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CBS Apologizes for Bush Documents; Terrorist-Set Deadline to Behead U.S. Hostages Passes
Aired September 20, 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.
KYRA PHILLIPS, CNN ANCHOR: "We got duped," the official word from CBS on the dubious documents. Will the apology rock black rock? We've got an insider live.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY, (D), PRESIDENTIAL CANDIDATE: George Bush has no strategy for Iraq. I do, and I have all along. George Bush has not told the truth to the American people about why we went to war and how the war is going.
(END VIDEO CLIP)
PHILLIPS: Kerry accuses Bush of lying to you about Iraq. The president's expected to respond this hour. Is Iraq the hot button issue for the campaign camp? We want to hear from you.
WALTER RODGERS, CNN CORRESPONDENT: I'm Walter Rodgers in Baghdad. The deadline set by Islamist militants to behead two Americans and one Briton has passed. We do not know if they're still alive.
PHILLIPS: From the CNN Center in Atlanta, hello, everyone, I'm Kyra Phillips. Miles is bailing out of a flooded basement, cursing the hurricane -- no, wait a minute, that was me. I am missing Miles, though, today. It's Monday, September 20th. Glad you're with us. CNN's LIVE FROM starts right now.
(COMMERCIAL BREAK)
PHILLIPS: We begin this hour with a source's deceit, a network's retreat, and the melee over those hotly disputed memos regarding George W. Bush and the Texas Air National Guard. CBS News now says it can't and won't vouch for the papers' authenticity, largely because the retired guardsman who provided them now admits he lied about them. CNN's Jeanne Meserve standing by in Washington with all the twists and turns -- Jeanne.
JEANNE MESERVE, CNN CORRESPONDENT: Well, this was certainly quite a turn, a turn about you might call it. Just a few moments ago, a statement from CBS' marquee newsman, Dan Rather. He says in this statement, "If I knew then what I know now, I would not have gone ahead with this story as it was aired, and I certainly would not have used the documents in question." This follows on the heels on a statement from CBS News President Andrew Hayward. It said, in part, "Based on what we know now, CBS News cannot prove that the documents are authentic, which is the only acceptable journalistic standard to justify using them in the report. We should not have used them. That was a mistake, which we deeply regret."
The statement says that Bill Burkett, a former guardsman with a long history and long-running dispute with the Guard and with President Bush was the source for CBS. The statement says that Burkett deliberately misled a CBS News producer, deliberately giving her a false account of the document's origin to protect the confidentiality of the actual source.
Now, the statement says Burkett says he got them from a different source, and CBS has not been able to verify their connection to the documents or their identity. This, of course, comes after more than a week of heavy criticism, the first report aired on September 8th. There was immediate criticism from people on the Web, also from other sorts of experts, both those who criticized the formatting of these documents, the content, the typography, whether or not the signatures were in fact those of Jerry Killian, the lieutenant colonel whose name is on them.
CBS initially stuck fast by its guns, saying that this was part of a partisan attack on what they had put on the air on "60 Minutes." But now, as you hear today, an about face from CBS. They are saying they would not have aired this report had they known then what they know now -- Kyra.
PHILLIPS: All right, Jeanne Meserve, thanks so much. And we're going to have more on the CBS controversy later in this hour when we hear from a media analyst who used to work for Dan Rather.
Now, we move to the intersection of war and politics. Air strikes, car bombs, rampant kidnappings in Iraq, intense new attacks, and counterattacks in the race for U.S. president. We'll get to the rhetoric in a moment. But first, the ravages of the Iraqi insurgency and the cost of trying to squash it. For the latest, we turn to CNN's senior international correspondent, Walter Rodgers. He's in Baghdad. Hi, Walt.
RODGERS: Hi, Kyra. So far, nothing buy silence from the kidnappers who are holding, or who abducted, two Americans and a British engineer on Thursday of last week. Today was the deadline set by Islamist militants to behead Jack Hensley and Eugene 'Jack" Armstrong, the two Americans, and Kenneth Bigley, the British engineer. But again, we have heard nothing from them.
The kidnappers' demands were that the United States must release all female Iraqi detainees -- that everyone, all women in Iraqi jails, be released. The United States only holds two high value Iraqi detainees, females that is. They were held in suspicion of being involved in Saddam Hussein's weapons programs. The United States will not free them. It is not known how many detainees the Iraqis have, again, of the female gender. We just do not know that at this point. If you're counting, there are at least eight western hostages now being held by radical Islamist groups in this country. Besides the three we mentioned, there are two women Italian aid workers and two French journalists, plus an Iraqi-American businessman.
It was a very bad day here in Iraq. Particularly ominous was the fact that in two separate incidents, two Sunni Muslim sheikhs, fairly important religious leaders, were murdered. They were Sunnis. They were assassinated, murdered in Shiite neighborhoods. That is the kind of violence here which breeds the potential for a civil war.
And in Fallujah itself, that hot spot of trouble in the so-called Sunni Triangle, U.S. jets were back in action there, bombing heavy construction equipment, a dump truck and a bulldozer. The U.S. military says the insurgents were using those construction vehicles to try to build barricades and fortresses so they could get a higher elevation to aim their fire on U.S. troops -- Kyra.
PHILLIPS: Walter Rodgers, live from Baghdad, thank you. And among the latest kidnapped victims is a construction worker from just outside Atlanta, whose wife says he only wanted to help the Iraqi people. Forty-eight-year-old Jack Hensley and two western coworkers were kidnapped, as Walter said, from the house that they shared in Baghdad last Thursday, a house that usually was guarded round the clock, but suspiciously was not the day of the attack. Yesterday, Hensley's wife read this statement on CNN.
(BEGIN VIDEO CLIP)
PATTY HENSLEY, HOSTAGE'S WIFE: Jack is a simple, generous man, who loves the Iraqi people and has made many friends while in Iraq. Since Jack has been a guest in your country, he has been treated with honor and dignity. We ask for your mercy in freeing Jack and his coworkers, so that they can continue to return home to their loving families. And it is your decision whether this happens.
(END VIDEO CLIP)
PHILLIPS: Now, Hensley's younger brother says Jack was more like a father, and killing him won't accomplish anything.
(BEGIN VIDEO CLIP)
TY HENSLEY, HOSTAGE'S BROTHER: At the moment, we have tried to do all we can do. And I guess by talking to the media and trying to share what kind of person Jack Hensley was and is, it's tough... it's just tough.
(END VIDEO CLIP)
PHILLIPS: And the family of another kidnapped American, Eugene Armstrong, says it's too traumatizing to even speak publicly.
Iraq's interim prime minister says he's adamant that nationwide elections will take place as scheduled by the end of January. Ayad Allawi is on a business trip this week, first to London, then D.C. In London, the prime minister told an Arabic newspaper that he survived four assassination attempts since he came to power in June.
Now, to presidential politics. The Democratic challenger is challenging the administration's war plans and approach, and performance, like never before. We expect to hear a fiery defense before the end of this hour. CNN's Bob Franken is with the Kerry campaign in New York. Dana Bash is at our post at the White House. Bob, let's start with you.
BOB FRANKEN, CNN CORRESPONDENT: Well, the first point is, is it's not so much what John Kerry said, it's where and when he said it. He said it in New York, just as President Bush was planning to come to speak to the United Nations General Assembly. And it's not so much what he said, but the way he said it. It was one of the strongest worded attacks yet on the president's policies in Iraq.
What John Kerry did was he called for... a four-part plan. It would be based on a summit meeting, while President Bush is at the UN General Assembly, to secure international cooperation to see to it that Iraqi security forces are the ones who are trained, see to it that reconstruction efforts become effective, and to make sure that Iraqi elections are held, in fact, next year.
It's also the way that he phrased things. He was really rough on the president, saying not only was the president not truthful with the American people, but he made severe miscalculations, the worst of which was the president saying that if he knew then what he knew now, he would still have initiated the war in Iraq.
(BEGIN VIDEO CLIP)
KERRY: How can he possibly be serious? Is he really saying to America that if we know there was no imminent threat, no weapons of mass destruction, no ties to al-Qaeda, the United States should have invaded Iraq? My answer... resoundingly no, because a commander in chief's first responsibility is to make a wise and responsible decision to keep America safe.
(END VIDEO CLIP)
FRANKEN: And the Kerry speech is notable not only by the contents of the speech, but also by the criticism that he has not been aggressive enough in his campaign against the president. He was certainly more aggressive today -- Kyra.
PHILLIPS: Bob Franken, thanks. Well, the Bush campaign says consistency is a necessity in wartime. And while we wait for an "Ask President Bush" event in about 40 minutes from now, let's bring in CNN White House correspondent. Dana Bash -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, what you just said, Kyra, has really been the crux of the Bush argument against Senator Kerry when it comes to Iraq, that he has so many positions, the Bush campaign says, the president says, that he is too indecisive to be a credible leader when it comes to dealing with Iraq now.
Now, the Bush campaign, as you would imagine, watched Senator Kerry's speech quite carefully, and they're already reaching into their arsenal full of past Kerry quotes to try to illustrate what they call even more flip-flops. Now, one senior Bush aid said that they found one that they are already calling the mother of all flip-flops. Senator Kerry said today that Mr. Bush doesn't have the judgment or credibility to be president because of the way he handled Iraq.
They're looking at a quote from December of 2003 by Senator Kerry, who then said that, "Those who believe we are not safer with his capture..." meaning Saddam Hussein... "don't have the judgment to be president, or the credibility to be elected president." Now, that is all what the Bush campaign was prepared for, but there were other comments from those within the president's own party, fresh criticism over the weekend from some senior senators, like, for example, the foreign relations chairman, Richard Lugar, who said that perhaps the administration is incompetent, because they've only spent $1 billion out of the $18 billion they have to rebuild Iraq.
Even Senator John McCain, somebody who has been campaigning with the president, who stood at the Republican Convention and said the president is the man to lead on Iraq -- he said over the weekend that perhaps President Bush needs to be more candid with the American people about the realities on the ground in Iraq.
Now, Mr. Bush will be addressing all of these criticisms later today. Shortly, New Hampshire Bush aids say that he is going to talk about the fact that John Kerry will retreat from Iraq if he goes along with what he said today, and that will send the wrong message to allies and to Iraqis and, according to Mr. Bush, will make the world a less safe place.
Also, look for the White House to rely on some symbolism. Starting tomorrow, the Iraqi interim prime minister, Allawi, will be in New York at the United Nations. He'll be here in Washington, even here at the White House. The White House is going to point to him as somebody that the American people perhaps should listen to when he says that things in Iraq are moving along OK -- Kyra.
PHILLIPS: Dana, while I have you there at the White House, I'm just curious... your contacts and with whom you've spoken, the CBS documents, the story, Dan Rather coming out with an apology, CBS coming out, apologizing. What's been the reaction? As soon as that hit, what was the feel there at the White House? What were people saying?
BASH: Well, Kyra, as you well know, the fact that the focus had turned in the past week or so from the question of the president's National Guard service to the question of whether CBS was accurate or inaccurate in these documents certainly did not make the Bush campaign unhappy. A senior Republican aid says, however, with this new statement by CBS, that there are still questions that are unanswered. For example, they are still going to press as to whether or not there was some political motivation that went on here. PHILLIPS: All right, Dana Bash, live from the White House. Thanks so much. And later this hour, the president takes to the podium in Derry, New Hampshire. Considering the news of the day, his remarks are expected to be much more than a routine stump speech. We're going to take you there live.
And more on the Iraq war tomorrow when Mr. Bush addresses the United Nations. CNN will have live coverage. And as Iraq heats up as a home stretch campaign issue, CNN's Paula Zahn looks at war and politics. Her guests include former UN Ambassador and Kerry campaign advisor Richard Holbrooke, and Senator Jon Kyl, chairman of the Republican Policy Committee. That's tonight at 8 Eastern.
Now, obviously, Iraq is becoming the focus for both campaigns, but we want to hear from you. Is Iraq the top issue for you in this election, or will other concerns be more important when you step into the voting booth? I'm curious too, the change in the CBS story, wondering if that's going to make an impact on you. We're reading your emails, so send us your thoughts at LiveFrom@CNN.com.
Well, Iraq isn't the only hot issue for voters. Is it fear mongering or just telling it like it is? We're going to get caught up on the war of words over the war on terror.
(BEGIN VIDEO CLIP)
ERICA MILKOVICH, FLOOD VICTIM: It's all gone. We've got to start all over from scratch now.
(END VIDEO CLIP)
PHILLIPS: Not Florida, not Alabama... try New Jersey. A half- century high for a river gone wild. And we're not forgetting the devastated gulf coast, where it's back to basics. As tempers flare and lines get longer, there are still 71 days left in the hurricane season. LIVE FROM picks up the pieces right after this.
(COMMERCIAL BREAK)
PHILLIPS: Well, life is far from normal, from Florida north to New Jersey and New England, as millions of people struggle with Ivan's aftermath. Near Pensacola, long stretches of beachfront property look bombed out. The storm surge from Ivan destroyed homes and businesses there, and people have been lining up for days just to buy food, water, ice, and gas.
Now, homes along the riverfront in suburban Philadelphia were inundated. Pennsylvania Governor Ed Rendell says that nearly the entire state was devastated by the remnants of Ivan. And in neighboring New Jersey, flooding has swept some homes right off of their foundations. Reporter James Ford of CNN affiliate WNYW has been talking to anxious homeowners.
(BEGIN VIDEOTAPE)
MILKOVICH (ph): It's all gone. We've got to start all over from scratch now.
JAMES FORD, CNN AFFILIATE WNYW: Erica Milkovich (ph) is talking about this, her three-story home on -- no, make that in the Delaware River. You can only see two stories now, thanks to a river that crested at least 11 feet above its flood stage. These aerial shots show you what that means. The river is normally only about one-third this wide, and it's been a long time since it's been this deep.
UNIDENTIFIED MAN: In '55, it was higher than this. This is the highest it's been since '55.
FORD: So not never, but nearly half a century. He owns the home that was here. All that's left is the telephone pole for the cable that served this summer rental before the river washed away the whole structure around 10 AM. These riverside families now rely on insurance and the state to help them out. Governor McGreevey says he'll deliver.
GOV. JIM MCGREEVEY, (D), NEW JERSEY: We have to work with them to rebuild their lives, literally to make sure that they have a place in which to live for the foreseeable future.
(END VIDEOTAPE)
PHILLIPS: And out west, it's the same story in Sacramento. The California capital was flooded Sunday by a brief but intense thunderstorm. Even the capital basement took on water. Many downtown streets were flooded by what one city official says was just too much water too fast.
Next on LIVE FROM, B list names, A list crimes... Enron's back in court. We're live as the first criminal trial begins. Most heart attacks happen at home. Now, the treatment can begin there too. No prescription required. What you need to know about defibrillators, coming up. And the world is watching... President Bush addresses the UN General Assembly. Will he get a warm reception? LIVE FROM works the room tomorrow.
(COMMERCIAL BREAK)
PHILLIPS: Well, the spotlight is on Enron and Wall Street in the first criminal case involving former Enron executives. The trial is getting under way in federal court. We get the latest now from CNN's Chris Huntington in Houston, Texas -- Chris.
CHRIS HUNTINGTON, CNN CORRESPONDENT: Kyra, thanks a lot. Actually, I'm in New York, but I'm monitoring it as closely as possible. You know, since Enron collapsed nearly three years ago, 32 Enron executives have been indicted, 14 have pleaded guilty, including former chief financial officer Andy Fastow. Enron's former Chairman Kenneth Lay, and former CEO Jeff Skilling have been indicted and are awaiting trial.
Now, the case in Houston today, jury selection under way, is a trial of two former mid-level Enron executives and four former investment bankers from Merrill Lynch. Now, they're on trial for fraud and conspiracy charges relating to a double-sided deal involving three electricity-generating barges that had been moored off the coast of Nigeria.
The trial's important for two reasons. It's the first courtroom test of the government's main theory, that Enron used these kinds of off balance sheet transactions to illegally prop up its earnings and hide debt. The trial also will be important because it focuses attention on how the big investment banking firms enabled Enron to do these deals.
Enron had substantial help over the years from Citigroup, JP Morgan Chase, Credit Suisse First Boston, and of course, Merrill Lynch. The defendants, who all insist they are innocent, are Dan Boyle, who's a former Enron VP of finance, Sheila Kahanek, who is a former in-house accountant at Enron, and then four investment bankers from Merrill Lynch, including Daniel Bayly who, at one time, ran Merrill Lynch's global investment banking division.
James Brown, William Fuhs, and Robert Furst are also among the defendants. Now, at the end of 1999, Enron wanted to sell these Nigerian barges and book the proceeds. Merrill Lynch agreed to buy them, but then, six months later, sold the barges back to an Enron- related partnership run by Andy Fastow.
The government simply says that the whole deal was a sham. It was a shell game that temporarily took the barges off Enron's books, then put about $12 million on Enron's bottom line. And the government says that Merrill bankers simply played the role of bagmen, holding the barges off to the side with no risk, knowing that Fastow's partnership would buy them back at a higher price. And Merrill, indeed, made more than half a million dollars profit on the deal.
Prosecutors plan to call many former Enron employees as witnesses. So far, though, Andrew Fastow is not listed among them, although he could be. Prosecutors may want to keep him, in a sense, as an ace in the hole, particularly for the upcoming trials for Jeff Skilling and Ken Lay -- Kyra.
PHILLIPS: Chris, whether it be Houston or New York, wherever you are, I know you'll cover the story correctly and fairly. Thank you very much, Chris, from New York.
Well, from Enron to WorldCom, another company that lost its place as a market favorite amid charges of accounting fraud, now that company is on the auction block. Rhonda Schaffler joins us live...
(MARKET REPORT)
PHILLIPS: Checking stories now in the news, two U.S. troops are dead following a firefight with insurgents in Afghanistan. It happened in a troubled southeastern province. Two Americans and six Afghan soldiers were wounded. Officials have braced themselves for an escalation of violence leading up to the Afghan presidential elections October 9.
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Aired September 20, 2004 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: "We got duped," the official word from CBS on the dubious documents. Will the apology rock black rock? We've got an insider live.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY, (D), PRESIDENTIAL CANDIDATE: George Bush has no strategy for Iraq. I do, and I have all along. George Bush has not told the truth to the American people about why we went to war and how the war is going.
(END VIDEO CLIP)
PHILLIPS: Kerry accuses Bush of lying to you about Iraq. The president's expected to respond this hour. Is Iraq the hot button issue for the campaign camp? We want to hear from you.
WALTER RODGERS, CNN CORRESPONDENT: I'm Walter Rodgers in Baghdad. The deadline set by Islamist militants to behead two Americans and one Briton has passed. We do not know if they're still alive.
PHILLIPS: From the CNN Center in Atlanta, hello, everyone, I'm Kyra Phillips. Miles is bailing out of a flooded basement, cursing the hurricane -- no, wait a minute, that was me. I am missing Miles, though, today. It's Monday, September 20th. Glad you're with us. CNN's LIVE FROM starts right now.
(COMMERCIAL BREAK)
PHILLIPS: We begin this hour with a source's deceit, a network's retreat, and the melee over those hotly disputed memos regarding George W. Bush and the Texas Air National Guard. CBS News now says it can't and won't vouch for the papers' authenticity, largely because the retired guardsman who provided them now admits he lied about them. CNN's Jeanne Meserve standing by in Washington with all the twists and turns -- Jeanne.
JEANNE MESERVE, CNN CORRESPONDENT: Well, this was certainly quite a turn, a turn about you might call it. Just a few moments ago, a statement from CBS' marquee newsman, Dan Rather. He says in this statement, "If I knew then what I know now, I would not have gone ahead with this story as it was aired, and I certainly would not have used the documents in question." This follows on the heels on a statement from CBS News President Andrew Hayward. It said, in part, "Based on what we know now, CBS News cannot prove that the documents are authentic, which is the only acceptable journalistic standard to justify using them in the report. We should not have used them. That was a mistake, which we deeply regret."
The statement says that Bill Burkett, a former guardsman with a long history and long-running dispute with the Guard and with President Bush was the source for CBS. The statement says that Burkett deliberately misled a CBS News producer, deliberately giving her a false account of the document's origin to protect the confidentiality of the actual source.
Now, the statement says Burkett says he got them from a different source, and CBS has not been able to verify their connection to the documents or their identity. This, of course, comes after more than a week of heavy criticism, the first report aired on September 8th. There was immediate criticism from people on the Web, also from other sorts of experts, both those who criticized the formatting of these documents, the content, the typography, whether or not the signatures were in fact those of Jerry Killian, the lieutenant colonel whose name is on them.
CBS initially stuck fast by its guns, saying that this was part of a partisan attack on what they had put on the air on "60 Minutes." But now, as you hear today, an about face from CBS. They are saying they would not have aired this report had they known then what they know now -- Kyra.
PHILLIPS: All right, Jeanne Meserve, thanks so much. And we're going to have more on the CBS controversy later in this hour when we hear from a media analyst who used to work for Dan Rather.
Now, we move to the intersection of war and politics. Air strikes, car bombs, rampant kidnappings in Iraq, intense new attacks, and counterattacks in the race for U.S. president. We'll get to the rhetoric in a moment. But first, the ravages of the Iraqi insurgency and the cost of trying to squash it. For the latest, we turn to CNN's senior international correspondent, Walter Rodgers. He's in Baghdad. Hi, Walt.
RODGERS: Hi, Kyra. So far, nothing buy silence from the kidnappers who are holding, or who abducted, two Americans and a British engineer on Thursday of last week. Today was the deadline set by Islamist militants to behead Jack Hensley and Eugene 'Jack" Armstrong, the two Americans, and Kenneth Bigley, the British engineer. But again, we have heard nothing from them.
The kidnappers' demands were that the United States must release all female Iraqi detainees -- that everyone, all women in Iraqi jails, be released. The United States only holds two high value Iraqi detainees, females that is. They were held in suspicion of being involved in Saddam Hussein's weapons programs. The United States will not free them. It is not known how many detainees the Iraqis have, again, of the female gender. We just do not know that at this point. If you're counting, there are at least eight western hostages now being held by radical Islamist groups in this country. Besides the three we mentioned, there are two women Italian aid workers and two French journalists, plus an Iraqi-American businessman.
It was a very bad day here in Iraq. Particularly ominous was the fact that in two separate incidents, two Sunni Muslim sheikhs, fairly important religious leaders, were murdered. They were Sunnis. They were assassinated, murdered in Shiite neighborhoods. That is the kind of violence here which breeds the potential for a civil war.
And in Fallujah itself, that hot spot of trouble in the so-called Sunni Triangle, U.S. jets were back in action there, bombing heavy construction equipment, a dump truck and a bulldozer. The U.S. military says the insurgents were using those construction vehicles to try to build barricades and fortresses so they could get a higher elevation to aim their fire on U.S. troops -- Kyra.
PHILLIPS: Walter Rodgers, live from Baghdad, thank you. And among the latest kidnapped victims is a construction worker from just outside Atlanta, whose wife says he only wanted to help the Iraqi people. Forty-eight-year-old Jack Hensley and two western coworkers were kidnapped, as Walter said, from the house that they shared in Baghdad last Thursday, a house that usually was guarded round the clock, but suspiciously was not the day of the attack. Yesterday, Hensley's wife read this statement on CNN.
(BEGIN VIDEO CLIP)
PATTY HENSLEY, HOSTAGE'S WIFE: Jack is a simple, generous man, who loves the Iraqi people and has made many friends while in Iraq. Since Jack has been a guest in your country, he has been treated with honor and dignity. We ask for your mercy in freeing Jack and his coworkers, so that they can continue to return home to their loving families. And it is your decision whether this happens.
(END VIDEO CLIP)
PHILLIPS: Now, Hensley's younger brother says Jack was more like a father, and killing him won't accomplish anything.
(BEGIN VIDEO CLIP)
TY HENSLEY, HOSTAGE'S BROTHER: At the moment, we have tried to do all we can do. And I guess by talking to the media and trying to share what kind of person Jack Hensley was and is, it's tough... it's just tough.
(END VIDEO CLIP)
PHILLIPS: And the family of another kidnapped American, Eugene Armstrong, says it's too traumatizing to even speak publicly.
Iraq's interim prime minister says he's adamant that nationwide elections will take place as scheduled by the end of January. Ayad Allawi is on a business trip this week, first to London, then D.C. In London, the prime minister told an Arabic newspaper that he survived four assassination attempts since he came to power in June.
Now, to presidential politics. The Democratic challenger is challenging the administration's war plans and approach, and performance, like never before. We expect to hear a fiery defense before the end of this hour. CNN's Bob Franken is with the Kerry campaign in New York. Dana Bash is at our post at the White House. Bob, let's start with you.
BOB FRANKEN, CNN CORRESPONDENT: Well, the first point is, is it's not so much what John Kerry said, it's where and when he said it. He said it in New York, just as President Bush was planning to come to speak to the United Nations General Assembly. And it's not so much what he said, but the way he said it. It was one of the strongest worded attacks yet on the president's policies in Iraq.
What John Kerry did was he called for... a four-part plan. It would be based on a summit meeting, while President Bush is at the UN General Assembly, to secure international cooperation to see to it that Iraqi security forces are the ones who are trained, see to it that reconstruction efforts become effective, and to make sure that Iraqi elections are held, in fact, next year.
It's also the way that he phrased things. He was really rough on the president, saying not only was the president not truthful with the American people, but he made severe miscalculations, the worst of which was the president saying that if he knew then what he knew now, he would still have initiated the war in Iraq.
(BEGIN VIDEO CLIP)
KERRY: How can he possibly be serious? Is he really saying to America that if we know there was no imminent threat, no weapons of mass destruction, no ties to al-Qaeda, the United States should have invaded Iraq? My answer... resoundingly no, because a commander in chief's first responsibility is to make a wise and responsible decision to keep America safe.
(END VIDEO CLIP)
FRANKEN: And the Kerry speech is notable not only by the contents of the speech, but also by the criticism that he has not been aggressive enough in his campaign against the president. He was certainly more aggressive today -- Kyra.
PHILLIPS: Bob Franken, thanks. Well, the Bush campaign says consistency is a necessity in wartime. And while we wait for an "Ask President Bush" event in about 40 minutes from now, let's bring in CNN White House correspondent. Dana Bash -- Dana.
DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, what you just said, Kyra, has really been the crux of the Bush argument against Senator Kerry when it comes to Iraq, that he has so many positions, the Bush campaign says, the president says, that he is too indecisive to be a credible leader when it comes to dealing with Iraq now.
Now, the Bush campaign, as you would imagine, watched Senator Kerry's speech quite carefully, and they're already reaching into their arsenal full of past Kerry quotes to try to illustrate what they call even more flip-flops. Now, one senior Bush aid said that they found one that they are already calling the mother of all flip-flops. Senator Kerry said today that Mr. Bush doesn't have the judgment or credibility to be president because of the way he handled Iraq.
They're looking at a quote from December of 2003 by Senator Kerry, who then said that, "Those who believe we are not safer with his capture..." meaning Saddam Hussein... "don't have the judgment to be president, or the credibility to be elected president." Now, that is all what the Bush campaign was prepared for, but there were other comments from those within the president's own party, fresh criticism over the weekend from some senior senators, like, for example, the foreign relations chairman, Richard Lugar, who said that perhaps the administration is incompetent, because they've only spent $1 billion out of the $18 billion they have to rebuild Iraq.
Even Senator John McCain, somebody who has been campaigning with the president, who stood at the Republican Convention and said the president is the man to lead on Iraq -- he said over the weekend that perhaps President Bush needs to be more candid with the American people about the realities on the ground in Iraq.
Now, Mr. Bush will be addressing all of these criticisms later today. Shortly, New Hampshire Bush aids say that he is going to talk about the fact that John Kerry will retreat from Iraq if he goes along with what he said today, and that will send the wrong message to allies and to Iraqis and, according to Mr. Bush, will make the world a less safe place.
Also, look for the White House to rely on some symbolism. Starting tomorrow, the Iraqi interim prime minister, Allawi, will be in New York at the United Nations. He'll be here in Washington, even here at the White House. The White House is going to point to him as somebody that the American people perhaps should listen to when he says that things in Iraq are moving along OK -- Kyra.
PHILLIPS: Dana, while I have you there at the White House, I'm just curious... your contacts and with whom you've spoken, the CBS documents, the story, Dan Rather coming out with an apology, CBS coming out, apologizing. What's been the reaction? As soon as that hit, what was the feel there at the White House? What were people saying?
BASH: Well, Kyra, as you well know, the fact that the focus had turned in the past week or so from the question of the president's National Guard service to the question of whether CBS was accurate or inaccurate in these documents certainly did not make the Bush campaign unhappy. A senior Republican aid says, however, with this new statement by CBS, that there are still questions that are unanswered. For example, they are still going to press as to whether or not there was some political motivation that went on here. PHILLIPS: All right, Dana Bash, live from the White House. Thanks so much. And later this hour, the president takes to the podium in Derry, New Hampshire. Considering the news of the day, his remarks are expected to be much more than a routine stump speech. We're going to take you there live.
And more on the Iraq war tomorrow when Mr. Bush addresses the United Nations. CNN will have live coverage. And as Iraq heats up as a home stretch campaign issue, CNN's Paula Zahn looks at war and politics. Her guests include former UN Ambassador and Kerry campaign advisor Richard Holbrooke, and Senator Jon Kyl, chairman of the Republican Policy Committee. That's tonight at 8 Eastern.
Now, obviously, Iraq is becoming the focus for both campaigns, but we want to hear from you. Is Iraq the top issue for you in this election, or will other concerns be more important when you step into the voting booth? I'm curious too, the change in the CBS story, wondering if that's going to make an impact on you. We're reading your emails, so send us your thoughts at LiveFrom@CNN.com.
Well, Iraq isn't the only hot issue for voters. Is it fear mongering or just telling it like it is? We're going to get caught up on the war of words over the war on terror.
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ERICA MILKOVICH, FLOOD VICTIM: It's all gone. We've got to start all over from scratch now.
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PHILLIPS: Not Florida, not Alabama... try New Jersey. A half- century high for a river gone wild. And we're not forgetting the devastated gulf coast, where it's back to basics. As tempers flare and lines get longer, there are still 71 days left in the hurricane season. LIVE FROM picks up the pieces right after this.
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PHILLIPS: Well, life is far from normal, from Florida north to New Jersey and New England, as millions of people struggle with Ivan's aftermath. Near Pensacola, long stretches of beachfront property look bombed out. The storm surge from Ivan destroyed homes and businesses there, and people have been lining up for days just to buy food, water, ice, and gas.
Now, homes along the riverfront in suburban Philadelphia were inundated. Pennsylvania Governor Ed Rendell says that nearly the entire state was devastated by the remnants of Ivan. And in neighboring New Jersey, flooding has swept some homes right off of their foundations. Reporter James Ford of CNN affiliate WNYW has been talking to anxious homeowners.
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MILKOVICH (ph): It's all gone. We've got to start all over from scratch now.
JAMES FORD, CNN AFFILIATE WNYW: Erica Milkovich (ph) is talking about this, her three-story home on -- no, make that in the Delaware River. You can only see two stories now, thanks to a river that crested at least 11 feet above its flood stage. These aerial shots show you what that means. The river is normally only about one-third this wide, and it's been a long time since it's been this deep.
UNIDENTIFIED MAN: In '55, it was higher than this. This is the highest it's been since '55.
FORD: So not never, but nearly half a century. He owns the home that was here. All that's left is the telephone pole for the cable that served this summer rental before the river washed away the whole structure around 10 AM. These riverside families now rely on insurance and the state to help them out. Governor McGreevey says he'll deliver.
GOV. JIM MCGREEVEY, (D), NEW JERSEY: We have to work with them to rebuild their lives, literally to make sure that they have a place in which to live for the foreseeable future.
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PHILLIPS: And out west, it's the same story in Sacramento. The California capital was flooded Sunday by a brief but intense thunderstorm. Even the capital basement took on water. Many downtown streets were flooded by what one city official says was just too much water too fast.
Next on LIVE FROM, B list names, A list crimes... Enron's back in court. We're live as the first criminal trial begins. Most heart attacks happen at home. Now, the treatment can begin there too. No prescription required. What you need to know about defibrillators, coming up. And the world is watching... President Bush addresses the UN General Assembly. Will he get a warm reception? LIVE FROM works the room tomorrow.
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PHILLIPS: Well, the spotlight is on Enron and Wall Street in the first criminal case involving former Enron executives. The trial is getting under way in federal court. We get the latest now from CNN's Chris Huntington in Houston, Texas -- Chris.
CHRIS HUNTINGTON, CNN CORRESPONDENT: Kyra, thanks a lot. Actually, I'm in New York, but I'm monitoring it as closely as possible. You know, since Enron collapsed nearly three years ago, 32 Enron executives have been indicted, 14 have pleaded guilty, including former chief financial officer Andy Fastow. Enron's former Chairman Kenneth Lay, and former CEO Jeff Skilling have been indicted and are awaiting trial.
Now, the case in Houston today, jury selection under way, is a trial of two former mid-level Enron executives and four former investment bankers from Merrill Lynch. Now, they're on trial for fraud and conspiracy charges relating to a double-sided deal involving three electricity-generating barges that had been moored off the coast of Nigeria.
The trial's important for two reasons. It's the first courtroom test of the government's main theory, that Enron used these kinds of off balance sheet transactions to illegally prop up its earnings and hide debt. The trial also will be important because it focuses attention on how the big investment banking firms enabled Enron to do these deals.
Enron had substantial help over the years from Citigroup, JP Morgan Chase, Credit Suisse First Boston, and of course, Merrill Lynch. The defendants, who all insist they are innocent, are Dan Boyle, who's a former Enron VP of finance, Sheila Kahanek, who is a former in-house accountant at Enron, and then four investment bankers from Merrill Lynch, including Daniel Bayly who, at one time, ran Merrill Lynch's global investment banking division.
James Brown, William Fuhs, and Robert Furst are also among the defendants. Now, at the end of 1999, Enron wanted to sell these Nigerian barges and book the proceeds. Merrill Lynch agreed to buy them, but then, six months later, sold the barges back to an Enron- related partnership run by Andy Fastow.
The government simply says that the whole deal was a sham. It was a shell game that temporarily took the barges off Enron's books, then put about $12 million on Enron's bottom line. And the government says that Merrill bankers simply played the role of bagmen, holding the barges off to the side with no risk, knowing that Fastow's partnership would buy them back at a higher price. And Merrill, indeed, made more than half a million dollars profit on the deal.
Prosecutors plan to call many former Enron employees as witnesses. So far, though, Andrew Fastow is not listed among them, although he could be. Prosecutors may want to keep him, in a sense, as an ace in the hole, particularly for the upcoming trials for Jeff Skilling and Ken Lay -- Kyra.
PHILLIPS: Chris, whether it be Houston or New York, wherever you are, I know you'll cover the story correctly and fairly. Thank you very much, Chris, from New York.
Well, from Enron to WorldCom, another company that lost its place as a market favorite amid charges of accounting fraud, now that company is on the auction block. Rhonda Schaffler joins us live...
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PHILLIPS: Checking stories now in the news, two U.S. troops are dead following a firefight with insurgents in Afghanistan. It happened in a troubled southeastern province. Two Americans and six Afghan soldiers were wounded. Officials have braced themselves for an escalation of violence leading up to the Afghan presidential elections October 9.
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