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Congress Considers Goss Nomination; House Armed Services Committee Tackles 9/11 Commission Ideas; Continued Fighting In Najaf; Amber Frey Takes The Stand; Fed Raises Interest Rates
Aired August 10, 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.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Porter Goss is a leader with strong experience in intelligence and the fight against terrorism.
(END VIDEO CLIP)
MILES O'BRIEN, CNN ANCHOR: Tapping the top spot, but will the politics of terror prevent him from actually getting the job?
BETTY NGUYEN, CNN ANCHOR: Did officials in the city of light keep Las Vegas residents in the dark about an al Qaeda home video, a possible target?
O'BRIEN: Star witness Amber Frey takes the stand in the Scott Peterson murder trial. We're live from the courthouse in California.
NGUYEN: And your health -- how your job could actually help prevent developing Alzheimer's Disease. From the CNN Center here in Atlanta, I'm Betty Nguyen in for Kyra Phillips.
O'BRIEN: And I'm Miles O'Brien. CNN's LIVE FROM starts right now.
A spy turned politician known as a straight shooter taking aim at the top intelligence job in the U.S. for now.
Porter Goss, a Republican congressman from Florida emerged in the Rose Garden this morning as President Bush announced him as his choice to tackle the thorny job of leading the Central Intelligence Agency.
But even as Congress considers the Goss nomination, there is growing momentum to change his perspective job description by creating a new post to try and fix what ails the nation's vast intelligence apparatus.
CNN's Jill Dougherty at the White House with more on all of this -- hello Jill.
JILL DOUGHERTY, CNN CORRESPONDENT: Hello, Miles.
Well, the president is currently in Florida. In fact, Porter Goss is from Florida and the president is down there for a campaign swing that's ultimately going to take him to the western part of the United States.
Before he left, he was in the Rose Garden making that brief announcement and saying that Porter Goss quote, knows the CIA inside and out; that he is well prepared to lead the agency at this time.
In Florida, he also very briefly mentioned Porter Goss and said that he wants to work to move ahead on creating a national intelligence director. Here's what the president said.
(BEGIN VIDEO CLIP)
BUSH: We're already taking action on a large majority of the 9/11 Commission report. And we've got more to do to better secure our ports and borders and to train our first responders, to dramatically improve intelligence-gathering capability.
Today I nominated a fine Floridian, Congressman Porter Goss, to head the Central Intelligence Agency.
And we'll work with Congress to create a position of the National Intelligence Director, so that one person is in charge of coordinating all our intelligence efforts overseas and at home.
(END VIDEO CLIP)
DOUGHERTY: So, the president made the official offer to Porter Goss last night, we're told, at a dinner here at the White House.
And he -- the president has been stressing the two halves -- that's -- in his long career -- Porter Goss has had. Number one, beginning in intelligence back in Army intelligence, then in the CIA, and for 12 years in fact, and then moving on into politics.
And in the Bush opinion, that is something that should be able to help him, knowing the political side and then the intelligence side.
Democrats, however, some of them at least, are taking a different position. They are criticizing the fact that he is a very strong supporter of the president and they say there shouldn't be a politician in that job -- Miles.
O'BRIEN: Jill, a fair amount of vocal opposition already to Porter Goss on Capitol Hill. So, he might have a rough ride down there on the nomination process?
DOUGHERTY: He could, theoretically, Miles but you know, you have to say that both sides, the Democrats and the Republicans, are now under pressure to move as quickly and resolutely forward on security issues and intelligence issues as possible.
So, they are both under the gun. And the Democrats can't really be perceived either as trying to slow things down or not move ahead and keep that CIA position vacant for a long time.
O'BRIEN: And just quickly on his Congressional seat, what becomes of it -- would there be some sort of special election, assuming he is nominated and endorsed by Congress?
DOUGHERTY: Well, if he were endorsed by Congress, actually he'd have to be approved by the Senate, then he could assume the post of the head of the CIA and then down the road farther you have the issue of this national intelligence director.
And that really does reorganize intelligence so that the NID as they are called, the national intelligence director, would actually be overseeing the CIA and other agencies that deal with intelligence in the United States.
O'BRIEN: Jill Dougherty at the White House thank you -- Betty.
NGUYEN: Well, bringing the role of CIA chief into the 21st century is what Goss' fellow lawmakers are trying to do.
Right now, the House Armed Services Committee is tackling some reform ideas put forth by the 9/11 Commission.
Among the first to testify the man who led that panel.
(BEGIN VIDEO CLIP)
THOMAS KEAN, CHAIRMAN, 9/11 COMMISSION: We cannot succeed against terrorism by Islamic extremist groups unless we use all elements of national power and that's military power, diplomacy, intelligence, covert action, law enforcement, economic policy, foreign aid, public diplomacy, and of course homeland defense.
If we favor one tool while neglecting others we're going to leave ourselves vulnerable and weaken our entire national effort.
This is not just our view; it is the view of every policymaker.
(END VIDEO CLIP)
NGUYEN: And in just a few minutes, Miles will be talking more reform with Timothy Roemer, member of the 9/11 Commission. That is coming up right here on LIVE FROM -- Miles.
O'BRIEN: What would you think if you learned alleged terrorists were casing your city for a possible attack that officials knew about it but kept you in the dark?
Reporter Gerard Ramalho of affiliate KVBC says apparently that's what happened in Las Vegas not too long ago.
(BEGIN VIDEOTAPE)
GERARD RAMALHO, KVBC-TV REPORTER: This is surveillance tape that was confiscated from a man in Detroit accused of being part of a terrorist cell. The tape shows the Las Vegas strip and specifically several casinos, including New York, New York, Excalibur, and MGM.
According to a former federal prosecutor, officials brought the tapes to Las Vegas to show them to city leaders but he says the leaders seemed unconcerned.
RICHARD CONVERTINO, FMR. FEDERAL PROSECUTOR: We sent an agent out to Las Vegas to fully brief the people there. The agent asked for a meeting of the relevant people so he could brief everyone in the Las Vegas law enforcement community and only two people showed up for the meeting.
The reason that he was given for the low turnout was because of liability -- that if they heard this information, they would have to act on it. It was extraordinary, unacceptable and absolutely outrageous.
RAMALHO: News 3 spoke to Mayor Oscar Goodman about the tapes. He says he never even knew they existed.
MAYOR OSCAR GOODMAN, LAS VEGAS: No one has ever asked for a meeting with me that had to do with our security in this community where I didn't drop everything and meet with them and then tell the public exactly what the meeting was about. So, whoever is spreading these kind of rumors is doing it for malicious purposes; that's the only explanation I have.
RAMALHO: A government memo obtained by the Associated Press also indicates FBI officials were told Las Vegas officials were concerned about liability, that if they heard about the information, they could be held responsible in the event of an attack. So far, no specific Las Vegas leaders have been named.
(END VIDEOTAPE)
O'BRIEN: A more immediate concern: warnings that terrorists might commander sight seeing helicopters or limousines. Days after that warning, some Nevada air tour and limo operators say no one has said a word to them yet.
Terrifying flashback in Istanbul today. Two small hotels were bombed almost at the exact same moment. Two were killed, 11 others wounded. A third explosion damaged a gas plant on the outskirts of the city.
Officials aren't sure if all three are linked. An al Qaeda linked group has claimed responsibility, but Turkish authorities say they suspect Kurdish rebels. This isn't the first time Istanbul has been targeted of course. In November more than 60 were killed by suicide truck bombers there.
NGUYEN: Gunfire and explosions rock Najaf on the sixth day of fighting between U.S. forces and supporters of wanted cleric Muqtada al-Sadr. And now the fighting is spreading elsewhere.
CNN's John Vause reports from Baghdad.
(BEGIN VIDEOTAPE)
JOHN VAUSE, CNN CORRESPONDENT: Tensions have been rising here all day in Baghdad with the expectation of a major confrontation between U.S. and Iraqi forces and the militia loyal to the radical Shiite cleric Muqtada al-Sadr.
The reason for this a statement put out on behalf of the cleric warning Baghdad residents to stay indoors and earlier today in Sadr City a poor neighborhood of Baghdad a stronghold for al-Sadr, a call from the mosque, a crisis call, a call for the residents there to take up arms.
An overnight curfew in Sadr City did little to quell the violence with ongoing clashes between al-Sadr's men and the U.S. and Iraqi forces.
One U.S. official there described the fighting as more concentrated than in previous days and said the clashes are directly linked to the fighting ongoing in Najaf. In that holy city the militia loyal to al-Sadr has now dug into the mosque and also the nearby cemetery. This is set for an explosive showdown with U.S. troops now having the permission of the governor of Najaf to go into the mosque to clear out the militia.
Right now the U.S. says it has no plans to do this. Instead it has encircled the Imam Ali Mosque compound, trying to cut off supply lines to the militants inside.
There has been sporadic fighting in Najaf but it is relatively quiet compared to previous days. U.S. troops are now warning residents near to the fighting to leave in Arabic announcements they say it is not safe to stay in Najaf.
They are also warning the insurgents inside the Imam Ali Mosque compound to leave peacefully or they will face death.
Now a statement put out on behalf of the radical Shiite cleric Muqtada al-Sadr is now calling on other Islamic organizations to join the fight, to defend Najaf and the Imam Ali Mosque, the most holy place for Shiite Muslims in all of Islam.
John Vause, CNN, Baghdad.
(END VIDEOTAPE)
O'BRIEN: Well, forces of nature caught on tape. The earth moves quite literally. Details on the landslide ahead on LIVE FROM.
RUSTY DORNIN, CNN CORRESPONDENT: I'm Rusty Dornin in Redwood City, California where the prosecution's star witness finally takes the stand. More coming up.
O'BRIEN: And this story begs a question. Can a tiger change its stripes? Or at least shed them? We're pacing the cage later on LIVE FROM.
ANNOUNCER: You're watching LIVE FROM on CNN, the most trusted name in news.
(COMMERCIAL BREAK) O'BRIEN: Nearly three years after the 9/11 attacks in Washington these days seems to be all about intelligence or perhaps the current lack of it.
As the political power structure digests the president's nomination of Porter Goss to head the CIA, it is simultaneously working on a response to the definitive study of terror attacks that changed the world.
We're joined now by a member of the 9/11 Commission, Tim Roemer, Democrat of Indiana, former member of Congress. Good to have you with us.
TIM ROEMER, 9/11 COMMISSION MEMBER My pleasure, Miles, thanks.
O'BRIEN: Let's talk about Porter Goss, former colleague of yours, other side of the aisle, in Congress. He's not going to get a free ride as he seeks confirmation for the Senate is he?
ROEMER: Nobody should get a free ride. This job is too important.
Look, I worked with Porter for a number of years as a member of the Intelligence Committee on the joint inquiry where we took the first look at the failures of 9/11, and I think he has the personality, the background as an insider for a lot of this.
But the inside knowledge, I think, Miles has to be used to turn the CIA upside down and right side up. It has to be used to get structural change and human personnel change in the CIA.
Just a short month and a half ago, his committee issued a excoriating report about how bad and how dysfunctional the CIA was with respect to their human intelligence, so Porter's got a lot of work ahead of him and hopefully he will also endorse the 9/11 Commission recommendations along the way during his confirmation hearings.
O'BRIEN: That insider status -- his background as a CIA agent and operative -- he was involved in the Cuban missile crisis days doing some things we can't talk about unfortunately but I'm sure they're quite heroic.
Nevertheless, that can cut both ways. That inside knowledge can help you tame the bureaucracy. It can also make it difficult for you to be a change agent. Which way do you think it will go?
ROEMER: That's the challenge and the big question today. Can Congressman Porter Goss use that institutional knowledge, that background, that experience in operations to change a system that has become dysfunctional and that even in the structure of this -- the 9/11 Commission has outlined, if there is a created national intelligence director, would Porter Goss be reporting directly to that person?
Would he be reporting directly to the head of the national counterterrorism unit? And how is he going to be able to put forward with vision and management change and institutional reform the kind of rebuilding of analysts, the kind of strategic capabilities that the CIA needs, rebuilding the human intelligence capabilities at CIA and as I said before, using this in positive ways to turn an institution around in a good way to get a change bottom up.
O'BRIEN: That's the second time you've mentioned human intelligence. From my read of what happened prior to 9/11, that is the most glaring weakness. Not necessarily a problem at the top although they're not mutually exclusive, of course.
But the fact is over the years; the U.S. intelligence apparatus has allowed that human intelligence capability -- spies on the ground -- you know, people who are undercover to whither. In focusing so much on creating this you know huge new structure, this new leader of intelligence, does that minimize that concern?
ROEMER: No, in fact what we've found in many of the mistakes and failures leading up to 9/11 that there was not a sharing of information. There was not somebody in charge.
O'BRIEN: Was it just bad information or not sharing or both?
ROEMER: Well it was -- oftentimes it was not a thorough understanding of the threat -- they thought bin Laden was a financier of terrorism rather than one of the heads of terrorism. They didn't connect the dots with many of the clues leading up to 9/11.
They had a culture of a need to know rather than a need to share information. And they let the human intelligence capabilities just wither away and become dysfunctional.
We've got great people at the CIA; we've got patriotic people there. We've got good grounds to build on.
But there's a lot of work to make sure that analytical capabilities, penetration so that we penetrate organizations like al Qaeda in the future and that we don't just put all the money into satellites up in the sky that can't help us understand the threat in Torah Bora in the mountains between Pakistan and Afghanistan.
O'BRIEN: Can a single person, though, cut through those fiefdoms, those walls that exist between all those intelligence agencies, and I guess a related question might be why does national security adviser currently do just that?
ROEMER: One person can do it, Miles, if you give them the power to do it. If you give somebody in Washington, D.C. the power with the budget and so they get...
O'BRIEN: Don't call them czar, whatever you do...
ROEMER: Czar is what we have now. Czar is somebody that can -- that's a synonym for failure. It's the worst term in the lexicon of Washington, D.C. If you give somebody the power of the budget. If you give somebody the power to hire and fire; if you give them the troops to get things done, then you've got somebody with real power and access to the president and the capability to move our institutions where they need to go to this new threat.
We need a new government for a new era and a new threat environment out there. Right now we don't have the powerful CIA person. They don't control 80 percent of the budget. They don't have the power to walk into a room and fire and hire people.
We need to create that powerful person and that's what the 9/11 Commission has done with this national intelligence director.
O'BRIEN: But why a new post? Why not give the national security adviser that role?
ROEMER: I think the primary reason is because what we saw leading up to 9/11 was a failure to communicate. It's a failure to bridge the divide between what the CIA was doing overseas and what the FBI was collecting. We need one person that's accountable for that that can advise the president and gets the information coming up in a competitive yet diffused fashion so that we can act on a threat quickly.
O'BRIEN: The flip side of that approach is it encourages kind of bureaucratic groupthink. It homogenizes all that information.
In other words, when you have horizontal structures novel approaches imagination, which is the term used by the committee is allowed to -- well it fosters it. How do you avoid that? By creating this huge centralized authority?
ROEMER: Well, we're doing is we're eliminating bureaucracy. We're saying for instance with the creation of a national counterterrorism center take all these government centers and fusion centers, 11 or 12 of them, and make one fusion center.
We're saying that instead of having the CIA director and the FBI director who did not talk when we captured Moussaui in August 16 of 2001, they didn't tell each other that they just had found an extremist who has learned to fly in America. The systems blinking red, people's hair's on fire, they know something bad is going to happen, and the CIA and the FBI never connect the dots and never communicate.
We want one person that can bring and fuse and synergize this system and be accountable and make the system work to this new threat.
O'BRIEN: Tim Roemer, member of the 9/11 Commission who is touring the country now to talk about the subjects we've just been talking about. Thanks for your time.
ROEMER: Thanks, Miles. Nice being with you.
O'BRIEN: All right, thank you. NGUYEN: After months of waiting and growing intrigue, jurors in the Scott Peterson double murder trial today are hearing from Peterson's mistress, Amber Frey.
Our Rusty Dornin joins us now outside the courthouse with all the details and Rusty I understand Amber Frey has taken the stand?
DORNIN: That's right -- and we barely got a glimpse of her this morning when she came to the courthouse just about an hour before the proceedings started. She was brought by the detectives into the underground garage and then taken directly up to the courtroom.
We understand perhaps later we may get a picture of Amber Frey. Meantime, they talked about in the beginning of her testimony her first date with Scott Peterson on November 20 of 2002. She talked about how they went to a Japanese restaurant, that he got a private room for her, that she was nervous during the date but she felt very comfortable with him.
But the prosecutors did draw out a lot of answers and a lot of the lies that Scott Peterson began telling within just perhaps the first ten minutes of Amber Frey's testimony.
Apparently he did tell her that he had a warehouse in Modesto, that he had a condo in San Diego, that he lived in Sacramento, that he was going fishing with his brothers in Alaska during Thanksgiving and then going to his family's home in Kennebunkport, Maine which of course those were all not true.
They talked about how they stayed and closed the restaurant there and then went to a bar later on and how she went back to his hotel with him and had sex with him and spent the night there.
She also described another date where he -- they went hiking with her daughter on December 2 and how he called her often and left her many messages, calling her from the road, from his business trips and that sort of thing.
She was wearing -- is wearing a black suit. She appeared very nervous and stumbled several times during her testimony. Kept apologizing to the court, apologizing to the judge, having to repeat herself. The judge had asked her a couple of times to please speak up.
Also, in the courtroom the reporters were given these 42 pages worth of transcripts, which are Amber Frey and Scott Peterson's telephone conversations, presumably we are going to be hearing those some time in court in the near future so Amber Frey on the stand after much anticipation in this case and even her own attorney says she's going to be spending a considerable amount of time there -- Betty.
NGUYEN: And he said at least a week -- Rusty Dornin in California, thank you -- Miles.
O'BRIEN: So, what are the odds that your ride will roll over?
A first of its kind system for you to find out just how stable your SUV really is. We'll have details ahead on LIVE FROM.
And two words for billionaire boss Donald Trump: you're bankrupt.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Really scary.
UNIDENTIFIED MALE: It's awe-inspiring. It's kind of nice to see that.
(END VIDEO CLIP)
O'BRIEN: Is it a war on terror or a tourist photo opportunity. In New York, the answer is yes.
(COMMERCIAL BREAK)
NGUYEN: Some "News Across America" now, Mark Hacking has made his first court appearance since being charged with murdering his wife, Lori.
He was seen on a live video hook-up from jail and police say Hacking confessed to the killing, telling his brothers he shot his wife to death while she slept.
Donald Trump could lose his majority stake in his troubled casinos. They're being restructured under a bankruptcy plan. The company hopes to emerge from Chapter 11 bankruptcy within a year.
And less than an hour from now, we should know the size of an expected interest rate hike by the Federal Reserve. Most experts predict a quarter point rise. We'll bring you that announcement in less than an hour at about 2:15 Eastern.
O'BRIEN: Ahead in the Fed announcement on interest rates, we bring you Rhonda Schaffler who is fully versed in Green-speak and will be able to explain everything that we see. A quarter point rise is what we expect, Rhonda, so I guess we better lock our rates in right now.
RHONDA SCHAFFLER, SR. BUSINESS CORRESPONDENT: Well, Miles, it is pretty much a foregone conclusion here that the fed is going to raise its key interest rate by that quarter point. It would be one-and-a- half percent. That is the wide back here. It would be the second rate increase in two months.
And that's after going about three years with no hikes whatsoever. The Fed cut rates aggressively back in 2001 to guard against deflation. That's no longer a threat now. Fed more concerned about the possibility of inflation.
Stocks were actually holding some pretty strong gains ahead of the Fed announcement. Dow up about 70 points, Nasdaq adding one percent. O'BRIEN: All right, let's take out the crystal ball, Rhonda. I know you're going to be watching this very carefully and as will investors behind you there to see what the trend is. Is this the beginning of a series of rate hikes or what?
SCHAFFLER: Well, that's what's going to be perhaps most interesting about the afternoon. We know that Greenspan earlier signaled a series of gradual rate hikes in the coming months but what happened since then the economy has cooled in June and July; in fact, Greenspan calls it a soft patch, the economy, and that means the Fed may take a wait and see approach and the other issue of course oil prices are still soaring, lots of uncertainties about how strongly the economy can grow.
With that issue as well as the jobs issue unless jobs, spending and some of the other data improve before the Feds next meeting. Central Bank could skip another increase at its September meeting and some Fed watchers also say the Fed might want to avoid controversy of raising rates just weeks before the presidential elections so we will have to wait and see on that one.
For now, that's the latest from Wall Street. Still ahead, we're revving up a new set of rankings about SUVs and rollovers. Later this hour, I'll tell you how your gas-guzzler compares. CNN's LIVE FROM rolls on right after this break.
(COMMERCIAL BREAK)
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Aired August 10, 2004 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Porter Goss is a leader with strong experience in intelligence and the fight against terrorism.
(END VIDEO CLIP)
MILES O'BRIEN, CNN ANCHOR: Tapping the top spot, but will the politics of terror prevent him from actually getting the job?
BETTY NGUYEN, CNN ANCHOR: Did officials in the city of light keep Las Vegas residents in the dark about an al Qaeda home video, a possible target?
O'BRIEN: Star witness Amber Frey takes the stand in the Scott Peterson murder trial. We're live from the courthouse in California.
NGUYEN: And your health -- how your job could actually help prevent developing Alzheimer's Disease. From the CNN Center here in Atlanta, I'm Betty Nguyen in for Kyra Phillips.
O'BRIEN: And I'm Miles O'Brien. CNN's LIVE FROM starts right now.
A spy turned politician known as a straight shooter taking aim at the top intelligence job in the U.S. for now.
Porter Goss, a Republican congressman from Florida emerged in the Rose Garden this morning as President Bush announced him as his choice to tackle the thorny job of leading the Central Intelligence Agency.
But even as Congress considers the Goss nomination, there is growing momentum to change his perspective job description by creating a new post to try and fix what ails the nation's vast intelligence apparatus.
CNN's Jill Dougherty at the White House with more on all of this -- hello Jill.
JILL DOUGHERTY, CNN CORRESPONDENT: Hello, Miles.
Well, the president is currently in Florida. In fact, Porter Goss is from Florida and the president is down there for a campaign swing that's ultimately going to take him to the western part of the United States.
Before he left, he was in the Rose Garden making that brief announcement and saying that Porter Goss quote, knows the CIA inside and out; that he is well prepared to lead the agency at this time.
In Florida, he also very briefly mentioned Porter Goss and said that he wants to work to move ahead on creating a national intelligence director. Here's what the president said.
(BEGIN VIDEO CLIP)
BUSH: We're already taking action on a large majority of the 9/11 Commission report. And we've got more to do to better secure our ports and borders and to train our first responders, to dramatically improve intelligence-gathering capability.
Today I nominated a fine Floridian, Congressman Porter Goss, to head the Central Intelligence Agency.
And we'll work with Congress to create a position of the National Intelligence Director, so that one person is in charge of coordinating all our intelligence efforts overseas and at home.
(END VIDEO CLIP)
DOUGHERTY: So, the president made the official offer to Porter Goss last night, we're told, at a dinner here at the White House.
And he -- the president has been stressing the two halves -- that's -- in his long career -- Porter Goss has had. Number one, beginning in intelligence back in Army intelligence, then in the CIA, and for 12 years in fact, and then moving on into politics.
And in the Bush opinion, that is something that should be able to help him, knowing the political side and then the intelligence side.
Democrats, however, some of them at least, are taking a different position. They are criticizing the fact that he is a very strong supporter of the president and they say there shouldn't be a politician in that job -- Miles.
O'BRIEN: Jill, a fair amount of vocal opposition already to Porter Goss on Capitol Hill. So, he might have a rough ride down there on the nomination process?
DOUGHERTY: He could, theoretically, Miles but you know, you have to say that both sides, the Democrats and the Republicans, are now under pressure to move as quickly and resolutely forward on security issues and intelligence issues as possible.
So, they are both under the gun. And the Democrats can't really be perceived either as trying to slow things down or not move ahead and keep that CIA position vacant for a long time.
O'BRIEN: And just quickly on his Congressional seat, what becomes of it -- would there be some sort of special election, assuming he is nominated and endorsed by Congress?
DOUGHERTY: Well, if he were endorsed by Congress, actually he'd have to be approved by the Senate, then he could assume the post of the head of the CIA and then down the road farther you have the issue of this national intelligence director.
And that really does reorganize intelligence so that the NID as they are called, the national intelligence director, would actually be overseeing the CIA and other agencies that deal with intelligence in the United States.
O'BRIEN: Jill Dougherty at the White House thank you -- Betty.
NGUYEN: Well, bringing the role of CIA chief into the 21st century is what Goss' fellow lawmakers are trying to do.
Right now, the House Armed Services Committee is tackling some reform ideas put forth by the 9/11 Commission.
Among the first to testify the man who led that panel.
(BEGIN VIDEO CLIP)
THOMAS KEAN, CHAIRMAN, 9/11 COMMISSION: We cannot succeed against terrorism by Islamic extremist groups unless we use all elements of national power and that's military power, diplomacy, intelligence, covert action, law enforcement, economic policy, foreign aid, public diplomacy, and of course homeland defense.
If we favor one tool while neglecting others we're going to leave ourselves vulnerable and weaken our entire national effort.
This is not just our view; it is the view of every policymaker.
(END VIDEO CLIP)
NGUYEN: And in just a few minutes, Miles will be talking more reform with Timothy Roemer, member of the 9/11 Commission. That is coming up right here on LIVE FROM -- Miles.
O'BRIEN: What would you think if you learned alleged terrorists were casing your city for a possible attack that officials knew about it but kept you in the dark?
Reporter Gerard Ramalho of affiliate KVBC says apparently that's what happened in Las Vegas not too long ago.
(BEGIN VIDEOTAPE)
GERARD RAMALHO, KVBC-TV REPORTER: This is surveillance tape that was confiscated from a man in Detroit accused of being part of a terrorist cell. The tape shows the Las Vegas strip and specifically several casinos, including New York, New York, Excalibur, and MGM.
According to a former federal prosecutor, officials brought the tapes to Las Vegas to show them to city leaders but he says the leaders seemed unconcerned.
RICHARD CONVERTINO, FMR. FEDERAL PROSECUTOR: We sent an agent out to Las Vegas to fully brief the people there. The agent asked for a meeting of the relevant people so he could brief everyone in the Las Vegas law enforcement community and only two people showed up for the meeting.
The reason that he was given for the low turnout was because of liability -- that if they heard this information, they would have to act on it. It was extraordinary, unacceptable and absolutely outrageous.
RAMALHO: News 3 spoke to Mayor Oscar Goodman about the tapes. He says he never even knew they existed.
MAYOR OSCAR GOODMAN, LAS VEGAS: No one has ever asked for a meeting with me that had to do with our security in this community where I didn't drop everything and meet with them and then tell the public exactly what the meeting was about. So, whoever is spreading these kind of rumors is doing it for malicious purposes; that's the only explanation I have.
RAMALHO: A government memo obtained by the Associated Press also indicates FBI officials were told Las Vegas officials were concerned about liability, that if they heard about the information, they could be held responsible in the event of an attack. So far, no specific Las Vegas leaders have been named.
(END VIDEOTAPE)
O'BRIEN: A more immediate concern: warnings that terrorists might commander sight seeing helicopters or limousines. Days after that warning, some Nevada air tour and limo operators say no one has said a word to them yet.
Terrifying flashback in Istanbul today. Two small hotels were bombed almost at the exact same moment. Two were killed, 11 others wounded. A third explosion damaged a gas plant on the outskirts of the city.
Officials aren't sure if all three are linked. An al Qaeda linked group has claimed responsibility, but Turkish authorities say they suspect Kurdish rebels. This isn't the first time Istanbul has been targeted of course. In November more than 60 were killed by suicide truck bombers there.
NGUYEN: Gunfire and explosions rock Najaf on the sixth day of fighting between U.S. forces and supporters of wanted cleric Muqtada al-Sadr. And now the fighting is spreading elsewhere.
CNN's John Vause reports from Baghdad.
(BEGIN VIDEOTAPE)
JOHN VAUSE, CNN CORRESPONDENT: Tensions have been rising here all day in Baghdad with the expectation of a major confrontation between U.S. and Iraqi forces and the militia loyal to the radical Shiite cleric Muqtada al-Sadr.
The reason for this a statement put out on behalf of the cleric warning Baghdad residents to stay indoors and earlier today in Sadr City a poor neighborhood of Baghdad a stronghold for al-Sadr, a call from the mosque, a crisis call, a call for the residents there to take up arms.
An overnight curfew in Sadr City did little to quell the violence with ongoing clashes between al-Sadr's men and the U.S. and Iraqi forces.
One U.S. official there described the fighting as more concentrated than in previous days and said the clashes are directly linked to the fighting ongoing in Najaf. In that holy city the militia loyal to al-Sadr has now dug into the mosque and also the nearby cemetery. This is set for an explosive showdown with U.S. troops now having the permission of the governor of Najaf to go into the mosque to clear out the militia.
Right now the U.S. says it has no plans to do this. Instead it has encircled the Imam Ali Mosque compound, trying to cut off supply lines to the militants inside.
There has been sporadic fighting in Najaf but it is relatively quiet compared to previous days. U.S. troops are now warning residents near to the fighting to leave in Arabic announcements they say it is not safe to stay in Najaf.
They are also warning the insurgents inside the Imam Ali Mosque compound to leave peacefully or they will face death.
Now a statement put out on behalf of the radical Shiite cleric Muqtada al-Sadr is now calling on other Islamic organizations to join the fight, to defend Najaf and the Imam Ali Mosque, the most holy place for Shiite Muslims in all of Islam.
John Vause, CNN, Baghdad.
(END VIDEOTAPE)
O'BRIEN: Well, forces of nature caught on tape. The earth moves quite literally. Details on the landslide ahead on LIVE FROM.
RUSTY DORNIN, CNN CORRESPONDENT: I'm Rusty Dornin in Redwood City, California where the prosecution's star witness finally takes the stand. More coming up.
O'BRIEN: And this story begs a question. Can a tiger change its stripes? Or at least shed them? We're pacing the cage later on LIVE FROM.
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(COMMERCIAL BREAK) O'BRIEN: Nearly three years after the 9/11 attacks in Washington these days seems to be all about intelligence or perhaps the current lack of it.
As the political power structure digests the president's nomination of Porter Goss to head the CIA, it is simultaneously working on a response to the definitive study of terror attacks that changed the world.
We're joined now by a member of the 9/11 Commission, Tim Roemer, Democrat of Indiana, former member of Congress. Good to have you with us.
TIM ROEMER, 9/11 COMMISSION MEMBER My pleasure, Miles, thanks.
O'BRIEN: Let's talk about Porter Goss, former colleague of yours, other side of the aisle, in Congress. He's not going to get a free ride as he seeks confirmation for the Senate is he?
ROEMER: Nobody should get a free ride. This job is too important.
Look, I worked with Porter for a number of years as a member of the Intelligence Committee on the joint inquiry where we took the first look at the failures of 9/11, and I think he has the personality, the background as an insider for a lot of this.
But the inside knowledge, I think, Miles has to be used to turn the CIA upside down and right side up. It has to be used to get structural change and human personnel change in the CIA.
Just a short month and a half ago, his committee issued a excoriating report about how bad and how dysfunctional the CIA was with respect to their human intelligence, so Porter's got a lot of work ahead of him and hopefully he will also endorse the 9/11 Commission recommendations along the way during his confirmation hearings.
O'BRIEN: That insider status -- his background as a CIA agent and operative -- he was involved in the Cuban missile crisis days doing some things we can't talk about unfortunately but I'm sure they're quite heroic.
Nevertheless, that can cut both ways. That inside knowledge can help you tame the bureaucracy. It can also make it difficult for you to be a change agent. Which way do you think it will go?
ROEMER: That's the challenge and the big question today. Can Congressman Porter Goss use that institutional knowledge, that background, that experience in operations to change a system that has become dysfunctional and that even in the structure of this -- the 9/11 Commission has outlined, if there is a created national intelligence director, would Porter Goss be reporting directly to that person?
Would he be reporting directly to the head of the national counterterrorism unit? And how is he going to be able to put forward with vision and management change and institutional reform the kind of rebuilding of analysts, the kind of strategic capabilities that the CIA needs, rebuilding the human intelligence capabilities at CIA and as I said before, using this in positive ways to turn an institution around in a good way to get a change bottom up.
O'BRIEN: That's the second time you've mentioned human intelligence. From my read of what happened prior to 9/11, that is the most glaring weakness. Not necessarily a problem at the top although they're not mutually exclusive, of course.
But the fact is over the years; the U.S. intelligence apparatus has allowed that human intelligence capability -- spies on the ground -- you know, people who are undercover to whither. In focusing so much on creating this you know huge new structure, this new leader of intelligence, does that minimize that concern?
ROEMER: No, in fact what we've found in many of the mistakes and failures leading up to 9/11 that there was not a sharing of information. There was not somebody in charge.
O'BRIEN: Was it just bad information or not sharing or both?
ROEMER: Well it was -- oftentimes it was not a thorough understanding of the threat -- they thought bin Laden was a financier of terrorism rather than one of the heads of terrorism. They didn't connect the dots with many of the clues leading up to 9/11.
They had a culture of a need to know rather than a need to share information. And they let the human intelligence capabilities just wither away and become dysfunctional.
We've got great people at the CIA; we've got patriotic people there. We've got good grounds to build on.
But there's a lot of work to make sure that analytical capabilities, penetration so that we penetrate organizations like al Qaeda in the future and that we don't just put all the money into satellites up in the sky that can't help us understand the threat in Torah Bora in the mountains between Pakistan and Afghanistan.
O'BRIEN: Can a single person, though, cut through those fiefdoms, those walls that exist between all those intelligence agencies, and I guess a related question might be why does national security adviser currently do just that?
ROEMER: One person can do it, Miles, if you give them the power to do it. If you give somebody in Washington, D.C. the power with the budget and so they get...
O'BRIEN: Don't call them czar, whatever you do...
ROEMER: Czar is what we have now. Czar is somebody that can -- that's a synonym for failure. It's the worst term in the lexicon of Washington, D.C. If you give somebody the power of the budget. If you give somebody the power to hire and fire; if you give them the troops to get things done, then you've got somebody with real power and access to the president and the capability to move our institutions where they need to go to this new threat.
We need a new government for a new era and a new threat environment out there. Right now we don't have the powerful CIA person. They don't control 80 percent of the budget. They don't have the power to walk into a room and fire and hire people.
We need to create that powerful person and that's what the 9/11 Commission has done with this national intelligence director.
O'BRIEN: But why a new post? Why not give the national security adviser that role?
ROEMER: I think the primary reason is because what we saw leading up to 9/11 was a failure to communicate. It's a failure to bridge the divide between what the CIA was doing overseas and what the FBI was collecting. We need one person that's accountable for that that can advise the president and gets the information coming up in a competitive yet diffused fashion so that we can act on a threat quickly.
O'BRIEN: The flip side of that approach is it encourages kind of bureaucratic groupthink. It homogenizes all that information.
In other words, when you have horizontal structures novel approaches imagination, which is the term used by the committee is allowed to -- well it fosters it. How do you avoid that? By creating this huge centralized authority?
ROEMER: Well, we're doing is we're eliminating bureaucracy. We're saying for instance with the creation of a national counterterrorism center take all these government centers and fusion centers, 11 or 12 of them, and make one fusion center.
We're saying that instead of having the CIA director and the FBI director who did not talk when we captured Moussaui in August 16 of 2001, they didn't tell each other that they just had found an extremist who has learned to fly in America. The systems blinking red, people's hair's on fire, they know something bad is going to happen, and the CIA and the FBI never connect the dots and never communicate.
We want one person that can bring and fuse and synergize this system and be accountable and make the system work to this new threat.
O'BRIEN: Tim Roemer, member of the 9/11 Commission who is touring the country now to talk about the subjects we've just been talking about. Thanks for your time.
ROEMER: Thanks, Miles. Nice being with you.
O'BRIEN: All right, thank you. NGUYEN: After months of waiting and growing intrigue, jurors in the Scott Peterson double murder trial today are hearing from Peterson's mistress, Amber Frey.
Our Rusty Dornin joins us now outside the courthouse with all the details and Rusty I understand Amber Frey has taken the stand?
DORNIN: That's right -- and we barely got a glimpse of her this morning when she came to the courthouse just about an hour before the proceedings started. She was brought by the detectives into the underground garage and then taken directly up to the courtroom.
We understand perhaps later we may get a picture of Amber Frey. Meantime, they talked about in the beginning of her testimony her first date with Scott Peterson on November 20 of 2002. She talked about how they went to a Japanese restaurant, that he got a private room for her, that she was nervous during the date but she felt very comfortable with him.
But the prosecutors did draw out a lot of answers and a lot of the lies that Scott Peterson began telling within just perhaps the first ten minutes of Amber Frey's testimony.
Apparently he did tell her that he had a warehouse in Modesto, that he had a condo in San Diego, that he lived in Sacramento, that he was going fishing with his brothers in Alaska during Thanksgiving and then going to his family's home in Kennebunkport, Maine which of course those were all not true.
They talked about how they stayed and closed the restaurant there and then went to a bar later on and how she went back to his hotel with him and had sex with him and spent the night there.
She also described another date where he -- they went hiking with her daughter on December 2 and how he called her often and left her many messages, calling her from the road, from his business trips and that sort of thing.
She was wearing -- is wearing a black suit. She appeared very nervous and stumbled several times during her testimony. Kept apologizing to the court, apologizing to the judge, having to repeat herself. The judge had asked her a couple of times to please speak up.
Also, in the courtroom the reporters were given these 42 pages worth of transcripts, which are Amber Frey and Scott Peterson's telephone conversations, presumably we are going to be hearing those some time in court in the near future so Amber Frey on the stand after much anticipation in this case and even her own attorney says she's going to be spending a considerable amount of time there -- Betty.
NGUYEN: And he said at least a week -- Rusty Dornin in California, thank you -- Miles.
O'BRIEN: So, what are the odds that your ride will roll over?
A first of its kind system for you to find out just how stable your SUV really is. We'll have details ahead on LIVE FROM.
And two words for billionaire boss Donald Trump: you're bankrupt.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Really scary.
UNIDENTIFIED MALE: It's awe-inspiring. It's kind of nice to see that.
(END VIDEO CLIP)
O'BRIEN: Is it a war on terror or a tourist photo opportunity. In New York, the answer is yes.
(COMMERCIAL BREAK)
NGUYEN: Some "News Across America" now, Mark Hacking has made his first court appearance since being charged with murdering his wife, Lori.
He was seen on a live video hook-up from jail and police say Hacking confessed to the killing, telling his brothers he shot his wife to death while she slept.
Donald Trump could lose his majority stake in his troubled casinos. They're being restructured under a bankruptcy plan. The company hopes to emerge from Chapter 11 bankruptcy within a year.
And less than an hour from now, we should know the size of an expected interest rate hike by the Federal Reserve. Most experts predict a quarter point rise. We'll bring you that announcement in less than an hour at about 2:15 Eastern.
O'BRIEN: Ahead in the Fed announcement on interest rates, we bring you Rhonda Schaffler who is fully versed in Green-speak and will be able to explain everything that we see. A quarter point rise is what we expect, Rhonda, so I guess we better lock our rates in right now.
RHONDA SCHAFFLER, SR. BUSINESS CORRESPONDENT: Well, Miles, it is pretty much a foregone conclusion here that the fed is going to raise its key interest rate by that quarter point. It would be one-and-a- half percent. That is the wide back here. It would be the second rate increase in two months.
And that's after going about three years with no hikes whatsoever. The Fed cut rates aggressively back in 2001 to guard against deflation. That's no longer a threat now. Fed more concerned about the possibility of inflation.
Stocks were actually holding some pretty strong gains ahead of the Fed announcement. Dow up about 70 points, Nasdaq adding one percent. O'BRIEN: All right, let's take out the crystal ball, Rhonda. I know you're going to be watching this very carefully and as will investors behind you there to see what the trend is. Is this the beginning of a series of rate hikes or what?
SCHAFFLER: Well, that's what's going to be perhaps most interesting about the afternoon. We know that Greenspan earlier signaled a series of gradual rate hikes in the coming months but what happened since then the economy has cooled in June and July; in fact, Greenspan calls it a soft patch, the economy, and that means the Fed may take a wait and see approach and the other issue of course oil prices are still soaring, lots of uncertainties about how strongly the economy can grow.
With that issue as well as the jobs issue unless jobs, spending and some of the other data improve before the Feds next meeting. Central Bank could skip another increase at its September meeting and some Fed watchers also say the Fed might want to avoid controversy of raising rates just weeks before the presidential elections so we will have to wait and see on that one.
For now, that's the latest from Wall Street. Still ahead, we're revving up a new set of rankings about SUVs and rollovers. Later this hour, I'll tell you how your gas-guzzler compares. CNN's LIVE FROM rolls on right after this break.
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