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Where do You Draw the Line Between Caution and Crying Wolf?
Aired July 08, 2004 - 13:00 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.
KYRA PHILLIPS, CNN ANCHOR: Hovering between fear and frustration. Today's terror threat update may have confused you a bit.
(BEGIN VIDEO CLIP)
TOM RIDGE, SECRETARY OF HOMELAND SECURITY: In the coming months, the nation will host high-profile events, including those associated with our democratic traditions. We are working very closely with our colleagues, state and local officials in New York and Boston, to ensure the security at the Democratic and Republican national conventions.
I designated these events national special security events, making the United States Secret Service the lead agency for identifying and implementing protective efforts in these locations.
(END VIDEO CLIP)
PHILLIPS: Well, the possibility of a pre-election attack is nothing we haven't heard of before, so where do you draw the line between caution and crying wolf? We posed that question to CNN's Mike Brooks now.
Let's talk about general intelligence versus a specific threat. There was no specific threat here, was there?
MIKE BROOKS, CNN LAW ENFORCEMENT ANALYST: Oh, this is stuff we've heard before. About six weeks ago, we saw FBI Director Mueller and the secretary -- Justice Department come out and say, OK, there's possibly a planning stage, here's seven pictures.
It seems like when they have ...
PHILLIPS: Are you talking about when John Ashcroft showed the pictures of the American and the al Qaeda activist?
BROOKS: It seems that when there's specific information to give out about something, we see Mueller and Ashcroft. When there is general -- just, I call it today a vigilance alert and a public service announcement for the Department of Homeland Security, we see Tom Ridge.
Now, there is nothing new that we heard today. I think this is more just a vigilance alert and a public service announcement, with the upcoming convention saying everybody has to be vigilant, here's what we have, but there was nothing new.
PHILLIPS: But, Mike, why do that? Because, obviously, all the networks start talking about it. It's a lead story, and it frightens Americans, I think a number of Americans. I mean, we've been on alert since 9/11, so why do this?
BROOKS: Oh, I think it's just another poke with a stick. People say, well, no, we're not becoming complacent. Well, I hear from agents that I used to work with, and cops on the street, that even they sometimes become complacent. Nothing's going on and they have to sometimes have a little bit of impetus to watch out for certain things.
I think this is more of a vigilance alert than anything else. But we have to be careful, and the FBI -- I was talking to someone, an FBI source today at headquarters, that even in the halls of FBI headquarters, they are concerned with people becoming kind of laid back and not really taking anything seriously, and they're concerned about that. And that's why we're not seeing the terrorism level change. He said there's credible information, but the level's not changing.
Now, if there was an imminent attack, then they probably would put it up to orange, but they're not changing it at all.
PHILLIPS: All right, Mike Brooks, we'll follow the story throughout the day. Thanks.
Miles.
MILES O'BRIEN, CNN ANCHOR: Let's check in at the White House, where the terror threat is clearly the intended message of the day. But in this election year, Democrats are raising questions about the timing and the motivation of the Ridge announcement. John King joins us from the White House North Lawn with more on that.
John?
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Miles, perhaps inevitable, we are less than four months away from the presidential election. It is hotly contested, a very partisan atmosphere, so everything this president does is viewed through a political prism. And even before Secretary Ridge made his public announcement today, as word of that announcement became known and became reported on, our network and others, some Democrats started to say whoa. They're accusing the Bush administration of trying to distract attention to scare the American people on a big week for the Democrats.
John Kerry, of course, picked Senator John Edwards as his running mate. They traditionally get a great deal of attention in the days after that. The White House says, nonsense. It says it would not play politics with an issue like this, and Secretary Ridge tried to defuse any such criticism at his news conference.
He did not have any specific information about the timing of an attack, the location of an attack, the type of an attack, but Secretary Ridge said the American people should believe him when he says this information is quite serious.
(BEGIN VIDEO CLIP)
RIDGE: We are basically laying out before the general public the kind of information that we've received, and it's not us -- these are not conjectures or mythical statements we are making. These are pieces of information that we could trace comfortably to sources that we deem to be credible.
(END VIDEO CLIP)
KING: Now, also, Secretary Ridge saying while there is no specificity about the timing of an attack, or even the target of an attack, that there is a continuing stream of intelligence that Boston could be targeted, that New York could be targeted. They are the sites, of course, of the upcoming political conventions. Boston first at the end of this month. August -- at the end of August will be the Republican convention in New York City.
And what the White House is saying as part of an effort to defuse any political criticism, it says look to some of the comments from the Democrats on Capitol Hill who have been briefed today. Some of them coming out and saying what they are hearing is in fact troubling new information.
The White House also says it has offer a briefing to both senior officials at the Bush/Cheney campaign and at the Kerry/Edwards campaign to update them on the threat information, and to update them on the security precautions being taken, not only for the conventions, but for the entire campaign season, Miles.
O'BRIEN: But, at the core, this announcement, the statement that Boston and New York might become targets, that's not necessarily news, is it, John?
KING: It's not news. The administration has been saying this, going back several months, now. Especially once you saw the bombing in Madrid, so closely to the Spanish elections. The administration has said it believed al Qaeda might try to do that here, disrupt the political process.
The administration also says, and Secretary Ridge talked about this, that after some recent events -- recent arrests, excuse me, in England, in Italy, in Jordan, that in the interrogation of those terrorist suspects, it has come to believe that there are in fact al Qaeda operatives in this country that have the capability to launch attacks. And the administration believes, based on these interrogations and other intelligence, they would like to do that sometime around the election season.
That leads them to come to the hunch, anyway, if not the conclusion, that the conventions could be -- emphasis on could be -- if you want to say it this way, appealing targets, Miles.
O'BRIEN: John King at the White House. Thanks.
Kyra?
PHILLIPS: A closed-door briefing, a lot of open-ended questions. Congressional leaders are discussing national security at this hour.
CNN congressional correspondent Ed Henry joins us live from Capitol Hill.
Ed, tell us about this high-level briefing.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Kyra.
Lawmakers here are trying to sort through these conflicting statements we've been hearing about conflicting guidance about how to judge all of this intelligence. There was a closed-door briefing this morning, 9:00 a.m. Eastern time. CIA and FBI came in, and I can tell you, we've been talking to a lot of lawmakers this morning who say that they were hearing new information, they were hearing new details. They were getting suggestions that this was more than just the same old, same old.
In fact, Senator Charles Schumer from New York came out and said, as John referenced, there was troubling and worrisome information. I spoke just moments ago to another senator who did not want to use his name. He came out of that saying that the way this was described by the CIA and the FBI is that this is the most worrisome situation since 9/11, what we're facing over the next couple of months, leading up to the election.
Now, Senate Majority Leader Bill Frist came out of this briefing, however, and tried to calm everyone down, and sounded a lot like what Secretary Ridge was saying. Here's what Frist said.
(BEGIN VIDEO CLIP)
SEN. BILL FRIST (R-TN), MAJORITY LEADER: Well, there's obviously no reason for panic or no reason for paralysis. But the fact that general intelligence says that the country is at some increased risk between now and the time of the presidential election. It is important for people to be aware of that.
(END VIDEO CLIP)
HENRY: Now, Kyra, John King mentioned the politics being raised, obviously not a surprise to anyone about the timing of this.
There's another political line of attack coming from Democrats. Democratic senators are now going on the Senate floor. They're going to have a press conference at 2:00 as well, off the floor, saying that if this situation is so serious, the Senate should stop debating the class action reform bill currently on the floor, move on to the Homeland Security appropriations bill, move on to rail security, port security, on and on and on.
You can see them making political points, and next year there's going to be a debate over a constitutional amendment banning same-sex marriage. Democrats are saying that has no chance of package, and Republicans should move on now to homeland security issues.
So you're seeing politics popping up very quickly, Kyra.
PHILLIPS: All right, you talk about politics popping up. Let's talk about national security once again for just a moment.
Ed, I just talked with Mike Brooks, former terrorism -- in the counterterrorism department with the FBI, obviously now works with us, talking about these threats that are out there. Tom Ridge, coming forward, holding this news conference.
What are -- behind closed doors, what you're hearing there on the Hill, what are congressmen and women saying about these continuous news conference without a lot of substance?
HENRY: Well, there is confusion. Basically, what you're hearing from lawmakers is that they're hearing one thing in public and another thing in private. I have not, and I stress not, heard anyone accuse the administration of telling two different stories. But they are saying there are different ways that the information is being interpreted behind closed doors and publicly. The politics has not quite gone that far for Democrats to go on the attack about what Secretary Ridge was saying.
But Democrats, in particular, are pointing out that when they go behind closed doors, particularly this morning, they heard a much different story. They heard some details suggesting that they should be worried, and that they should be very concerned about this summer and fall. But, again, Secretary Ridge was striking a much different note in that press conference, a much difference tone, Kyra.
PHILLIPS: Ed Henry, live from Capitol Hill. Thanks.
Miles?
O'BRIEN: Some news just coming in to us here at CNN on the Martha Stewart case. As you know, there had been some question as to whether her trial would be thrown out, the charges against her thrown out, after it was alleged that a federal government member of the Secret Service who testified against her committed perjury.
But there's news to report on that. Apparently, that trial will hold, and perhaps clearing the way for sentencing. Joining us now with a live report from the courthouse is CNN's Allan Chernoff to give us the basics.
Hello, Allan.
ALLAN CHERNOFF, CNNfn CORRESPONDENT: Hello, Miles, and we have just received the opinion from Judge Miriam Cedarbaum, putting it out just moments ago, and she is denying the request by Martha Stewart for a new trial, saying that the alleged perjury of Larry Stewart, the Secret Service ink expert, basically has no bearing upon the final verdict of the case.
Let me quickly quote from her opinion, saying that "Defendants have failed to show that the prosecution was aware of Lawrence Stewart's perjury, and have failed to show a reasonable probability that had the evidence of his perjury come to light, the outcome of their trial would have been different."
Now, keep in mind, Martha Stewart and her co-defendant, Peter Bacanovic, have made two motions for new trials, first based upon alleged perjury of one of the members of the jury, who apparently, or allegedly, had lied in order to get onto the jury. And then, remember, the government itself had brought charges against one of its witnesses, the ink expert, Larry Stewart.
Martha Stewart and Bacanovic used that as an effort to get a new trial. It is failing, now, the judge saying that she is denying that request for a new trial, and Martha Stewart is scheduled to be sentenced on the 16th of the month. The expectation in the legal community is that she will be sentenced to between 10 months and 18 months for her conviction in this case, which involved allegations that she had lied to cover up the true reason for her sale of ImClone stock.
Miles?
O'BRIEN: All right, so, Allan, as far as that date goes, is there anything in this that would lead you to believe that date might slide backward, or is it very likely that she will be sentenced on the 16th?
CHERNOFF: Miles, we've already had that date slide twice. It now seems there is no reason at all for it to be pushed back once again. So, for now, it seems that date is going to stick, but, of course, we won't know until the exact date does arrive.
O'BRIEN: And I suppose it's a foregone conclusion that there will be an appeal. At what time is it appropriate? After the sentencing, or would they try to put an appeal in right away?
CHERNOFF: Right after the sentencing, that's when they have the opportunity to actually appeal to a higher court, and they have already said that they intend to do so.
O'BRIEN: CNN's Allan Chernoff. Thanks very much, keep us posted.
Kyra?
Kidnapped Marine Corporal Wassef Hassoun has turned up in Lebanon, and in the hands of Americans. CNN Pentagon correspondent Barbara Starr joins us live with the latest twist in this tale.
Barbara?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Kyra, Corporal Wassef Ali Hassoun arriving at the U.S. embassy in Beirut just about two hours ago, according to administration officials here in Washington. Still, a big investigation underway as to what exactly happened to this Marine who was last seen on the evening of June 19 at his unit in Iraq.
He did not report for duty the next morning. And, of course, as the world knows (INAUDIBLE) missing, then a videotape turned up where he appeared to be in the hands of insurgents. Captured became his new status. He was shown with a sword to his head. And then, in the last few days, apparent telephone contact with his family in Lebanon and his family here in the United States.
Now, State Department officials saying earlier today that, quote, "He made contact with us and arranged a place to meet, and we went to pick him up and brought him back to the embassy." That, in Beirut, Lebanon.
Corporal Hassoun, now it is not clear exactly what his status will be, what will happen next. He is an active-duty U.S. Marine subject to the uniform code of military justice, if he was indeed absent without leave from his unit. He is expected to undergo a medical evaluation. Where that will take place is also not certain.
Typically in these cases, personnel are flown to Landstuhl, Germany. They have the facilities to do that type of work. But still, we are awaiting word from the Pentagon on what the next step will be for Corporal Hassoun.
Kyra?
PHILLIPS: Barbara, just real quickly, will he be interrogated by a number of agencies to try to find out what did happen? Was it AWOL, was it capture, what's the story behind what happened?
STARR: Well, at this point, the Naval Criminal Investigative Service, which overseas these types of matters for both the Navy and the Marine Corps is in charge of the investigation. Until the point he turned up, it was said to be a missing persons investigation by NCIS. However, NCIS was also investigating a full range of possibilities to find out what had happened to him. They said, however, they simply couldn't come to any conclusions until they talked to him.
So, every expectation now is that NCIS, the Naval Criminal Investigative Service, will continue the investigation and will talk to him at length about what happened to him since the evening of June 19, when he was last seen with his unit in Iraq.
Kyra?
PHILLIPS: Barbara Starr, live from the Pentagon. Miles?
O'BRIEN: Two-and-a-half years after the collapse of Enron, the founder of the energy giant is pleading not guilty to a whole raft of charges. Joining us live now from Houston with details on this, CNN's Jen Rogers.
Jen?
JEN ROGERS, CNNfn CORRESPONDENT: That's right, Miles. I just left the courtroom. It was absolutely packed. Ken Lay, the former chairman and CEO of Enron, pleading not guilty. He said, "Not guilty, your honor," in a very loud voice.
He is now facing, they say, 175 years -- it's a maximum sentence -- for these counts. He has and will be released on a $500,000 unsecured bond later today after he goes through all the paperwork.
Right now, right behind me, the Enron Task Force is beginning to talk about this superseding indictment. Let's listen in.
ANDREW WEISSMAN, DIRECTOR OF ENRON TASK FORCE: ... participated in a wide-ranging conspiracy to paint for the public a picture of Enron that diverged from the actual financial condition of the company. When Skilling abruptly resigned from Enron in August, 2001, Ken Lay took over the helm of the criminal scheme.
As also alleged in the indictment, rather than come clean and tell the unvarnished truth about Enron, Lay chose to conceal and distort and mislead at the expense of Enron's shareholders and employees, people to whom he owed a duty of complete candor.
As alleged, Ken Lay made a decision, a decision that has resulted in his being here today. Ken Lay could have been truthful about what he knew about Enron, but he chose not to be. Mr. Lay did not want and did not allow the public to learn what he already knew, that Enron, absent the manipulative schemes, was in dire straights.
Criminal cases in America are not brought solely to send messages. They are brought to bring individuals to account for their criminal acts. There are, however, two undeniable messages from today's charges. First, to corporate America, your constituents are owed your complete candor, the unvarnished truth. Second, if you violate that trust, you will be called to account, no matter how powerful, no matter how wealthy. No one is above the law.
Are there any questions?
UNIDENTIFIED FEMALE: How much of the indictment is based on what Mr. Fastow has offered?
WEISSMAN: We cannot get into the evidentiary support and what will be proved at trial. Sorry.
UNIDENTIFIED FEMALE: Was it integral in this indictment?
WEISSMAN: I can't get into that area, I'm sorry.
UNIDENTIFIED MALE: The overt acts described under the conspiracy count only pick up with Ken Lay as of September 26. Was he not knowledgeable -- is the government's position that he was not knowledgeable of the events preceding his return to the company?
WEISSMAN: As you look at the indictment, what's alleged is that his sort of masterminding and taking over the helm of the conspiracy began with the departure of Skilling. But there is no allegation that he only then learned what was going on at Enron. UNIDENTIFIED MALE: Is it the government's position that Ken Lay knew about the illegal conspiracies that you're describing in the indictment between Skilling and Causey in the periods prior to August 15.
WEISSMAN: I can't get into the -- again, the evidentiary detail. What I can point you to is what's alleged in the indictment. I would focus you, for instance, on the allegations regarding a business unit at Enron called EES, where there are allegations regarding what Mr. Lay knew and when he knew it, before Mr. Skilling's departure.
Any other ...
ROGERS: That is Andrew Weissman, the director of the Enron Task force, going over some of the details that he can talk about, obviously declining to answer some questions, as well.
Now, we are expecting to hear from Ken Lay and his lawyer, Michael Ramsey, later today. They are going to have a press conference nearby at a downtown Houston hotel. So far the only statements that we've had from Ken Lay -- of course, he did say, "Not guilty, your honor," today, but last night he did release a statement through a spokeswoman when he said I have done nothing wrong, and the indictment is not justified. Probably more of those comments likely to come at his press conference later this afternoon.
O'BRIEN: But to boil it all down, Jen, just to in a synopsis form -- his defense essentially is that he was mislead as much as any stockholder of Enron, correct?
ROGERS: So far, what we can glean from his defense is just that, that he was in charge. He says, look, I was in charge of the company. That being said, I didn't come up with these accounting schemes that ended up bringing down the company. I didn't know about them. And that is so far what we've been able to get from what they've been saying, the hints of what his defense will be.
O'BRIEN: Jen Rogers, thank you very much. Let's check in with you a little bit later.
A warning about al Qaeda with a will and a way to attack the United States. How seriously should we take this latest one, though? We'll talk about it with an author who has been very critical of America's security prior to 9/11. We'll also ask him about the CIA after George Tenet. What is the future of America's top spy agency?
(COMMERCIAL BREAK)
O'BRIEN: On the day Tom Ridge issued yet another warning to Americans about the threat of terror in the homeland, the nation's top spy vacated his office under a cloud of controversy. The question is, nearly three years after the 9/11 attacks, does the U.S. have an intelligence capability that is worth the billions we all spend on it?
The failure of intelligence prior to 9/11 has been the focus of a lot of writings of late, among them, James Bamford, with the book, "A Pretext for War: 9/11, Iraq and the Abuse of America's Intelligence Agencies."
Mr. Bamford is our guest right now.
Good to have you with us, sir.
JAMES BAMFORD, AUTHOR: Well, thanks very much.
O'BRIEN: Let's talk about what we saw just unfold about an hour ago. Secretary of Homeland Security Tom Ridge issuing yet another warning. It was hard for us here in the newsroom to figure out what was different and new about it. What does that say, perhaps, about our ability to know what al Qaeda is up to in our shores?
BAMFORD: Well, it seems like they regularly come up with these sort of blanket warnings that don't seem to address when, where, how or what's going to take place. And I think all it does is get the American public on edge and never really accomplishes very much.
If they had a direct piece of evidence, a direct piece of intelligence, it'd be one thing. But it's another thing just to come out and make these blanket warnings.
O'BRIEN: Well, so is there any value, then, to issue blanket warnings, absent something more substantive? Or, perhaps, is there something more substantive that can't be shared, for various national security reasons?
BAMFORD: No, I think the history of this is that they've gotten the American public on edge so much its almost become a regular event. So the public pays very little attention to it, and that's the problem.
When they do come out with a real warning, I think the public's going to be paying far less attention than they should, because they're so immune because of all these blanket warnings.
O'BRIEN: Crying wolf, I guess you could call it.
Let's talk for a moment about Madrid. That attack kind of looms large over all of these discussions. Those associated with al Qaeda were able to really tip an election, to turn an election their way by engaging in that terror attack a few days before the Spanish elections.
First of all, do you think that that threat is real and credible here in the United States?
BAMFORD: Well, I think that's certainly a factor in their planning. The problem is, you never know which way it's going to go. If they're doing it in order to hurt George Bush, it may end up helping George Bush. So I'm sure that's a factor in their thinking, but which way they're hoping it will go is hard to say.
O'BRIEN: Well, and I guess we are making an assumption here that al Qaeda would like George Bush out of office. Perhaps it's just the opposite. BAMFORD: Well, I think they're more interested in changing American foreign policy, and there isn't a huge amount of difference, I don't think, between the planned foreign policy of the Kerry group or George Bush in terms of their policies in the Middle East.
Kerry seems to be following the Bush lead in terms of wanting to continue the war over there until it draws to an end. So I don't think, either way, it's going to help them much in terms of creating a terrorist incident.
O'BRIEN: I guess it's human nature. Certainly, here in the U.S., we tend to sort of fight the last war, and it seems to me that we make a mistake by focusing on the last attack, when, in fact, al Qaeda has an uncanny way of looking where we least suspect it.
BAMFORD: Well, that's true, and Madrid is a perfect example. You spend billions of dollars to improve security at the airlines, and they blow up a train. I mean, they could easily in the United States go to a bridge in the Midwest or something and blow it up as a train's going over. There are a lot of little synapses that they could take advantage of in our security.
So we could spend trillions of dollars on security, and in the end, they have the luxury of time and location. And that's the problem that faces the United States.
O'BRIEN: George Tenet, head of the CIA, out of office officially now. A lot of controversy surrounding his tenure, particularly in the waning days, there, and certainly prior to 9/11, as is laid out in your book.
I'm curious if you could give us, in short form here, obviously -- we're condensing this -- a general state of American intelligence right now. Has the intelligence community truly gotten the message, or are we wasting those billions, as some of us have the sense of, prior to 9/11?
BAMFORD: Well, I think there's two key things. One of them is that George Bush himself -- I'm sorry, George Tenet, the director of the CIA, himself said that we're looking at probably five years before the CIA gets up to speed, and he just said that a few months ago.
So, no, the intelligence community is not in a very good position right now. And the second thing is that I think the public and media and other people have this expectation that we're going to be in the same situation we were during the Cold War. But everything has changed. The Cold War was focused on basically one country and one way of attack, a missile attack.
Everything has changed now, and the intelligence community is not very good, and it's not set up to chase people around the world from country to country, using cell phones and pay phones and calling cards. And so, no, the intelligence is never going to be as good today as it was during the Cold War.
O'BRIEN: The book is "A Pretext for War: 9/11, Iraq and the Abuse of America's Intelligence Agency." The author, James Bamford. Thank you for your time, sir.
BAMFORD: My pleasure.
O'BRIEN: Kyra.
PHILLIPS: We're being told that Americans are getting richer, but it's not form winning the lottery or investments, or selling Mary Kay, or what else should I say, Rhonda Schaffler?
(MARKET UPDATE)
(COMMERCIAL BREAK)
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Aired July 8, 2004 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Hovering between fear and frustration. Today's terror threat update may have confused you a bit.
(BEGIN VIDEO CLIP)
TOM RIDGE, SECRETARY OF HOMELAND SECURITY: In the coming months, the nation will host high-profile events, including those associated with our democratic traditions. We are working very closely with our colleagues, state and local officials in New York and Boston, to ensure the security at the Democratic and Republican national conventions.
I designated these events national special security events, making the United States Secret Service the lead agency for identifying and implementing protective efforts in these locations.
(END VIDEO CLIP)
PHILLIPS: Well, the possibility of a pre-election attack is nothing we haven't heard of before, so where do you draw the line between caution and crying wolf? We posed that question to CNN's Mike Brooks now.
Let's talk about general intelligence versus a specific threat. There was no specific threat here, was there?
MIKE BROOKS, CNN LAW ENFORCEMENT ANALYST: Oh, this is stuff we've heard before. About six weeks ago, we saw FBI Director Mueller and the secretary -- Justice Department come out and say, OK, there's possibly a planning stage, here's seven pictures.
It seems like when they have ...
PHILLIPS: Are you talking about when John Ashcroft showed the pictures of the American and the al Qaeda activist?
BROOKS: It seems that when there's specific information to give out about something, we see Mueller and Ashcroft. When there is general -- just, I call it today a vigilance alert and a public service announcement for the Department of Homeland Security, we see Tom Ridge.
Now, there is nothing new that we heard today. I think this is more just a vigilance alert and a public service announcement, with the upcoming convention saying everybody has to be vigilant, here's what we have, but there was nothing new.
PHILLIPS: But, Mike, why do that? Because, obviously, all the networks start talking about it. It's a lead story, and it frightens Americans, I think a number of Americans. I mean, we've been on alert since 9/11, so why do this?
BROOKS: Oh, I think it's just another poke with a stick. People say, well, no, we're not becoming complacent. Well, I hear from agents that I used to work with, and cops on the street, that even they sometimes become complacent. Nothing's going on and they have to sometimes have a little bit of impetus to watch out for certain things.
I think this is more of a vigilance alert than anything else. But we have to be careful, and the FBI -- I was talking to someone, an FBI source today at headquarters, that even in the halls of FBI headquarters, they are concerned with people becoming kind of laid back and not really taking anything seriously, and they're concerned about that. And that's why we're not seeing the terrorism level change. He said there's credible information, but the level's not changing.
Now, if there was an imminent attack, then they probably would put it up to orange, but they're not changing it at all.
PHILLIPS: All right, Mike Brooks, we'll follow the story throughout the day. Thanks.
Miles.
MILES O'BRIEN, CNN ANCHOR: Let's check in at the White House, where the terror threat is clearly the intended message of the day. But in this election year, Democrats are raising questions about the timing and the motivation of the Ridge announcement. John King joins us from the White House North Lawn with more on that.
John?
JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Miles, perhaps inevitable, we are less than four months away from the presidential election. It is hotly contested, a very partisan atmosphere, so everything this president does is viewed through a political prism. And even before Secretary Ridge made his public announcement today, as word of that announcement became known and became reported on, our network and others, some Democrats started to say whoa. They're accusing the Bush administration of trying to distract attention to scare the American people on a big week for the Democrats.
John Kerry, of course, picked Senator John Edwards as his running mate. They traditionally get a great deal of attention in the days after that. The White House says, nonsense. It says it would not play politics with an issue like this, and Secretary Ridge tried to defuse any such criticism at his news conference.
He did not have any specific information about the timing of an attack, the location of an attack, the type of an attack, but Secretary Ridge said the American people should believe him when he says this information is quite serious.
(BEGIN VIDEO CLIP)
RIDGE: We are basically laying out before the general public the kind of information that we've received, and it's not us -- these are not conjectures or mythical statements we are making. These are pieces of information that we could trace comfortably to sources that we deem to be credible.
(END VIDEO CLIP)
KING: Now, also, Secretary Ridge saying while there is no specificity about the timing of an attack, or even the target of an attack, that there is a continuing stream of intelligence that Boston could be targeted, that New York could be targeted. They are the sites, of course, of the upcoming political conventions. Boston first at the end of this month. August -- at the end of August will be the Republican convention in New York City.
And what the White House is saying as part of an effort to defuse any political criticism, it says look to some of the comments from the Democrats on Capitol Hill who have been briefed today. Some of them coming out and saying what they are hearing is in fact troubling new information.
The White House also says it has offer a briefing to both senior officials at the Bush/Cheney campaign and at the Kerry/Edwards campaign to update them on the threat information, and to update them on the security precautions being taken, not only for the conventions, but for the entire campaign season, Miles.
O'BRIEN: But, at the core, this announcement, the statement that Boston and New York might become targets, that's not necessarily news, is it, John?
KING: It's not news. The administration has been saying this, going back several months, now. Especially once you saw the bombing in Madrid, so closely to the Spanish elections. The administration has said it believed al Qaeda might try to do that here, disrupt the political process.
The administration also says, and Secretary Ridge talked about this, that after some recent events -- recent arrests, excuse me, in England, in Italy, in Jordan, that in the interrogation of those terrorist suspects, it has come to believe that there are in fact al Qaeda operatives in this country that have the capability to launch attacks. And the administration believes, based on these interrogations and other intelligence, they would like to do that sometime around the election season.
That leads them to come to the hunch, anyway, if not the conclusion, that the conventions could be -- emphasis on could be -- if you want to say it this way, appealing targets, Miles.
O'BRIEN: John King at the White House. Thanks.
Kyra?
PHILLIPS: A closed-door briefing, a lot of open-ended questions. Congressional leaders are discussing national security at this hour.
CNN congressional correspondent Ed Henry joins us live from Capitol Hill.
Ed, tell us about this high-level briefing.
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Kyra.
Lawmakers here are trying to sort through these conflicting statements we've been hearing about conflicting guidance about how to judge all of this intelligence. There was a closed-door briefing this morning, 9:00 a.m. Eastern time. CIA and FBI came in, and I can tell you, we've been talking to a lot of lawmakers this morning who say that they were hearing new information, they were hearing new details. They were getting suggestions that this was more than just the same old, same old.
In fact, Senator Charles Schumer from New York came out and said, as John referenced, there was troubling and worrisome information. I spoke just moments ago to another senator who did not want to use his name. He came out of that saying that the way this was described by the CIA and the FBI is that this is the most worrisome situation since 9/11, what we're facing over the next couple of months, leading up to the election.
Now, Senate Majority Leader Bill Frist came out of this briefing, however, and tried to calm everyone down, and sounded a lot like what Secretary Ridge was saying. Here's what Frist said.
(BEGIN VIDEO CLIP)
SEN. BILL FRIST (R-TN), MAJORITY LEADER: Well, there's obviously no reason for panic or no reason for paralysis. But the fact that general intelligence says that the country is at some increased risk between now and the time of the presidential election. It is important for people to be aware of that.
(END VIDEO CLIP)
HENRY: Now, Kyra, John King mentioned the politics being raised, obviously not a surprise to anyone about the timing of this.
There's another political line of attack coming from Democrats. Democratic senators are now going on the Senate floor. They're going to have a press conference at 2:00 as well, off the floor, saying that if this situation is so serious, the Senate should stop debating the class action reform bill currently on the floor, move on to the Homeland Security appropriations bill, move on to rail security, port security, on and on and on.
You can see them making political points, and next year there's going to be a debate over a constitutional amendment banning same-sex marriage. Democrats are saying that has no chance of package, and Republicans should move on now to homeland security issues.
So you're seeing politics popping up very quickly, Kyra.
PHILLIPS: All right, you talk about politics popping up. Let's talk about national security once again for just a moment.
Ed, I just talked with Mike Brooks, former terrorism -- in the counterterrorism department with the FBI, obviously now works with us, talking about these threats that are out there. Tom Ridge, coming forward, holding this news conference.
What are -- behind closed doors, what you're hearing there on the Hill, what are congressmen and women saying about these continuous news conference without a lot of substance?
HENRY: Well, there is confusion. Basically, what you're hearing from lawmakers is that they're hearing one thing in public and another thing in private. I have not, and I stress not, heard anyone accuse the administration of telling two different stories. But they are saying there are different ways that the information is being interpreted behind closed doors and publicly. The politics has not quite gone that far for Democrats to go on the attack about what Secretary Ridge was saying.
But Democrats, in particular, are pointing out that when they go behind closed doors, particularly this morning, they heard a much different story. They heard some details suggesting that they should be worried, and that they should be very concerned about this summer and fall. But, again, Secretary Ridge was striking a much different note in that press conference, a much difference tone, Kyra.
PHILLIPS: Ed Henry, live from Capitol Hill. Thanks.
Miles?
O'BRIEN: Some news just coming in to us here at CNN on the Martha Stewart case. As you know, there had been some question as to whether her trial would be thrown out, the charges against her thrown out, after it was alleged that a federal government member of the Secret Service who testified against her committed perjury.
But there's news to report on that. Apparently, that trial will hold, and perhaps clearing the way for sentencing. Joining us now with a live report from the courthouse is CNN's Allan Chernoff to give us the basics.
Hello, Allan.
ALLAN CHERNOFF, CNNfn CORRESPONDENT: Hello, Miles, and we have just received the opinion from Judge Miriam Cedarbaum, putting it out just moments ago, and she is denying the request by Martha Stewart for a new trial, saying that the alleged perjury of Larry Stewart, the Secret Service ink expert, basically has no bearing upon the final verdict of the case.
Let me quickly quote from her opinion, saying that "Defendants have failed to show that the prosecution was aware of Lawrence Stewart's perjury, and have failed to show a reasonable probability that had the evidence of his perjury come to light, the outcome of their trial would have been different."
Now, keep in mind, Martha Stewart and her co-defendant, Peter Bacanovic, have made two motions for new trials, first based upon alleged perjury of one of the members of the jury, who apparently, or allegedly, had lied in order to get onto the jury. And then, remember, the government itself had brought charges against one of its witnesses, the ink expert, Larry Stewart.
Martha Stewart and Bacanovic used that as an effort to get a new trial. It is failing, now, the judge saying that she is denying that request for a new trial, and Martha Stewart is scheduled to be sentenced on the 16th of the month. The expectation in the legal community is that she will be sentenced to between 10 months and 18 months for her conviction in this case, which involved allegations that she had lied to cover up the true reason for her sale of ImClone stock.
Miles?
O'BRIEN: All right, so, Allan, as far as that date goes, is there anything in this that would lead you to believe that date might slide backward, or is it very likely that she will be sentenced on the 16th?
CHERNOFF: Miles, we've already had that date slide twice. It now seems there is no reason at all for it to be pushed back once again. So, for now, it seems that date is going to stick, but, of course, we won't know until the exact date does arrive.
O'BRIEN: And I suppose it's a foregone conclusion that there will be an appeal. At what time is it appropriate? After the sentencing, or would they try to put an appeal in right away?
CHERNOFF: Right after the sentencing, that's when they have the opportunity to actually appeal to a higher court, and they have already said that they intend to do so.
O'BRIEN: CNN's Allan Chernoff. Thanks very much, keep us posted.
Kyra?
Kidnapped Marine Corporal Wassef Hassoun has turned up in Lebanon, and in the hands of Americans. CNN Pentagon correspondent Barbara Starr joins us live with the latest twist in this tale.
Barbara?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Indeed, Kyra, Corporal Wassef Ali Hassoun arriving at the U.S. embassy in Beirut just about two hours ago, according to administration officials here in Washington. Still, a big investigation underway as to what exactly happened to this Marine who was last seen on the evening of June 19 at his unit in Iraq.
He did not report for duty the next morning. And, of course, as the world knows (INAUDIBLE) missing, then a videotape turned up where he appeared to be in the hands of insurgents. Captured became his new status. He was shown with a sword to his head. And then, in the last few days, apparent telephone contact with his family in Lebanon and his family here in the United States.
Now, State Department officials saying earlier today that, quote, "He made contact with us and arranged a place to meet, and we went to pick him up and brought him back to the embassy." That, in Beirut, Lebanon.
Corporal Hassoun, now it is not clear exactly what his status will be, what will happen next. He is an active-duty U.S. Marine subject to the uniform code of military justice, if he was indeed absent without leave from his unit. He is expected to undergo a medical evaluation. Where that will take place is also not certain.
Typically in these cases, personnel are flown to Landstuhl, Germany. They have the facilities to do that type of work. But still, we are awaiting word from the Pentagon on what the next step will be for Corporal Hassoun.
Kyra?
PHILLIPS: Barbara, just real quickly, will he be interrogated by a number of agencies to try to find out what did happen? Was it AWOL, was it capture, what's the story behind what happened?
STARR: Well, at this point, the Naval Criminal Investigative Service, which overseas these types of matters for both the Navy and the Marine Corps is in charge of the investigation. Until the point he turned up, it was said to be a missing persons investigation by NCIS. However, NCIS was also investigating a full range of possibilities to find out what had happened to him. They said, however, they simply couldn't come to any conclusions until they talked to him.
So, every expectation now is that NCIS, the Naval Criminal Investigative Service, will continue the investigation and will talk to him at length about what happened to him since the evening of June 19, when he was last seen with his unit in Iraq.
Kyra?
PHILLIPS: Barbara Starr, live from the Pentagon. Miles?
O'BRIEN: Two-and-a-half years after the collapse of Enron, the founder of the energy giant is pleading not guilty to a whole raft of charges. Joining us live now from Houston with details on this, CNN's Jen Rogers.
Jen?
JEN ROGERS, CNNfn CORRESPONDENT: That's right, Miles. I just left the courtroom. It was absolutely packed. Ken Lay, the former chairman and CEO of Enron, pleading not guilty. He said, "Not guilty, your honor," in a very loud voice.
He is now facing, they say, 175 years -- it's a maximum sentence -- for these counts. He has and will be released on a $500,000 unsecured bond later today after he goes through all the paperwork.
Right now, right behind me, the Enron Task Force is beginning to talk about this superseding indictment. Let's listen in.
ANDREW WEISSMAN, DIRECTOR OF ENRON TASK FORCE: ... participated in a wide-ranging conspiracy to paint for the public a picture of Enron that diverged from the actual financial condition of the company. When Skilling abruptly resigned from Enron in August, 2001, Ken Lay took over the helm of the criminal scheme.
As also alleged in the indictment, rather than come clean and tell the unvarnished truth about Enron, Lay chose to conceal and distort and mislead at the expense of Enron's shareholders and employees, people to whom he owed a duty of complete candor.
As alleged, Ken Lay made a decision, a decision that has resulted in his being here today. Ken Lay could have been truthful about what he knew about Enron, but he chose not to be. Mr. Lay did not want and did not allow the public to learn what he already knew, that Enron, absent the manipulative schemes, was in dire straights.
Criminal cases in America are not brought solely to send messages. They are brought to bring individuals to account for their criminal acts. There are, however, two undeniable messages from today's charges. First, to corporate America, your constituents are owed your complete candor, the unvarnished truth. Second, if you violate that trust, you will be called to account, no matter how powerful, no matter how wealthy. No one is above the law.
Are there any questions?
UNIDENTIFIED FEMALE: How much of the indictment is based on what Mr. Fastow has offered?
WEISSMAN: We cannot get into the evidentiary support and what will be proved at trial. Sorry.
UNIDENTIFIED FEMALE: Was it integral in this indictment?
WEISSMAN: I can't get into that area, I'm sorry.
UNIDENTIFIED MALE: The overt acts described under the conspiracy count only pick up with Ken Lay as of September 26. Was he not knowledgeable -- is the government's position that he was not knowledgeable of the events preceding his return to the company?
WEISSMAN: As you look at the indictment, what's alleged is that his sort of masterminding and taking over the helm of the conspiracy began with the departure of Skilling. But there is no allegation that he only then learned what was going on at Enron. UNIDENTIFIED MALE: Is it the government's position that Ken Lay knew about the illegal conspiracies that you're describing in the indictment between Skilling and Causey in the periods prior to August 15.
WEISSMAN: I can't get into the -- again, the evidentiary detail. What I can point you to is what's alleged in the indictment. I would focus you, for instance, on the allegations regarding a business unit at Enron called EES, where there are allegations regarding what Mr. Lay knew and when he knew it, before Mr. Skilling's departure.
Any other ...
ROGERS: That is Andrew Weissman, the director of the Enron Task force, going over some of the details that he can talk about, obviously declining to answer some questions, as well.
Now, we are expecting to hear from Ken Lay and his lawyer, Michael Ramsey, later today. They are going to have a press conference nearby at a downtown Houston hotel. So far the only statements that we've had from Ken Lay -- of course, he did say, "Not guilty, your honor," today, but last night he did release a statement through a spokeswoman when he said I have done nothing wrong, and the indictment is not justified. Probably more of those comments likely to come at his press conference later this afternoon.
O'BRIEN: But to boil it all down, Jen, just to in a synopsis form -- his defense essentially is that he was mislead as much as any stockholder of Enron, correct?
ROGERS: So far, what we can glean from his defense is just that, that he was in charge. He says, look, I was in charge of the company. That being said, I didn't come up with these accounting schemes that ended up bringing down the company. I didn't know about them. And that is so far what we've been able to get from what they've been saying, the hints of what his defense will be.
O'BRIEN: Jen Rogers, thank you very much. Let's check in with you a little bit later.
A warning about al Qaeda with a will and a way to attack the United States. How seriously should we take this latest one, though? We'll talk about it with an author who has been very critical of America's security prior to 9/11. We'll also ask him about the CIA after George Tenet. What is the future of America's top spy agency?
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O'BRIEN: On the day Tom Ridge issued yet another warning to Americans about the threat of terror in the homeland, the nation's top spy vacated his office under a cloud of controversy. The question is, nearly three years after the 9/11 attacks, does the U.S. have an intelligence capability that is worth the billions we all spend on it?
The failure of intelligence prior to 9/11 has been the focus of a lot of writings of late, among them, James Bamford, with the book, "A Pretext for War: 9/11, Iraq and the Abuse of America's Intelligence Agencies."
Mr. Bamford is our guest right now.
Good to have you with us, sir.
JAMES BAMFORD, AUTHOR: Well, thanks very much.
O'BRIEN: Let's talk about what we saw just unfold about an hour ago. Secretary of Homeland Security Tom Ridge issuing yet another warning. It was hard for us here in the newsroom to figure out what was different and new about it. What does that say, perhaps, about our ability to know what al Qaeda is up to in our shores?
BAMFORD: Well, it seems like they regularly come up with these sort of blanket warnings that don't seem to address when, where, how or what's going to take place. And I think all it does is get the American public on edge and never really accomplishes very much.
If they had a direct piece of evidence, a direct piece of intelligence, it'd be one thing. But it's another thing just to come out and make these blanket warnings.
O'BRIEN: Well, so is there any value, then, to issue blanket warnings, absent something more substantive? Or, perhaps, is there something more substantive that can't be shared, for various national security reasons?
BAMFORD: No, I think the history of this is that they've gotten the American public on edge so much its almost become a regular event. So the public pays very little attention to it, and that's the problem.
When they do come out with a real warning, I think the public's going to be paying far less attention than they should, because they're so immune because of all these blanket warnings.
O'BRIEN: Crying wolf, I guess you could call it.
Let's talk for a moment about Madrid. That attack kind of looms large over all of these discussions. Those associated with al Qaeda were able to really tip an election, to turn an election their way by engaging in that terror attack a few days before the Spanish elections.
First of all, do you think that that threat is real and credible here in the United States?
BAMFORD: Well, I think that's certainly a factor in their planning. The problem is, you never know which way it's going to go. If they're doing it in order to hurt George Bush, it may end up helping George Bush. So I'm sure that's a factor in their thinking, but which way they're hoping it will go is hard to say.
O'BRIEN: Well, and I guess we are making an assumption here that al Qaeda would like George Bush out of office. Perhaps it's just the opposite. BAMFORD: Well, I think they're more interested in changing American foreign policy, and there isn't a huge amount of difference, I don't think, between the planned foreign policy of the Kerry group or George Bush in terms of their policies in the Middle East.
Kerry seems to be following the Bush lead in terms of wanting to continue the war over there until it draws to an end. So I don't think, either way, it's going to help them much in terms of creating a terrorist incident.
O'BRIEN: I guess it's human nature. Certainly, here in the U.S., we tend to sort of fight the last war, and it seems to me that we make a mistake by focusing on the last attack, when, in fact, al Qaeda has an uncanny way of looking where we least suspect it.
BAMFORD: Well, that's true, and Madrid is a perfect example. You spend billions of dollars to improve security at the airlines, and they blow up a train. I mean, they could easily in the United States go to a bridge in the Midwest or something and blow it up as a train's going over. There are a lot of little synapses that they could take advantage of in our security.
So we could spend trillions of dollars on security, and in the end, they have the luxury of time and location. And that's the problem that faces the United States.
O'BRIEN: George Tenet, head of the CIA, out of office officially now. A lot of controversy surrounding his tenure, particularly in the waning days, there, and certainly prior to 9/11, as is laid out in your book.
I'm curious if you could give us, in short form here, obviously -- we're condensing this -- a general state of American intelligence right now. Has the intelligence community truly gotten the message, or are we wasting those billions, as some of us have the sense of, prior to 9/11?
BAMFORD: Well, I think there's two key things. One of them is that George Bush himself -- I'm sorry, George Tenet, the director of the CIA, himself said that we're looking at probably five years before the CIA gets up to speed, and he just said that a few months ago.
So, no, the intelligence community is not in a very good position right now. And the second thing is that I think the public and media and other people have this expectation that we're going to be in the same situation we were during the Cold War. But everything has changed. The Cold War was focused on basically one country and one way of attack, a missile attack.
Everything has changed now, and the intelligence community is not very good, and it's not set up to chase people around the world from country to country, using cell phones and pay phones and calling cards. And so, no, the intelligence is never going to be as good today as it was during the Cold War.
O'BRIEN: The book is "A Pretext for War: 9/11, Iraq and the Abuse of America's Intelligence Agency." The author, James Bamford. Thank you for your time, sir.
BAMFORD: My pleasure.
O'BRIEN: Kyra.
PHILLIPS: We're being told that Americans are getting richer, but it's not form winning the lottery or investments, or selling Mary Kay, or what else should I say, Rhonda Schaffler?
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