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Osama bin Laden Associate Surrenders; Iraqi Army Now Patrolling Baghdad Streets

Aired July 13, 2004 - 15:00   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: One of Osama bin Laden's cohorts is on a plane to Saudi Arabia. Al Qaeda's Khaled al-Harby turned himself in at the Saudi Embassy in Iran. We'll have more on that in just a moment on a possible score in the war on the terrorism.
With overseas commitments now straining its ranks, the Army is looking for a few good men and women from the Air Force and Navy. Pentagon officials tell CNN that those two services are downsized. They phased out sailors and airmen that could be a good fit for the Army.

Hundreds of people are homeless in the flooding in southern New Jersey. Jacqui Jeras will be along in a moment to tell us more about that, plus the chance of severe weather in the Upper Midwest.

Keeping you informed, CNN, the most trusted name in news.

We begin this hour at end of the road for Khaled al-Harby. The longtime associate of Osama bin Laden is being held in Saudi Arabia today, having turned himself in at the Saudi Embassy in Tehran. Al- Harby and bin Laden fought the Soviets together in Afghanistan and many years later the two appeared in a video clip discussing September 11. Somewhere along the way, al-Harby lost use of his legs. In any event, the bin Laden cohort is out of circulation.

We get some insights now from CNN senior Arab affairs correspondent editor Octavia Nasr.

We'll get to why he's in a wheelchair in a second, but, first of all, how big is this? How is it being reported overseas?

OCTAVIA NASR, CNN SR. EDITOR FOR ARAB AFFAIRS: It's been reported.

It depends on who you ask. The Saudis are trying to make it into a big story. This is a big catch. Others are being very cautious, saying this man, his only guilt is that he appeared on this tape with bin Laden and he got a lot of attention for that.

The Saudis not long ago launched a pardon program where terrorists were given one month to either give themselves in or face the consequences. Here, we're looking at that video that was so interesting back in 2001, December 2001. The U.S. Department of Defense released this video. The audio on it is not very clear, but we could tell that this man on the right, on the right-hand side of the screen, was referred to as the sheik. And we even called him the mystery sheik because we couldn't tell for sure who he was. There were a lot of speculations about who he was and what he was doing in this video, bin Laden treating him with a lot of respect and enjoying his company, telling him and bragging about 9/11 and how well his plan worked.

And so, people, especially in this country, would remember this video. This is not new. This is from 2001. The difference is that this man whose name is Khaled al-Harby, turned himself in, as you said, to the Saudi Embassy in Tehran. Saudi security forces are saying that he was living on the border of Iran and Afghanistan for a while and he turned himself in Tehran.

He was flown back to Saudi Arabia and now the questioning is going to start about his whereabouts, who else was there, that meeting with bin Laden and so forth.

PHILLIPS: And was he in hiding when he just decided to turn himself in? Did people know where he was or had an idea of where he and was? And, also, do they believe -- when was the last time he talked to Osama bin Laden, because that's probably the first question they're going to ask him, is what he knows about the whereabouts of OBL.

NASR: Absolutely, Osama bin Laden and the other al Qaeda members and al Qaeda leadership. This man is going to have some tough questions put forth for him.

Whether he has the answers or not, that remains to be seen. Some sources are saying that he turned himself in because he's not feeling well. He's weak. He wanted to take advantage of this pardon program. Listen to him. This is the statement he gave as soon as he landed in Saudi Arabia. This is what he said.

(BEGIN VIDEO CLIP)

KHALED AL-HARBY, OSAMA BIN LADEN ASSOCIATE (through translator): I called the embassy and we felt that we were welcome, that we were among family. Thank God for this blessing. I came because I abide the word of God and that of the caretaker of the holy sites. This initiative from the caretaker of holy sites and the king is an opportunity. Our country is the country of Islam. Undoubtedly, any logical man would thank God and should take advantage of this opportunity.

(END VIDEO CLIP)

NASR: Now, this is not an old man, as you can see in this video. He is paralyzed.

(CROSSTALK)

PHILLIPS: Shot in the back while fighting with Osama bin Laden?

NASR: With, perhaps, Osama bin Laden. We're not sure. But this is a mujahid. He's known to be a mujahid. And he fought. We understand, he fought against the Soviets in Afghanistan and he fought in Bosnia.

Some people believe it is in Bosnia that he was shot in the back and this is where he lost the use of his legs. It remains to be seen. I think this man is going to answer all the questions that have been on our minds since that video was released back in December 2001, specifically that meeting with bin Laden, where did it take place? Some say it took place in Kandahar. Others say in another part of Afghanistan.

But if you look at the transcript of that meeting, it was very interesting because in it he says that he was expecting to be taken into a cave to meet bin Laden, but instead he was received in a home and he says a clean home and a tidy home. He was impressed that bin Laden was not in hiding. He was living in a regular home.

So going back and looking at those transcripts is going to be chilling now that this man turned himself in. He certainly has some answers. Whether he has all of them or not remains to be seen.

PHILLIPS: We'll be eager to hear what he has to say. Octavia Nasr, thank you so much.

Well, targeting the criminal element in Iraq, Iraqi police fanned out across a Baghdad neighborhood, rounding up suspected thieves, robbers and kidnappers, among others. In an effort to improve security, Iraqi army units are now patrolling the streets of Baghdad.

Our Michael Holmes reports.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): Coalition forces coming under fire on patrol is routine. These troops, however, are not Americans. They are Iraqi, all of them, not a single American in sight.

(on camera): This is an area where just a few weeks ago, U.S. troops on patrol faced what one officer said was rocks by day, bullets, bombs and RPGs by night. But in the two weeks that these Iraqi soldiers have been patrolling the same area, not a single shot has been fired.

(voice-over): What is happening in what is still considered a highly dangerous suburb is waves, handshakes, water being offered. One American later said, No one offered us water. This is an army unit which literally speaks the same language as the locals.

MAJOR DAVID LANE, 14TH MARINE REGIMENT: They understand the people. They understand the insinuations. They understand the cultural perspective. And if they need to get a different answer, if they need more information they, know to ask that information, whereas where we may stop short.

HOLMES: It's called the Iraqi Intervention Force, 2nd Battalion, trained in urban combat, counterinsurgency and crucial intelligence gathering. "We are the army of Iraq," says this veteran. "We are proud of what we do." Their American instructors say this unit has probably already saved lives. Residents here alerted an IIF patrol to a roadside bomb, later destroyed in a controlled explosion.

(on camera): Would you imagine coalition force would have been given that information?

LANE: I could say maybe. But I'll tell you what. For sure, yes, the Iraqis got that information. And it's very comforting because if a coalition Humvee had been driving by and it would have gone off, it would have potentially killed somebody.

HOLMES (voice-over): These days, Lieutenant Colonel Muhammad Al Ali Hussein runs the show.

He tells us, "Of course, the people were very happy to see us. They showed cooperation by informing about the bad people." Some of the colonel's men may have already found weapons caches, arrested high-level suspects and engaged in gun battles.

LANE: They're willing to return fire when engaged. And they have been engaged and they have returned fire.

HOLMES (on camera): So these are the real deal?

LANE: No doubt.

HOLMES (voice-over): Two more IIF battalions are about to finish training and hit the streets, a total of 2,000 men. Well equipped and well armed they will have the job of stamping out Iraq's insurgents. Major Lane is confident they are up to the task.

Michael Holmes, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well, back here at home, testimony in the Scott Peterson murder case has resumed, jurors hearing from the man who examined Peterson's body for anything suspicious after his wife's disappearance.

CNN's Rusty Dornin is covering the trial in Redwood City, California.

Hi, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Kyra, of the three detectives that testified this morning, the key witness here today is definitely Detective Dodge Hendee. He will be appearing also again after the noon recess.

He is the one that oversaw the search warrant at Scott Peterson's warehouse. He is also the one that found the pair of pliers with a single hair in it. Now, Hendee did -- prosecutors did show a video of the warehouse and showed those pliers. And he did tell prosecutors that he found a single hair attached. Now, this is very important because the defense has tried to have this piece of hair thrown out during the preliminary hearing. They were unsuccessful.

They claim that hair was tampered with because a month after it was found, two other detectives went in and they discovered it was actually two hairs. Prosecutors are claiming it was simply a hair split in half. The defense is claiming that it shows that the evidence had been tampered with. Prosecutors, of course, claiming that the hair could be Laci Peterson's. Tests show that and that it was definitely not Scott Peterson's.

The video also showed a homemade cement anchor, is what the detective called it, in the bottom of Scott's boat. Prosecutors are claiming that those were the anchors that he used to weight down his wife's body. We are expecting, as I say, Detective Dodge Hendee to continue his testimony this afternoon. He is still being questioned by prosecutors. But Mark Geragos is likely to have a rather thorny cross-examination of Hendee -- Kyra.

PHILLIPS: All right, Rusty Dornin live from Redwood City -- thank you, Rusty.

Parts of the Northeast and Midwest are starting the week waterlogged by summer storms. Floods in some Eastern areas have damaged roads, dams and homes.

Nora Muchanic of affiliate WPVI talked with flood victims in Lumberton, New Jersey.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Well, we got up at 4:00 in the morning. And the water started to rise, got as many things out as we could, parked them out at the village green. But I've still got a car in the back that I'm worried about. It's up on a lift, but I think the water is going to get to that. But it's been fun. It's been slowly raising since about -- I guess about 4:00 is when they woke us up. I have a swimming pool for a basement.

I have a hot tub that's floating. I have a shed that's on its side and I have an old convertible in the back that I haven't seen the roof in about an hour.

NORA MUCHANIC, WPVI REPORTER: Why haven't you left yet?

UNIDENTIFIED FEMALE: Well, we're waiting to see what we can protect and if it keeps coming we're going to keep putting more things upstairs. We got all of the major things upstairs and we're just hoping that it doesn't go further.

MUCHANIC (voice-over): This is what it looks like on Main Street in downtown Lumberton. Water is everywhere.

UNIDENTIFIED MALE: It's in my living room. It's up to my waist almost, so it's probably about 8 feet off the ground where I'm at.

MUCHANIC (on camera): What made you wait this long?

UNIDENTIFIED MALE: Just to save some stuff and wait until help arrived.

MUCHANIC (voice-over): Evacuations included this man and his dog, but some folks are upset there are still animals in flooded houses. People in this neighborhood near the creek are literally swamped.

MUCHANIC (on camera): Tell me what you got out?

UNIDENTIFIED MALE: Well, I got a '65 Galaxy two-door hardtop got out. I took it up to my parents. By the time I came back, I had three motor vehicles I pushed out. By that time, it was too late. I couldn't get my trailer, couldn't get anything.

UNIDENTIFIED MALE: I've had water come across my driveway, but nothing like this. A dam breaks, there's nothing you're going to do. It all runs downhill.

MUCHANIC: And you're in the way.

UNIDENTIFIED MALE: Oh, we're in the way.

(END VIDEOTAPE)

PHILLIPS: And thank you to WPVI's Nora Muchanic for that.

(WEATHER UPDATE)

PHILLIPS: Well, lying, cheating and stealing, are they the keys to staying ahead on the job? The truth about lying in the workplace straight ahead.

Paris Hilton proving that charity begins at home or at least on the home video, a reported new legal twist for the infamous tape.

(COMMERCIAL BREAK)

PHILLIPS: CNN's "AMERICAN MORNING" is presenting a week-long series, "The Truth About Lying."

In this excerpt from today's segment, Heidi Collins profiles a reformed Wall Street swindler who now helps protect others from corporate liars.

(BEGIN VIDEOTAPE)

HEIDI COLLINS, CNN ANCHOR (voice-over): You could say Barry Minkow was a pioneer in the business world.

BARRY MINKOW, FORMER OWNER ZZZZ BEST: We were the first company, really, to lie to the auditors and get clean opinions from three different auditing firms to inflate earnings and not disclose all the debt. COLLINS: At 16 Minkow started a carpet cleaning company. By age 20 he had a $240 million company and was referred to as a whiz kid of Wall Street.

And at 23 was sentenced to 25 years in prison for defrauding investors of $26 million.

MINKOW: I was a crook and, you know, although I started it with the best of intentions, the company ran into financial difficulty. And I lied and cheated to keep it running.

COLLINS: What Barry Minkow did resembles the recent accusations against many high-profile corporations. Lying about what you earn and owe to make more money.

According to Minkow right and wrong is something different in the business world.

MINKOW: Right equals forward motion and wrong is anybody who gets in my way.

COLLINS: That says author David Callahan is because the cheating culture sometimes makes it necessary to lie to get ahead.

DAVID CALLAHAN, AUTHOR, THE CHEATING CULTURE: Lawyers will say, hey, everybody in my firm is over billing. If I don't also pad my hours, I'm not going to be considered for partner. I'm not going to get a bonus. I'm not going to get ahead in the firm.

COLLINS: In many cases Callahan says we are cheating and lying more. Tax invasion has more than doubled since 1990 to $250 billion a year. And he says, workplace theft totaled $600 billion a year.

CALLAHAN: If you're not cheating, then you're not playing by the real rules; you're playing by an abstract moral code that has no relevance in today's society.

MINKOW: We have to sleep at night, too. We don't want to look at ourselves at parties as a big con men. It's a means to an end.

COLLINS: And in the end Barry Minkow paid for his crime. Today, he works to prevent others from getting swindled. His Fraud Discovery Institute has help law enforcement agencies uncover more than $1 billion worth of fraud.

MINKOW: You'd have to have been there and done that to know what to test for.

I think most CEOs are honest. Some are not on a witch hunt. But every one of them is going to be tempted at one time in their business life.

(END VIDEOTAPE)

PHILLIPS: And you can catch part three of the series tomorrow on "AMERICAN MORNING," military interrogators, truth or consequences? (FINANCIAL UPDATE)

PHILLIPS: Britney Spears' impending marriage is weighing heavy on the mind of Donald Trump. Find out why he wants to teach pop star the art of the prenup.

And a little later on INSIDE POLITICS, the same-sex marriage debate and the race for the White House.

(COMMERCIAL BREAK)

PHILLIPS: All right, checking entertainment headlines this Tuesday, July 13 to the new and hip music here on CNN.

Paris Hilton is cashing in on her infamous sex tape. Imagine that. She dropped her lawsuit against her ex-boyfriend, who taped their bedroom escapades. An insider says that he and the distributor agreed to pay the socialite $400,000 and a percentage of the profits. Hilton says to a friend that she's giving the money to charity.

Marriage advice for Britney Spears for a man who knows a thing or two about mergers and acquisitions and marriage. Donald Trump tells "Entertainment Tonight" if Spears doesn't have a prenup, she's making a huge mistake. Spears plans to wed boyfriend Kevin Federline.

What's in a name? Al Franken changing the name of his radio show from "The O'Franken Factor" to "The Al Franken Show." The original title was a swipe at Bill O'Reilly, as you know, at that other competing network. But Franken says O'Reilly wouldn't sue him, so Franken decided to just use his real name.

That wraps up this Tuesday edition of LIVE FROM.

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 July 13, 2004 - 15:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: One of Osama bin Laden's cohorts is on a plane to Saudi Arabia. Al Qaeda's Khaled al-Harby turned himself in at the Saudi Embassy in Iran. We'll have more on that in just a moment on a possible score in the war on the terrorism.
With overseas commitments now straining its ranks, the Army is looking for a few good men and women from the Air Force and Navy. Pentagon officials tell CNN that those two services are downsized. They phased out sailors and airmen that could be a good fit for the Army.

Hundreds of people are homeless in the flooding in southern New Jersey. Jacqui Jeras will be along in a moment to tell us more about that, plus the chance of severe weather in the Upper Midwest.

Keeping you informed, CNN, the most trusted name in news.

We begin this hour at end of the road for Khaled al-Harby. The longtime associate of Osama bin Laden is being held in Saudi Arabia today, having turned himself in at the Saudi Embassy in Tehran. Al- Harby and bin Laden fought the Soviets together in Afghanistan and many years later the two appeared in a video clip discussing September 11. Somewhere along the way, al-Harby lost use of his legs. In any event, the bin Laden cohort is out of circulation.

We get some insights now from CNN senior Arab affairs correspondent editor Octavia Nasr.

We'll get to why he's in a wheelchair in a second, but, first of all, how big is this? How is it being reported overseas?

OCTAVIA NASR, CNN SR. EDITOR FOR ARAB AFFAIRS: It's been reported.

It depends on who you ask. The Saudis are trying to make it into a big story. This is a big catch. Others are being very cautious, saying this man, his only guilt is that he appeared on this tape with bin Laden and he got a lot of attention for that.

The Saudis not long ago launched a pardon program where terrorists were given one month to either give themselves in or face the consequences. Here, we're looking at that video that was so interesting back in 2001, December 2001. The U.S. Department of Defense released this video. The audio on it is not very clear, but we could tell that this man on the right, on the right-hand side of the screen, was referred to as the sheik. And we even called him the mystery sheik because we couldn't tell for sure who he was. There were a lot of speculations about who he was and what he was doing in this video, bin Laden treating him with a lot of respect and enjoying his company, telling him and bragging about 9/11 and how well his plan worked.

And so, people, especially in this country, would remember this video. This is not new. This is from 2001. The difference is that this man whose name is Khaled al-Harby, turned himself in, as you said, to the Saudi Embassy in Tehran. Saudi security forces are saying that he was living on the border of Iran and Afghanistan for a while and he turned himself in Tehran.

He was flown back to Saudi Arabia and now the questioning is going to start about his whereabouts, who else was there, that meeting with bin Laden and so forth.

PHILLIPS: And was he in hiding when he just decided to turn himself in? Did people know where he was or had an idea of where he and was? And, also, do they believe -- when was the last time he talked to Osama bin Laden, because that's probably the first question they're going to ask him, is what he knows about the whereabouts of OBL.

NASR: Absolutely, Osama bin Laden and the other al Qaeda members and al Qaeda leadership. This man is going to have some tough questions put forth for him.

Whether he has the answers or not, that remains to be seen. Some sources are saying that he turned himself in because he's not feeling well. He's weak. He wanted to take advantage of this pardon program. Listen to him. This is the statement he gave as soon as he landed in Saudi Arabia. This is what he said.

(BEGIN VIDEO CLIP)

KHALED AL-HARBY, OSAMA BIN LADEN ASSOCIATE (through translator): I called the embassy and we felt that we were welcome, that we were among family. Thank God for this blessing. I came because I abide the word of God and that of the caretaker of the holy sites. This initiative from the caretaker of holy sites and the king is an opportunity. Our country is the country of Islam. Undoubtedly, any logical man would thank God and should take advantage of this opportunity.

(END VIDEO CLIP)

NASR: Now, this is not an old man, as you can see in this video. He is paralyzed.

(CROSSTALK)

PHILLIPS: Shot in the back while fighting with Osama bin Laden?

NASR: With, perhaps, Osama bin Laden. We're not sure. But this is a mujahid. He's known to be a mujahid. And he fought. We understand, he fought against the Soviets in Afghanistan and he fought in Bosnia.

Some people believe it is in Bosnia that he was shot in the back and this is where he lost the use of his legs. It remains to be seen. I think this man is going to answer all the questions that have been on our minds since that video was released back in December 2001, specifically that meeting with bin Laden, where did it take place? Some say it took place in Kandahar. Others say in another part of Afghanistan.

But if you look at the transcript of that meeting, it was very interesting because in it he says that he was expecting to be taken into a cave to meet bin Laden, but instead he was received in a home and he says a clean home and a tidy home. He was impressed that bin Laden was not in hiding. He was living in a regular home.

So going back and looking at those transcripts is going to be chilling now that this man turned himself in. He certainly has some answers. Whether he has all of them or not remains to be seen.

PHILLIPS: We'll be eager to hear what he has to say. Octavia Nasr, thank you so much.

Well, targeting the criminal element in Iraq, Iraqi police fanned out across a Baghdad neighborhood, rounding up suspected thieves, robbers and kidnappers, among others. In an effort to improve security, Iraqi army units are now patrolling the streets of Baghdad.

Our Michael Holmes reports.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): Coalition forces coming under fire on patrol is routine. These troops, however, are not Americans. They are Iraqi, all of them, not a single American in sight.

(on camera): This is an area where just a few weeks ago, U.S. troops on patrol faced what one officer said was rocks by day, bullets, bombs and RPGs by night. But in the two weeks that these Iraqi soldiers have been patrolling the same area, not a single shot has been fired.

(voice-over): What is happening in what is still considered a highly dangerous suburb is waves, handshakes, water being offered. One American later said, No one offered us water. This is an army unit which literally speaks the same language as the locals.

MAJOR DAVID LANE, 14TH MARINE REGIMENT: They understand the people. They understand the insinuations. They understand the cultural perspective. And if they need to get a different answer, if they need more information they, know to ask that information, whereas where we may stop short.

HOLMES: It's called the Iraqi Intervention Force, 2nd Battalion, trained in urban combat, counterinsurgency and crucial intelligence gathering. "We are the army of Iraq," says this veteran. "We are proud of what we do." Their American instructors say this unit has probably already saved lives. Residents here alerted an IIF patrol to a roadside bomb, later destroyed in a controlled explosion.

(on camera): Would you imagine coalition force would have been given that information?

LANE: I could say maybe. But I'll tell you what. For sure, yes, the Iraqis got that information. And it's very comforting because if a coalition Humvee had been driving by and it would have gone off, it would have potentially killed somebody.

HOLMES (voice-over): These days, Lieutenant Colonel Muhammad Al Ali Hussein runs the show.

He tells us, "Of course, the people were very happy to see us. They showed cooperation by informing about the bad people." Some of the colonel's men may have already found weapons caches, arrested high-level suspects and engaged in gun battles.

LANE: They're willing to return fire when engaged. And they have been engaged and they have returned fire.

HOLMES (on camera): So these are the real deal?

LANE: No doubt.

HOLMES (voice-over): Two more IIF battalions are about to finish training and hit the streets, a total of 2,000 men. Well equipped and well armed they will have the job of stamping out Iraq's insurgents. Major Lane is confident they are up to the task.

Michael Holmes, CNN, Baghdad.

(END VIDEOTAPE)

PHILLIPS: Well, back here at home, testimony in the Scott Peterson murder case has resumed, jurors hearing from the man who examined Peterson's body for anything suspicious after his wife's disappearance.

CNN's Rusty Dornin is covering the trial in Redwood City, California.

Hi, Rusty.

RUSTY DORNIN, CNN CORRESPONDENT: Well, Kyra, of the three detectives that testified this morning, the key witness here today is definitely Detective Dodge Hendee. He will be appearing also again after the noon recess.

He is the one that oversaw the search warrant at Scott Peterson's warehouse. He is also the one that found the pair of pliers with a single hair in it. Now, Hendee did -- prosecutors did show a video of the warehouse and showed those pliers. And he did tell prosecutors that he found a single hair attached. Now, this is very important because the defense has tried to have this piece of hair thrown out during the preliminary hearing. They were unsuccessful.

They claim that hair was tampered with because a month after it was found, two other detectives went in and they discovered it was actually two hairs. Prosecutors are claiming it was simply a hair split in half. The defense is claiming that it shows that the evidence had been tampered with. Prosecutors, of course, claiming that the hair could be Laci Peterson's. Tests show that and that it was definitely not Scott Peterson's.

The video also showed a homemade cement anchor, is what the detective called it, in the bottom of Scott's boat. Prosecutors are claiming that those were the anchors that he used to weight down his wife's body. We are expecting, as I say, Detective Dodge Hendee to continue his testimony this afternoon. He is still being questioned by prosecutors. But Mark Geragos is likely to have a rather thorny cross-examination of Hendee -- Kyra.

PHILLIPS: All right, Rusty Dornin live from Redwood City -- thank you, Rusty.

Parts of the Northeast and Midwest are starting the week waterlogged by summer storms. Floods in some Eastern areas have damaged roads, dams and homes.

Nora Muchanic of affiliate WPVI talked with flood victims in Lumberton, New Jersey.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Well, we got up at 4:00 in the morning. And the water started to rise, got as many things out as we could, parked them out at the village green. But I've still got a car in the back that I'm worried about. It's up on a lift, but I think the water is going to get to that. But it's been fun. It's been slowly raising since about -- I guess about 4:00 is when they woke us up. I have a swimming pool for a basement.

I have a hot tub that's floating. I have a shed that's on its side and I have an old convertible in the back that I haven't seen the roof in about an hour.

NORA MUCHANIC, WPVI REPORTER: Why haven't you left yet?

UNIDENTIFIED FEMALE: Well, we're waiting to see what we can protect and if it keeps coming we're going to keep putting more things upstairs. We got all of the major things upstairs and we're just hoping that it doesn't go further.

MUCHANIC (voice-over): This is what it looks like on Main Street in downtown Lumberton. Water is everywhere.

UNIDENTIFIED MALE: It's in my living room. It's up to my waist almost, so it's probably about 8 feet off the ground where I'm at.

MUCHANIC (on camera): What made you wait this long?

UNIDENTIFIED MALE: Just to save some stuff and wait until help arrived.

MUCHANIC (voice-over): Evacuations included this man and his dog, but some folks are upset there are still animals in flooded houses. People in this neighborhood near the creek are literally swamped.

MUCHANIC (on camera): Tell me what you got out?

UNIDENTIFIED MALE: Well, I got a '65 Galaxy two-door hardtop got out. I took it up to my parents. By the time I came back, I had three motor vehicles I pushed out. By that time, it was too late. I couldn't get my trailer, couldn't get anything.

UNIDENTIFIED MALE: I've had water come across my driveway, but nothing like this. A dam breaks, there's nothing you're going to do. It all runs downhill.

MUCHANIC: And you're in the way.

UNIDENTIFIED MALE: Oh, we're in the way.

(END VIDEOTAPE)

PHILLIPS: And thank you to WPVI's Nora Muchanic for that.

(WEATHER UPDATE)

PHILLIPS: Well, lying, cheating and stealing, are they the keys to staying ahead on the job? The truth about lying in the workplace straight ahead.

Paris Hilton proving that charity begins at home or at least on the home video, a reported new legal twist for the infamous tape.

(COMMERCIAL BREAK)

PHILLIPS: CNN's "AMERICAN MORNING" is presenting a week-long series, "The Truth About Lying."

In this excerpt from today's segment, Heidi Collins profiles a reformed Wall Street swindler who now helps protect others from corporate liars.

(BEGIN VIDEOTAPE)

HEIDI COLLINS, CNN ANCHOR (voice-over): You could say Barry Minkow was a pioneer in the business world.

BARRY MINKOW, FORMER OWNER ZZZZ BEST: We were the first company, really, to lie to the auditors and get clean opinions from three different auditing firms to inflate earnings and not disclose all the debt. COLLINS: At 16 Minkow started a carpet cleaning company. By age 20 he had a $240 million company and was referred to as a whiz kid of Wall Street.

And at 23 was sentenced to 25 years in prison for defrauding investors of $26 million.

MINKOW: I was a crook and, you know, although I started it with the best of intentions, the company ran into financial difficulty. And I lied and cheated to keep it running.

COLLINS: What Barry Minkow did resembles the recent accusations against many high-profile corporations. Lying about what you earn and owe to make more money.

According to Minkow right and wrong is something different in the business world.

MINKOW: Right equals forward motion and wrong is anybody who gets in my way.

COLLINS: That says author David Callahan is because the cheating culture sometimes makes it necessary to lie to get ahead.

DAVID CALLAHAN, AUTHOR, THE CHEATING CULTURE: Lawyers will say, hey, everybody in my firm is over billing. If I don't also pad my hours, I'm not going to be considered for partner. I'm not going to get a bonus. I'm not going to get ahead in the firm.

COLLINS: In many cases Callahan says we are cheating and lying more. Tax invasion has more than doubled since 1990 to $250 billion a year. And he says, workplace theft totaled $600 billion a year.

CALLAHAN: If you're not cheating, then you're not playing by the real rules; you're playing by an abstract moral code that has no relevance in today's society.

MINKOW: We have to sleep at night, too. We don't want to look at ourselves at parties as a big con men. It's a means to an end.

COLLINS: And in the end Barry Minkow paid for his crime. Today, he works to prevent others from getting swindled. His Fraud Discovery Institute has help law enforcement agencies uncover more than $1 billion worth of fraud.

MINKOW: You'd have to have been there and done that to know what to test for.

I think most CEOs are honest. Some are not on a witch hunt. But every one of them is going to be tempted at one time in their business life.

(END VIDEOTAPE)

PHILLIPS: And you can catch part three of the series tomorrow on "AMERICAN MORNING," military interrogators, truth or consequences? (FINANCIAL UPDATE)

PHILLIPS: Britney Spears' impending marriage is weighing heavy on the mind of Donald Trump. Find out why he wants to teach pop star the art of the prenup.

And a little later on INSIDE POLITICS, the same-sex marriage debate and the race for the White House.

(COMMERCIAL BREAK)

PHILLIPS: All right, checking entertainment headlines this Tuesday, July 13 to the new and hip music here on CNN.

Paris Hilton is cashing in on her infamous sex tape. Imagine that. She dropped her lawsuit against her ex-boyfriend, who taped their bedroom escapades. An insider says that he and the distributor agreed to pay the socialite $400,000 and a percentage of the profits. Hilton says to a friend that she's giving the money to charity.

Marriage advice for Britney Spears for a man who knows a thing or two about mergers and acquisitions and marriage. Donald Trump tells "Entertainment Tonight" if Spears doesn't have a prenup, she's making a huge mistake. Spears plans to wed boyfriend Kevin Federline.

What's in a name? Al Franken changing the name of his radio show from "The O'Franken Factor" to "The Al Franken Show." The original title was a swipe at Bill O'Reilly, as you know, at that other competing network. But Franken says O'Reilly wouldn't sue him, so Franken decided to just use his real name.

That wraps up this Tuesday edition of LIVE FROM.

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