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Delegates Nominate Bush; Pentagon Spy?; Iraq a "Catastrophic Success?"

Aired August 30, 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.


UNIDENTIFIED MALE: Mr. Chairman and delegates, it is my great honor and high privilege to nominate George W. Bush, a strong and compassionate leader, for the office of president of the United States of America.
KYRA PHILLIPS, CNN ANCHOR: The Republicans get down to business. We're live from Madison Square Garden.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace on the floor of Madison Square Garden, where George W. Bush and Dick Cheney were just formally re-nominated by the Republican Party for president and vice president. A live report, coming right up.

MILES O'BRIEN, CNN ANCHOR: Spy at the Pentagon -- an investigation under way on whether classified secrets were leaked. From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. CNN's LIVE FROM starts right now.

We begin this hour with an all-important formality in a sea of festivity. Moments ago, with fanfare to spare, Republicans meeting in New York City submitted the one and only name their delegates will vote on when they choose the party's nominee for president. Live pictures right now. If you weren't watching, we won't spoil the suspense.

We'll just turn things over to CNN's Kelly Wallace at Madison Square Garden. Looking at live pictures right now, Kelly -- I believe it was a Dick Cheney sighting.

WALLACE: And Kyra, I don't know if you can see me, but Dick Cheney is up in this booth behind me, talking to some delegates right up here. He came into this hall a short time ago, just moments before his name, formally mentioned, re-nominated to be vice president; George W. Bush, re-nominated, his name put into nomination for president.

The Republicans are doing something different. They're going to start their roll call in this afternoon session, going in alphabetical order, some 21 states, building some suspense to Wednesday night, when there will be one state -- they're not sure which state -- which will formally put George W. Bush and Dick Cheney over the top when it comes to being president and vice president -- Kyra.

PHILLIPS: Kelly, as we continue to look at these live pictures of the vice president, you know, there's been a lot of articles that have come out recently, a lot of rumors about Dick Cheney's health, and is he fit to continue on as the vice president.

What can you tell us? Can you dispel any of these rumors? Can you expand a little bit on the truth?

WALLACE: You know, Kyra, it's so interesting. Every time you ask a Bush-Cheney campaign advisor, even White House officials we've questioned, they sort of roll their eyes. They've heard it over and over again, and they say, categorically, Dick Cheney will be on this ticket. He will be George W. Bush's running mate.

That hasn't stopped political people from talking and speculating -- is it possible, if the polls go a certain direction, Dick Cheney could dropout. Right now, Bush-Cheney folks are saying he is here, he is standing with the president, and he will be his running mate, Kyra.

PHILLIPS: Of course, and a couple of other big names we've been talking about, John McCain, Rudy Giuliani, they're set to speak tonight -- two men that haven't necessarily seen eye to eye with the president. Let's talk about these two men.

WALLACE: Not seeing eye to eye, in fact, definitely. Rudy Giuliani, the former mayor of New York City, differing with President Bush on issues such as abortion and gay rights. John McCain has been a critic of the president, as well. They don't see eye to eye on issues such as tax cuts and a Constitutional amendment to ban gay marriage.

But what this is all about, Kyra, is really stars of the Republican Party. Rudy Giuliani, enormously popular; John McCain, incredibly popular as a politician, especially with swing voters and independents. So, these two men are coming out here tonight.

We'll talk about George Bush, talk about what he did after September 11th. The goal is trying to get that message out to as many moderates and swing voters -- those voters that can prove critical in this very tight race right now, Kyra.

PHILLIPS: Kelly, you mentioned the stars. How about TV stars -- Ron Silver, Democrat, Republican, Democrat, Republican -- now he's speaking at the RNC. Will you explain the Ron Silver factor here?

WALLACE: Well, and I have a little factoid that I just learned from our Sam Feist, heading up all of our political programming. He says that Ron Silver the actor is the only person in the history of "CROSSFIRE" who has filled in on the left as a host and then filled in on the right. He has been a strong Democrat.

We are told he's gone on a delegation, a trip for President Bush to China -- that he is a strong supporter of the war with Iraq, a very strong supporter of President Bush's policy when it comes to Israel. So, he will be at this convention as Bush-Cheney supporter. A one- time Democrat, now he's going for George W. Bush in 2004, Kyra.

PHILLIPS: All right, final question. Republicans, they feel they're in a much better position than they were just a few weeks ago, isn't that true?

WALLACE: They really do. And they're sort of saying that they're cautiously optimistic. Certainly, they see the national polls, some of the battleground states, they see President Bush leading or gaining on John Kerry -- a new position for him from just a couple of weeks ago. And another number they keep looking at is the approval rating of the president in many polls, or some, is starting to come close to 50 percent.

They're hoping to get that at 50 or over 50 after this convention, because then they think history's on their side. They say no incumbent has ever lost reelection with an approval rating higher than 50 percent -- Kyra.

PHILLIPS: All right, our Kelly Wallace right there on the floor in the middle of all the action. Kelly, we'll continue to check in with you, thanks.

O'BRIEN: The man of the hour is in New Hampshire for an "Ask President Bush" event at Nashua High School.

Earlier, NBC's Matt Lauer asked President Bush about terrorism, taxes, and some other hot topics while the two passed the time on the candidate's bus. On terror, Mr. Bush said victory may prove elusive.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: I don't think you can win it, but I think you can create conditions so that those who use terror as a tool are less acceptable in parts of the world, let's put it that way.

(END VIDEO CLIP)

O'BRIEN: On economics, Mr. Bush says the deficit will come down and taxes won't go up, period.

(BEGIN VIDEO CLIP)

MATT LAUER, ANCHOR, "NBC NEWS": If the deficit does not come down, if you can't pay it down in half by 2008, will you raise taxes?

BUSH: It's going to come down in half, that's the goal.

LAUER: If it doesn't?

BUSH: There's no need to answer a hypothetical, because it is going to. That's what we've got in place, and that's what we've got in mind. And I think raising taxes now would be a disaster.

(END VIDEO CLIP)

O'BRIEN: From New Hampshire, Mr. Bush flies to Michigan, ahead of a three-state Tuesday -- Tennessee, Iowa, and Pennsylvania. He comes to New York on Wednesday. PHILLIPS: Well, among the RNC's opening night attractions is a man whose favor is often sought by both parties, outspoken Republican Senator and past presidential candidate, John McCain. The day before he addresses conventioneers, well, McCain talked to CNN's Judy Woodruff about the negatives of negative campaigning.

(BEGIN VIDEO CLIP)

JUDY WOODRUFF, HOST, "INSIDE POLITICS": Do you think this country's going to remain divided after this election, no matter who wins?

SEN. JOHN MCCAIN (R), ARIZONA: The way this campaign's going, yes. But if I were President Bush, as soon as I'm reelected, I would make my top priority trying to bring this nation back together. This is the worst, most partisan environment that I've seen in 22 years in public office, and I deeply regret it -- I deeply regret it.

We are friends. We're not enemies. We have a common enemy. Maybe we ought to start working together to address that challenge.

(END VIDEO CLIP)

PHILLIPS: Well, you can see Judy's entire interview with Senator McCain on a special 90-minute "INSIDE POLITICS." That begins less than two hours from now, 3:00 noon Pacific, right here on CNN.

O'BRIEN: Well, in the old days, political conventions were opportunities for the opposing presidential candidates to catch a little R&R. Not so the running mates. Democratic VP nominee John Edwards is front and center in Wilmington North Carolina today for a frontal assault on Republicans' claims that they are the toughest on terror.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: We'll go on the defensive to defeat these terrorists before they can get to us. We'll strengthen our defenses by preventing the spread of weapons of mass destruction, and by providing stronger homeland security, and we will build strong alliances. This is what we will do. This is what they haven't done, and that is a difference.

(END VIDEO CLIP)

O'BRIEN: That was former Democratic presidential hopeful, retired NATO Supreme Commander Wes Clark at Edwards' right side. Actually, the top of the Democratic ticket will make a campaign appearance this week. John Kerry speaks to the American Legion Convention in Nashville on Wednesday.

PHILLIPS: And CNN's prime-time coverage of the RNC begins tonight, 7:00 p.m. Eastern, with Anderson Cooper, Wolf Blitzer, and Larry King. 10:00 p.m. Eastern, Senator John McCain takes the stage, followed by "NEWSNIGHT," and Larry King wraps up the night live at midnight. O'BRIEN: High-profile speakers with differences with the president. Will they put those aside at the podium tonight, we wonder? We'll talk about that straight ahead. Investigation at the Pentagon -- is someone on the inside passing secrets to someone on the outside?

And a storm warning -- deluged by Tropical Storm Gaston and keeping an eye on Hurricane Frances -- a live weather update after the break.

(COMMERCIAL BREAK)

O'BRIEN: Is there an Israeli spy working inside the Pentagon? The denials are loud and persistent following reports the FBI is investigating.

The latest now from CNN's Barbara Starr at the Pentagon. Barbara, what do we know right now?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Miles, we don't know an awful lot to be totally candid and clear. What we do know -- federal law enforcement sources have told CNN's Kelli Arena that there has been, indeed, an ongoing investigation into the possibility of espionage being conducted by Israel. All of this is possible, not proven.

As that investigation was ongoing, this single individual, who is an analyst here in the Pentagon who deals with Persian Gulf and Middle East issues, came to the attention of federal law enforcement officials.

One of the things that happened, according to Kelli Arena's sources, is federal agents were monitoring a lunch where there were Israelis, and this Pentagon official walked into that lunch. That caught everyone by surprise.

It is the general understanding that he is cooperating with federal law enforcement, that they have looked at his computer and his e-mails. But beyond that Miles, it is not clear yet whether this man or anybody will be charged with espionage, with a lesser charge of mishandling classified information, or charged with anything. We just don't know.

O'BRIEN: Wow. So, it's very difficult to have a sense of how much damage might have occurred. Let's talk for just a moment about the conspicuous fact that we have not said this person's name, even though many of us this morning have read his name in various media.

STARR: Indeed, Miles, it is the policy of CNN not to name this person, because he has not been charged with a crime yet. And in fact, we don't know -- it is not confirmed whether there is any grand jury proceeding, whether there are any charges being drawn up. So, at this point, he will not be named.

I should also add, it is the strong understanding of the Pentagon, at the highest levels, that there is only one employee in this building who is directly being looked at by federal law enforcement, apparently part of a larger potential picture.

But this man is a fairly low-level analyst in this building, and it appears, at this point, that not all the pieces of the puzzle have been put together as to exactly how he fits into the picture.

O'BRIEN: And we should point out low-level analysts, at times, have access to high level secret stuff too, right?

STARR: Well, they do. Now, one of the things that does, in fact, have the Pentagon quite distressed, again, at the highest levels today, is this person is relatively low level. The claim is, of course, that he had access to restricted information, if you will -- passed it along to some Israeli lobbying group, who then passed it along to Israel.

It is the kind of information many, many hundreds, if not thousands, of Pentagon officials do have access to. But there have been a lot of press reports that this man has so-called links to high level officials in the Pentagon. Let's be blunt. They are talking about Paul Wolfowitz, the number two man in the Pentagon, and Doug Feith, the number three man in the Pentagon.

Pentagon officials are telling CNN they're very distressed about those news reports -- that there is no proven link, if you will, that he works in that organization, but he is several levels below either man -- Miles.

O'BRIEN: CNN's Barbara Starr at the Pentagon, thank you very much -- Kyra.

PHILLIPS: Time now for two perspectives on the events unfolding in New York, inside and outside the convention site. Former Hillary Clinton press secretary Lisa Caputo is at the Time-Warner Center, and former Republican Congressman Bob Barr is at convention hall, in the middle of all the action there. Welcome to you both.

Let's talk about this interview with "TIME" magazine. The president calling the invasion in Iraq a "catastrophic success." First of all, I want to know how each of you define "catastrophic success," and how do you present that in a forum, like at the RNC -- Lisa?

LISA CAPUTO, CLINTON WHITE HOUSE AIDE: I don't know what a catastrophic success means. I have to tell you, Kyra, let's put it in the context where the president said he miscalculated on Iraq. My interpretation is, and what the president said, is that the troops won the war too quickly. I don't know how you can win a war too quickly.

What's at play here, really, is that there was no peace plan in action, no weapons of mass destruction -- so we went in under false pretenses -- and to boot, taxpayers are being saddled with $200 billion to foot the bill for this. And the U.S. is bearing 90 percent of the casualties in Iraq.

So, when you look at the whole picture here, I guess what he means by catastrophic success is they won the war, but really, he led us into war under misleading circumstances, and there's no game plan postwar.

So, he has a real challenge in front of him, I would say, at the convention. And that's why you see John Edwards out on the stump today laying forth the Kerry-Edwards vision for how they would lead American foreign policy, not the Bush foreign policy of go it alone.

PHILLIPS: So, Bob, let's define catastrophic success, from your point of view. I guess if you wanted to talk about a success, if you think about the beginning of the air war, you could definitely define that a success. Catastrophic -- everything that happened afterwards and the lack of strategy to take care of a post air war.

BOB BARR, FMR. REPUBLICAN CONGRESSMAN: Well, I guess I ought to write another book. I have a book out called "The Meaning of Is." This next one ought to be "The Meaning of Catastrophic Success." It makes about as much sense as trying to redefine the meaning of "is."

I don't know what catastrophic success is, and I'm a little bit dismayed that the president has chosen to come up with some semantical permutations to try and explain a situation that, as Lisa said, was very well executed initially -- the war itself, going in militarily -- but far too little attention was paid to the post-military side of the equation.

Certainly, judging with the success, the rapidity with which we achieved success in 1991, our military certainly, and our policy leaders, should have been prepared for a very quick military success. After all, this was the Iraqi army, not the Russian army. And the fact that we have run into a very serious series of problems since then indicates simply a lack of post-military planning.

PHILLIPS: Of course, that's brought about a lot of demonstrations. The number of demonstrators we've seen already in New York -- the last number, I think, around 500,000. Lisa, is this significant?

CAPUTO: Oh, I think it is. I mean, clearly, you know, people's right to speak their mind is an important right. It's a First Amendment right. I mean, clearly, there were demonstrations in Boston during the Democratic Convention. But I think, clearly, the significance of the number of people who took to the streets in Manhattan yesterday shouldn't go unnoticed.

I happen to live, actually, downtown about two blocks from the World Trade Center site. And on Saturday, there were demonstrators, quite a number of them -- I wouldn't want to put a number on it -- but ringing bells in protest of President Bush's foreign policy and leadership, or lack thereof, as they say, on the terrorism issue.

Their feeling is that, clearly, this administration has gone it alone without allied support. And as a result, they've taken their eye off the ball on terrorism.

PHILLIPS: Bob, when you look at the number of protesters -- and then, you and I have talked about this base, the Republican base being so divided, the Democratic Party being much more united than the Republican Party, you have all these undecided voters, you have a very tight race.

So, taking into account all these factors, in addition to these demonstrators, could it push one way or another when it comes to an ultimate decision come November?

BARR: I think this is going to be a very close race. These demonstrators are not going to play a role. I mean, this is New York. You know, this is Democrat territory up here to have several hundred thousand demonstrators on a beautiful summer day with nothing else to do is not going to change the outcome of the election.

What is going to determine the outcome of the election, Kyra, you're absolutely correct, it's those middle voters that haven't made up their mind yet -- that is, swing voters, so to speak. And they're not going to be paying attention to this convention, just as they didn't really pay attention to the Democratic Convention a month ago. And that's why we didn't see Mr. Kerry get much of a bounce.

I don't think we'll see much change in the numbers are this week's festivities in New York. But what's going to make a difference is, in the last two weeks of this campaign, if Mr. Kerry, which he has not been able to do so far, can come up with a real vision for the future, he will be in a very strong position.

If Mr. Bush and Mr. Cheney can do that for the Republicans, this is going to be another nail biter. And I wouldn't bet on either side right now, to be honest with you.

PHILLIPS: Former Republican Congressman Bob Barr, former Hillary Clinton Press Secretary Lisa Caputo, thanks to you both. I know we'll be talking to you all week. Thanks.

CAPUTO: Thanks.

BARR: Thank you.

PHILLIPS: Miles?

O'BRIEN: Terror in the sky: Investigators release new information about what brought down those two Russian airliners.

And later on LIVE FROM, long distance disruption: A leading marathon runner shoved out of contention by a man wearing a red kilt. What's up with that?

PHILLIPS: It's wrong, that's what it is. It's wrong.

O'BRIEN: Should the Olympic Committee give him gold? He was cruising for it. We'll take your e-mails next hour.

(COMMERCIAL BREAK)

PHILLIPS: They are now certain that explosions brought down two Russian airliners last week. That's according to Russian authorities. The planes crashed within moments of each other after taking off from a Moscow airport. Eight-nine people were killed. Authorities found traces of the high explosive hexogen in the wreckages of both airliners. Hexogen has been used by Chechen rebels in attacks in Russia -- found in ordinance there.

Two Chechen women remain the focus of the investigation, but they're being careful not to assign blame at this point.

O'BRIEN: News across America now. A small plane plowed into a house in Montana killing both men on board. The pilot was practicing takeoffs and landings -- touch-and-gos they call them -- when his '52 Beechcraft Bonanza went down Sunday. Police say it narrowly missed a church where services had just ended.

Former Atlanta Mayor Bill Campbell indicted on charges of racketeering, bribery, and wire fraud. He's accused of taking illegal campaign contributions and payoffs in exchange for city contracts. Campbell denies it, calling the federal investigation a witch-hunt.

That was not Bill Campbell looking at the homerun. In baseball, the Giants' Barry Bonds blasted two more homers in a single game. It's the 68th time he's done that in his career. That breaks a tie with Mark McGuire, places Bonds second to Babe Ruth. Both of Bonds' homers generated a standing ovation. They went about 10 miles. By the way, the Giants beat the Braves 9 to 5.

PHILLIPS: Wall Street affected by the RNC. Let's go uptown, talk to Fred Katayama...

(STOCK MARKET REPORT)

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Aired August 30, 2004 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
UNIDENTIFIED MALE: Mr. Chairman and delegates, it is my great honor and high privilege to nominate George W. Bush, a strong and compassionate leader, for the office of president of the United States of America.
KYRA PHILLIPS, CNN ANCHOR: The Republicans get down to business. We're live from Madison Square Garden.

KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace on the floor of Madison Square Garden, where George W. Bush and Dick Cheney were just formally re-nominated by the Republican Party for president and vice president. A live report, coming right up.

MILES O'BRIEN, CNN ANCHOR: Spy at the Pentagon -- an investigation under way on whether classified secrets were leaked. From the CNN Center in Atlanta, I'm Miles O'Brien.

PHILLIPS: And I'm Kyra Phillips. CNN's LIVE FROM starts right now.

We begin this hour with an all-important formality in a sea of festivity. Moments ago, with fanfare to spare, Republicans meeting in New York City submitted the one and only name their delegates will vote on when they choose the party's nominee for president. Live pictures right now. If you weren't watching, we won't spoil the suspense.

We'll just turn things over to CNN's Kelly Wallace at Madison Square Garden. Looking at live pictures right now, Kelly -- I believe it was a Dick Cheney sighting.

WALLACE: And Kyra, I don't know if you can see me, but Dick Cheney is up in this booth behind me, talking to some delegates right up here. He came into this hall a short time ago, just moments before his name, formally mentioned, re-nominated to be vice president; George W. Bush, re-nominated, his name put into nomination for president.

The Republicans are doing something different. They're going to start their roll call in this afternoon session, going in alphabetical order, some 21 states, building some suspense to Wednesday night, when there will be one state -- they're not sure which state -- which will formally put George W. Bush and Dick Cheney over the top when it comes to being president and vice president -- Kyra.

PHILLIPS: Kelly, as we continue to look at these live pictures of the vice president, you know, there's been a lot of articles that have come out recently, a lot of rumors about Dick Cheney's health, and is he fit to continue on as the vice president.

What can you tell us? Can you dispel any of these rumors? Can you expand a little bit on the truth?

WALLACE: You know, Kyra, it's so interesting. Every time you ask a Bush-Cheney campaign advisor, even White House officials we've questioned, they sort of roll their eyes. They've heard it over and over again, and they say, categorically, Dick Cheney will be on this ticket. He will be George W. Bush's running mate.

That hasn't stopped political people from talking and speculating -- is it possible, if the polls go a certain direction, Dick Cheney could dropout. Right now, Bush-Cheney folks are saying he is here, he is standing with the president, and he will be his running mate, Kyra.

PHILLIPS: Of course, and a couple of other big names we've been talking about, John McCain, Rudy Giuliani, they're set to speak tonight -- two men that haven't necessarily seen eye to eye with the president. Let's talk about these two men.

WALLACE: Not seeing eye to eye, in fact, definitely. Rudy Giuliani, the former mayor of New York City, differing with President Bush on issues such as abortion and gay rights. John McCain has been a critic of the president, as well. They don't see eye to eye on issues such as tax cuts and a Constitutional amendment to ban gay marriage.

But what this is all about, Kyra, is really stars of the Republican Party. Rudy Giuliani, enormously popular; John McCain, incredibly popular as a politician, especially with swing voters and independents. So, these two men are coming out here tonight.

We'll talk about George Bush, talk about what he did after September 11th. The goal is trying to get that message out to as many moderates and swing voters -- those voters that can prove critical in this very tight race right now, Kyra.

PHILLIPS: Kelly, you mentioned the stars. How about TV stars -- Ron Silver, Democrat, Republican, Democrat, Republican -- now he's speaking at the RNC. Will you explain the Ron Silver factor here?

WALLACE: Well, and I have a little factoid that I just learned from our Sam Feist, heading up all of our political programming. He says that Ron Silver the actor is the only person in the history of "CROSSFIRE" who has filled in on the left as a host and then filled in on the right. He has been a strong Democrat.

We are told he's gone on a delegation, a trip for President Bush to China -- that he is a strong supporter of the war with Iraq, a very strong supporter of President Bush's policy when it comes to Israel. So, he will be at this convention as Bush-Cheney supporter. A one- time Democrat, now he's going for George W. Bush in 2004, Kyra.

PHILLIPS: All right, final question. Republicans, they feel they're in a much better position than they were just a few weeks ago, isn't that true?

WALLACE: They really do. And they're sort of saying that they're cautiously optimistic. Certainly, they see the national polls, some of the battleground states, they see President Bush leading or gaining on John Kerry -- a new position for him from just a couple of weeks ago. And another number they keep looking at is the approval rating of the president in many polls, or some, is starting to come close to 50 percent.

They're hoping to get that at 50 or over 50 after this convention, because then they think history's on their side. They say no incumbent has ever lost reelection with an approval rating higher than 50 percent -- Kyra.

PHILLIPS: All right, our Kelly Wallace right there on the floor in the middle of all the action. Kelly, we'll continue to check in with you, thanks.

O'BRIEN: The man of the hour is in New Hampshire for an "Ask President Bush" event at Nashua High School.

Earlier, NBC's Matt Lauer asked President Bush about terrorism, taxes, and some other hot topics while the two passed the time on the candidate's bus. On terror, Mr. Bush said victory may prove elusive.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH (R), PRESIDENT OF THE UNITED STATES: I don't think you can win it, but I think you can create conditions so that those who use terror as a tool are less acceptable in parts of the world, let's put it that way.

(END VIDEO CLIP)

O'BRIEN: On economics, Mr. Bush says the deficit will come down and taxes won't go up, period.

(BEGIN VIDEO CLIP)

MATT LAUER, ANCHOR, "NBC NEWS": If the deficit does not come down, if you can't pay it down in half by 2008, will you raise taxes?

BUSH: It's going to come down in half, that's the goal.

LAUER: If it doesn't?

BUSH: There's no need to answer a hypothetical, because it is going to. That's what we've got in place, and that's what we've got in mind. And I think raising taxes now would be a disaster.

(END VIDEO CLIP)

O'BRIEN: From New Hampshire, Mr. Bush flies to Michigan, ahead of a three-state Tuesday -- Tennessee, Iowa, and Pennsylvania. He comes to New York on Wednesday. PHILLIPS: Well, among the RNC's opening night attractions is a man whose favor is often sought by both parties, outspoken Republican Senator and past presidential candidate, John McCain. The day before he addresses conventioneers, well, McCain talked to CNN's Judy Woodruff about the negatives of negative campaigning.

(BEGIN VIDEO CLIP)

JUDY WOODRUFF, HOST, "INSIDE POLITICS": Do you think this country's going to remain divided after this election, no matter who wins?

SEN. JOHN MCCAIN (R), ARIZONA: The way this campaign's going, yes. But if I were President Bush, as soon as I'm reelected, I would make my top priority trying to bring this nation back together. This is the worst, most partisan environment that I've seen in 22 years in public office, and I deeply regret it -- I deeply regret it.

We are friends. We're not enemies. We have a common enemy. Maybe we ought to start working together to address that challenge.

(END VIDEO CLIP)

PHILLIPS: Well, you can see Judy's entire interview with Senator McCain on a special 90-minute "INSIDE POLITICS." That begins less than two hours from now, 3:00 noon Pacific, right here on CNN.

O'BRIEN: Well, in the old days, political conventions were opportunities for the opposing presidential candidates to catch a little R&R. Not so the running mates. Democratic VP nominee John Edwards is front and center in Wilmington North Carolina today for a frontal assault on Republicans' claims that they are the toughest on terror.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL CANDIDATE: We'll go on the defensive to defeat these terrorists before they can get to us. We'll strengthen our defenses by preventing the spread of weapons of mass destruction, and by providing stronger homeland security, and we will build strong alliances. This is what we will do. This is what they haven't done, and that is a difference.

(END VIDEO CLIP)

O'BRIEN: That was former Democratic presidential hopeful, retired NATO Supreme Commander Wes Clark at Edwards' right side. Actually, the top of the Democratic ticket will make a campaign appearance this week. John Kerry speaks to the American Legion Convention in Nashville on Wednesday.

PHILLIPS: And CNN's prime-time coverage of the RNC begins tonight, 7:00 p.m. Eastern, with Anderson Cooper, Wolf Blitzer, and Larry King. 10:00 p.m. Eastern, Senator John McCain takes the stage, followed by "NEWSNIGHT," and Larry King wraps up the night live at midnight. O'BRIEN: High-profile speakers with differences with the president. Will they put those aside at the podium tonight, we wonder? We'll talk about that straight ahead. Investigation at the Pentagon -- is someone on the inside passing secrets to someone on the outside?

And a storm warning -- deluged by Tropical Storm Gaston and keeping an eye on Hurricane Frances -- a live weather update after the break.

(COMMERCIAL BREAK)

O'BRIEN: Is there an Israeli spy working inside the Pentagon? The denials are loud and persistent following reports the FBI is investigating.

The latest now from CNN's Barbara Starr at the Pentagon. Barbara, what do we know right now?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Miles, we don't know an awful lot to be totally candid and clear. What we do know -- federal law enforcement sources have told CNN's Kelli Arena that there has been, indeed, an ongoing investigation into the possibility of espionage being conducted by Israel. All of this is possible, not proven.

As that investigation was ongoing, this single individual, who is an analyst here in the Pentagon who deals with Persian Gulf and Middle East issues, came to the attention of federal law enforcement officials.

One of the things that happened, according to Kelli Arena's sources, is federal agents were monitoring a lunch where there were Israelis, and this Pentagon official walked into that lunch. That caught everyone by surprise.

It is the general understanding that he is cooperating with federal law enforcement, that they have looked at his computer and his e-mails. But beyond that Miles, it is not clear yet whether this man or anybody will be charged with espionage, with a lesser charge of mishandling classified information, or charged with anything. We just don't know.

O'BRIEN: Wow. So, it's very difficult to have a sense of how much damage might have occurred. Let's talk for just a moment about the conspicuous fact that we have not said this person's name, even though many of us this morning have read his name in various media.

STARR: Indeed, Miles, it is the policy of CNN not to name this person, because he has not been charged with a crime yet. And in fact, we don't know -- it is not confirmed whether there is any grand jury proceeding, whether there are any charges being drawn up. So, at this point, he will not be named.

I should also add, it is the strong understanding of the Pentagon, at the highest levels, that there is only one employee in this building who is directly being looked at by federal law enforcement, apparently part of a larger potential picture.

But this man is a fairly low-level analyst in this building, and it appears, at this point, that not all the pieces of the puzzle have been put together as to exactly how he fits into the picture.

O'BRIEN: And we should point out low-level analysts, at times, have access to high level secret stuff too, right?

STARR: Well, they do. Now, one of the things that does, in fact, have the Pentagon quite distressed, again, at the highest levels today, is this person is relatively low level. The claim is, of course, that he had access to restricted information, if you will -- passed it along to some Israeli lobbying group, who then passed it along to Israel.

It is the kind of information many, many hundreds, if not thousands, of Pentagon officials do have access to. But there have been a lot of press reports that this man has so-called links to high level officials in the Pentagon. Let's be blunt. They are talking about Paul Wolfowitz, the number two man in the Pentagon, and Doug Feith, the number three man in the Pentagon.

Pentagon officials are telling CNN they're very distressed about those news reports -- that there is no proven link, if you will, that he works in that organization, but he is several levels below either man -- Miles.

O'BRIEN: CNN's Barbara Starr at the Pentagon, thank you very much -- Kyra.

PHILLIPS: Time now for two perspectives on the events unfolding in New York, inside and outside the convention site. Former Hillary Clinton press secretary Lisa Caputo is at the Time-Warner Center, and former Republican Congressman Bob Barr is at convention hall, in the middle of all the action there. Welcome to you both.

Let's talk about this interview with "TIME" magazine. The president calling the invasion in Iraq a "catastrophic success." First of all, I want to know how each of you define "catastrophic success," and how do you present that in a forum, like at the RNC -- Lisa?

LISA CAPUTO, CLINTON WHITE HOUSE AIDE: I don't know what a catastrophic success means. I have to tell you, Kyra, let's put it in the context where the president said he miscalculated on Iraq. My interpretation is, and what the president said, is that the troops won the war too quickly. I don't know how you can win a war too quickly.

What's at play here, really, is that there was no peace plan in action, no weapons of mass destruction -- so we went in under false pretenses -- and to boot, taxpayers are being saddled with $200 billion to foot the bill for this. And the U.S. is bearing 90 percent of the casualties in Iraq.

So, when you look at the whole picture here, I guess what he means by catastrophic success is they won the war, but really, he led us into war under misleading circumstances, and there's no game plan postwar.

So, he has a real challenge in front of him, I would say, at the convention. And that's why you see John Edwards out on the stump today laying forth the Kerry-Edwards vision for how they would lead American foreign policy, not the Bush foreign policy of go it alone.

PHILLIPS: So, Bob, let's define catastrophic success, from your point of view. I guess if you wanted to talk about a success, if you think about the beginning of the air war, you could definitely define that a success. Catastrophic -- everything that happened afterwards and the lack of strategy to take care of a post air war.

BOB BARR, FMR. REPUBLICAN CONGRESSMAN: Well, I guess I ought to write another book. I have a book out called "The Meaning of Is." This next one ought to be "The Meaning of Catastrophic Success." It makes about as much sense as trying to redefine the meaning of "is."

I don't know what catastrophic success is, and I'm a little bit dismayed that the president has chosen to come up with some semantical permutations to try and explain a situation that, as Lisa said, was very well executed initially -- the war itself, going in militarily -- but far too little attention was paid to the post-military side of the equation.

Certainly, judging with the success, the rapidity with which we achieved success in 1991, our military certainly, and our policy leaders, should have been prepared for a very quick military success. After all, this was the Iraqi army, not the Russian army. And the fact that we have run into a very serious series of problems since then indicates simply a lack of post-military planning.

PHILLIPS: Of course, that's brought about a lot of demonstrations. The number of demonstrators we've seen already in New York -- the last number, I think, around 500,000. Lisa, is this significant?

CAPUTO: Oh, I think it is. I mean, clearly, you know, people's right to speak their mind is an important right. It's a First Amendment right. I mean, clearly, there were demonstrations in Boston during the Democratic Convention. But I think, clearly, the significance of the number of people who took to the streets in Manhattan yesterday shouldn't go unnoticed.

I happen to live, actually, downtown about two blocks from the World Trade Center site. And on Saturday, there were demonstrators, quite a number of them -- I wouldn't want to put a number on it -- but ringing bells in protest of President Bush's foreign policy and leadership, or lack thereof, as they say, on the terrorism issue.

Their feeling is that, clearly, this administration has gone it alone without allied support. And as a result, they've taken their eye off the ball on terrorism.

PHILLIPS: Bob, when you look at the number of protesters -- and then, you and I have talked about this base, the Republican base being so divided, the Democratic Party being much more united than the Republican Party, you have all these undecided voters, you have a very tight race.

So, taking into account all these factors, in addition to these demonstrators, could it push one way or another when it comes to an ultimate decision come November?

BARR: I think this is going to be a very close race. These demonstrators are not going to play a role. I mean, this is New York. You know, this is Democrat territory up here to have several hundred thousand demonstrators on a beautiful summer day with nothing else to do is not going to change the outcome of the election.

What is going to determine the outcome of the election, Kyra, you're absolutely correct, it's those middle voters that haven't made up their mind yet -- that is, swing voters, so to speak. And they're not going to be paying attention to this convention, just as they didn't really pay attention to the Democratic Convention a month ago. And that's why we didn't see Mr. Kerry get much of a bounce.

I don't think we'll see much change in the numbers are this week's festivities in New York. But what's going to make a difference is, in the last two weeks of this campaign, if Mr. Kerry, which he has not been able to do so far, can come up with a real vision for the future, he will be in a very strong position.

If Mr. Bush and Mr. Cheney can do that for the Republicans, this is going to be another nail biter. And I wouldn't bet on either side right now, to be honest with you.

PHILLIPS: Former Republican Congressman Bob Barr, former Hillary Clinton Press Secretary Lisa Caputo, thanks to you both. I know we'll be talking to you all week. Thanks.

CAPUTO: Thanks.

BARR: Thank you.

PHILLIPS: Miles?

O'BRIEN: Terror in the sky: Investigators release new information about what brought down those two Russian airliners.

And later on LIVE FROM, long distance disruption: A leading marathon runner shoved out of contention by a man wearing a red kilt. What's up with that?

PHILLIPS: It's wrong, that's what it is. It's wrong.

O'BRIEN: Should the Olympic Committee give him gold? He was cruising for it. We'll take your e-mails next hour.

(COMMERCIAL BREAK)

PHILLIPS: They are now certain that explosions brought down two Russian airliners last week. That's according to Russian authorities. The planes crashed within moments of each other after taking off from a Moscow airport. Eight-nine people were killed. Authorities found traces of the high explosive hexogen in the wreckages of both airliners. Hexogen has been used by Chechen rebels in attacks in Russia -- found in ordinance there.

Two Chechen women remain the focus of the investigation, but they're being careful not to assign blame at this point.

O'BRIEN: News across America now. A small plane plowed into a house in Montana killing both men on board. The pilot was practicing takeoffs and landings -- touch-and-gos they call them -- when his '52 Beechcraft Bonanza went down Sunday. Police say it narrowly missed a church where services had just ended.

Former Atlanta Mayor Bill Campbell indicted on charges of racketeering, bribery, and wire fraud. He's accused of taking illegal campaign contributions and payoffs in exchange for city contracts. Campbell denies it, calling the federal investigation a witch-hunt.

That was not Bill Campbell looking at the homerun. In baseball, the Giants' Barry Bonds blasted two more homers in a single game. It's the 68th time he's done that in his career. That breaks a tie with Mark McGuire, places Bonds second to Babe Ruth. Both of Bonds' homers generated a standing ovation. They went about 10 miles. By the way, the Giants beat the Braves 9 to 5.

PHILLIPS: Wall Street affected by the RNC. Let's go uptown, talk to Fred Katayama...

(STOCK MARKET REPORT)

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