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Rehnquist Released; One Week Later; Coalition Forces Arrest Two Alleged al Qaeda Leaders

Aired July 14, 2005 - 14:00   ET

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

KYRA PHILLILPS, CNN ANCHOR: Chief justice sent home from the hospital. We've got the latest on William Rehnquist's health straight ahead.
Live pictures from London. A memorial service for victims of last week's bombing.

This hour we're live from Leeds, where the investigation is centered.

And the Natalee Holloway case. A decision expected soon about whether to re-arrest two brothers once held in her disappearance.

From the CNN Center in Atlanta, I'm Kyra Phillips. This hour of CNN's LIVE FROM starts right now.

Well, we begin with the latest on Chief Justice William Rehnquist. He's been released from the hospital after undergoing tests and observations. The 80-year-old justice who's battling thyroid cancer was admitted on Tuesday night with a fever.

Our Joe Johns joins us now with the latest from Washington.

Joe, it's amazing how strong he maintains.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: It certainly seems that way, Kyra. We are told the chief justice is now back at his house in Virginia after leaving the hospital apparently sometime today.

We haven't been able to see him so far, but the court has reaffirmed the fact that, yes, the chief justice is back at home. Of course, he did go to the hospital on Tuesday night by ambulance, complaining of a fever, kept there apparently for tests and observation, kept there last night, as well.

The chief justice 80 years old, of course suffering from thyroid cancer. This is not the first time this year he's been to the hospital. He went to the very same hospital, in fact, back in March.

Now, we have, of course, been sort of following the movement of cars lacking even the least bit of information, and we did see a limousine that was parked over at the hospital, also saw a limousine parked outside his house now, along with the SUV, the security vehicle that sometimes trails the chief justice. There had been some questions obviously today that if he were released where he would go. The indication we had gotten early on was, if were released, he would be going over to his home. That's where he is.

No word at all from him so far. And the speculation, of course, continues in Washington, as it has for days and weeks, perhaps, about when or if the chief justice might retire. No word on that -- Kyra.

PHILLIPS: All right. Joe Johns, we'll stay in touch with you.

Tears in Trafalgar for the 50-plus commuters killed in the bombings of London's public transport system one week ago today. It's been a day of public remembrances all across Europe and personal struggles for the many who knew the victims or know they easily could have been among them.

Here's CNN's Alessio Vinci.

(BEGIN VIDEOTAPE)

ALESSIO VINCI, CNN ROME BUREAU CHIEF (voice-over): What a difference a week can make. More security officers at London underground stations with bomb-sniffing dogs, posting notices asking people for help. "Were you there? Did you see anything suspicious? Call us."

The bombers may be dead, but who was the mastermind? The investigation continues.

There are still more than two dozen missing. And after a week, the makeshift memorial at King's Cross Station still draws hundreds. A few in tears.

UNIDENTIFIED FEMALE: It's terribly sad. And one of my friends, one of my school friends was in the disaster, so that's why I was just passing by now to pay my respects.

UNIDENTIFIED MALE: It's a very different atmosphere in London this week. Very -- everyone is a bit twitchy, a little bit nervous, perhaps a little bit philosophical as well. It's very different.

VINCI (on camera): Not everyone realized immediately there had been a terrorist attack. Some people perhaps felt they were experiencing one of the underground's notorious delays, so as they left the station, some people caught a bus.

(voice-over): The buses are still filling up, including number 30, the one that was bombed at 9:47 a week ago. A week later, number 30 is packed.

The headlines are chilling. Reports about the teenager who carried the bomb on board last Thursday. Behind me, Johnny, a regular on this route, may have escaped death as he was on a trip abroad.

UNIDENTIFIED MALE: When I was watching the news, right, when I was abroad and I saw the bus number 30, obviously I was shocked, because that's the bus I use most regularly. And at that time I was away, so, you know, it was quite hard to get on the bus this morning, but obviously I have to get to work today.

VINCI: Abigail Millner (ph) was just across the street when the bomb on the bus exploded. She returned near the site for the first time today. Like the queen, the prime minister and millions in London, she, too, paused for two minutes of silence at midday. Abigail (ph) is still traumatized.

UNIDENTIFIED FEMALE: I managed to get back on a bus the other day, so slowly but surely, you know. I don't know how long it will take.

VINCI: By early afternoon, Trafalgar Square filled with mourners there to sign books of condolence and share their sense of loss.

Alessio Vinci, CNN, London.

(END VIDEOTAPE)

PHILLIPS: A long arm of Scotland Yard is still reaching all the way to Leeds, where a whole neighborhood is cordoned off right now. Some 200 homes emptied out in an apparent search for evidence or further suspects.

We say apparent because police aren't saying what exactly they're up to, though, it's known at least three of the four suspected bombers are from that area. Now we're hearing possibly a fifth.

Back in London, police sought the public's help in retracing the footsteps of the man, suspected bus bomber Hasib Hussain. They say that they want to know where Hussain went and with whom between the time he left King's Cross train station and boarded the number 30 bus which blew up in Tavistock Square.

Later this hour, we're going to take you inside London's Muslim community for reaction. I'm going to speak live with a city counselor right there in Leeds.

Al Qaeda's alleged top man in Baghdad is out of circulation today, as is a top suspect in a spate of attacks on diplomats. CNN's Aneesh Raman has those stories, plus another brazen attack on Baghdad's Green Zone -- Aneesh.

ANEESH RAMAN, CNN CORRESPONDENT: Kyra, good afternoon.

Among some 30 suspected insurgents taken into custody recently, the U.S. military today announcing that two of them are top aides to Abu Musab al-Zarqawi. The first a man by the name of Abu Seba. He was taken into custody on Saturday during a raid west of the capital city in the town of Ramadi.

He is described as a senior lieutenant in al Qaeda in Iraq, but equally important, Kyra, he is, as they say, directly linked to the attacks on diplomats here in Baghdad last week. Specifically, the murder of Egypt's top enjoy to Iraq, Ihab Sherif.

That, of course, had a huge ripple effect in the diplomatic community. This arrest a key step for the Iraqi government to ease concern.

Now, the second man, his name is Abu Aziz. He is, as you say, described as the top man for al Qaeda in Iraq here in the capital city. They call him "a significant operative."

Both men now in custody. Both men, they hope, will provide actionable intelligence on further operatives in the organization and perhaps even the whereabouts of Zarqawi himself.

Now, as this announcement was made, another suicide attack here in the capital city. A dual suicide bombing outside the Green Zone at a main checkpoint. That, of course, the highly fortified area that houses both the U.S. military and key parts of the Iraqi government.

At first a suicide car bomb detonated. That was followed by a suicide bomber with an explosives vest. At least one person killed. Five others wounded.

Kyra, we're told among the five was a third potential suicide bomber. His vest didn't explode. It was defused.

The U.S. military saying this is a sign of success for Iraq's security forces. They were able to prevent these bombers from getting any closer to that key target, the Green Zone, and prevented any casualty numbers much higher than the ones we saw today -- Kyra.

PHILLIPS: Aneesh Raman. Thanks for the latest out of Baghdad.

In Aruba, a three-judge panel is expected to rule today on whether to re-arrest two brothers in the Natalee Holloway case. Ten days ago, a lower court freed Satish and Deepak Kalpoe after nearly a month in jail.

Seventeen-year-old Joran Van Der Sloot still is being held, and the panel that's reviewing the Kalpoes' status is to rule on a plea by Van Der Sloot, appealing his continued confinement. No one has yet been charged.

Natalee Holloway was last seen early May 30 in the company of Van Der Sloot. She was celebrating her graduation from a high school outside Birmingham, Alabama.

We're going to take a quick break.

Also straight ahead, the CIA leak investigation putting Karl Rove in the political hot seat. But did Rove or anyone do anything illegal? We're going to talk with the man who co-wrote the law protecting agents' identities.

A building collapse and a frantic search in New York. Details straight ahead.

And a hurricane churning up in the Caribbean. We're tracking Emily right here on LIVE FROM.

(COMMERCIAL BREAK) PHILLIPS: So just what was said? President Bush remains mum about the CIA leak investigation which involves his top political adviser, Karl Rove. "TIME" magazine reporter Matthew Cooper testified before a grand jury yesterday. Documents show Rove as a source, telling him the wife of a Bush administration critic was a CIA agent.

Well, it's illegal to knowingly out a covert CIA operative. Rove's attorney, Robert Luskin, says that Rove is innocent of any wrongdoing and has been assured that he's not a target of the investigation.

Bruce Sanford is a First Amendment rights attorney who actually consulted and was part of drafting the 1992 agents identity act.

And just specifically, so -- I want to get it right. It's the 1982 Intelligence Identities Protection Act.

BRUCE SANFORD, ATTORNEY: That's right, Kyra.

PHILLIPS: Bruce, tell me your intent when you helped to draft this.

SANFORD: Well, we were representing a big cross-section of press groups trying to narrow the act, because whenever Congress gets in the business of making it a crime to make a disclosure, essentially making it a crime to convey speech, you're really talking about a law that infringes on the First Amendment field of free expression. So we were trying to do everything we could to narrow the law. And, indeed, it is so narrow it's only been used once in its 23-year history, and that was with one of our embassy officials in Ghana in a prosecution where she pled guilty to telling her boyfriend who the local CIA agent was.

The truth of the matter is that this was a law passed in 1982 to stop Philip Agee from outing our covert agents during the Cold War abroad. And it really is not intended, never was intended, and I don't think (AUDIO GAP) of public policy or national policy or whether we should be going to war with Iraq.

PHILLIPS: Well, aside from maybe partisan politics, looking strictly at the law that you drafted, do you see any evidence, according to this law, any evidence of any criminal wrongdoing?

SANFORD: No, I think it's pretty clear that what Karl Rove said to "TIME" magazine's Matthew Cooper doesn't even come close to the kind of knowing violation that is required by the act. Really, the act really requires an intent to harm national security, and that certainly can't be said in these circumstances, I think.

PHILLIPS: All right. Now, we've heard a lot about the act, but let's look at it, actually read a section from 421.

"Knowing that the information disclosed so identifies such covert agent, and that the United States is taking affirmative measures to conceal such covert agent's intelligence relationship to the United States." So in other words, what you're saying, the reason why there is no evidence of criminal wrongdoing is because Karl Rove didn't do anything wrong because he didn't know that Plame was covert.

SANFORD: That's pretty clear from the notes, the e-mails that "TIME" magazine released to the grand jury that Karl Rove said that Wilson's wife -- he didn't even use her name -- but Wilson's wife "apparently works" at the CIA.

It seems to me there's a substantial question whether she qualifies as the kind of covert agent that was envisioned by the act. There are very tight requirements for that. And there is a substantial doubt whether the agency was taking the kind of affirmative measures to conceal her identity that the act talks about.

PHILLIPS: So, Bruce, how would you define a covert agent?

SANFORD: I think a covert agent under the act has to be someone who has deep cover, who is working abroad. Not just traveling abroad, but is stationed and working abroad sometime within the last five years.

And "USA Today" reported that Joe Wilson's book has even made -- if you do the timeline, the Wilsons were married in 1998. There's some question whether she was even abroad during the last five years.

She really had a desk job at Langley and was driving in and out of the CIA every day. That's not exactly deep cover.

PHILLIPS: Well, do you think that is the area that needs to be flushed out in a little more detail? Because obviously there is a criminal investigation going on. Somebody thinks that somebody did something wrong. Is it going to come down to defining her job, detail by detail?

SANFORD: Well, I think we'll have to -- Pat Fitzgerald, the prosecutor, will obviously have to see whether this act applies. But if it isn't this act that serves as the basis for an investigation, he could always rely on perjury or obstruction of justice, the sort of lying to investigators that prosecutors have used time and time again in recent years.

PHILLIPS: Well, breaking the law or partisan politics, do you think Valerie Plame is now damaged goods?

SANFORD: Well, I think when -- it is worth remembering that when Robert Novak, the columnist, disclosed her identity in his column, he had called the CIA to tell them he was going to do that, and they didn't stop him. They did not do what the CIA normally does in that situation if they want to protect or continue to protect somebody's identity.

They don't -- they didn't call his syndicate. They didn't scream at him say you're going to endanger her life or danger her career, that sort of thing. They just sort of shrugged and said, well, I guess she won't be getting any more overseas assignments.

I don't think that's the kind of affirmative measures that the agency needs to be taking in order to invoke the statute. PHILLIPS: Bruce Sanford, thanks for your time today.

SANFORD: You're welcome, Kyra.

PHILLIPS: Straight ahead, when will NASA attempt another launch of Discovery? Well, we're minutes away from a live NASA news conference. We're going to bring that to you when it happens.

Also ahead, we'll go to the London suburb that's become the center of the bombings investigation.

KATHLEEN HAYS, CNN CORRESPONDENT: I'm Kathleen Hays at the New York Stock Exchange. We all know U.S. healthcare costs are high, but how do they compare to the rest of the world? I'll have the numbers right after this break.

(COMMERCIAL BREAK)

PHILLIPS: News coming out of Aruba this hour. A three-judge panel has denied an appeal to free Joran Van Der Sloot, the 17-year- old suspect held in the probe into Natalee Holloway's disappearance. The panel is also ruling on the prosecutor's request to re--arrest two brothers who were released last week.

CNN's Karl Penhaul went to great lengths to report on Holloway's tragic disappearance. He just returned from Aruba.

Thanks for being with us. And you've actually been working this up until the last minute. You just got on set. What did you find out?

KARL PENHAUL, CNN CORRESPONDENT: That's right, we've just come off the phone to the defense attorneys in Aruba. And what they've told us is the results of the three-judge appeal.

Joran Van Der Sloot, one of the suspects, will stay in custody. The judges have denied that appeal by his defense attorneys.

Also, the judges have appealed -- denied the appeal to re-arrest the Kalpoe brothers, certainly Satish Kalpoe. We're still waiting from the defense attorney of Deepak Kalpoe to see whether will be arrested, but certainly the younger one, Satish, will not be arrested for the time being.

And another element to this whole appeal process was that the prosecution wanted to stop Joran Van Der Sloot's attorney from attending interrogation sessions, but the appeal judges said, no, we won't accept that appeal either. So for the time being, Joran Van Der Sloot's attorney can continue to attend those interrogation sessions.

PHILLIPS: So right now Joran Van Der Sloot is the one suspect, or the prime suspect, can we say -- how can we say it?

PENHAUL: He's the only suspect in custody.

PHILLIPS: OK. PENHAUL: But under Aruban law, even though these other guys are now free, they're not in custody, they're still classed as suspects. So they could be pulled back into the investigation and for interrogation at any stage.

PHILLIPS: You know, it's interesting, because we've been learning so much about the legal system over there. Very different from obviously the way we cover the legal system here.

Has that been a challenge, sort of keeping up with the different procedures and laws and how they're handling this case?

PENHAUL: To some extent, but it's basically Dutch law. And some of those elements are very similar to British law, to other parts of European law. So it isn't too much of a mystery on that front. But it certainly is very different from U.S. law, and that's been a source of frustration for a lot of people, and that's been fueling these comments that maybe the Aruban authorities aren't doing all they can.

Just a very different system.

PHILLIPS: Did you discover anything about Aruba that -- and when we think about Aruba we think people go there on their honeymoon, it's a paradise, it's a beautiful place. But there were a lot of things that you discovered and uncovered through following this case.

For example, the issues of drugs, prostitution, a lot of things we probably would have never imagined about Aruba, and probably maybe -- I don't know if people will start thinking twice about wanting to go there aside from this case.

PENHAUL: Well, it still remains a very safe island. And that's obviously the image that the Aruban authorities want to project, it's a safe island. Their slogan is "One happy island."

But during the course of this investigation, there were allegations by people maybe Natalee has been sold into the white slave trade, maybe Natalee has been inveigled into a crack house somewhere. So for that reason we went down to the eastern end of the island, we went into a crack house.

Now, the crack problem there is certainly no worse than it is in the United States, probably in many respects better. But they do have crack addicts there, like they do in many other places.

Prostitution is legal there, but what happens is a lot of South American prostitutes will come through Aruba, and sometimes with their earnings there will then use that as a jumping off point to arrive in the U.S. or to Europe because they've got some more money to do that. And, of course, if you look at DEA reports, Aruba is still listed s a major transshipment point for Colombian cocaine and heroin, ships moving through Aruban waters or container traffic going through Aruba and then on to the U.S.

PHILLIPS: Interesting. So you also spent a lot of time with teens Natalee Holloway's age, and there really wasn't any resistance to going back to Carlos 'N Charlie's or staying out late or walking the beach. You didn't see that at all, did you?

PENHAUL: Not really. These are young people. They come off -- they come to Aruba to blow off some steam. They maybe just graduated.

It is a party island in many respects. At 18 they can legally drink alcohol in Aruba. They're coming down for a party.

The group of teens that we followed, for example, were saying, yeah, mom and dad have told us steer clear of Carlos 'N Charlie's, watch out for one another on this trip. Like a moth to a flame they head for Carlos 'N Charlie's, maybe have one or two cocktails too many, get a bit wild. They can't figure out exactly what happened to their friends.

And the case that we followed, everybody turned out OK. And that's the general rule there. Obviously on the night that Natalee disappeared something went wrong with that.

PHILLIPS: Well, you brought us a little bit of the background, also the latest developing news. So what are waiting for? What's the next move in the case?

PENHAUL: A couple of things really. Obviously for the legal maneuvers to be played out, to see how all these appeals play out, for the investigators to continue to do their investigation.

But obviously the big question still on everybody's mind is where is Natalee? What happened to Natalee?

There's still no evidence of whether she's definitely alive or dead. One can only speculate. And there's no sign of where she is or where her remains may be. That's the big mystery still.

PHILLIPS: Karl Penhaul, glad you're back. Thank you.

PENHAUL: Thanks.

PHILLIPS: Well, we go behind the scenes of the major news stories every weekend, just like we did here with Karl. So tune into "ON THE STORY" this Saturday at 7:00 p.m. Eastern.

And some of the best engineer minds in the world are scrambling to fix a faulty fuel sensor now. That's the glitch that forced NASA to scrub the Shuttle Discovery's launch yesterday. Today the tech squad at Kennedy Space Center is strategizing.

Our Sean Callebs is there trying to figure out the strategy.

Hi, Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Hi, Kyra. Indeed.

I can tell you at 8:00 this morning, no fewer than 11 different technical committees began meeting here at the Kennedy Space Center, trying to figure out what happened to that faulty fuel sensor yesterday. Could it be in the external fuel tank, or could it be a cable, wiring, or actually an electronics box in Discovery?

We know the mission management team began meeting at noon Eastern Time, and we are expecting a news conference very soon, probably within the next five to 10 minutes. At that point we should have a better idea when NASA will try and launch Discovery once again.

There is a live picture of Discovery on the pad. They know -- we know they began draining the external fuel tank yesterday, basically right after the mission was scrubbed.

Now, if that faulty sensor is in the bottom of the fuel tank -- and real quickly, Kyra, I'll explain. It's actually -- we say fuel tank, but it's actually two separate tanks. The top part holds oxygen and the bottom part holds hydrogen.

Now, the sensor could be all the way down here. If that is indeed the case, they would have to roll the shuttle back into the vehicle assembly building and somehow get down into here, take that sensor out.

There are four sensors here, four sensors here. They monitor the fuel use as the -- during the ascent, and once the propellant has been used, it shuts down the engines.

Now, if indeed that sensor didn't work and the engines kept burning after the propellant was gone, it could lead to a catastrophic problem. So clearly NASA saying safety is first on their minds, and they're really walking the walk at this point -- Kyra.

PHILLIPS: No doubt. Sean Callebs, thank you so much. We'll wait for that news conference.

Meanwhile, healthcare costs have been soaring lately. But how do the prices here compare to those in the rest of the world?

(STOCK MARKET REPORT)

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