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Officials Confirm NSA Secretly Eavesdropped on Americans; Impasse Reached on Patriot Act; Preview of 2008 Presidential Race; NYC Transit Workers Call Partial Strike

Aired December 16, 2005 - 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: From CNN's world headquarters in Atlanta, I'm Kyra Phillips. Here the stories that we're working on for you right now.
Secretly listening to phone calls, reading e-mails. Did the National Security Agency go too far spying on Americans after September 11?

Rebuilding after Katrina. Bishop T.D. Jakes begins a new phase of his mission. He joins me live to talk about it.

Presidential predictions: will it be Clinton versus Giuliani? Wait until you hear how the insiders rate 2008.

All that and more, straight ahead. CNN's LIVE FROM starts right now.

Listening in, speaking out and fears of overstepping. It's no secret Congress is abuzz today about the power of the government to eavesdrop, to snoop, to know your business without your knowing anything about it.

The Senate once again is the key battleground for the Patriot Act, that post 9/11 collection of surveillance powers that will mostly cease to exist at year's end unless lawmakers vote to renew it. Renewal got a lot less likely just a few minutes ago with a Senate vote that failed to cut off the debate.

And if that debate were not passionate enough, "The New York Times" broke news today that President Bush secretly empowered the National Security Agency to eavesdrop on Americans in America without seeking warrants. That's a huge change from long-established practice.

Fresh off his victory in anti-torture legislation, Republican Senator John McCain weighed in from the White House.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: All I know is what I read in the paper, which I know is always totally, absolutely accurate. Obviously, we need -- we need to look into that. I asked some questions this morning. But the first I knew of it is was what I saw this morning in the papers.

UNIDENTIFIED MALE: How would you feel about such a thing theoretically?

MCCAIN: Well, theoretically, I obviously wouldn't like it. But I don't know the extent of it, and I don't know -- I don't know enough about it to really make an informed comment. Ask me again in about a week.

UNIDENTIFIED MALE: You're saying Congress could investigate it?

MCCAIN: A court investigate (ph). We should be informed as to exactly what's going on.

(END VIDEO CLIP)

PHILLIPS: McCain's Republican colleague, Arlen Specter, chairman of the judiciary committee, says that he'll make NSA hearings a very, very high priority in 2006.

CNN justice correspondent Kelli Arena joins me now live from the D.C. bureau where we're talking spies, torture and Patriot Act. Interesting timing.

KELLI ARENA, CNN CORRESPONDENT: You think? Kyra, I'll tell you, we've been working the story since "The New York Times" reported it last night. And we waited until we had conversations with several sources who had some knowledge of this program.

Here's the bottom line: those sources, who obviously refused to be identified because of the classified nature of this program, they said that "The New York Times" report is dead on, that the president signed a secret order in 2002, allowing the National Security Agency to eavesdrop on U.S. citizens and others who are here in the U.S. who are communicating with individuals overseas.

Now, the reason this is such a big deal is that the NSA has predominantly been barred from domestic spying, and because there is a special court. It's known as the FISA court, which is set up specifically to issue warrants to eavesdrop in this matter.

Now, no one in the administration is publicly confirming the existence of this program, and it's not clear what the president's order says or what exactly it allows.

Earlier today, my colleague, Terry Freedom, was able to talk with the attorney general, Alberto Gonzales, at a press conference. Gonzales joins his colleagues, would not comment.

But he did say that information is the key to winning the war on terror. And he said that the administration will be very aggressive in obtaining that information but will always do so in a way that's consistent with the law.

Everybody is -- sort of has an opinion, but nobody is really saying what we need them to say, Kyra.

The officials that we spoke to say that it was their understanding that there were some who argued that they need to move faster than the FISA court would allow when dealing with terrorism threats, and that's why the president did what he did.

But there are some who say there were enough within the NSA and other agencies who were really worried that it wasn't constitutional, didn't want any part of it.

That's what we know.

PHILLIPS: Well, we're talking about this 2002 incident.

ARENA: Right. Right after September 11.

PHILLIPS: Right. Of course. So the question is, is the eavesdropping happening on a regular basis, a daily basis? Today, there are people here in the United States where the NSA is listening to their phone calls?

Or is this a situation where, like you said, "Look, we're on to something. We need to act fast. We don't have time to get to the court. We've got to get what we need right now"?

ARENA: Well, "The New York Times" report and the officials we spoke to said it is accurate that as many as 500 people at any given time are being eavesdropped on by the NSA. So that's one statistic.

And the way that it was explained to me, let's say, for example, you have a terrorist arrest, like Khalid Skaikh Mohammed, when he was taken in. He was taken in with cell phones and computers.

Those cell phones have hundreds of numbers in them. You have to go to a FISA court and say, "OK, I need warrants on, you know, these 300 phone numbers." It's going to take a long time.

When you're dealing with intelligence, sometimes many, many intelligence officials say it's a matter of hours, not days, not weeks. They have to move on things as quickly as they can.

This is something that, you know, once we find out exactly what we're dealing with, will probably be debated for a very long time, Kyra.

PHILLIPS: It's an interesting debate. Kelli Arena, thank you very much.

Well, CNN's Andrea Koppel is following the story on Capitol Hill. Interesting timing, Andrea Koppel, as we mentioned there briefly with Kelli Arena, just the timing of this story, the issue of spying and also the Patriot Act, of course, is being debated as we speak.

ANDREA KOPPEL, CNN CORRESPONDENT: Absolutely. What we know at this point, Kyra, that the Republican leadership's effort to cut off debate on the Patriot Act and move to an up or down vote failed by a vote of 52-47.

And what that means, essentially, is that at least 16 provisions, what some believe are sort of the key, the core provisions of the Patriot Act will expire on December 31 unless sometime, somehow, between now and then, Senator Bill Frist and others are able to get the 60 votes that they need.

Bill Frist said just a short time ago that he was going to continue debate, would push for debate throughout the day and might likely call for another vote between now and December 31.

But, Kyra, the Senate and the House are supposed to go out for their Christmas recess this weekend. So it would mean that the Senate would have to stay in session, which is highly unusual, between now and the end of the year if they don't want those provisions to expire.

PHILLIPS: And we'll see what happens. It's possible they may not go on that break, yes?

KOPPEL: It's possible they may not go on the break. And, you know, when senators were talking both before and after today's vote, and I can tell you after the vote, the Republican chairman of the judiciary committee, Arlen Specter, when asked about the impact of "The New York Times" story, which Kelly just confirmed, he said it was very, very problemsome, in his words, perhaps devastating to today's vote.

We know that Chuck Schumer, who's the Democrat from New York, said on the floor before the vote that he was prepared to support the end of the debate, to support the move by the Senate Republican leadership. But he said after "The New York Times" story was out there, he said he changed his mind.

So the timing, as you just pointed out, was extremely problemsome and causes a huge embarrassment for the White House and for President Bush and for Senator Frist.

PHILLIPS: Andrea Koppel on the Hill. Thanks, Andrea.

There's no shortages of stories and conspiracy theories built around the NSA, an organization so surrounded by secrecy it was once called the no-such agency.

Here's a few things that we know for sure.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): The National Security Agency is the branch of American intelligence dedicated to cryptology. It designs codes to protect U.S. government information and communications. It works to break codes used by the nation's adversaries. The agency uses some of the world's most advanced technology.

Since it's founding in 1952, the NSA has helped coordinate military maneuvers in the Korean War, helped monitor Soviet communications during the Cold War, and more recently track cell phone chips to identify the September 11 hijackers.

One more thing about the NSA you may not know. The agency says its efforts in developing small storage devices helped lead to the creation of the tape cassette. NSA headquarters is in Fort Meade, Maryland. It was moved there in 1957, amid fears that Washington would be hit in a nuclear war. At Fort Meade and in posts around the world, the agency employs mathematicians, physicists, computer scientists, linguists and others. The employees are about half civilian, half military.

The agency won't disclose its budget or say how many employees it has. But it says if it were a corporation, it would be among the Fortune 500's top 50.

(END VIDEOTAPE)

PHILLIPS: It's common knowledge the U.S. government, just like any other government on the planet, spies on people and organizations in other governments. But Americans expect certain rules.

Joining me with many thoughts about this is CNN security analyst Richard Falkenrath.

And Richard, Stansfield Turner, former CIA director said, plain and simple, the Bush administration broke the law. Do you agree with that and if so, was it justified?

RICHARD FALKENRATH, CNN SECURITY ANALYST: Well, I think there certainly was no evidence in today's "New York Times" story that the president or the administration had broken the law or violated the Constitution. I think that goes too far.

It's important here, Kyra, to give a little bit of context. The president has a secure -- has the authority under the Constitution to conduct electronic national security surveillance. That's been confirmed by the Supreme Court and by circuit courts.

The methods for doing that in some cases are regulated by the FISA statute, the Foreign Intelligence Surveillance Act court. But not in every case. And I think it's very important here to say the president has very powerful constitutional authority to conduct electronic national security surveillance.

PHILLIPS: So historically, if we were to talk about the NSA, would you say it's fair to say that it has been a conservative operation? But since 9/11, it's liberalized some of its tactics, its ways of operating?

For example, usually, I mean, it was meant to just deal with foreign searches, right? But since 9/11, there were a lot of connections found to the United States. So therefore the NSA had to maybe budget the rules or fudge the rules a little bit and say, "We've got to go after this intel within the U.S. so we don't have another 9/11"?

FALKENRATH: Well, I wouldn't say they fudged the rules. I would say this. The NSA had a reputation of being very conservative about when and how it collected information against U.S. citizens, U.S. persons on U.S. territory. And many people, after 9/11, some cases even before, felt they were too conservative, that they didn't come up close enough to the line.

The 9/11 Commission said that. The congressional joint inquiry into the causes of 9/11 said that. The Bremer commission said that before 9/11. And so there was a feeling among many people that the NSA should be more aggressive.

And after 9/11, the Bush administration and the White House and others were very aggressive in pushing all of the agencies of the U.S. government to get better about collecting information against terrorist threats, sharing it, analyzing it and acting upon it, always within the law and the Constitution but to go further, when allowed to do so by the law and Constitution.

PHILLIPS: Now, in this "New York Times" article, and I want to ask you about the article, too, if you think it's a fair article and it's a complete article. But it mentions when talking about with dealing a threat, it says the NSA eavesdropped without warrants on up to 500 people in the United States at any given time. The list changes as some names are added and others are dropped, so the number monitored in this country may have reached into the thousands since the program began.

How were those individuals selected? And are they all Americans? Are they all of Middle Eastern descent? Is it a combination ever both? How do you know who's on the list and how are those individuals selected?

FALKENRATH: I really can't comment on the specific claims in the article, Kyra. And there's a reason for that. It's the same reason that the White House is being very reserved about commenting on this.

These are very sensitive techniques, and they're used to collect information against active terrorist plots. And when there is a successful technique that allows the U.S. government to gain insight into what a terrorist is up to, that information is incredibly valuable, because if it is revealed what that technique is, then they can change habits very easily and avoid detection, possibly leading to a failed effort to prevent an attack.

And so that, I just want to say -- I'm not trying to avoid your question, but I'm trying to give you the basic reason why the administration is so cautious about commenting about these things. I think it's an appropriate caution.

PHILLIPS: Well, that leads me to be ask you, should we even be talking about this and should "The New York Times" have even run -- should they have run with the story?

FALKENRATH: Look, the national -- the former national security official in me would rather never see things like this in public. There are other schools of thought. There are other interests in our society that leads them to want to divulge this.

They say in the article that there are certain things they withheld. Possibly, those were related to the specific techniques and methods that the NSA were using. And if they are, in fact, withholding such information, I'm glad they are, because that should never be revealed publicly.

PHILLIPS: Richard Falkenrath, thanks so much for your time.

FALKENRATH: Thank you, Kyra.

PHILLIPS: Well, the party rank -- rank and file, rather, and Washington insiders have different opinions about the next presidential race. Up next, who's up, who's down and a look at who the movers and shakers say could make noise in 2008.

(COMMERCIAL BREAK)

PHILLIPS: A big name means a lot in politics, but some lesser no-names could be lurking beneath the radar in the 2008 presidential race. The latest CNN/"USA Today"/Gallup up poll of Democrats finds Hillary Clinton still a runaway favorite. She got 43 percent. John Kerry and John Kerry are tied at 14 percent. They're followed by a handful of others, including Virginia Governor Mark Warner.

The "National Journal" recently asked hundreds of Democratic insiders to predict who would actually win their party's nomination. They agreed Senator Clinton is the one to beat. But they dropped Kerry to the bottom, and they moved Virginia's Governor Warner just behind Senator Clinton.

Republican voters are also backing the big names at this early date. Rudi Giuliani got 30 percent; John McCain, 22 percent. Condoleezza Rice and Virginia Senator George Allen were next. Then Bill Frist and two governors, Mitt Romney of Massachusetts and Haley Barbour of Mississippi.

But the GOP insiders have a different view as to who will actually win the nomination. They put Senator Allen on top. He's followed by Senator McCain and Governor Romney.

Let's talk a little bit more about the polls and the outlook for 2008 with Ken Rudin. He's the political editor from National Public Radio.

Ken, great to see you.

KEN RUDIN, POLITICAL EDITOR, NATIONAL PUBLIC RADIO: Hi, Kyra.

PHILLIPS: Usually we're harassing each other about politics via e-mail. Today we're live on television, so we'll behave, all right?

RUDIN: We have to.

PHILLIPS: All right. Let's talk about the difference between these polls, what voters are saying and then what the insiders are saying. Why is there a difference?

RUDIN: Well, certainly, I mean, as you say, name and familiarity is always a big thing. So obviously, with three years to go, before any of the primaries have begun, before the outright campaigning has begun, everybody knows who Senator Clinton is. How could you not? Former first lady, senator from New York. And again, she would have the logical top numbers.

Also Kerry and Edwards are the ticket in 2004, obviously well- known. They ran nationally. But, again, so that's why three years before, you'll see those names in highlighted names.

PHILLIPS: And, of course, we have plenty of time for someone else to emerge, like you've said. Do you think there's somebody that we're not talking about that we should be talking about? Is there somebody you're keeping your eye on?

RUDIN: Well, obviously, we watch everybody. I mean, we can't help not forget what happened in 1975-76 when unknown one-term governor from Georgia, Jimmy Carter, who was Jimmy Who at the time, came from nowhere to do well Iowa, won New Hampshire and went on to win the nomination and the election.

So a lot of people are saying, well, you know, Mark Warner, the one-time senator -- one-term governor, the retiring governor from Virginia, making a very good impression with a lot of audiences. And -- and a lot of people point out the fact that the last three Democrats who have won the presidency, Jimmy Carter, Lyndon Johnson and Bill Clinton, all hailed from the south. And Mark Warner certainly comes from a red state, in Virginia.

PHILLIPS: Here's a name that got us all talking today, and that's George Allen. Let's talk about him for a minute.

RUDIN: Well, George Allen, I mean, there are different kinds of Republicans. Obviously, there are true believers, and George Allen is considered a true believer: conservative, very pro-Bush Republican.

He's not a leader in the Senate, but -- in the sense that Bill Frist might be considered a leader. But -- but he votes the right way. Conservatives like him, and he talks their language. And again, he comes from also a southern state. It would be interesting to see George Allen versus Mark Warner in 2008. But he's up there as well.

But there, again, only two senators in history have ever been elected president: Warren Harding, I think you cover that campaign in 1920, Kyra, and John Kennedy in 1960. So it's not often that a senator gets elected president.

PHILLIPS: If you look at the Democrats, Hillary, Kerry, Edwards, those were the three you said, let's really talk about them. Hillary Clinton, hands down, a favorite.

RUDIN: Yes, but again, if the Democrats -- if you listen to a lot of Democrats, they'll say that the war in Iraq is the big issue. And Hillary Clinton it's kind of interesting her position on the war.

As recently as this year, she's called for more troops sent to Iraq. Just the other day she signed on to a constitutional amendment protecting the flag. These are not the issues that most activist Democrats, liberal Democrats are pushing for.

Now maybe Hillary Clinton needs to be very cautious, and she'd be the first woman nominee, of course. And given this controversy over her association with what's-his-name who used to be president, I mean, obviously, she has to be very careful. But, again, she may be a little too cautious for some of the party activists.

PHILLIPS: You bring up the issues, and you mention the fact, OK, she's a female. If you think of it, though, I mean, let's put it out there. She -- because of who she is and the situation she went through with her husband and the fact that she's a female and she's very aggressive and she's smart. And she's made it to where she is right now. That has created a lot of buzz.

I'm just wondering how much that will play -- you know, is it that more so than the issues? Or vice versa?

RUDIN: Well, I think it's both. But you made a good point. I mean, if it was a male who was aggressive and came out of nowhere and was pushy and you know, they say that's what a male does.

PHILLIPS: What's the surprise?

RUDIN: Exactly right. But, again, more -- the people who are most nervous about Hillary Clinton, Democrats, not Republicans. Democrats are nervous, either she's not the ideological perfect match for some of them.

Or they feel that, given her past and given the things that people will write about her or say about her, this may not be the candidate you want to lead the Democrats, given the fact that 2008, at this point, could be a very good Democratic year.

PHILLIPS: So then, talking about the GOP, you say Giuliani and McCain are the ones we should be talking about. It could be interesting to see Hillary Clinton running against Rudi Giuliani or John McCain.

RUDIN: Everybody loves to talk about Rudy Giuliani, the hero of 9/11, did a great job of turning New York City around. True, but if you've ever been to a Republican convention, if you've ever listened to a Republican caucus in Iowa, a pro-gay rights, pro-abortion rights, anti-gun Republican is not the kind of guy who wins the nomination.

So Rudy Giuliani leads the pack, you know, understandably. But again -- and he campaigns for Republicans all over the country. They love having him campaign for them. But when you get down to it the conservatives who run the presidential apparatus in 2008, presidential apparatus, are -- I can't see voting for a pro-gay rights, pro- abortion rights Republican.

PHILLIPS: Real quickly. Mitt Romney just got us talking a couple days ago when he announced he was not going to seek re-election for the governorship. What do you think? Is this an interesting person to throw into the mix?

Something else that was interesting, too. I don't know if you thought about this, the fact that he's Mormon. A lot of people when we were talking about this in the meeting said, that's an interesting factor. Is America ready for something like that?

RUDIN: I don't hear that too much. I mean, you know, George Romney, his father, ran for the Republican presidential nomination in '68. And all the problems he had, Mormonism wasn't one of them.

I think it's interesting, though, that Mitt Romney coming from Massachusetts, we talked about, you know, Kennedy and Dukakis and Tsongas and the liberals that come out of there. What about a Republican from Massachusetts? The last Republican presidential candidate from Massachusetts was Calvin Coolidge, but of course, he was the vice president at the time.

My point is, I think there are a lot of other people ahead of him. But, given the fact that Romney is very attractive, well able to raise a lot of money, he could be a ticket mate for whoever the nominee is.

PHILLIPS: Ken Rudin, great talking to you. We didn't even get into Jack Murtha.

RUDIN: I'm not leaving. I have plenty to talk about.

PHILLIPS: I'm sure you do.

RUDIN: Just keep rolling.

PHILLIPS: I'll talk to you in the break.

RUDIN: OK.

PHILLIPS: Ken Rudin.

RUDIN: Thank you.

PHILLIPS: A political junkie. Great stuff.

Well, a seaside day for New York commuters. A threatened mass transit strike did not materialize, but after a night of unsuccessful bargaining, New York's transit union has called for a partial strike beginning next week and threatens it could turn into a full-scale mass transit shutdown.

CNN senior correspondent Allan Chernoff, live at New York's Penn Station with the latest. What do we mean by partial strike, Allan?

ALLAN CHERNOFF, CNN CORRESPONDENT: Kyra, what they're talking about is a potential strike against two private bus companies that operate in the borough of Queens. And that strike could begin Sunday night.

The shop stewards are telling the drivers there and the maintenance workers that they would be going on strike Sunday night at midnight if there is no resolution. And it appears that the two sides are at an impasse right now.

Earlier this morning, the transit workers union rejected the latest offer from the Metropolitan Transit Authority. And within the past hour, the MTA said there is no more room for negotiation.

(BEGIN VIDEO CLIP)

PETER KALIOKOW, MTA CHAIRMAN: There are no talks scheduled, because we've done them yesterday and our offer that's out there is the best that we're going to come up with.

(END VIDEO CLIP)

CHERNOFF: And the threat to strike against the entire system, New York City subways and buses, that threat remains. And as I said, it appears the two sides are at an impasse. The MTA executive council is now suggesting that the union agree to binding arbitration. But the union has already rejected that idea -- Kyra.

PHILLIPS: But the strikes is talking about these private bus companies immediately, right? What's the strategy there and what private bus companies are we talking about?

CHERNOFF: Right. These are two companies, Jamaica Bus and also Tri-boro Bus. These two companies are private right now. They are due to be acquired by the MTA.

The strategy here by the union is that they want to start off with these two companies because the employees would not be covered by a New York state law, the Taylor law, that makes it illegal for civil employees to strike. So these employees would not be penalized.

If the transit workers here in New York City for the subways and the buss were to go on strike, they would be penalized two days' pay for every day they're on strike. So a very strategic move here by the transit union.

PHILLIPS: Allan Chernoff, live from New York. Thanks, Allan.

Today on LIVE FROM, a message from the other Iraq. Iraqi Kurds send thanks to America for toppling Saddam Hussein.

(COMMERCIAL BREAK)

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