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More Al Qaeda Arrests In Pakistan; Terror Alerts Based Off Old Information; Statue Of Liberty Reopens; Greece Ready For Olympics

Aired August 03, 2004 - 12:58   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: Better late than never? Al Qaeda spy documents raise the threat level, but is the information out of date? Well, we're going in depth. Terrorists and the World Wide Web: simple tactics to get out the message to the faithful.
CHAD MEYERS, CNN METEOROLOGIST: And I'm meteorologist Chad Meyers, live in North Carolina. Up the beach in Cape Hatteras, winds gusting to 80 miles an hour; down the beach, it's sunny. The forecast coming up in just a few minutes.

PHILLIPS: Lady Liberty lays out the welcome mat. A post- September 11th milestone for the symbol of American freedom.

From the CNN Center in Atlanta, I'm Kyra Phillips. Miles is off. CNN'S LIVE FROM starts right now.

Up first this hour: New arrests, old surveillance, and high alert with no end in sight. From Pakistan, word of several more al Qaeda suspects in custody. At least one of them tied to the computer expert whose hard drive is said to have prompted Code Orange crackdowns in lower Manhattan, northern New Jersey, and Washington.

We're also learning that most of the research and recon on potential financial targets was years old, pre-dating 9/11. And other sites in other cities were at least vaguely considered for attack.

Our coverage begins with CNN's Ash-har Quraishi in Islamabad -- Ash-her?

ASH-HAR QURAISHI, CNN CORRESPONDENT: Hello, Kyra. That's right. Pakistani intelligence officials telling us that the arrests have continued.

Now, since the arrest of a man named Ahmed Khalfan Ghailani -- now, this is an al Qaeda operative wanted by the FBI who was arrested back on July 25 for his role in the bombings of the U.S. embassies in Nairobi and Dar es Salaam.

Now, we're told since that arrest, there have been at least seven more suspected al Qaeda operatives taken into custody, including one man who was arrested on Monday in the eastern city of Lahore.

Now this man is described by intelligence officials as a Nigerian. They are saying his name is Ibrahim. Now they say he also was found with coded messages, they are calling it, on computer discs when he was taken into custody. They say he is an associate of the man identified as Naeem Noor Khan. Now Khan, as you recall, is that computer expert that was apprehended back in July -- the middle of July. His computer led to the terror alerts, that we're told, being increased in New York, New Jersey and Washington.

Now right now officials say they do understand that much of this information may have been old, may have pre-dated 9/11. Some of it may have been updated as recently as January 2004.

But the key is, they say, they are learning more about the communications that the al Qaeda network is using at this time, how they're getting their messages out and how they're trying to get this information to other operatives around the world -- Kyra.

PHILLIPS: Ash-har, obviously this is a big deal when it comes to the U.S. military and agents trying to get this type of information. How are Pakistani officials and the United States working on this, are they working well together, is the Pakistani government allowing the U.S. in?

QURAISHI: Absolutely. We understand from our sources that they are working very closely together. The intelligence agencies between Islamabad and Washington are working on the material that they've seized over the last few weeks and months -- the computers, the discs, the documents -- and they are trying to get as much information as they can in terms of some sort of a time table.

If, in fact, there is one to indicate when these attacks were planned for. Now, of course, as we've been mentioning, some of this material has been gathered before 9/11 but the understanding is that al Qaeda is an organization that has had ongoing operations -- ongoing reconnaissance in trying to attack or target places in the United States as we've seen has been the terror alert that's been increased in the last few days.

So, the point right now they're trying to do is trying to find as much information that would indicate some sort of a timing and some sort of an actual operational plan this sort of an attack on the U.S. -- Kyra.

PHILLIPS: Ash-har Quraishi, live from Islamabad. Thanks so much. We're going to talk more about al Qaeda's Internet connections at the bottom of the hour with London-based investigative reporter Paul Eedlem.

So, why now at a New York skyscraper cased by al Qaeda Homeland Security Chief Tom Ridge said it's a judgment call when where and how to raise alerts.

He also pointed out that some of the information al Qaeda gathered on perspective U.S. targets was updated as recently as this year. CNN's Deborah Feyerick has much more on that now -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Kyra, the secretary in New York today meeting with the heads of some two dozen financial organizations including the American Stock Exchange, Nasdaq, but also Prudential, Citigroup and J.P. Morgan.

This was an important meeting in terms of reassuring the financial community that the government is doing everything that it can. Secretary Ridge talking about the newest intelligence that terror operatives have been in the U.S. scouting targets including the Citigroup building where this meeting was held, but also trying to reassure the community that the government is doing everything that it can as you mentioned.

Ridge seemed almost to defend some of the intelligence that's been put out there, there's been some criticism that its two or three years old but Ridge said that al Qaeda is very patient organization, that the operatives will strike at their own time when they feel that they could be successful.

The secretary also said that the government assumes the terror operatives are in the United States. Law enforcement keeping an eye on those sympathetic to al Qaeda.

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: We just assume that there are operatives here. Obviously the law enforcement community has their eyes on people they believe are connected or sympathetic to the cause, but we don't have the luxury of waiting to identify somebody coming across the border.

We just have to accept our planning and preparation -- the notion that they are here, they're looking to attack us and we need to do everything that we can every single day to try to detect, deter and prepare for it.

(END VIDEO CLIP)

FEYERICK: Now there was some question about the timing and one reporter asked whether in fact there's any intelligence indicating that a strike could actually come during the Republican National Convention.

The secretary said that there is information out there that in fact al Qaeda is looking to disrupt what he called the democratic process. Whether that means in the month leading up to the election he said that there was some indication of that, again making it clear that law enforcement is on top of this and that they're going to take every possible security measure that they need to -- Kyra.

PHILLIPS: Deb Feyerick, thank you so much.

Now to Capitol Hill where some suspect President Bush's overhaul of intelligence oversight is being oversold. At issue, how closely and how quickly to embrace the recommendations of the 9/11 Commission.

Members of which aren't content to watch from the spectator seats. Here's CNN's Joe Johns.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Kyra, wide-ranging testimony here on Capitol Hill in both the Senate and the House of Representatives going across the board talking about feasibility, timing -- not only that those specific proposals we've heard so much about: creating a national director of intelligence, also a national counter-terrorism center.

Even touching on the very touchy issue of civil liberties. Ohio Democrat and former presidential candidate Dennis Kucinich asking commissioner Bob Kerrey about initiatives to protect civil liberties.

(BEGIN VIDEO CLIP)

BOB KERREY (D), 9/11 COMMISSION MEMBER: I'm glad we have this -- this -- this concern about civil liberties. It needs to be there. But the enemy has no concerns for civil liberties. The enemy has no concern for the Geneva Convention. And you've got to come with that -- and I know you do in this debate. We've got to come with that hardheaded attitude or we're not going to get this -- this thing balanced right.

(END VIDEO CLIP)

JOHNS: In the big picture, the question is priorities. What should the Congress do first, what should the Congress do last? Today, one member of the Commission also said he believes this Congress needs to first focus on reforming itself, specifically the committee system and how it handles oversight of intelligence. Listen now to John Lehman.

(BEGIN VIDEO CLIP)

JOHN LEHMAN (R) 9/11 COMMISSION MEMBER: The most important thing to do is to fix the congressional issues. As you say, the Homeland Security -- we strongly endorse a joint committee on intelligence with appropriating powers. Fix that first if there has to be a priority.

(END VIDEO CLIP)

JOHNS: So a lot of people here on the Senate side would like to at least have legislative language by October 1. Of course a lot of people saying that may be very hard to do. On the other hand, it could be in the interest of Congress just in case there's some other terrorist act the Congress would be able to say it has done something -- Kyra back to you.

PHILLIPS: Joe, yesterday when the talk of this national director of intelligence, even this department, came up so many questions from reporters about budget. Where's the money going to come from, how will this be funded, how will Congress be involved in the allocation of that money?

What's the talk there? Is this something that can even be afforded?

JOHNS: Well, one thing that seems very clear right now is that this administration is not certain about how you should handle the budget priorities and whether, for example, the director of national intelligence, which the administration is signed on to, ought to be able to control the budget, control the flow of money from these various agencies.

It's a sticky issue and, as you know, it really creates a potential turf battle between and among the agencies also between and among the chairmen of the very committees here on Capitol Hill that oversee those agencies. So there's a lot of that detail that has to be worked out and as I said could be a very short timeline, Kyra.

PHILLIPS: Yes, a lot of debate, too. Joe Johns on the Hill, thanks so much.

Well, amid the tempest over terror, the perfect storm of presidential politics, a real live hurricane. The first one of the season, Alex.

(WEATHER REPORT)

PHILLIPS: Well, her grinning face became an international symbol for an ugly chapter in Iraq. Now Private Lynndie England is facing military justice.

A live report from Fort Bragg, North Carolina.

Not-ready-for-prime-time presidents? Find out why Bill Clinton may soon be practicing his punch lines.

Getting up close and personal: It's a new day for the Statue of Liberty. We've got a little statue trivia question for you. Here you go: Her friends call her Lady Liberty, but what is the statue's formal name? Think about it. We're going to make it a true daily double ahead on LIVE FROM.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Well, minutes ago we tested your knowledge of the Statue of Liberty in honor of today's re-opening. Here's what we asked you.

The statue is know to her friends as Lady Liberty, but what is her formal name?

The answer: The statue was dedicated in 1886 by President Cleveland as "Liberty Enlightening the World."

Let's go to CNN National Correspondent Kelly Wallace, who is huddled with the mass of tourists at the New York landmark.

She knows all the details about the Statue of Liberty, or Lady Liberty, or -- she's just enlightening herself. Hi, Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Oh, you are very kind, Kyra.

I thought you were going to put me on the spot asking me that answer -- question. So I was looking through my research for the answer.

What I can tell you, Kyra, though believe it or not, this is the last monument in the United States to reopen since the September 11 attacks. There's a lot of pomp and circumstance marking this reopening.

Just a short time ago, you saw New York City's mayor Michael Bloomberg along with New York's governor George Pataki as the doors were opened for the first time since the September 11 attacks.

Visitors allowed inside Lady Liberty so we spent some of this day asking people from around the country, around the world, what it felt like to come here today.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It was awesome. I've seen it for years from the shore but never been close in my whole life.

UNIDENTIFIED MALE: To see her in all of her elegance once again standing strong on a land of many waters symbolizing truth, freedom, and the American way I think she's just as grand as ever.

(END VIDEO CLIP)

WALLACE: And there's a bit of an ironic twist. This re-opening coming as there are new warnings about the possibility of terror attacks against targets in and around New York City. Mayor Bloomberg mentioned this during his remarks here. He said canceling this event on this day would send the absolute wrong message to the terrorists.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: There's no more appropriate day than to have a ceremony like this today where we're really saying to the rest of the world this is America and Americans are strong and Americans value their freedoms.

(END VIDEO CLIP)

WALLACE: But this re-opening not without some controversy. You are looking right now at Lady Liberty from behind.

Well, right now visitors can go inside -- they can go into the pedestal and up to the observation deck at the top of the pedestal but they can't go inside the statue itself.

They can't climb the 354 steps that you could climb to get to the observation deck at the top of the crown. This is stuff you used to be able to do before September 11 -- you can't do right now. Some lawmakers, including New York senior Senator Charles Schumer very upset about this saying not fully re-opening the Statue of Liberty is sending a wrong message to the terrorists -- Kyra. PHILLIPS: All right Kelly. I got to know. Did you make your way up to the top? Or not?

WALLACE: Did not make my way up to the top. I can't.

PHILLIPS: Why not?

WALLACE: I've seen it before, actually. But let me -- this is important -- important stuff, Kyra because we've been asking this throughout the day, asking tourists about it, our own colleagues are asking. Why can't you go inside? Why have they decided not to allow you inside the statue and up to the crown, something you could do before September 11?

The message we're getting from the Interior Department, even from New York City Mayor Bloomberg -- two reasons: they say security, number one; they also say these stairwells are very narrow. They're concerned about people panicking. They're concerned about what if there's a fire or something.

So, they're saying right now it's not code compliant. They really can't handle it. But again, you've heard from lawmakers like Senator Schumer who say this is not the case. We'll have to see if down the road once again people are allowed to go up to the tippy-top. Back to you.

PHILLIPS: All right. Kelly Wallace, thanks so much.

Well, the woman at the center of the Abu Ghraib Prison scandal is in court to learn whether she'll face a full court martial. Let's go to CNN's national correspondent Bob Franken.

He's in Fort Bragg, North Carolina -- Bob, what have you learned so far today?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, we have just been told that the hearing which was to resume after a lunch break is now delayed for an hour-and-a-half so the lawyers can talk to one another with the judge.

That could mean any number of things. We of course know that there are all kinds of discussions going on about the extent of the charges.

Lynndie England has been in and out all day. At the moment, her charges would bring her a potential 38 years in prison and a dishonorable discharge. In testimony this morning came from a couple of the investigators including the chief investigator, Special Agent Paul Arthur, who said that when he first questioned Lynndie England she said that what was going on was, quote, just for fun.

They were joking around, him quoting Lynndie England. Of course, the -- the lawyers for Lynndie England saying she was following orders. Testimony also included description of explicit photographs that include Lynndie England in them. I'll save you the descriptions of those. But they have become the basis for a variety of charges against England including indecent acts.

The introduction of those photos brought a sharp rhetoric from her lawyer.

(BEGIN VIDEO CLIP)

RICHARD HERNANDEZ, LYNNDIE ENGLAND'S ATTORNEY: One thing we want to make absolutely clear is that these photographs that they intend to use for the new charges have absolutely nothing to do with prisoner abuse scandal or Iraqi detainees. They're intimate photos of a young girl with her boyfriend at the time -- another soldier.

And these photographs are just intimate photographs; they're not something that had anything to do with prisoner abuse.

(END VIDEO CLIP)

FRANKEN: At the moment, this preliminary hearing, this is what they call an Article 32; it is to decide whether to court martial. They plan to call 25 witnesses, 25 witnesses over the period of a week; they are only on their second one right now.

I point out again, Kyra, that there has been a delay, unexplained delay, while the lawyers and the presiding officer meet in private -- Kyra.

PHILLIPS: All right. Bob Franken thanks so much. Other news across America now.

You may be seeing Bill Clinton on stage in New York. NBC has apparently asked the former president to host an episode of "Saturday Night Live" this coming season. So far, nothing has been set in stone.

One thing you can count on, though, is more of comedian Dave Chappelle. He's signed a two-year extension with Comedy Central that will also give him a hefty cut in his DVD sales. That deal is reportedly worth at least $35 million. The "Dave Chappelle Show" is said to be Comedy Central's biggest hit since "South Park."

Mystery solved in Georgia. A four-year-old boy who apparently walked out of his Atlanta-area home Sunday has been found alive. David Tippin was found today in a vacant house just nearby. He said that he's dehydrated, but otherwise he's in good condition.

Ready for the risk? Greece gets ready to host the world at the Olympic Games. We're going to check on the security situation LIVE FROM Athens just ahead.

Crazy claims -- want to guess how this medical device was supposed to be used? Details on LIVE FROM.

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT: I'm Dr. Sanjay Gupta. Everybody needs to take their vitamins, but what about getting them in the form of a spray?

I'll have that coming up. Stay with us.

(COMMERCIAL BREAK)

PHILLIPS: News around the world now starting in Australia where the government is paying a baby bonus in a bid to boost the birth rate.

The amount: $2100. Some women who were planning C-sections in June delayed that procedure until after the bonuses kicked in on July 1.

On your mark, get set, mow -- I mean, go. The 12-hour annual lawnmower race in rural England. Thirty-five teams battled day and night. This year's event was nicknamed weapons of grass destruction.

On a less frantic note, while we go to a rooftop in Rome, dozens of doves, pigeons, were released carrying messages of hope and peace. To what else? The Olympic Games in Athens.

Unprecedented security is in place in Athens, Greece. Less than two weeks before the summer Olympic Games.

CNN's Michael Holmes joins us now via Athens, via videophone with a look. Michael, I'm glad you got to leave Iraq for a little bit and go to Greece.

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, there's people with guns here, Kyra, but they're not shooting at you. The ready, set, mow. Well it's ready set go here.

You know with only a couple of months ago, Kyra, that everybody was worried nothing would be ready on time. You know everything is pretty much they've covered over a few things rather than doing it the way they meant to do it but it all feels pretty good.

When it comes to security of course this is the first summer games post 9/11 and that sort of upped the ante unbelievably, $1.2 billion being spent on security. That's 15 times what was spent in Atlanta only eight years ago. But they think they have it under control.

Certainly, we've spoken with people from NATO, the mayor's office, with the police today. They're all saying that they feel they have it under control and that they have no specific threats, either when it comes to either Greece or the games. The intelligence chatter, as they like to call it is very silent when it comes to the games and it wouldn't be a good place to hit either.

There's 70,000 Greek police and troops, there's NATO troops, there's going to be 400 U.S. Special forces. The Navy Seals are going to be out in the harbor looking after the boats under water.

So it's all pretty much in lock down mode, but the funny thing is when you walk around the streets, not a lot of armed security around the place. That will ratchet up a little but they're trying to keep it low key.

Everyone we talked to on an official basis says this is the games -- about the athletes, about the people, it's not about soldiers and troops as the mayor said to us the other day -- Kyra.

PHILLIPS: Michael, you actually and a chance to speak one on one with the NATO spokesperson. Tell us about the U.S. Special forces, more besides the Navy Seals -- but other armed guards that are being talked about about being there with the athletes and the rules of engagement. How has that been hammered out?

HOLMES: Yes, that's always been a really contentious issue. Who controls who because you've got -- you've got the Greek police -- Greek troops. You've got NATO troops standing by. You've got U.S. Special Forces, 400 of them are going to be involved at different levels.

And then, different teams like the Americans, the Israelis, the Australians, just to name a few, bringing their own armed guards. So it's always going to be a case of, well, who is in charge? It's been made very clear from both NATO, the Americans and the mayor's office we spoke to the mayor herself yesterday -- that it's the Greeks running the show.

Nobody does anything without the Greek's say-so in terms of weapons and the like. But yes those special forces also the FBI is going to be in town; they're bringing in special teams for hostage rescue and they're also bringing in special teams for bomb site analysis which we hope they're not going to have to utilize.

One other thing I'll just tell you about, Kyra, was it's interesting, on the Internet today they've been putting out this list of things that tourists should watch out for in terms of prices. They're worried about price gouging, not all that unusual. This list is amazing, it covers everything from what you should pay for a bottle of water or a Souvlaki right through to a taxi fare and even a cardiologist, should you need one, Kyra.

PHILLIPS: Michael Holmes, you always find the quirky things in the story so we look forward to more of your reports. Thanks so much.

Well, gas prices are going down but who would have thought that $1.89 per gallon would sound reasonable? Mary Snow joins us live from the New York Stock Exchange. Hi, Mary.

MARY SNOW, FINANCIAL NEWS: Hi, there, Kyra. Yes, hardly a bargain with the retail price of gasoline fell to its lowest level in three months. The Energy Department saying the nationwide average is now $1.89 a gallon. Still, it's 35 cents higher than it was a year ago but it's off the record high of its $2.06 a gallon. That was set back in May.

The drop in pump price is made slower, even reverse in coming weeks, though. This is higher crude oil costs get passed along to consumers and those crude oil prices hit all time highs earlier today trading above $44 a barrel for the first time since prices hovering right now around that mark.

The head of OPEC warns the cartel has nothing in reserve that can be brought to the market quickly to cool off red-hot demand -- Kyra.

PHILLIPS: All right tell us about the market, Mary.

SNOW: Well, those oil prices really pressuring the markets back up in the red all day. Not only oil prices but disappointing economic day. The government report showing that consumer spending slowed dramatically in June, turning in its biggest decline since September of 2001.

Personal income growth also slowed. Taking a look at the numbers, the Dow Industrials right now down 35 points, the Nasdaq is down more than 1 percent. And that is the latest from Wall Street. Coming up later this hour, a new study shows fewer Americans have health insurance and children might be even worse off than adults.

LIVE FROM is coming right back.

(COMMERCIAL BREAK)

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Aired August 3, 2004 - 12:58   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Better late than never? Al Qaeda spy documents raise the threat level, but is the information out of date? Well, we're going in depth. Terrorists and the World Wide Web: simple tactics to get out the message to the faithful.
CHAD MEYERS, CNN METEOROLOGIST: And I'm meteorologist Chad Meyers, live in North Carolina. Up the beach in Cape Hatteras, winds gusting to 80 miles an hour; down the beach, it's sunny. The forecast coming up in just a few minutes.

PHILLIPS: Lady Liberty lays out the welcome mat. A post- September 11th milestone for the symbol of American freedom.

From the CNN Center in Atlanta, I'm Kyra Phillips. Miles is off. CNN'S LIVE FROM starts right now.

Up first this hour: New arrests, old surveillance, and high alert with no end in sight. From Pakistan, word of several more al Qaeda suspects in custody. At least one of them tied to the computer expert whose hard drive is said to have prompted Code Orange crackdowns in lower Manhattan, northern New Jersey, and Washington.

We're also learning that most of the research and recon on potential financial targets was years old, pre-dating 9/11. And other sites in other cities were at least vaguely considered for attack.

Our coverage begins with CNN's Ash-har Quraishi in Islamabad -- Ash-her?

ASH-HAR QURAISHI, CNN CORRESPONDENT: Hello, Kyra. That's right. Pakistani intelligence officials telling us that the arrests have continued.

Now, since the arrest of a man named Ahmed Khalfan Ghailani -- now, this is an al Qaeda operative wanted by the FBI who was arrested back on July 25 for his role in the bombings of the U.S. embassies in Nairobi and Dar es Salaam.

Now, we're told since that arrest, there have been at least seven more suspected al Qaeda operatives taken into custody, including one man who was arrested on Monday in the eastern city of Lahore.

Now this man is described by intelligence officials as a Nigerian. They are saying his name is Ibrahim. Now they say he also was found with coded messages, they are calling it, on computer discs when he was taken into custody. They say he is an associate of the man identified as Naeem Noor Khan. Now Khan, as you recall, is that computer expert that was apprehended back in July -- the middle of July. His computer led to the terror alerts, that we're told, being increased in New York, New Jersey and Washington.

Now right now officials say they do understand that much of this information may have been old, may have pre-dated 9/11. Some of it may have been updated as recently as January 2004.

But the key is, they say, they are learning more about the communications that the al Qaeda network is using at this time, how they're getting their messages out and how they're trying to get this information to other operatives around the world -- Kyra.

PHILLIPS: Ash-har, obviously this is a big deal when it comes to the U.S. military and agents trying to get this type of information. How are Pakistani officials and the United States working on this, are they working well together, is the Pakistani government allowing the U.S. in?

QURAISHI: Absolutely. We understand from our sources that they are working very closely together. The intelligence agencies between Islamabad and Washington are working on the material that they've seized over the last few weeks and months -- the computers, the discs, the documents -- and they are trying to get as much information as they can in terms of some sort of a time table.

If, in fact, there is one to indicate when these attacks were planned for. Now, of course, as we've been mentioning, some of this material has been gathered before 9/11 but the understanding is that al Qaeda is an organization that has had ongoing operations -- ongoing reconnaissance in trying to attack or target places in the United States as we've seen has been the terror alert that's been increased in the last few days.

So, the point right now they're trying to do is trying to find as much information that would indicate some sort of a timing and some sort of an actual operational plan this sort of an attack on the U.S. -- Kyra.

PHILLIPS: Ash-har Quraishi, live from Islamabad. Thanks so much. We're going to talk more about al Qaeda's Internet connections at the bottom of the hour with London-based investigative reporter Paul Eedlem.

So, why now at a New York skyscraper cased by al Qaeda Homeland Security Chief Tom Ridge said it's a judgment call when where and how to raise alerts.

He also pointed out that some of the information al Qaeda gathered on perspective U.S. targets was updated as recently as this year. CNN's Deborah Feyerick has much more on that now -- Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Kyra, the secretary in New York today meeting with the heads of some two dozen financial organizations including the American Stock Exchange, Nasdaq, but also Prudential, Citigroup and J.P. Morgan.

This was an important meeting in terms of reassuring the financial community that the government is doing everything that it can. Secretary Ridge talking about the newest intelligence that terror operatives have been in the U.S. scouting targets including the Citigroup building where this meeting was held, but also trying to reassure the community that the government is doing everything that it can as you mentioned.

Ridge seemed almost to defend some of the intelligence that's been put out there, there's been some criticism that its two or three years old but Ridge said that al Qaeda is very patient organization, that the operatives will strike at their own time when they feel that they could be successful.

The secretary also said that the government assumes the terror operatives are in the United States. Law enforcement keeping an eye on those sympathetic to al Qaeda.

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: We just assume that there are operatives here. Obviously the law enforcement community has their eyes on people they believe are connected or sympathetic to the cause, but we don't have the luxury of waiting to identify somebody coming across the border.

We just have to accept our planning and preparation -- the notion that they are here, they're looking to attack us and we need to do everything that we can every single day to try to detect, deter and prepare for it.

(END VIDEO CLIP)

FEYERICK: Now there was some question about the timing and one reporter asked whether in fact there's any intelligence indicating that a strike could actually come during the Republican National Convention.

The secretary said that there is information out there that in fact al Qaeda is looking to disrupt what he called the democratic process. Whether that means in the month leading up to the election he said that there was some indication of that, again making it clear that law enforcement is on top of this and that they're going to take every possible security measure that they need to -- Kyra.

PHILLIPS: Deb Feyerick, thank you so much.

Now to Capitol Hill where some suspect President Bush's overhaul of intelligence oversight is being oversold. At issue, how closely and how quickly to embrace the recommendations of the 9/11 Commission.

Members of which aren't content to watch from the spectator seats. Here's CNN's Joe Johns.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Kyra, wide-ranging testimony here on Capitol Hill in both the Senate and the House of Representatives going across the board talking about feasibility, timing -- not only that those specific proposals we've heard so much about: creating a national director of intelligence, also a national counter-terrorism center.

Even touching on the very touchy issue of civil liberties. Ohio Democrat and former presidential candidate Dennis Kucinich asking commissioner Bob Kerrey about initiatives to protect civil liberties.

(BEGIN VIDEO CLIP)

BOB KERREY (D), 9/11 COMMISSION MEMBER: I'm glad we have this -- this -- this concern about civil liberties. It needs to be there. But the enemy has no concerns for civil liberties. The enemy has no concern for the Geneva Convention. And you've got to come with that -- and I know you do in this debate. We've got to come with that hardheaded attitude or we're not going to get this -- this thing balanced right.

(END VIDEO CLIP)

JOHNS: In the big picture, the question is priorities. What should the Congress do first, what should the Congress do last? Today, one member of the Commission also said he believes this Congress needs to first focus on reforming itself, specifically the committee system and how it handles oversight of intelligence. Listen now to John Lehman.

(BEGIN VIDEO CLIP)

JOHN LEHMAN (R) 9/11 COMMISSION MEMBER: The most important thing to do is to fix the congressional issues. As you say, the Homeland Security -- we strongly endorse a joint committee on intelligence with appropriating powers. Fix that first if there has to be a priority.

(END VIDEO CLIP)

JOHNS: So a lot of people here on the Senate side would like to at least have legislative language by October 1. Of course a lot of people saying that may be very hard to do. On the other hand, it could be in the interest of Congress just in case there's some other terrorist act the Congress would be able to say it has done something -- Kyra back to you.

PHILLIPS: Joe, yesterday when the talk of this national director of intelligence, even this department, came up so many questions from reporters about budget. Where's the money going to come from, how will this be funded, how will Congress be involved in the allocation of that money?

What's the talk there? Is this something that can even be afforded?

JOHNS: Well, one thing that seems very clear right now is that this administration is not certain about how you should handle the budget priorities and whether, for example, the director of national intelligence, which the administration is signed on to, ought to be able to control the budget, control the flow of money from these various agencies.

It's a sticky issue and, as you know, it really creates a potential turf battle between and among the agencies also between and among the chairmen of the very committees here on Capitol Hill that oversee those agencies. So there's a lot of that detail that has to be worked out and as I said could be a very short timeline, Kyra.

PHILLIPS: Yes, a lot of debate, too. Joe Johns on the Hill, thanks so much.

Well, amid the tempest over terror, the perfect storm of presidential politics, a real live hurricane. The first one of the season, Alex.

(WEATHER REPORT)

PHILLIPS: Well, her grinning face became an international symbol for an ugly chapter in Iraq. Now Private Lynndie England is facing military justice.

A live report from Fort Bragg, North Carolina.

Not-ready-for-prime-time presidents? Find out why Bill Clinton may soon be practicing his punch lines.

Getting up close and personal: It's a new day for the Statue of Liberty. We've got a little statue trivia question for you. Here you go: Her friends call her Lady Liberty, but what is the statue's formal name? Think about it. We're going to make it a true daily double ahead on LIVE FROM.

ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.

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PHILLIPS: Well, minutes ago we tested your knowledge of the Statue of Liberty in honor of today's re-opening. Here's what we asked you.

The statue is know to her friends as Lady Liberty, but what is her formal name?

The answer: The statue was dedicated in 1886 by President Cleveland as "Liberty Enlightening the World."

Let's go to CNN National Correspondent Kelly Wallace, who is huddled with the mass of tourists at the New York landmark.

She knows all the details about the Statue of Liberty, or Lady Liberty, or -- she's just enlightening herself. Hi, Kelly.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: Oh, you are very kind, Kyra.

I thought you were going to put me on the spot asking me that answer -- question. So I was looking through my research for the answer.

What I can tell you, Kyra, though believe it or not, this is the last monument in the United States to reopen since the September 11 attacks. There's a lot of pomp and circumstance marking this reopening.

Just a short time ago, you saw New York City's mayor Michael Bloomberg along with New York's governor George Pataki as the doors were opened for the first time since the September 11 attacks.

Visitors allowed inside Lady Liberty so we spent some of this day asking people from around the country, around the world, what it felt like to come here today.

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UNIDENTIFIED FEMALE: It was awesome. I've seen it for years from the shore but never been close in my whole life.

UNIDENTIFIED MALE: To see her in all of her elegance once again standing strong on a land of many waters symbolizing truth, freedom, and the American way I think she's just as grand as ever.

(END VIDEO CLIP)

WALLACE: And there's a bit of an ironic twist. This re-opening coming as there are new warnings about the possibility of terror attacks against targets in and around New York City. Mayor Bloomberg mentioned this during his remarks here. He said canceling this event on this day would send the absolute wrong message to the terrorists.

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MAYOR MICHAEL BLOOMBERG (R), NEW YORK: There's no more appropriate day than to have a ceremony like this today where we're really saying to the rest of the world this is America and Americans are strong and Americans value their freedoms.

(END VIDEO CLIP)

WALLACE: But this re-opening not without some controversy. You are looking right now at Lady Liberty from behind.

Well, right now visitors can go inside -- they can go into the pedestal and up to the observation deck at the top of the pedestal but they can't go inside the statue itself.

They can't climb the 354 steps that you could climb to get to the observation deck at the top of the crown. This is stuff you used to be able to do before September 11 -- you can't do right now. Some lawmakers, including New York senior Senator Charles Schumer very upset about this saying not fully re-opening the Statue of Liberty is sending a wrong message to the terrorists -- Kyra. PHILLIPS: All right Kelly. I got to know. Did you make your way up to the top? Or not?

WALLACE: Did not make my way up to the top. I can't.

PHILLIPS: Why not?

WALLACE: I've seen it before, actually. But let me -- this is important -- important stuff, Kyra because we've been asking this throughout the day, asking tourists about it, our own colleagues are asking. Why can't you go inside? Why have they decided not to allow you inside the statue and up to the crown, something you could do before September 11?

The message we're getting from the Interior Department, even from New York City Mayor Bloomberg -- two reasons: they say security, number one; they also say these stairwells are very narrow. They're concerned about people panicking. They're concerned about what if there's a fire or something.

So, they're saying right now it's not code compliant. They really can't handle it. But again, you've heard from lawmakers like Senator Schumer who say this is not the case. We'll have to see if down the road once again people are allowed to go up to the tippy-top. Back to you.

PHILLIPS: All right. Kelly Wallace, thanks so much.

Well, the woman at the center of the Abu Ghraib Prison scandal is in court to learn whether she'll face a full court martial. Let's go to CNN's national correspondent Bob Franken.

He's in Fort Bragg, North Carolina -- Bob, what have you learned so far today?

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, we have just been told that the hearing which was to resume after a lunch break is now delayed for an hour-and-a-half so the lawyers can talk to one another with the judge.

That could mean any number of things. We of course know that there are all kinds of discussions going on about the extent of the charges.

Lynndie England has been in and out all day. At the moment, her charges would bring her a potential 38 years in prison and a dishonorable discharge. In testimony this morning came from a couple of the investigators including the chief investigator, Special Agent Paul Arthur, who said that when he first questioned Lynndie England she said that what was going on was, quote, just for fun.

They were joking around, him quoting Lynndie England. Of course, the -- the lawyers for Lynndie England saying she was following orders. Testimony also included description of explicit photographs that include Lynndie England in them. I'll save you the descriptions of those. But they have become the basis for a variety of charges against England including indecent acts.

The introduction of those photos brought a sharp rhetoric from her lawyer.

(BEGIN VIDEO CLIP)

RICHARD HERNANDEZ, LYNNDIE ENGLAND'S ATTORNEY: One thing we want to make absolutely clear is that these photographs that they intend to use for the new charges have absolutely nothing to do with prisoner abuse scandal or Iraqi detainees. They're intimate photos of a young girl with her boyfriend at the time -- another soldier.

And these photographs are just intimate photographs; they're not something that had anything to do with prisoner abuse.

(END VIDEO CLIP)

FRANKEN: At the moment, this preliminary hearing, this is what they call an Article 32; it is to decide whether to court martial. They plan to call 25 witnesses, 25 witnesses over the period of a week; they are only on their second one right now.

I point out again, Kyra, that there has been a delay, unexplained delay, while the lawyers and the presiding officer meet in private -- Kyra.

PHILLIPS: All right. Bob Franken thanks so much. Other news across America now.

You may be seeing Bill Clinton on stage in New York. NBC has apparently asked the former president to host an episode of "Saturday Night Live" this coming season. So far, nothing has been set in stone.

One thing you can count on, though, is more of comedian Dave Chappelle. He's signed a two-year extension with Comedy Central that will also give him a hefty cut in his DVD sales. That deal is reportedly worth at least $35 million. The "Dave Chappelle Show" is said to be Comedy Central's biggest hit since "South Park."

Mystery solved in Georgia. A four-year-old boy who apparently walked out of his Atlanta-area home Sunday has been found alive. David Tippin was found today in a vacant house just nearby. He said that he's dehydrated, but otherwise he's in good condition.

Ready for the risk? Greece gets ready to host the world at the Olympic Games. We're going to check on the security situation LIVE FROM Athens just ahead.

Crazy claims -- want to guess how this medical device was supposed to be used? Details on LIVE FROM.

DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT: I'm Dr. Sanjay Gupta. Everybody needs to take their vitamins, but what about getting them in the form of a spray?

I'll have that coming up. Stay with us.

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PHILLIPS: News around the world now starting in Australia where the government is paying a baby bonus in a bid to boost the birth rate.

The amount: $2100. Some women who were planning C-sections in June delayed that procedure until after the bonuses kicked in on July 1.

On your mark, get set, mow -- I mean, go. The 12-hour annual lawnmower race in rural England. Thirty-five teams battled day and night. This year's event was nicknamed weapons of grass destruction.

On a less frantic note, while we go to a rooftop in Rome, dozens of doves, pigeons, were released carrying messages of hope and peace. To what else? The Olympic Games in Athens.

Unprecedented security is in place in Athens, Greece. Less than two weeks before the summer Olympic Games.

CNN's Michael Holmes joins us now via Athens, via videophone with a look. Michael, I'm glad you got to leave Iraq for a little bit and go to Greece.

MICHAEL HOLMES, CNN CORRESPONDENT: Yes, there's people with guns here, Kyra, but they're not shooting at you. The ready, set, mow. Well it's ready set go here.

You know with only a couple of months ago, Kyra, that everybody was worried nothing would be ready on time. You know everything is pretty much they've covered over a few things rather than doing it the way they meant to do it but it all feels pretty good.

When it comes to security of course this is the first summer games post 9/11 and that sort of upped the ante unbelievably, $1.2 billion being spent on security. That's 15 times what was spent in Atlanta only eight years ago. But they think they have it under control.

Certainly, we've spoken with people from NATO, the mayor's office, with the police today. They're all saying that they feel they have it under control and that they have no specific threats, either when it comes to either Greece or the games. The intelligence chatter, as they like to call it is very silent when it comes to the games and it wouldn't be a good place to hit either.

There's 70,000 Greek police and troops, there's NATO troops, there's going to be 400 U.S. Special forces. The Navy Seals are going to be out in the harbor looking after the boats under water.

So it's all pretty much in lock down mode, but the funny thing is when you walk around the streets, not a lot of armed security around the place. That will ratchet up a little but they're trying to keep it low key.

Everyone we talked to on an official basis says this is the games -- about the athletes, about the people, it's not about soldiers and troops as the mayor said to us the other day -- Kyra.

PHILLIPS: Michael, you actually and a chance to speak one on one with the NATO spokesperson. Tell us about the U.S. Special forces, more besides the Navy Seals -- but other armed guards that are being talked about about being there with the athletes and the rules of engagement. How has that been hammered out?

HOLMES: Yes, that's always been a really contentious issue. Who controls who because you've got -- you've got the Greek police -- Greek troops. You've got NATO troops standing by. You've got U.S. Special Forces, 400 of them are going to be involved at different levels.

And then, different teams like the Americans, the Israelis, the Australians, just to name a few, bringing their own armed guards. So it's always going to be a case of, well, who is in charge? It's been made very clear from both NATO, the Americans and the mayor's office we spoke to the mayor herself yesterday -- that it's the Greeks running the show.

Nobody does anything without the Greek's say-so in terms of weapons and the like. But yes those special forces also the FBI is going to be in town; they're bringing in special teams for hostage rescue and they're also bringing in special teams for bomb site analysis which we hope they're not going to have to utilize.

One other thing I'll just tell you about, Kyra, was it's interesting, on the Internet today they've been putting out this list of things that tourists should watch out for in terms of prices. They're worried about price gouging, not all that unusual. This list is amazing, it covers everything from what you should pay for a bottle of water or a Souvlaki right through to a taxi fare and even a cardiologist, should you need one, Kyra.

PHILLIPS: Michael Holmes, you always find the quirky things in the story so we look forward to more of your reports. Thanks so much.

Well, gas prices are going down but who would have thought that $1.89 per gallon would sound reasonable? Mary Snow joins us live from the New York Stock Exchange. Hi, Mary.

MARY SNOW, FINANCIAL NEWS: Hi, there, Kyra. Yes, hardly a bargain with the retail price of gasoline fell to its lowest level in three months. The Energy Department saying the nationwide average is now $1.89 a gallon. Still, it's 35 cents higher than it was a year ago but it's off the record high of its $2.06 a gallon. That was set back in May.

The drop in pump price is made slower, even reverse in coming weeks, though. This is higher crude oil costs get passed along to consumers and those crude oil prices hit all time highs earlier today trading above $44 a barrel for the first time since prices hovering right now around that mark.

The head of OPEC warns the cartel has nothing in reserve that can be brought to the market quickly to cool off red-hot demand -- Kyra.

PHILLIPS: All right tell us about the market, Mary.

SNOW: Well, those oil prices really pressuring the markets back up in the red all day. Not only oil prices but disappointing economic day. The government report showing that consumer spending slowed dramatically in June, turning in its biggest decline since September of 2001.

Personal income growth also slowed. Taking a look at the numbers, the Dow Industrials right now down 35 points, the Nasdaq is down more than 1 percent. And that is the latest from Wall Street. Coming up later this hour, a new study shows fewer Americans have health insurance and children might be even worse off than adults.

LIVE FROM is coming right back.

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