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Londoners Go Back to Normal Lives in Wake of Bombing; White House Deputy Chief of Staff Suspected of Leaking CIA Operative's Name; Dennis Hits Southeastern U.S. with Massive Damage; Daughter Remembers Missing Dad, Victim of Srebrenica Massacre; NASA Prepares for Space Shuttle Launch

Aired July 11, 2005 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: "Now in the News," cleaning up after Hurricane Dennis. Hundreds of thousands of people trying to get their lives back to normal today. Dennis is now a tropical depression, spreading rain as it heads for the Ohio Valley. In its wake, 850,000 people left without power and other basics like safe drinking water.
One storm not yet a memory, though, when another begins forming. A tropical depression, which forecasters say could become a tropical storm, is being watched in the Atlantic Ocean. If it strengthens, it would be named Emily and would be the fifth named storm of the hurricane season. Some forecasters say the system could become hurricane strength by Friday.

Danger on the mountain. Three climbers are dead, a fourth seriously injured, after what's being described as an accident at a popular climbing peak in the North Cascades National Park. The victims were all from Washington state. Two other members of that group escaped injury.

On The Tube, underground, all over London, commuters heed the word of British leaders and Scotland Yard to live their normal lives in the aftermath of last week's bombings on trains and a double-decker bus. It's been basically uneventful today, save for a brief evacuation at King's Cross Station, supposedly because of a suspicious, ultimately harmless package.

WOLF BLITZER, CO-HOST: Earlier today, Tony Blair assured Parliament that not just the bombers but the planners of what he called "this outrage" will be tracked down and brought to justice.

The prime minister also saluted, in his words, "the sheer undaunted spirit of the people of London."

Investigators now put the confirmed number of dead from Thursday's explosion at 52, but so far, only three sets of remains have been identified. The grim forensics continue. The hustle and bustle of everyday life goes on, but CNN's John Vause reports you can't call it business as usual.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice-over): The start of the work week and London with its congested morning rush hour at least appeared to be returning normal.

UNIDENTIFIED MALE: Things bounced back quicker than even I thought it would.

VAUSE: Almost all Underground services are now running again and, as police urge people to return to the city, London Mayor Ken Livingstone was on The Tube...

KEN LIVINGSTONE, MAYOR OF LONDON: We carry on with our lives. I think we have to stop thinking about last week.

VAUSE: ... along with millions of others making a jittery commute to work.

What wasn't normal, the sight of so many uniformed police at train stations with bomb-sniffing dogs and at bus stops, an attempt to reassure the public more than anything else.

But on bus No. 30, the thoughts here were simply it could have been us.

UNIDENTIFIED FEMALE: Everybody has to think about what happened, and, you know, just considering that it's, of course, very frightening.

VAUSE: This was bus No. 30 on Thursday. Today in the distance, passengers could see the white plastic sheets covering the twisted wreckage. The bomb exploded towards the back on the upper deck. This morning those seats were empty.

UNIDENTIFIED FEMALE: It's really bad. (UNINTELLIGIBLE)

VAUSE: And with London police warning the bombers may still strike, there are fears this massive public transit system will never be truly safe.

UNIDENTIFIED MALE: Obviously, terrorism is so pervasive if it chooses to be, there's no way to ultimately protect, so you just do what you do.

VAUSE (on camera): Many here in London with their "life must go on attitude" are doing precisely what their political leaders have asked, to ensure that Thursday's bomb blasts do not change their way of life.

John Vause, CNN, London.

(END VIDEOTAPE)

PHILLIPS: United we stand. That message delivered by President Bush to the crowd at the FBI Academy in Quantico, Virginia. Mr. Bush promised solidarity with Britain in the wake of last week's deadly wave of bombings. He says the attacks give new urgency to the war on terrorism and promised America will not retreat.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These kind of people who blow up subways and buses are not people you can negotiate with or reason with, or appease. In the face of such adversaries, there is only one course of action. We will continue to take the fight to the enemy, and we will fight until this enemy is defeated.

(END VIDEO CLIP)

BLITZER: The president speaking earlier today.

It took 30 years to crack the secret source on Watergate to reveal the identity of Deep Throat. But has it taken less than two years to out another alleged secret source?

Today's "Washington Post" reports that it was Karl Rove, President Bush's deputy chief of staff, who spoke with "TIME" magazine reporter Matt Cooper about CIA operative Valerie Plame.

To knowingly -- knowingly reveal the identity of a covert CIA operative is a criminal offense, and Rove's lawyer says his client never identified her by name.

But Plame's husband, former Ambassador Joe Wilson, has said his wife was named as an act of revenge after he, Wilson, discounted White House claims Iraq was trying to buy uranium.

The federal grand jury probe resulted -- resulted, and it's been looking into who leaked what to whom, and although "TIME" reporter Matt Cooper refused to reveal his sources on the story, his editors at "TIME" magazine," our sister publication, opted to release his notes.

In one e-mail Cooper reportedly wrote his bureau chief the following: "It was, KR said, Wilson's wife, who apparently works at the agency on WMD issues who authorized the trip."

So is the "KR" in Cooper's e-mail Karl Rove? The White House has steadfastly maintained that Rove had nothing to do with the leak, but the release of the e-mail prompted sparks to fly in today's White House press briefing, as reporters tried to pin down press secretary Scott McClellan.

(BEGIN VIDEO CLIP)

DAVID GREGORY, NBC NEWS CORRESPONDENT: You stood at that podium and said that Karl Rove was not involved, and now we find out that he spoke about Joseph Wilson's wife. So don't you owe the public a fuller explanation? Was he involved or was he not? Because contrary to what you told the American people, he did, indeed, talk about his wife, didn't he?

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: David, there will be a time to talk about this, but now is not the time to talk about it.

(END VIDEO CLIP) BLITZER: Joining us now to sort through this complicated story, "Washington Post" media critic and the host of CNN's "RELIABLE SOURCES," Howard Kurtz. He's joining us from "The Washington Post."

What do you make of this latest twist in this story, Howard?

HOWARD KURTZ, HOST, "RELIABLE SOURCES": Well, you know, up until now, Wolf, this has been a difficult story for the press to cover, not only because reporters' conduct is at issue -- we have Judith Miller of "The New York Times" in jail this week over this investigation -- but also because there were so unanswered questions: who you were the sources, was Bob Novak, the columnist and CNN commentator, subpoenaed? Did he testify? Why wasn't he threatened with jail?

But now, in the words of Matt iCooper's own e-mail, "KR" is clearly Karl Rove. We know that the president's deputy chief of staff played some role in the Valerie Plame affair, and that, I think, is going to boost the coverage of this story to Hurricane Dennis-like levels.

BLITZER: The assumption would be -- correct me if I'm wrong, Howie -- that if Karl Rove was Matt Cooper's source, he could have been Bob Novak's source, as well.

KURTZ: He could have been, but he also -- there could have been other sources here: Vice President Cheney's chief of staff Lewis Libby gave wavers to reporters to testify about any conversations that he may have had.

Novak in his original July 2003 column said he had two senior administration officials who had discussed Valerie Plame's role with him.

Now I don't know about the legal aspect here, because there are a lot of specific tests that have to be met. Did you knowingly out a CIA agent? Did you know this person was a covert operative?

But politically speaking, this is a big headache for the White House and Karl Rove.

BLITZER: And you're -- because the intent, the law, the 1982 law clearly has to have an intent, a criminal intent that you want to release the name of a clandestine officer, which is against the law. And there's no indication he actually released a name to Matt Cooper, other than saying she works over at the CIA on WMD matters.

KURTZ: Well, I think the name thing is a matter of semantics. He says it's Joe Wilson's wife. Therefore, it's Valerie Plame. I don't think that gets Rove off the hook.

But it is worth noting that in this Matt Cooper e-mail to his bureau chief, he says that he called Cooper -- excuse me, that Cooper called Karl Rove. They were discussing something else, and at the end of the conversation, it was Cooper, the reporter, who asked Rove about Joe Wilson and got that response involving his wife. So that doesn't sound like an orchestrated effort by Rove to out Valerie Plame, but we don't know who else Rove talked to.

Already you have Democrats calling for hearings. You know, given Karl Rove's very high profile in this administration, I think we're just at the beginning of quite a wave of coverage here.

BLITZER: And that conversation between Matt Cooper and Karl Rove took place before Bob Novak actually published the name in "The Chicago Sun-Times" and other newspapers.

KURTZ: That's right. And that's a key fact. Because if reporters are calling the White House after the Novak column, and saying, "Hey, what about this," it's already been in print, that's a very different situation than before Valerie Plame's name a came out.

And this was so sensitive that Matt Cooper told his editors that this was on double super secret background, a category with which I was unfamiliar with until now.

BLITZER: Me, too, and I've been a journalist longer than you have, Howie. Thanks very much. Howard Kurtz is the host of CNN's "RELIABLE SOURCE." That airs Sunday mornings, 11:30 a.m. Eastern. He also writes for "The Washington Post."

Howie, thanks very much.

And we'll have much more on today's political news, coming up later today here on CNN, including my special interview with Bob Woodward and Carl Bernstein. They kept the identity of their Watergate whistle-blower, Deep Throat, a secret for more than three decades. Could they have done so in today's climate? That's coming up today on "WOLF BLITZER REPORTS," 5 p.m. Eastern.

PHILLIPS: 10 months after Hurricane Ivan, folks on the Florida Panhandle can finally say something good about it. It made Hurricane Dennis seem like a downpour. And that's really more of a testament to Ivan's wrath than Dennis' weakness.

Both storms are Category 3, Dennis packing 120-mile-per-hour winds when it came ashore on a Panhandle barrier island this time yesterday. Navarre Beach took much of the brunt. For miles around, what the wind didn't damage high water did.

Twenty-four hours later, high water still is a rising concern in several states. Around Atlanta, we've had six inches of rain and are bracing for several more. That's because Dennis, now a mere depression, is basically stalled in the southern Ohio Valley. It's running out of steam but still overflowing with rain.

When it was still a mighty wind it knocked out power to hundreds of people, more than 570,000 in Florida alone. And when all the insurance claims are filed and tallied, well, they're expected to reach in the billions, though probably not the level seen after Ivan.

Now father north, the problem is rain and lots of it. We just mentioned that. Dennis has bombarded several states, particularly Georgia, with torrential rains. The result: flooding. CNN's Catherine Callaway is seeing some of the worst of it in Douglas County, west of Atlanta. I saw a lot of it driving to work today, Catherine.

CATHERINE CALLAWAY, CNN CORRESPONDENT: Yes, it's amazing. The sun was out a few minutes ago. We get a torrential rainfall. The sun will come out and it will start up again.

Here this morning, though, at this parking lot, the car dealership just west of Atlanta in a town called Douglasville. The parking lot behind me was completely covered in water, all the vehicles that you can see behind me, about 90 of them, are basically totaled because of the rain. The water was up above the roofs of these cars.

And then in the parking lot behind us, another shopping center completely flooded, and all of that water, all of that debris caused a sinkhole. We have some videotape to show you of that.

The concern about that sinkhole was that there was a gas line running next to it, and officials were concerned that that gas line might rupture. So they evacuated this area, kept a close on high on it. But now they feel like they have that situation under control.

Some of the businesses here have started to reopen, but the clean-up is just beginning, and the damage is just being assessed. And we spoke with John Bleakley, the owner of this car dealership, who has been here since 3 this morning, trying to save as many cars as he could. Let's listen to what he had to say.

(BEGIN VIDEO CLIP)

JOHN BLEAKLEY, OWNER, CAR DEALERSHIP: The water gets in and floods, and then horns question off, lights flash. No telling what's going to happen. All of a sudden, like I said, we saw windows going down, and these are the cars we just couldn't get to. We couldn't get them.

(END VIDEO CLIP)

CALLAWAY: They were able to save about 150 cars, but as I said, about 90 ruined. And also there's two or three buildings here that were flooded with several feet of water. All the information, all of the material in those buildings also destroyed.

He's estimating about $3 million to $4 million worth of damage just here at this dealership, alone.

We do have some concern now about rain causing trees to fall in the Atlanta area. We have had one fatality of a tree that fell on a house in Decatur, causing one fatality. So we continue to watch these waters. Like I said, Kyra, it's dry for a moment and then the rains start up again.

PHILLIPS: Yes, those trees are a nightmare. I mean, driving to work, not only the flooding, a number of those trees, 100-foot trees I saw over streets and have blocked off area, and people tried to get around them. It's something we deal with here in Georgia on a regular basis.

Catherine Callaway watching things for us in Douglas County. Thanks, Catherine.

BLITZER: World leaders and thousands of people are commemorating a grim anniversary today. So is this Georgia college student. Her father was killed 10 years ago after the worst massacre in Europe since World War II. Her story, that's coming up next.

PHILLIPS: And later, prepare for lift off. For the first time in two and a half years, NASA getting ready for a space shuttle launch. We're live at the Kennedy Space Center when LIVE FROM returns.

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

(COMMERCIAL BREAK)

BLITZER: It's one of the worse atrocities in modern history, the massacre of Srebrenica. Bosnian Serb forces slaughtered thousands of Muslims in July of 1995, 10 years ago exactly.

Hundreds of green-draped coffins were ready for burial today, marking this tenth anniversary of the genocide. They contain the latest remains collected and identified from the mass graves.

Even a decade after the bloodshed, one girl who lost her father holds out hope that she'll see him again. She sits down with our Morgan Neill.

(BEGIN VIDEOTAPE)

MORGAN NEILL, CNN CORRESPONDENT (voice-over): For Sejdefa Dozic, July the 11th is a date charged with powerful memories, memories of a home lost and a father last seen 10 years ago.

Sejdefa, a Bosnian Muslim, grew up in Srebrenica. She was 10 years old in 1985 when Serbian forces overran the town. When the Serbs came, her father, along with thousands of Muslim men, decided to separate from the women and children and strike out through the woods, in hopes of reaching safety.

For five days, Bosnian Serb soldiers systematically killed some 8,000 Bosnian Muslim men and boys in and around Srebrenica.

Sejdefa, along with her mother and younger brother, walked to Pocachadi (ph) and eventually on to Tusla (ph). There, they greeted buses filled with surviving men from Srebrenica in desperate hope.

SEJDEFA DOZIC, BOSNIAN MUSLIM: I remember every time they would come, I would run and search through the crowds, trying to find the face of my father, but unfortunately, I never did. NEILL: With no way of knowing what happened to her father, Sejdefa tried to concentrate on her studies. She did so well she drew the attention of a Bosnian American society, as well as a nonprofit program called Art Reach that uses art therapy to help trauma victims.

(on camera) The two groups offered to help Sejdefa come study in the United States, and after passing all her tests, she received a full scholarship here at Georgia Tech in Atlanta.

(voice-over) Now she's studying biochemical engineering, but Sejdefa says what happened at Srebrenica 10 years ago is never far from her mind.

DOZIC: It's hard for me to put my father in any of the stories that I heard. It's been 10 years after the genocide, and there is a part of me that still -- I still cherish the hope that he's alive.

NEILL: To mark the anniversary, she'll speak at the United Nations to try to ensure Srebrenica is not forgotten. At for her own memories...

DOZIC: I keep a journal. I've had this journal for awhile. The reason I started it is because I thought if my father shows up one time, I can tell him everything that happened and I wouldn't miss anything.

NEILL: Morgan Neill, CNN, Atlanta.

(END VIDEOTAPE)

PHILLIPS: Straight ahead, how high will they go? Perhaps you don't want to know. Believe it or not, gas prices have hit another high. See what folks across the nation are paying.

Speaking of high, NASA is set to soar back into space. We're live from Kennedy Space Center, where they're preparing for lift-off.

(COMMERCIAL BREAK)

PHILLIPS: Buckle your seat belts, gas prices taking off. The Lumberg Survey shows that gasoline prices have hit another all-time high. Prices soared nearly a dime over the past two weeks to $2.31 a gallon for self serve regular.

Driver in San Diego shelling out most of the cash: $2.55 a gallon. The lowest price is $2.09 down in Charleston, South Carolina. Not a bad place to be.

BLITZER: It's a lovely place. High crude is prices are partly to blame for those high gas prices -- Kyra.

PHILLIPS: Let's take a look at what oil is doing today and check the markets with Kathleen Hays, live at the New York Stock Exchange -- Kathleen.

(STOCK REPORT) BLITZER: Thanks, Kathleen, very much.

Two days and counting until lift-off for the Space Shuttle Discovery. NASA is anxiously awaiting its first manned flight in two and a half years, But will weather rain on NASA's parade?

CNN's Sean Callebs joining us now, live once again from Florida's Kennedy Space Center. What's the latest there, Sean?

SEAN CALLEBS, CNN CORRESPONDENT: Well, Wolf, anxious is not a bad word to use in this case. Not only are they concerned about the first launch in about two and a half years, but weather, also. They're having to dodge that.

First they gambled that Dennis would miss. They won that. Now they are concerned about the other depression out in the Atlantic, concerned that perhaps Emily could form into being a storm.

And the reason they're concerned about that, the scheduled launch on Wednesday, 3:51 Eastern Time. They only have a five-minute window. Launches have to be done in the daytime for the foreseeable future, because they have about 100 cameras all over, including two at 65,000 feet in aircraft that will be photographing the shuttle from every conceivable angle as it takes off to make sure there is no damage from debris during liftoff.

Of course, everybody remembers back on January 16, 2003, when Columbia was struck by that pound and a half of foam from the external fuel tank. It caused some damage to the leading edge of the wing and that spacecraft, of course, disintegrated once it was making reentry.

Well, they have made tremendous changes to the shuttle, the cost of $1 billion over the past two and a half years. They've toughened the shell. They now have a robotic arm with lasers on it, as well, that can do 3D imaging of the wing, the nose cone. And also, theoretically, astronauts could do repairs to the shuttle in space, but that's something no one wants to do.

Wolf, one final note, one interesting thing. If, indeed, there are concerns about the integrity of Discovery they could theoretically dock at the International Space Station for up to 41 days, and during that time they could get Atlantis up on the launch pad, into space with a four-person crew and perform a rescue mission and bring everybody back that way.

So there is a lot going on here, a lot to do in just a matter of hours, and a matter of days.

BLITZER: Thanks very much, Sean Callebs reporting for us -- Kyra.

PHILLIPS: Well, that wraps up a special edition of LIVE FROM. It's been a pleasure, Mr. Blitzer.

BLITZER: Special for us.

PHILLIPS: That's right.

BLITZER: The two of us here at the CNN Center in Atlanta.

PHILLIPS: Together in the same place.

BLITZER: I'll be back in Washington, D.C.

PHILLIPS: Hours on end. I wish you weren't going back.

BLITZER: It's been a lot of fun.

PHILLIPS: Well, Candy missed you. That's what I heard.

BLITZER: Before we get to Candy, I just want to update our viewers. I'll be back at 5 p.m. Eastern, a special edition of "WOLF BLITZER REPORTS." That's coming up.

But that's it for LIVE FROM. Candy Crowley standing by with a preview of what's ahead on "INSIDE POLITICS" -- Candy.

CANDY CROWLEY, HOST, "INSIDE POLITICS": Thanks, Wolf. Thanks, Kyra.

Washington is on pins and needles about the Supreme Court fight that's definitely coming up and the possibility of two battles at once. Will Chief Justice Rehnquist retire? We'll check out the hints, the hopes and the fears on Capitol Hill.

Plus a coordinated offensive after the attacks on London. Are President Bush and Prime Minister Blair on the same page about the war on terror?

"INSIDE POLITICS" begins in just a moment.

(COMMERCIAL BREAK)

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