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Secrets & Spies; Violence in Najaf; Swept Away

Aired August 17, 2004 - 13:59 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.

BETTY NGUYEN, CNN ANCHOR: Up first this hour, secrets and spies, politics and power, and millions of taxpayer dollars. They're converging this hour on Capitol Hill, where Defense Secretary Donald Rumsfeld is facing moves to strip the Pentagon of its lion's share of the U.S. intelligence budget.
CNN's Congressional correspondent, Ed Henry, has the latest. Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Betty.

Three more hearings today, overall, on top of a mountain of hearings that have mostly focused so far on the virtues of creating a new national intelligence director. But the significance today, as you mentioned, Defense Secretary Donald Rumsfeld finally speaking out. And for the first time we're seeing a real pushback on this national intelligence director post.

In particular, in part, this is all about Rumsfeld in a personal way not wanting to give up the power of the purse. As you mentioned, right now the Defense Department controls about 85 percent of the nation's intelligence budget. He does not want to give up those powers to a national intelligence director.

Rumsfeld, though, is walking a very fine line here. He has been on record for a long time being opposed to an intelligence director like this. But he realizes that his own boss, the president, has endorsed the proposal. So, Rumsfeld has to actually move forward on this, but he wants to work out the details, make sure that he has a voice in what happens.

But that division within the administration is something that Democrats like Carl Levin tried to exploit. And Rumsfeld got a little testy when Democrats pushed him on it.

(BEGIN VIDEO CLIP)

CARL LEVIN (D), MICHIGAN: Mr. Secretary, we've got specific recommendations...

DONALD RUMSFELD, DEFENSE SECRETARY: I understand.

LEVIN: ... from the 9/11 Commission. I'm quoting them. I just want to ask you your personal agreement or disagreement. If you can't give us that, that's OK. But just say you can't give us a personal "yes" or "no" from your perspective. RUMSFELD: I can't do it with yes or no, that's for sure.

LEVIN: Thank you. Thank you. Now, to the...

RUMSFELD: It's a vastly more complex question.

LEVIN: OK.

(END VIDEO CLIP)

HENRY: That complexity is what Rumsfeld is trying to stress, the fact that, as he put it later in the hearing, the devil will be in the details. He realizes that he has lost the battle on creating a national intelligence director, but he wants to make sure that he has a powerful voice in actually figuring out how that office will be shaped.

And in fact, Joint Chiefs Chairman General Richard Myers joined Rumsfeld in fighting back and cautioning Congress that this -- this solution that they're coming up with, the national intelligence director, might not solve all the problems.

(BEGIN VIDEO CLIP)

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: There cannot be a czar that just starts pointing and pulling levers. There is no wizard of Oz here that is going to solve this, in my opinion. It's got to be a collaborative effort.

(END VIDEO CLIP)

HENRY: But at another House hearing today, the 9/11 Commission co-chairs, Tom Kean and Lee Hamilton, were again pushing Congress on their 41 recommendations for reform. They have been very outspoken about their belief that, in fact, the national intelligence director does need to take this power from the Pentagon.

In one final hearing today, another Senate hearing in which 9/11 families testified, and they also joined the 9/11 Commission co- chairs, as well as all of the members of the 9/11 Commission in saying that these 9/11 families believe that there needs to be one top national intelligence director that will be held accountable and will have this power -- Betty.

NGUYEN: All right. Ed Henry, thank you for that -- Kyra.

KYRA PHILLIPS, CNN ANCHOR: Seven people killed today when a mortar round exploded on a busy street in Baghdad. That blast destroyed cars and set a building on fire, reportedly wounding 35 people. In a late report out of Baghdad, the military says insurgents attacked American troops with rocket-propelled grenades, killing one soldier and wounding several others.

Just north of Baghdad, a crash of an unmanned U.S. reconnaissance plane. The military says that the predator drone was assigned to the U.S. Air Force. That cause of the crash is either not yet known or it's not being released.

Fighting rages on in Najaf between U.S. forces and Shiite militants. American tanks reportedly tightened a cordon around rebel positions which include a hallowed mosque. At last report, an Iraqi delegation from Baghdad continued to meet with insurgent representatives in a bid to forge a truce.

The fighting in Najaf re-ignited nearly two weeks ago after a truce that lasted for about two months. CNN's Matthew Chance is in Najaf. He reports the situation is taking a toll on a lot of those Americans.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): The tombstones of the Valley of Peace, the ancient cemetery where U.S. troops have been fighting the Mehdi army in Najaf. This has been an eerie battle on sacred ground that few want.

UNIDENTIFIED MALE: Actually, sir, it's very scary at night, to tell you the truth. You don't know where the enemy is, you don't know who they are, the insurgents. And it's -- it's an old cemetery. So, I kind of feel bad for the people in a certain way. It's their cemetery, their mosque right there.

CHANCE: And everyone is a suspect. Troops even open coffins yet to be buried in a grim search for weapons.

UNIDENTIFIED MALE: I would like to pray especially today for the repose of the soul of all the Marines that have died.

CHANCE: In times of war, the church has its own battles to fight. Soldier and Marines attend this makeshift service to seek solace and advice. For some, the burden of killing or witnessing it is heavy.

CAPT. PAUL SHAUGHNESSY, U.S. NAVY: Last Friday night, during a mortar attack, there was a young corporal that was killed. And it was about 50 feet from me. A lot of his friends were right there.

We were trying to lift him out between two tombs so we could get him to the medical station. And his friends had to do that. And many of them, because his -- the blood was pretty profuse, really affected them, that somebody they had known that well kind of was dying before them.

CHANCE: And the threat of attack is constant. Here, a network of IEDs, or roadside bombs, is uncovered, 43 in all, designed to kill. They're disarmed and destroyed this time. But soldiers are killed and injured in attacks like this almost every day here.

UNIDENTIFIED MALE: Half the time you wave to somebody and they give you thumbs down, or whatever. You know, you are driving down the road and an IED goes off or something like that. It makes it like, you know, why are we even here when most of the people don't see us? Like most of the people don't even -- don't even want us here. CHANCE: After nearly 16 months of postwar Iraq, it's a question many now ask.

(on camera): Some of the troops here are uncomfortable about the idea of fighting in sacred places, especially ones that are so politically sensitive. But there is an old general frustration, too. For many it seems that the peaceful and stable Iraq they thought they were fighting for is getting more distant.

Matthew Chance, CNN, Najaf.

(END VIDEOTAPE)

NGUYEN: If the end of the world came tomorrow, this is what it would look like. That's how one Florida resident describes the struggle for survival after Hurricane Charley. It's a struggle that won't end anytime soon. The death toll has now climbed to 19.

Our Bob Franken is in Punta Gorda, where the cleanup is in day five, and there's still a lot of work to be done -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And Betty, let me show you a bag of what is extremely precious, a bag of ice. This is what they are passing out to the people who come down to the station here to get it.

You can see more in back of me. We are told, officials, that right now they are giving three of these per family. Of course, with the electricity out for hundreds of thousands, refrigeration of any sort is the only thing that helps them protect their food.

In addition to which, National Guard units have started moving out into some of the neighborhoods where people have been complaining that they are without the ability to come down here and get ice and the other things necessary for survival. And that's what we're talking about here, survival.

We're also talking about a massive federal presence. If there is a member of this administration who has anything to do with this, from the president on down, he has been in this area to tell people that the federal government cares, reminding many that in 1992 President George Bush the first was criticized for not responding and his administration not responding properly to Hurricane Andrew and possibly costing him some valuable votes. But the officials that are down here deny that there's anything to do with politics here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And what we are focused on right now are these victims. All of you guys will -- you know, all -- the media will go back to a nice air-conditioned room somewhere tonight. What FEMA is focused on is making certain that all of these disaster victims understand that we understand their suffering, we are trying to get everything out that we can to them.

It just so happens that Jeb Bush happens to be a Republican governor. It just so happens that President Bush happens to be a Republican president.

FEMA does not care. We respond to any kind of disaster in any state. Since -- since at least during my tenure, we responded to 56, I think, or more disasters. Democratic governors, Republican governors, it just doesn't make any difference. We're here to help disaster victims.

(END VIDEO CLIP)

FRANKEN: Air-conditioned rooms, of course, being something of a rarity around here because of all the power problems that they have in this state. Also another problem, and that has to do with the gougers and the various scam artists who are in town.

Officials are saying that if they get caught they are going to jail. As a matter of fact, the state's attorney general has announced that he is proceeding with a prosecution against two hotels, one in West Palm Beach, one in Lakeland, Florida. They say they received about 1,200 complaints of price gouging at the attorney general's office.

So, this is a very difficult situation, and they are trying to stop people like the price gougers and perhaps the looters from making things even worse -- Betty.

NGUYEN: CNN's Bob Franken in Punta Gorda. Thank you.

And we want to go now to Fort Myers with CNN's Jeanne Meserve, who is on the phone. She is traveling with Homeland Security Secretary Tom Ridge in the area -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Betty, Secretary Ridge came down here today with the secretary of Health and Human Services, Tommy Thompson. The two of them want to assess the response effort down here and see what more needs to be done.

Ridge said he was particularly concerned about communication problems. That meaning that even if his department moved resources down here they had to get word to people where they were. And he was a little frustrated and concerned that perhaps people weren't getting that word as quickly as they should.

He flew here to Fort Myers and then immediately boarded a Coast Guard helicopter. Tommy Thompson did as well. They took an aerial tour of the area around Punta Gorda that was so badly devastated. Secretary Ridge called the destruction "indiscriminate" and that it could lead one home intact and pulverize...

NGUYEN: That's Jeanne Meserve on the phone. Obviously we're having some audio difficulties with that report. She is traveling with Homeland secretary -- Security Secretary Tom Ridge. And of course we'll have much more on this a little bit later in the show.

Only two Category 5 hurricanes have made a direct hit on the U.S. mainland. One of them was Hurricane Camille which hit Mississippi and Louisiana 35 years ago today. The intense storm struck with 190-mile- an-hour winds. It pounded ashore with a 24-foot storm surge and left 256 people dead. In case you're wondering, the other Category 5 storm was the great Labor Day hurricane which hit the Florida Keys in September of 1935.

PHILLIPS: Other news across America now. Don't look for any Perry Mason moments. Michael Jackson's lawyers are back in a California courtroom today trying to block some potentially incriminating evidence in the child molestation case against the pop star. Jackson is not expected to attend.

Oprah has jury duty. Talk show host Oprah Winfrey is back in a Chicago courtroom. She is serving as a juror in a murder trial. The billionaire will use a special entrance to avoid the crowds, but Winfrey is not expected to get any other special treatment.

Bucking the system with an international buying plan. The governor of Illinois is announcing his plan for fighting high prescription drug costs today. He wants to create a network of pharmacies. They would allow Illinois residents to buy prescription drugs from other countries like Canada, Ireland and the United Kingdom. The FDA is against such imports.

NGUYEN: More fallout today over the governor's scandal in New Jersey. GOP leaders there are trying to pressure outgoing Governor James McGreevey to leave office before his self-imposed November deadline. McGreevey is stepping down after confessing he had an extramarital homosexual affair.

Now, if he leaves by September 3, the state can hold a special election to replace him. McGreevey explained his reasons for staying in an op-ed piece printed in "USA Today," and he writes, "The fact that I have chosen to leave office before the end of my term only heightens my responsibilities to the citizens of New Jersey not only to complete the initiatives we have started., but also to oversee an orderly transition of power."

Now, the man who alleges the governor sexually harassed him has taken refuge in Israel.

(BEGIN VIDEO CLIP)

GOLAN CIPEL, FMR. NEW JERSEY GOVERNOR AIDE (through translator): I have had a very difficult time. I have come to Israel to be with my family at this time. I cannot expand on anything for legal reasons.

(END VIDEO CLIP)

NGUYEN: Golan Cipel maintains he is not gay and he denies he had a consensual relationship with McGreevey.

Amazing devastation after flash floods sweep up everything in their path and trap residents on roofs. We're going to hear from some of those rescued just ahead.

On guard against those adding insult to injury of Hurricane Charley. We're going to talk with Florida's agricultural and consumer commissioner about dealing with construction cons.

Which candidate has the better plan to deal with global hotspots? We're going to look at some of the tough challenges ahead for whoever wins the White House.

(COMMERCIAL BREAK)

NGUYEN: Well, first came the sudden downpour, then the wall of water. The only thing the people in Boscastle, England, could do was head for the rooftops.

ITN reporter Chris Schiff (ph) has more on this nightmarish ordeal.

(BEGIN VIDEOTAPE)

CHRIS SCHIFF (ph), ITN REPORTER (voice-over): Amid the widespread chaos that is Boscastle today, there are many individual stories of daring rescues and narrow escapes.

PETER TEMPLAR, SURVIVED FLOODWATERS: And then it turned and the water just hit us like a tidal wave.

SCHIFF: This afternoon, Peter and Margaret Templar went back to look at their hotel, to look at what the river had left behind. This home video caught the moment yesterday when the current of ground water smashed its way past their tea room.

P. TEMPLAR: One minute you're in the kitchen cooking.

MARGARET TEMPLAR, SURVIVED FLOODWATERS: I was cooking. I was doing baguettes and green teas.

SCHIFF: And the next minute...

M. TEMPLAR: And the next minute it was just coming in around my feet.

P. TEMPLAR: Then all the tables and the chairs were coming out of the restaurant. There was everything coming out of there, gas tanks. There was a lot coming out of there.

SCHIFF: Such was the speed of the rising waters. The Templars were trapped. They and their family were forced to flee to the roof.

P. TEMPLAR: We were totally surrounded. I mean, we were like an island. We broke the (INAUDIBLE) windows in the roof space and literally kind of pushed everybody out through there.

SCHIFF: Grandmother clutching tightly to grandson as RAF helicopters whisked them away from danger.

M. TEMPLAR: Terrifying. Absolutely terrifying. I had my grandchildren, so I was concerned about getting them out. But we managed it. We got there.

P. TEMPLAR: You know, I mean words can't describe how quickly...

M. TEMPLAR: How quick it happened.

P. TEMPLAR: ... you know, it happened. And from the fact that nobody lost their lives.

SCHIFF: Looking down over their village, these two know how lucky they all were. The white car there is their son's. The blue one the hotel manager's.

M. TEMPLAR: I thought my time had come, I really did.

SCHIFF: You're up here now the day after, and you are looking down on the trees surrounding your restaurant, on the window that you got rescued from. What's going through your mind?

P. TEMPLAR: Where do we go from here?

M. TEMPLAR: How lucky we are to be here.

P. TEMPLAR: And how lucky we are to be here. That's the only thing that can go through your mind.

SCHIFF: The Templars know their hotel can be rebuilt. But what will never leave them, nor the rest of the village, is the panic that swept through here yesterday afternoon.

Chris Schiff (ph), ITV News, Boscastle.

(END VIDEOTAPE)

KAGAN: Battleground Pennsylvania. President Bush is in the state this hour to speak at a Boeing plant in Ridley Park. Pennsylvania is one of 17 showdown states where the race is said to be very tight. It has 21 electoral votes and narrowly voted for Al Gore in the 2000 presidential election.

Well, John Kerry is taking a breather from the campaign trail. He and his wife, Teresa Heinz Kerry, have been spending a long weekend at their home in Idaho. Their short vacation ends later today, when Kerry hits the battleground state of Ohio.

NGUYEN: Well, the war in Iraq and the war on terror have been major talking points in the presidential race. But there are a number of other potential hotspots on the global horizon. And our senior analyst, Jeff Greenfield, take as look.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The plan that I'm talking about today, over the next 10 years, we will bring home about 60,000 to 70,000 uniformed personnel.

JEFF GREENFIELD, CNN SR. ANALYST (voice-over): Here's the least surprising fallout from the president's announcement on troop re- deployment. All of the military, defense and foreign policy experts supporting Bush praised it. All of those supporting John Kerry denounced it. And this debate will join the now familiar front-and- center argument about Iraq.

(on camera): But here's a new flash. Events around the world do not always fit neatly into the contours of an American presidential campaign. And while there seems little room to talk about such matters in the nightly battle to dominate the headlines, they are matters that could well prove a major headache for the next president, whoever that may be.

For instance...

(voice-over): Iran clearly has nuclear weapons ambitions. If it gets them, will that trigger a regional race for nuclear arms, say by Egypt or Saudi Arabia? Would Israel take out an Iranian facility as it did with Iraq in 1981?

Can the United States negotiate with Iran? Or can it, should it encourage regime change, given widespread discontent in Iran with its rulers?

North Korea is apparently well on its way to joining the nuclear club, if it hasn't already done so. It is also an impoverished nation where starvation is a reality.

Will its desperate need for cash product to sell its nuclear know-how to other states, or through state-less groups, like al Qaeda? Can the United States negotiate the way out? And given the north's built to strike South Korea almost instantly with long-range artillery, does the U.S. have a military option if diplomacy fails?

The 55-year-old tension between China and Taiwan show signs of worsening. The communist mainland seems to be demanding that Taiwan accept the idea of reunification. Taiwan's leaders, in turn, have flirted with the idea of independence.

Recent United States policy has been to promise to defend Taiwan against the Chinese attack but also to oppose independence. Will the increasing economic engagement between the U.S. and China help cool tensions? If not, what does America do?

Since September 11, Pakistan's President Musharraf has stood with Washington in going after al Qaeda in Afghanistan and throughout the region. But al Qaeda has backers in Pakistan's intelligence and military, and Musharraf himself has escaped two assassination attempts in the last year. How should the U.S. respond if Pakistan, a nuclear power already, were to fall under the leadership of Muslim extremists?

(on camera): And these examples barely scratch the surface. For instance, if we want to reduce the poverty that helps breed extremism, opening our borders to third world imports might well help. But that would mean angering domestic political interests. Any chance the candidates want to talk about that? Don't hold your breath.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE)

NGUYEN: And Ohio is considered a pivotal state in the race for the White House. Tomorrow night, our Paula Zahn will try to get a read on the undecided voters in that state. She hosts a town hall meeting from Canton, Ohio, tomorrow night at 8:00 p.m. Eastern Time.

Well, if only this could happen to all of us. They went away for a quiet weekend and came home to find they were instant millionaires. How they did it just ahead.

(STOCK MARKET REPORT)

NGUYEN: And we want to take you to Fort Myers, Florida, where Homeland Security Secretary Tom Ridge is speaking. Let's listen in.

TOM RIDGE, HOMELAND SECURITY SECRETARY: ... very involved in getting information about how we were going to prepare ourselves for the hurricane and propositioning of supplies in order to respond. He made frequent phone calls through Friday and Saturday prior to his own visit here on Sunday, and has been -- has insisted upon situation reports since his visit on Sunday on a fairly regular basis.

The president directed Secretary Thompson and me to visit with Mike Brown because, based on his visit, he had concerns about the speed with which we are able to restore power, given the fact that there was so much of the communications infrastructure down, how we were going to get information out to the folks and just basically is interested in the response and recovery efforts of the federal government with our partners at the state and local level. And Secretary Thompson and I are here and prepared to give the president a report tomorrow.

Now, Secretary Thompson and I have seen and had to deal with a lot of natural disasters and had to ask presidents for emergency declarations as governors. And I think I speak for both Secretary Thompson and myself is that nothing we ever saw came close to the single devastation that we witnessed today, particularly with the helicopter ride over Lee counties and Charlotte counties. And we know what is going on in DeSoto County and Hardee County and the like.

You know, there's a lot of pain, a lot of suffering, a lot of anxiety, and some frustration. We can only imagine how people feel if you -- you're asked to leave your house, and you leave your house, and you come back and the house no longer exists. And maybe the neighbor down the street, their house is still up. And so, one family has retained most of its life and all the treasures associated with it, and another neighbor has lost it all.

And so, there are incredible feelings of -- of anxiety and sorrow associated with you trying to rebuild after a natural disaster. But I will tell you that I think the partnership between the federal government and the agencies within the federal government, state government and the local government, was strong enough and solid enough and hopefully project strongly enough that -- to provide some hope and some help in a neighborly hand to help these families in these communities. You should know that by the end of today, hopefully by sundown, Mike Brown's team will have over a thousand other Americans in from all around the country to help out as disaster assistance employees. We already have a thousand-plus, several thousand-plus utility workers from around the country. We are here to restore power. And obviously, as we went through the disaster relief center, I met Floridians from other parts of the state who came into this area to help their fellow citizens.

You should know that we have reports now that power has been restored to 74 percent of those who had lost it as a result of the hurricane. About 1.1 million people now have their power restored.

You should know that also there are about 640,000 more people that need their power to be turned back. There's going to be a lot of frustration as we get toward the end of the line with restoring power because, in some communities, it was easier to do than others. But frankly, the devastation of the infrastructure in some communities was so significant it's not just a matter of restoring lines.

First, you have to clear the debris before you can restore the lines. And in many communities you are going to have to replace the polls that snapped because of the high winds. And so, we just want to assure everyone in the remaining 25, 26 percent that everything humanly and technologically possible is being done to restore the power as quickly as possible.

I want to publicly commend Undersecretary Mike Brown and his team for the work they did in anticipation of the hurricane. We appreciate the strong infrastructure that Governor Bush had, not only in the state operation center, but throughout the entire state. And Mike has been working with them on a regular basis since days before the hurricane.

We propositioned some Homeland Security employees, men and women, for disaster teams here in Florida before it hit, dozens and dozens of semi-trailers full of supplies, medical supplies. I saw some of the supplies, Mike, the tarps on top of some of the roofs. We literally brought thousands and thousands of tarps with us, food and water.

We're going to continue the convoy of food and water, particularly water and ice over the next several days. We are working with the -- the state and local communities to determine the debris removal needs and prepared to do everything we can to accelerate that process as well.

Sometimes I think that America's best qualities as a country surface when we're asked to respond to a tragedy. And clearly, this is just another example.

When you have literally people coming from around the country to help the citizens of Florida, and you have Floridians leaving other parts of the state to come in and help their fellow citizens -- and I just want to assure you that from the federal government, from our perspective, we are prepared to work together. Secretary Thompson is down here. He's going to talk to you a little bit about what he has been doing today and why he is here. The corps of engineers called in to help with debris removal.

I mean, there's just a lot of assets that we can bring to bear in partnership with Governor Bush and local officials as well. So, I'll be prepared to answer some questions later. But our job is to bring some hope, some help and a neighborly hand to help these people in the communities recover from this extraordinary disaster.

I must tell you, flying over some of the areas, like I said, I never saw any hurricanes in Pennsylvania. But I saw a lot of tornadoes. And some of those communities looked like -- I mean, we knew the winds were high and the epicenter maybe be 100, 165 miles an hour. (INAUDIBLE) with the addition of high winds and the incredible water damage that devastated by hurricane-force winds, and obviously they were.

So, we are sorry we have to be here under these circumstances. But again, the president directed we come down and take a look at some of these -- the efforts that have been undertaken in the past 48, 72 hours so we can give him a personal report. There has been a special request from the governor and secretary of health about some medical assistance. And Secretary Thompson is down to respond to that. When we're done we'll be happy to respond to any questions you might have.

Secretary Tommy Thompson.

TOMMY THOMPSON, HEALTH & HUMAN SERVICES SECRETARY: First, let me thank Secretary Ridge for...

NGUYEN: You're listening to Homeland Security -- or were listening to Homeland Security Secretary Tom Ridge, who toured Fort Myers, Florida, after Hurricane Charley came through over the weekend. He talked about the lack of communication systems, the electricity being out. But he also talked about the help that's on the way.

We'll have much more on this later in the shows.

Kyra, back to you.

PHILLIPS: The citrus growers were hit hard by Charley. The hurricane's powerful winds damaged groves, barns, homes. Three of the state's largest citrus-producing counties were pummeled by that storm. It's bad news for orange juice lovers.

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Aired August 17, 2004 - 13:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BETTY NGUYEN, CNN ANCHOR: Up first this hour, secrets and spies, politics and power, and millions of taxpayer dollars. They're converging this hour on Capitol Hill, where Defense Secretary Donald Rumsfeld is facing moves to strip the Pentagon of its lion's share of the U.S. intelligence budget.
CNN's Congressional correspondent, Ed Henry, has the latest. Hi, Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good afternoon, Betty.

Three more hearings today, overall, on top of a mountain of hearings that have mostly focused so far on the virtues of creating a new national intelligence director. But the significance today, as you mentioned, Defense Secretary Donald Rumsfeld finally speaking out. And for the first time we're seeing a real pushback on this national intelligence director post.

In particular, in part, this is all about Rumsfeld in a personal way not wanting to give up the power of the purse. As you mentioned, right now the Defense Department controls about 85 percent of the nation's intelligence budget. He does not want to give up those powers to a national intelligence director.

Rumsfeld, though, is walking a very fine line here. He has been on record for a long time being opposed to an intelligence director like this. But he realizes that his own boss, the president, has endorsed the proposal. So, Rumsfeld has to actually move forward on this, but he wants to work out the details, make sure that he has a voice in what happens.

But that division within the administration is something that Democrats like Carl Levin tried to exploit. And Rumsfeld got a little testy when Democrats pushed him on it.

(BEGIN VIDEO CLIP)

CARL LEVIN (D), MICHIGAN: Mr. Secretary, we've got specific recommendations...

DONALD RUMSFELD, DEFENSE SECRETARY: I understand.

LEVIN: ... from the 9/11 Commission. I'm quoting them. I just want to ask you your personal agreement or disagreement. If you can't give us that, that's OK. But just say you can't give us a personal "yes" or "no" from your perspective. RUMSFELD: I can't do it with yes or no, that's for sure.

LEVIN: Thank you. Thank you. Now, to the...

RUMSFELD: It's a vastly more complex question.

LEVIN: OK.

(END VIDEO CLIP)

HENRY: That complexity is what Rumsfeld is trying to stress, the fact that, as he put it later in the hearing, the devil will be in the details. He realizes that he has lost the battle on creating a national intelligence director, but he wants to make sure that he has a powerful voice in actually figuring out how that office will be shaped.

And in fact, Joint Chiefs Chairman General Richard Myers joined Rumsfeld in fighting back and cautioning Congress that this -- this solution that they're coming up with, the national intelligence director, might not solve all the problems.

(BEGIN VIDEO CLIP)

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: There cannot be a czar that just starts pointing and pulling levers. There is no wizard of Oz here that is going to solve this, in my opinion. It's got to be a collaborative effort.

(END VIDEO CLIP)

HENRY: But at another House hearing today, the 9/11 Commission co-chairs, Tom Kean and Lee Hamilton, were again pushing Congress on their 41 recommendations for reform. They have been very outspoken about their belief that, in fact, the national intelligence director does need to take this power from the Pentagon.

In one final hearing today, another Senate hearing in which 9/11 families testified, and they also joined the 9/11 Commission co- chairs, as well as all of the members of the 9/11 Commission in saying that these 9/11 families believe that there needs to be one top national intelligence director that will be held accountable and will have this power -- Betty.

NGUYEN: All right. Ed Henry, thank you for that -- Kyra.

KYRA PHILLIPS, CNN ANCHOR: Seven people killed today when a mortar round exploded on a busy street in Baghdad. That blast destroyed cars and set a building on fire, reportedly wounding 35 people. In a late report out of Baghdad, the military says insurgents attacked American troops with rocket-propelled grenades, killing one soldier and wounding several others.

Just north of Baghdad, a crash of an unmanned U.S. reconnaissance plane. The military says that the predator drone was assigned to the U.S. Air Force. That cause of the crash is either not yet known or it's not being released.

Fighting rages on in Najaf between U.S. forces and Shiite militants. American tanks reportedly tightened a cordon around rebel positions which include a hallowed mosque. At last report, an Iraqi delegation from Baghdad continued to meet with insurgent representatives in a bid to forge a truce.

The fighting in Najaf re-ignited nearly two weeks ago after a truce that lasted for about two months. CNN's Matthew Chance is in Najaf. He reports the situation is taking a toll on a lot of those Americans.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): The tombstones of the Valley of Peace, the ancient cemetery where U.S. troops have been fighting the Mehdi army in Najaf. This has been an eerie battle on sacred ground that few want.

UNIDENTIFIED MALE: Actually, sir, it's very scary at night, to tell you the truth. You don't know where the enemy is, you don't know who they are, the insurgents. And it's -- it's an old cemetery. So, I kind of feel bad for the people in a certain way. It's their cemetery, their mosque right there.

CHANCE: And everyone is a suspect. Troops even open coffins yet to be buried in a grim search for weapons.

UNIDENTIFIED MALE: I would like to pray especially today for the repose of the soul of all the Marines that have died.

CHANCE: In times of war, the church has its own battles to fight. Soldier and Marines attend this makeshift service to seek solace and advice. For some, the burden of killing or witnessing it is heavy.

CAPT. PAUL SHAUGHNESSY, U.S. NAVY: Last Friday night, during a mortar attack, there was a young corporal that was killed. And it was about 50 feet from me. A lot of his friends were right there.

We were trying to lift him out between two tombs so we could get him to the medical station. And his friends had to do that. And many of them, because his -- the blood was pretty profuse, really affected them, that somebody they had known that well kind of was dying before them.

CHANCE: And the threat of attack is constant. Here, a network of IEDs, or roadside bombs, is uncovered, 43 in all, designed to kill. They're disarmed and destroyed this time. But soldiers are killed and injured in attacks like this almost every day here.

UNIDENTIFIED MALE: Half the time you wave to somebody and they give you thumbs down, or whatever. You know, you are driving down the road and an IED goes off or something like that. It makes it like, you know, why are we even here when most of the people don't see us? Like most of the people don't even -- don't even want us here. CHANCE: After nearly 16 months of postwar Iraq, it's a question many now ask.

(on camera): Some of the troops here are uncomfortable about the idea of fighting in sacred places, especially ones that are so politically sensitive. But there is an old general frustration, too. For many it seems that the peaceful and stable Iraq they thought they were fighting for is getting more distant.

Matthew Chance, CNN, Najaf.

(END VIDEOTAPE)

NGUYEN: If the end of the world came tomorrow, this is what it would look like. That's how one Florida resident describes the struggle for survival after Hurricane Charley. It's a struggle that won't end anytime soon. The death toll has now climbed to 19.

Our Bob Franken is in Punta Gorda, where the cleanup is in day five, and there's still a lot of work to be done -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And Betty, let me show you a bag of what is extremely precious, a bag of ice. This is what they are passing out to the people who come down to the station here to get it.

You can see more in back of me. We are told, officials, that right now they are giving three of these per family. Of course, with the electricity out for hundreds of thousands, refrigeration of any sort is the only thing that helps them protect their food.

In addition to which, National Guard units have started moving out into some of the neighborhoods where people have been complaining that they are without the ability to come down here and get ice and the other things necessary for survival. And that's what we're talking about here, survival.

We're also talking about a massive federal presence. If there is a member of this administration who has anything to do with this, from the president on down, he has been in this area to tell people that the federal government cares, reminding many that in 1992 President George Bush the first was criticized for not responding and his administration not responding properly to Hurricane Andrew and possibly costing him some valuable votes. But the officials that are down here deny that there's anything to do with politics here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: And what we are focused on right now are these victims. All of you guys will -- you know, all -- the media will go back to a nice air-conditioned room somewhere tonight. What FEMA is focused on is making certain that all of these disaster victims understand that we understand their suffering, we are trying to get everything out that we can to them.

It just so happens that Jeb Bush happens to be a Republican governor. It just so happens that President Bush happens to be a Republican president.

FEMA does not care. We respond to any kind of disaster in any state. Since -- since at least during my tenure, we responded to 56, I think, or more disasters. Democratic governors, Republican governors, it just doesn't make any difference. We're here to help disaster victims.

(END VIDEO CLIP)

FRANKEN: Air-conditioned rooms, of course, being something of a rarity around here because of all the power problems that they have in this state. Also another problem, and that has to do with the gougers and the various scam artists who are in town.

Officials are saying that if they get caught they are going to jail. As a matter of fact, the state's attorney general has announced that he is proceeding with a prosecution against two hotels, one in West Palm Beach, one in Lakeland, Florida. They say they received about 1,200 complaints of price gouging at the attorney general's office.

So, this is a very difficult situation, and they are trying to stop people like the price gougers and perhaps the looters from making things even worse -- Betty.

NGUYEN: CNN's Bob Franken in Punta Gorda. Thank you.

And we want to go now to Fort Myers with CNN's Jeanne Meserve, who is on the phone. She is traveling with Homeland Security Secretary Tom Ridge in the area -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Betty, Secretary Ridge came down here today with the secretary of Health and Human Services, Tommy Thompson. The two of them want to assess the response effort down here and see what more needs to be done.

Ridge said he was particularly concerned about communication problems. That meaning that even if his department moved resources down here they had to get word to people where they were. And he was a little frustrated and concerned that perhaps people weren't getting that word as quickly as they should.

He flew here to Fort Myers and then immediately boarded a Coast Guard helicopter. Tommy Thompson did as well. They took an aerial tour of the area around Punta Gorda that was so badly devastated. Secretary Ridge called the destruction "indiscriminate" and that it could lead one home intact and pulverize...

NGUYEN: That's Jeanne Meserve on the phone. Obviously we're having some audio difficulties with that report. She is traveling with Homeland secretary -- Security Secretary Tom Ridge. And of course we'll have much more on this a little bit later in the show.

Only two Category 5 hurricanes have made a direct hit on the U.S. mainland. One of them was Hurricane Camille which hit Mississippi and Louisiana 35 years ago today. The intense storm struck with 190-mile- an-hour winds. It pounded ashore with a 24-foot storm surge and left 256 people dead. In case you're wondering, the other Category 5 storm was the great Labor Day hurricane which hit the Florida Keys in September of 1935.

PHILLIPS: Other news across America now. Don't look for any Perry Mason moments. Michael Jackson's lawyers are back in a California courtroom today trying to block some potentially incriminating evidence in the child molestation case against the pop star. Jackson is not expected to attend.

Oprah has jury duty. Talk show host Oprah Winfrey is back in a Chicago courtroom. She is serving as a juror in a murder trial. The billionaire will use a special entrance to avoid the crowds, but Winfrey is not expected to get any other special treatment.

Bucking the system with an international buying plan. The governor of Illinois is announcing his plan for fighting high prescription drug costs today. He wants to create a network of pharmacies. They would allow Illinois residents to buy prescription drugs from other countries like Canada, Ireland and the United Kingdom. The FDA is against such imports.

NGUYEN: More fallout today over the governor's scandal in New Jersey. GOP leaders there are trying to pressure outgoing Governor James McGreevey to leave office before his self-imposed November deadline. McGreevey is stepping down after confessing he had an extramarital homosexual affair.

Now, if he leaves by September 3, the state can hold a special election to replace him. McGreevey explained his reasons for staying in an op-ed piece printed in "USA Today," and he writes, "The fact that I have chosen to leave office before the end of my term only heightens my responsibilities to the citizens of New Jersey not only to complete the initiatives we have started., but also to oversee an orderly transition of power."

Now, the man who alleges the governor sexually harassed him has taken refuge in Israel.

(BEGIN VIDEO CLIP)

GOLAN CIPEL, FMR. NEW JERSEY GOVERNOR AIDE (through translator): I have had a very difficult time. I have come to Israel to be with my family at this time. I cannot expand on anything for legal reasons.

(END VIDEO CLIP)

NGUYEN: Golan Cipel maintains he is not gay and he denies he had a consensual relationship with McGreevey.

Amazing devastation after flash floods sweep up everything in their path and trap residents on roofs. We're going to hear from some of those rescued just ahead.

On guard against those adding insult to injury of Hurricane Charley. We're going to talk with Florida's agricultural and consumer commissioner about dealing with construction cons.

Which candidate has the better plan to deal with global hotspots? We're going to look at some of the tough challenges ahead for whoever wins the White House.

(COMMERCIAL BREAK)

NGUYEN: Well, first came the sudden downpour, then the wall of water. The only thing the people in Boscastle, England, could do was head for the rooftops.

ITN reporter Chris Schiff (ph) has more on this nightmarish ordeal.

(BEGIN VIDEOTAPE)

CHRIS SCHIFF (ph), ITN REPORTER (voice-over): Amid the widespread chaos that is Boscastle today, there are many individual stories of daring rescues and narrow escapes.

PETER TEMPLAR, SURVIVED FLOODWATERS: And then it turned and the water just hit us like a tidal wave.

SCHIFF: This afternoon, Peter and Margaret Templar went back to look at their hotel, to look at what the river had left behind. This home video caught the moment yesterday when the current of ground water smashed its way past their tea room.

P. TEMPLAR: One minute you're in the kitchen cooking.

MARGARET TEMPLAR, SURVIVED FLOODWATERS: I was cooking. I was doing baguettes and green teas.

SCHIFF: And the next minute...

M. TEMPLAR: And the next minute it was just coming in around my feet.

P. TEMPLAR: Then all the tables and the chairs were coming out of the restaurant. There was everything coming out of there, gas tanks. There was a lot coming out of there.

SCHIFF: Such was the speed of the rising waters. The Templars were trapped. They and their family were forced to flee to the roof.

P. TEMPLAR: We were totally surrounded. I mean, we were like an island. We broke the (INAUDIBLE) windows in the roof space and literally kind of pushed everybody out through there.

SCHIFF: Grandmother clutching tightly to grandson as RAF helicopters whisked them away from danger.

M. TEMPLAR: Terrifying. Absolutely terrifying. I had my grandchildren, so I was concerned about getting them out. But we managed it. We got there.

P. TEMPLAR: You know, I mean words can't describe how quickly...

M. TEMPLAR: How quick it happened.

P. TEMPLAR: ... you know, it happened. And from the fact that nobody lost their lives.

SCHIFF: Looking down over their village, these two know how lucky they all were. The white car there is their son's. The blue one the hotel manager's.

M. TEMPLAR: I thought my time had come, I really did.

SCHIFF: You're up here now the day after, and you are looking down on the trees surrounding your restaurant, on the window that you got rescued from. What's going through your mind?

P. TEMPLAR: Where do we go from here?

M. TEMPLAR: How lucky we are to be here.

P. TEMPLAR: And how lucky we are to be here. That's the only thing that can go through your mind.

SCHIFF: The Templars know their hotel can be rebuilt. But what will never leave them, nor the rest of the village, is the panic that swept through here yesterday afternoon.

Chris Schiff (ph), ITV News, Boscastle.

(END VIDEOTAPE)

KAGAN: Battleground Pennsylvania. President Bush is in the state this hour to speak at a Boeing plant in Ridley Park. Pennsylvania is one of 17 showdown states where the race is said to be very tight. It has 21 electoral votes and narrowly voted for Al Gore in the 2000 presidential election.

Well, John Kerry is taking a breather from the campaign trail. He and his wife, Teresa Heinz Kerry, have been spending a long weekend at their home in Idaho. Their short vacation ends later today, when Kerry hits the battleground state of Ohio.

NGUYEN: Well, the war in Iraq and the war on terror have been major talking points in the presidential race. But there are a number of other potential hotspots on the global horizon. And our senior analyst, Jeff Greenfield, take as look.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The plan that I'm talking about today, over the next 10 years, we will bring home about 60,000 to 70,000 uniformed personnel.

JEFF GREENFIELD, CNN SR. ANALYST (voice-over): Here's the least surprising fallout from the president's announcement on troop re- deployment. All of the military, defense and foreign policy experts supporting Bush praised it. All of those supporting John Kerry denounced it. And this debate will join the now familiar front-and- center argument about Iraq.

(on camera): But here's a new flash. Events around the world do not always fit neatly into the contours of an American presidential campaign. And while there seems little room to talk about such matters in the nightly battle to dominate the headlines, they are matters that could well prove a major headache for the next president, whoever that may be.

For instance...

(voice-over): Iran clearly has nuclear weapons ambitions. If it gets them, will that trigger a regional race for nuclear arms, say by Egypt or Saudi Arabia? Would Israel take out an Iranian facility as it did with Iraq in 1981?

Can the United States negotiate with Iran? Or can it, should it encourage regime change, given widespread discontent in Iran with its rulers?

North Korea is apparently well on its way to joining the nuclear club, if it hasn't already done so. It is also an impoverished nation where starvation is a reality.

Will its desperate need for cash product to sell its nuclear know-how to other states, or through state-less groups, like al Qaeda? Can the United States negotiate the way out? And given the north's built to strike South Korea almost instantly with long-range artillery, does the U.S. have a military option if diplomacy fails?

The 55-year-old tension between China and Taiwan show signs of worsening. The communist mainland seems to be demanding that Taiwan accept the idea of reunification. Taiwan's leaders, in turn, have flirted with the idea of independence.

Recent United States policy has been to promise to defend Taiwan against the Chinese attack but also to oppose independence. Will the increasing economic engagement between the U.S. and China help cool tensions? If not, what does America do?

Since September 11, Pakistan's President Musharraf has stood with Washington in going after al Qaeda in Afghanistan and throughout the region. But al Qaeda has backers in Pakistan's intelligence and military, and Musharraf himself has escaped two assassination attempts in the last year. How should the U.S. respond if Pakistan, a nuclear power already, were to fall under the leadership of Muslim extremists?

(on camera): And these examples barely scratch the surface. For instance, if we want to reduce the poverty that helps breed extremism, opening our borders to third world imports might well help. But that would mean angering domestic political interests. Any chance the candidates want to talk about that? Don't hold your breath.

Jeff Greenfield, CNN, New York.

(END VIDEOTAPE)

NGUYEN: And Ohio is considered a pivotal state in the race for the White House. Tomorrow night, our Paula Zahn will try to get a read on the undecided voters in that state. She hosts a town hall meeting from Canton, Ohio, tomorrow night at 8:00 p.m. Eastern Time.

Well, if only this could happen to all of us. They went away for a quiet weekend and came home to find they were instant millionaires. How they did it just ahead.

(STOCK MARKET REPORT)

NGUYEN: And we want to take you to Fort Myers, Florida, where Homeland Security Secretary Tom Ridge is speaking. Let's listen in.

TOM RIDGE, HOMELAND SECURITY SECRETARY: ... very involved in getting information about how we were going to prepare ourselves for the hurricane and propositioning of supplies in order to respond. He made frequent phone calls through Friday and Saturday prior to his own visit here on Sunday, and has been -- has insisted upon situation reports since his visit on Sunday on a fairly regular basis.

The president directed Secretary Thompson and me to visit with Mike Brown because, based on his visit, he had concerns about the speed with which we are able to restore power, given the fact that there was so much of the communications infrastructure down, how we were going to get information out to the folks and just basically is interested in the response and recovery efforts of the federal government with our partners at the state and local level. And Secretary Thompson and I are here and prepared to give the president a report tomorrow.

Now, Secretary Thompson and I have seen and had to deal with a lot of natural disasters and had to ask presidents for emergency declarations as governors. And I think I speak for both Secretary Thompson and myself is that nothing we ever saw came close to the single devastation that we witnessed today, particularly with the helicopter ride over Lee counties and Charlotte counties. And we know what is going on in DeSoto County and Hardee County and the like.

You know, there's a lot of pain, a lot of suffering, a lot of anxiety, and some frustration. We can only imagine how people feel if you -- you're asked to leave your house, and you leave your house, and you come back and the house no longer exists. And maybe the neighbor down the street, their house is still up. And so, one family has retained most of its life and all the treasures associated with it, and another neighbor has lost it all.

And so, there are incredible feelings of -- of anxiety and sorrow associated with you trying to rebuild after a natural disaster. But I will tell you that I think the partnership between the federal government and the agencies within the federal government, state government and the local government, was strong enough and solid enough and hopefully project strongly enough that -- to provide some hope and some help in a neighborly hand to help these families in these communities. You should know that by the end of today, hopefully by sundown, Mike Brown's team will have over a thousand other Americans in from all around the country to help out as disaster assistance employees. We already have a thousand-plus, several thousand-plus utility workers from around the country. We are here to restore power. And obviously, as we went through the disaster relief center, I met Floridians from other parts of the state who came into this area to help their fellow citizens.

You should know that we have reports now that power has been restored to 74 percent of those who had lost it as a result of the hurricane. About 1.1 million people now have their power restored.

You should know that also there are about 640,000 more people that need their power to be turned back. There's going to be a lot of frustration as we get toward the end of the line with restoring power because, in some communities, it was easier to do than others. But frankly, the devastation of the infrastructure in some communities was so significant it's not just a matter of restoring lines.

First, you have to clear the debris before you can restore the lines. And in many communities you are going to have to replace the polls that snapped because of the high winds. And so, we just want to assure everyone in the remaining 25, 26 percent that everything humanly and technologically possible is being done to restore the power as quickly as possible.

I want to publicly commend Undersecretary Mike Brown and his team for the work they did in anticipation of the hurricane. We appreciate the strong infrastructure that Governor Bush had, not only in the state operation center, but throughout the entire state. And Mike has been working with them on a regular basis since days before the hurricane.

We propositioned some Homeland Security employees, men and women, for disaster teams here in Florida before it hit, dozens and dozens of semi-trailers full of supplies, medical supplies. I saw some of the supplies, Mike, the tarps on top of some of the roofs. We literally brought thousands and thousands of tarps with us, food and water.

We're going to continue the convoy of food and water, particularly water and ice over the next several days. We are working with the -- the state and local communities to determine the debris removal needs and prepared to do everything we can to accelerate that process as well.

Sometimes I think that America's best qualities as a country surface when we're asked to respond to a tragedy. And clearly, this is just another example.

When you have literally people coming from around the country to help the citizens of Florida, and you have Floridians leaving other parts of the state to come in and help their fellow citizens -- and I just want to assure you that from the federal government, from our perspective, we are prepared to work together. Secretary Thompson is down here. He's going to talk to you a little bit about what he has been doing today and why he is here. The corps of engineers called in to help with debris removal.

I mean, there's just a lot of assets that we can bring to bear in partnership with Governor Bush and local officials as well. So, I'll be prepared to answer some questions later. But our job is to bring some hope, some help and a neighborly hand to help these people in the communities recover from this extraordinary disaster.

I must tell you, flying over some of the areas, like I said, I never saw any hurricanes in Pennsylvania. But I saw a lot of tornadoes. And some of those communities looked like -- I mean, we knew the winds were high and the epicenter maybe be 100, 165 miles an hour. (INAUDIBLE) with the addition of high winds and the incredible water damage that devastated by hurricane-force winds, and obviously they were.

So, we are sorry we have to be here under these circumstances. But again, the president directed we come down and take a look at some of these -- the efforts that have been undertaken in the past 48, 72 hours so we can give him a personal report. There has been a special request from the governor and secretary of health about some medical assistance. And Secretary Thompson is down to respond to that. When we're done we'll be happy to respond to any questions you might have.

Secretary Tommy Thompson.

TOMMY THOMPSON, HEALTH & HUMAN SERVICES SECRETARY: First, let me thank Secretary Ridge for...

NGUYEN: You're listening to Homeland Security -- or were listening to Homeland Security Secretary Tom Ridge, who toured Fort Myers, Florida, after Hurricane Charley came through over the weekend. He talked about the lack of communication systems, the electricity being out. But he also talked about the help that's on the way.

We'll have much more on this later in the shows.

Kyra, back to you.

PHILLIPS: The citrus growers were hit hard by Charley. The hurricane's powerful winds damaged groves, barns, homes. Three of the state's largest citrus-producing counties were pummeled by that storm. It's bad news for orange juice lovers.

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