course, to recognize that there are some difficulties, that, yes, they realize the last couple of weeks were particularly hard on American troops as well as allied forces. Also the president acknowledging ,here saying that the coalition remains strong, this despite what we have seen as a crack in this alliance and this coalition, the pull-out of Spanish forces, Honduras, as well as the Dominican Republican forces also leaving.

The president making the point here that even some people -- or countries who did not support the Iraq war do support the effort in Afghanistan. They're sharing intelligence, that there are things behind the scenes that perhaps Americans aren't particularly taking note of. But this president very much making the case here that he believes that the Americans as well as the allies should stand by him in this war on terror.

Another thing that he addressed as well, Kyra, he's often criticized that he does not have a strategy here. He said long-term strategy is to make sure that Iraq is peaceful -- rather, short-term strategy. The long term strategy, he said, is to spread freedom around the world, that that is something he believes is worth the sacrifice -- Kyra.

PHILLIPS: Suzanne Malveaux, live from the White House, thank you.

Other news across America now begins with a tentative deal in Hamtramck, Michigan, allowing mosques to use loudspeakers to call Muslims to prayer. The city council gave preliminary approval as long as the loudspeakers are only used between 6:00 a.m. and 10:00 p.m.. That ruling goes into effect in about a month.

The home of the Crimson Tide stepping up to the plate to make things right. Officials at the University of Alabama are apologizing to the school's ties to slavery. It's the first college in the country to do so. Before the Civil War, faculty members owned slaves who helped build several of the campus' oldest buildings.

Calling it quits, in the wake of the scandal that former reporter Jack Kelley fabricated some of his stories, "USA Today" editor Karen Jurgensen has resigned. She told the paper, "I wish we'd caught him sooner."

A glimpse of the front lines, sights and sounds of the ongoing battle in Fallujah.

And could John Kerry's military career hurt his chances at becoming president? We'll take a closer look at the latest criticism of the Democratic candidate.

(COMMERCIAL BREAK)

PHILLIPS: One week from tomorrow the ongoing probe into the September 11 terrorist attacks heads straight to the White House. President Bush and Vice President Cheney are scheduled to answer questions from members of the 9/11 Commission at the White House. That pair will appear jointly and will not be under oath for what's described as informal questioning.

One criticism after the 9/11 attacks is that various agencies weren't sharing intelligence. The government set up a clearinghouse for information, so to speak, but is the new system working? CNN National Security Correspondent David Ensor was given an exclusive tour. He joins me now live from Washington.

David, tell us about it.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Kyra, this is first-time ever access to a highly secretive part of the U.S. intelligence community, the Terrorist Threat Integration Center, called TTIC. It deals in top secret classified information about terrorists. It is trying to make sure that the right people in government, federal, state and local, all know what each other know, that they have the best information on terrorist threats.

Now this new center is currently based at the CIA. And it is a response to the intelligence failures, the communications problems that have been revealed as having contributed to the 9/11 attack: things like the FBI Phoenix memo or the fact that the CIA failed to put two of the future hijackers on a watch list to be kept out of the United States. CNN cameras were the first ever to be allowed in the TTIC offices at the CIA. And Director John Brennan talked about the future, when the center will look like this. It will be moved to a new state-of- the-art highly secure building a few miles from the CIA in the Tyson's Corner area of Northern Virginia.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, TTIC DIRECTOR: We're talking about an environment where we're going to be sharing a lot of information, and some of the most sensitive secrets and sensitive collection systems of the U.S. government.

ENSOR: Do you think that another September 11 attack could happen?

BRENNAN: I think that we have positioned this country the best way possible to prevent another occurrence. I am not of the mind that another attack is inevitable.

(END VIDEO CLIP)

ENSOR: Not inevitable, but Brennan and his team do lose some sleep because their job is to make sure it does not happen again. We'll have a lot more later on how they go about that -- Kyra.

PHILLIPS: We look forward to it, David Ensor, thanks. You can catch David's full report tonight at 8 p.m. Eastern, 5 Pacific on CNN's "PAULA ZAHN NOW."

We'll take a quick break, we'll be back with more right after this.

(COMMERCIAL BREAK)

PHILLIPS: The IRS has found itself smack in the middle of a controversy. It appears the agency crossed the line in a statement to taxpayers. CNN's Sean Callebs explains.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It starts simply enough, an April 9 release from the Treasury Office of Public Affairs. A tax day reminder. But here's what's different, an italicized paragraph at the end that reads: "America has a choice, it can continue to grow the economy and create new jobs, as the president's policies are doing, or it can raise taxes on American families and small businesses, hurting economic recovery and future job creation." Some political observers say the language is jaw-dropping.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: It is not playing around in the gray area. It is not pushing the envelope. This is having a government agency, the IRS at tax time, say to the American people, you have a choice. You can either support the president or end up paying higher taxes by supporting Senator Kerry. CALLEBS: The same warning is also found on the Republican National Committee Web page and a White House fact sheet. Representative Charles Rangel is requesting the Treasury Department's inspector general to investigate.

REP. CHARLES RANGEL (D), NEW YORK: It is not proper for the secretary of the treasury to be promoting political policies and to be using taxpayers' money to get it out. If he wants to go to fund- raisers and do it, if he wants to go to rallies and do it, so do it.

CALLEBS: A spokesman for the Treasury Department says it is an appropriate statement and in no way, shape or form is it unusual or political language. He says: "We are stating fiscal policy. This is standard, it predates this administration, to the previous eight years."

CNN spoke with a former Treasury official who served under President Clinton, who denies such messages were ever attached to news releases.

(END VIDEOTAPE)

CALLEBS: This isn't lost on the presumptive Democratic presidential nominee. A spokesman for John Kerry says the Bush administration is abusing the public trust and at the same time campaigning on the taxpayers' dime. We spoke with representatives with the Bush/Cheney campaign, they had no comment, saying Kerry is responding to a release put out by the Treasury Department -- Kyra.

PHILLIPS: All right, Sean, let's talk about who can see this? The IRS has such a Big Brother feel. So subtle messages like this could have quite a big impact, right?

CALLEBS: Now, let's remember this is a news release. But it also came out just six days before April 15. And that's important because it is not only the press that looks at that information, also money managers, Wall Street types, CPAs. They all keep a very close eye on what the Treasury Department does. They study the subtleties and nuances of their statements, trying to find out any information that could affect the way they do business. So it's certainly clear that a lot of very influential and a lot of very wealthy people could have been watching those releases very closely.

PHILLIPS: Sean, what about other Treasury Department officials within other administrations?

CALLEBS: We went back and tried to ask anybody if they'd ever seen any kind of release that had this kind of, what some are calling, an overtly political statement attached to it. We could find no examples. And when we spoke with a couple of members who served in the Clinton administration, they said it simply didn't happen. And when we tried to press Treasury officials now working to say, just point us toward one, we were unable to find any.

PHILLIPS: Sean Callebs out of Washington, an enterprising report there, thanks so much, Sean. (MARKET REPORT)

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 April 21, 2004 - 13:57   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: A bloody day in Iraq, from Basra to Fallujah. Suicide bombers killed dozens of people while fighting intensifies.
The president gets a date for his sit-down with the 9/11 Commission.

John Kerry's military records released, will anything in his past come back to haunt him?

Tornado season opens with a vengeance in the Midwest. We'll take you there live.

From the CNN Center in Atlanta, I'm Kyra Phillips. This hour of CNN's LIVE FROM... starts right now.

We begin this hour with the deadly force of nature. In much of the U.S., it's an unwelcome rite of spring, tornadoes with devastating consequences. Case in point, Utica, Illinois. At least four people dead in the aftermath of yesterday's twister that flattened a century- old building that housed a tavern and upstairs. Five people were rescued, many others may still be trapped in the rubble. Four Illinois counties are being dubbed state disaster areas. And parts of northern Indiana were hit as well, though with much little damage. For now, folks in Utica are getting by with a little help from their friends.

(BEGIN VIDEO CLIP)

MAYOR FRED EDMOND, UTICA, ILLINOIS: It's a very serious disaster. We've had people from all over here to help, volunteers, Chicago, Skokie, Aurora. We're not going to get in -- we're going to thank them all later.

(END VIDEO CLIP)

PHILLIPS: Those twisters showed up loud and clear on the Doppler radar. And forecasters have their eyes glued for the rest of the week, that includes CNN meteorologist Jacqui Jeras.

Jacqui, what's the latest?

JACQUI JERAS, CNN METEOROLOGIST: Well, Kyra, more severe storms are going to be pretty likely later on this afternoon and this evening. And we could see another significant outbreak, compared to what we had yesterday. In all, more than 100 severe weather reports yesterday, more than half of them were tornadoes, 31 touched down in the state of Illinois.

These were all what we call supercell-type thunderstorms. They're isolated storms. It's not a huge convective line that moves on through. It's single cell storms. And this is the one that touched down in Utica. And you see a little bit of a hook right here. And that is where the tornado was as it pushed on through. And that happened around 6:00 last night.

And there's another isolated supercell thunderstorm. We may see more of the same later on today. Right now just garden variety showers and thunderstorms. Little Rock even getting a lot of rain throughout the day, and also a lot of lightning. But so far nothing severe.

Conditions are going to be destabilizing this afternoon. We have warmth and moisture flowing in from the south, dry air is pushing in from the west, and cooler air coming in from the north. Put all of these things together and that spells the recipe for severe weather, including the threat of tornadoes.

We're especially going to be concerned with what's going to happen later today in Oklahoma City, across eastern Oklahoma and western parts of Arkansas. That's the highest threat area that we're going to be seeing, the threat of tornadoes. And then we have a slight risk extending all the way through the Tennessee Valley into the Ohio Valley and even into parts of the Great Lakes. Even Detroit may see some severe thunderstorms later on today.

We need to have upper level support. The jetstream needs to be moving in on -- across on top of you in order to support these storms. It is moving in right across this region. And no big budges in the jetstream for the next three days, Kyra. And that means more severe weather the next three days. Back to you.

PHILLIPS: All right, Jacqui, you're going to be a busy woman. We'll check in with you. Thanks.

Bombs and bullets across Iraq, checking the latest developments: 68 people are killed in a series of five suicide car bombings in southern Iraq. Eighteen school children are among the dead. They were in minivans being driven to school during morning rush hour when the bombs exploded. Security threats are expected to pose many challenges as the June 30 handover approaches.

(BEGIN VIDEO CLIP)

PAUL BREMER, U.S. CIVILIAN ADMINISTRATOR: These threats will not go away on June 30 when Iraq gets a sovereign government. They will still be here. And the Iraqi security forces will, in the next few months, play an increasingly important role in defending Iraq, but I think we recognize that they will not be ready to defend Iraq entirely on their own.

(END VIDEO CLIP) PHILLIPS: Farther north in the volatile Sunni Triangle, dawn rose on a fierce firefight as insurgents attacked U.S. Marines in Fallujah. The marines say the rebels are trying to sabotage a cease- fire agreement reached with local Iraqi leaders.

U.S. Predator drones are now being used to hunt down insurgents. The U.S. Air Force says the remotely controlled drones are equipped with Hellfire missiles. They've been used to track and target a number of suspected insurgents.

The body of a Danish businessman who had been missing for several days in Iraq has been found. Authorities believe he was kidnapped by Iraqi militants.

Eyewitnesses say a suicide bomber blew himself apart as a powerful explosion shattered the general security building in Riyadh, Saudi Arabia. Hospital officials there say more than 10 people were killed, 130 wounded, including several children. An interior ministry official says that authorities had been tipped off to six planned explosions and managed to defuse five of the bombs.

Earlier on LIVE FROM..., CNN's Caroline Faraj described the scene.

(BEGIN VIDEOTAPE)

CAROLINE FARAJ, CNN CORRESPONDENT: Still they're saying that they're trying to enter all the areas and all the damage, and trying to find bodies, if there's any, all the injured to take them to hospital.

Still, the whole the area, Kyra, is closed and sealed by security forces. And they're trying to basically help as much as possible. We were also told that a lot of damage had also affected some of the buildings nearby, in the (UNINTELLIGIBLE) neighborhood. I was told about 50 families are now homeless because they were asked to evacuate their buildings. And these people are Arab expatriates living in the neighborhood.

The area is mainly, Kyra, for government buildings. And it is -- it was so crowded at that time because it was 2:00 which is the end of the work day, if you like, and people were preparing for the weekend. This is the (UNINTELLIGIBLE) weekend that starts at sunset (ph) tonight. The area is still sealed, as I said, the ambulances are working all the time. And still they're trying to figure out who was behind it up to now.

(END VIDEOTAPE)

PHILLIPS: And just this week, the U.S. warned of terrorist threats and ordered nonessential employees and their family members out of the kingdom.

PHILLIPS: Now live to Washington, D.C., the president of the United States taking questions from newspaper editors. Let's listen in. (LIVE EVENT)

PHILLIPS: I wish you could see the faces of those newspaper editors and see who the president was joking around with. Maybe our Suzanne Malveaux knows. She's live from the White House.

The president having a bit of fun there with fellow journalists -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: A rare moment, I suppose. But interestingly enough, too, saying that he wasn't going to dodge a couple of questions, the president getting some criticism after last week's press conference on a number of questions that he did not answer. But the president clearly making his case on a broad number of issues: the economy, to make the tax cuts permanent, homeland security, to renew the Patriot Act, and, of course, the war on terror. That being the focus here. The strategy of the White House is two-fold, essentially for the president, for the White House to acknowledge that there are some difficulties as well as progress inside of Iraq, and at the same time, that the coalition, that the allies are still willing to stand by the president.

(BEGIN VIDEO CLIP)

BUSH: They attacked today in Basra. There was a terrorist act today. They just blew up innocent Iraqis. They attacked in Riyadh, Saudi Arabia, today. And they attack all the time. They would like to attack us again.

(END VIDEO CLIP)

MALVEAUX: It is part of the White House strategy, of course, to recognize that there are some difficulties, that, yes, they realize the last couple of weeks were particularly hard on American troops as well as allied forces. Also the president acknowledging ,here saying that the coalition remains strong, this despite what we have seen as a crack in this alliance and this coalition, the pull-out of Spanish forces, Honduras, as well as the Dominican Republican forces also leaving.

The president making the point here that even some people -- or countries who did not support the Iraq war do support the effort in Afghanistan. They're sharing intelligence, that there are things behind the scenes that perhaps Americans aren't particularly taking note of. But this president very much making the case here that he believes that the Americans as well as the allies should stand by him in this war on terror.

Another thing that he addressed as well, Kyra, he's often criticized that he does not have a strategy here. He said long-term strategy is to make sure that Iraq is peaceful -- rather, short-term strategy. The long term strategy, he said, is to spread freedom around the world, that that is something he believes is worth the sacrifice -- Kyra.

PHILLIPS: Suzanne Malveaux, live from the White House, thank you.

Other news across America now begins with a tentative deal in Hamtramck, Michigan, allowing mosques to use loudspeakers to call Muslims to prayer. The city council gave preliminary approval as long as the loudspeakers are only used between 6:00 a.m. and 10:00 p.m.. That ruling goes into effect in about a month.

The home of the Crimson Tide stepping up to the plate to make things right. Officials at the University of Alabama are apologizing to the school's ties to slavery. It's the first college in the country to do so. Before the Civil War, faculty members owned slaves who helped build several of the campus' oldest buildings.

Calling it quits, in the wake of the scandal that former reporter Jack Kelley fabricated some of his stories, "USA Today" editor Karen Jurgensen has resigned. She told the paper, "I wish we'd caught him sooner."

A glimpse of the front lines, sights and sounds of the ongoing battle in Fallujah.

And could John Kerry's military career hurt his chances at becoming president? We'll take a closer look at the latest criticism of the Democratic candidate.

(COMMERCIAL BREAK)

PHILLIPS: One week from tomorrow the ongoing probe into the September 11 terrorist attacks heads straight to the White House. President Bush and Vice President Cheney are scheduled to answer questions from members of the 9/11 Commission at the White House. That pair will appear jointly and will not be under oath for what's described as informal questioning.

One criticism after the 9/11 attacks is that various agencies weren't sharing intelligence. The government set up a clearinghouse for information, so to speak, but is the new system working? CNN National Security Correspondent David Ensor was given an exclusive tour. He joins me now live from Washington.

David, tell us about it.

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, Kyra, this is first-time ever access to a highly secretive part of the U.S. intelligence community, the Terrorist Threat Integration Center, called TTIC. It deals in top secret classified information about terrorists. It is trying to make sure that the right people in government, federal, state and local, all know what each other know, that they have the best information on terrorist threats.

Now this new center is currently based at the CIA. And it is a response to the intelligence failures, the communications problems that have been revealed as having contributed to the 9/11 attack: things like the FBI Phoenix memo or the fact that the CIA failed to put two of the future hijackers on a watch list to be kept out of the United States. CNN cameras were the first ever to be allowed in the TTIC offices at the CIA. And Director John Brennan talked about the future, when the center will look like this. It will be moved to a new state-of- the-art highly secure building a few miles from the CIA in the Tyson's Corner area of Northern Virginia.

(BEGIN VIDEO CLIP)

JOHN BRENNAN, TTIC DIRECTOR: We're talking about an environment where we're going to be sharing a lot of information, and some of the most sensitive secrets and sensitive collection systems of the U.S. government.

ENSOR: Do you think that another September 11 attack could happen?

BRENNAN: I think that we have positioned this country the best way possible to prevent another occurrence. I am not of the mind that another attack is inevitable.

(END VIDEO CLIP)

ENSOR: Not inevitable, but Brennan and his team do lose some sleep because their job is to make sure it does not happen again. We'll have a lot more later on how they go about that -- Kyra.

PHILLIPS: We look forward to it, David Ensor, thanks. You can catch David's full report tonight at 8 p.m. Eastern, 5 Pacific on CNN's "PAULA ZAHN NOW."

We'll take a quick break, we'll be back with more right after this.

(COMMERCIAL BREAK)

PHILLIPS: The IRS has found itself smack in the middle of a controversy. It appears the agency crossed the line in a statement to taxpayers. CNN's Sean Callebs explains.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): It starts simply enough, an April 9 release from the Treasury Office of Public Affairs. A tax day reminder. But here's what's different, an italicized paragraph at the end that reads: "America has a choice, it can continue to grow the economy and create new jobs, as the president's policies are doing, or it can raise taxes on American families and small businesses, hurting economic recovery and future job creation." Some political observers say the language is jaw-dropping.

LARRY NOBLE, CENTER FOR RESPONSIVE POLITICS: It is not playing around in the gray area. It is not pushing the envelope. This is having a government agency, the IRS at tax time, say to the American people, you have a choice. You can either support the president or end up paying higher taxes by supporting Senator Kerry. CALLEBS: The same warning is also found on the Republican National Committee Web page and a White House fact sheet. Representative Charles Rangel is requesting the Treasury Department's inspector general to investigate.

REP. CHARLES RANGEL (D), NEW YORK: It is not proper for the secretary of the treasury to be promoting political policies and to be using taxpayers' money to get it out. If he wants to go to fund- raisers and do it, if he wants to go to rallies and do it, so do it.

CALLEBS: A spokesman for the Treasury Department says it is an appropriate statement and in no way, shape or form is it unusual or political language. He says: "We are stating fiscal policy. This is standard, it predates this administration, to the previous eight years."

CNN spoke with a former Treasury official who served under President Clinton, who denies such messages were ever attached to news releases.

(END VIDEOTAPE)

CALLEBS: This isn't lost on the presumptive Democratic presidential nominee. A spokesman for John Kerry says the Bush administration is abusing the public trust and at the same time campaigning on the taxpayers' dime. We spoke with representatives with the Bush/Cheney campaign, they had no comment, saying Kerry is responding to a release put out by the Treasury Department -- Kyra.

PHILLIPS: All right, Sean, let's talk about who can see this? The IRS has such a Big Brother feel. So subtle messages like this could have quite a big impact, right?

CALLEBS: Now, let's remember this is a news release. But it also came out just six days before April 15. And that's important because it is not only the press that looks at that information, also money managers, Wall Street types, CPAs. They all keep a very close eye on what the Treasury Department does. They study the subtleties and nuances of their statements, trying to find out any information that could affect the way they do business. So it's certainly clear that a lot of very influential and a lot of very wealthy people could have been watching those releases very closely.

PHILLIPS: Sean, what about other Treasury Department officials within other administrations?

CALLEBS: We went back and tried to ask anybody if they'd ever seen any kind of release that had this kind of, what some are calling, an overtly political statement attached to it. We could find no examples. And when we spoke with a couple of members who served in the Clinton administration, they said it simply didn't happen. And when we tried to press Treasury officials now working to say, just point us toward one, we were unable to find any.

PHILLIPS: Sean Callebs out of Washington, an enterprising report there, thanks so much, Sean. (MARKET REPORT)

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