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Inside the National Security Agency; Some New Orleans Police Remain Homeless; Mortgage Company Loses Customer Data

Aired December 16, 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: We are at the top of the hour now, and we are talking about a secret order, clandestine surveillance, shockwaves on Capitol Hill and beyond.
The world learned today that, among the post-9/11 security crackdowns imposed by President Bush , unprecedented authority for the National Security Agency to eavesdrops inside America without a judge's OK. The NSA concentrates on secrets and codes overseas.

And, while not confirming or denying today's explosive report in "The New York Times," officials say knowledge is power.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL: Let me just say that winning the war on terror requires winning the war of information. We are dealing with a very dangerous, very patient, very diabolical enemy, who wants to harm America. And, in order to be effective in dealing with this enemy, we need to have information. That's very, very important.

And, so, we will be aggressive in obtaining that information, but we will always do so in a manner that is consistent with our legal obligations.

(END VIDEO CLIP)

PHILLIPS: The Republican chairman of the Senate Judiciary Committee plans to find out for himself.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER (R), PENNSYLVANIA: When you got beyond the headline -- and starting with the headline that the president had authorized these wiretaps, surveillance of citizens in the United States -- that's wrong and it can't be condoned at all. And the Judiciary Committees can undertake oversight on it.

So, if you start with that proposition, I agree with those who condemned it.

(END VIDEO CLIP)

PHILLIPS: Well, there's no shortage of stories and conspiracy theories surrounding the NSA, an organization so super-secret, it was once called 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 worlds' most advanced technology. Since its 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, tracked 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: The NSA flap influenced, energized, maybe even predestined the already fiery debate on the Patriot Act.

You may know, most of that post-9/11 security and surveillance measure expires at -- at year's end, unless lawmakers vote to renew it. But critics, who complain the act tramples on privacy rights, were brandishing new ammunition this morning -- Democratic Senator Ted Kennedy offering his own headline, big brother run amok.

Fellow Democrat Dick Durbin fears it may not matter whether Congress re-ups Patriot or not.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN (D), ILLINOIS: Now today's headlines, headlines that suggest this administration went beyond the pale and authorization of the law to eavesdrop on Americans by the thousands in the name of security. And, so, the obvious question is this. Whether or not we pass the Patriot Act, will the administration argue they have the authority to go forward anyway?

SEN. JON KYL (R), ARIZONA: God help us if there's some kind of terrorist attack when we are not protected by the Patriot Act, and the act could have enabled our law enforcement or our intelligence people to help protect us. We will have to answer for that.

(END VIDEO CLIP)

PHILLIPS: In the end, the Senate voted not to cut off debate, meaning no votes any time soon on renewal.

And one tiny skirmish in the Patriot renewal fight is a bid to make so-called national security letters a little less secret. If you have never gotten one, you're probably the envy of anyone who has.

Here's CNN justice correspondent Kelli Arena.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): If you log on to a computer at this Connecticut library, a warning pops up, telling you your privacy cannot be guaranteed, that computer regards may have to be turned over to the government.

ALICE KNAPP, CONNECTICUT LIBRARY ASSOCIATION: I have grave concerns, both on a practical level, what this does, in terms of making people fearful about using the library, but also the danger sign that is for our whole democracy.

ARENA: Librarian Alice Knapp is very concerned about national security letters, or NSLs. The FBI can use them during terrorism investigations to get records and information quickly, without going to a judge. Instead, they are approved by FBI supervisors.

RACHEL BRAND, ASSISTANT ATTORNEY GENERAL: At stake is our ability to quickly track down information that could enable us to prevent terrorist attacks before they occur.

ARENA: Everything about them is secret, how many have been issued and who has received them. The case we know most about involves a Connecticut company, Library Connection. It provides Internet services for some state libraries. When it received an NSL, it refused to comply and went to court. But the company isn't talking.

CAROLINE FREDRICKSON, ACLU WASHINGTON DIRECTOR: The secrecy is a big problem. What happens when -- when, say, a business gets a national security letter is that the business also receives a gag order.

ARENA: Critics also argue, NSLs give the FBI too much power. Agents can get financial information from a bank, for example, toll records from a phone company, or Internet information, like who you e- mailed or which Web sites you visited.

But Assistant Attorney General Rachel Brand says, a lot of information is off limits.

BRAND: They cannot get the contents of an e-mail. They cannot listen in on anyone's telephone conversations. They cannot get, for example, library circulation records, the -- the books that someone checks out. ARENA (on camera): The bill to renew the Patriot Act calls for a review of the FBI's use of NSLs and for some public reporting, but it does not change the way NSLs are used.

Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Well, a law banning the torture of terrorism detainees could be a step closer to reality.

Congress is expected to include the measure in an upcoming defense bill. It was authored by Republican Senator John McCain of Arizona. The breakthrough came when President Bush, bowing to partisan pressure, lifted threats to veto the legislation. However, "The New York Times" quotes senior administration officials as saying they would define torture any way they want to.

The big fear during the Iraq elections was that insurgents would unleash a wave of attacks nearing polling stations. To prevent that from happening, U.S. and Iraqi forces, in recent weeks, launched a series of missions to drive insurgents from their strongholds.

One such mission, Operation Steel Curtain, happened last month near the Syrian border. And, as you can see, it was intense. CNN covered it extensively.

CNN's Arwa Damon has one story that remained untold, though, until last night's "ANDERSON COOPER 360."

Now, we warn you, some of the pictures in this report are disturbing.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): There was an eerie break in the echoing of gunfire in Husaybah when we Mohammad Reijeh.

UNIDENTIFIED MALE: Hey, Scott (ph), follow me.

DAMON: Reijeh's family, petrified, files out of their home as Marines charge past. His mother speaks in hushed tones about masked men. Out of scores of people we talked to here about the American presence, Reijeh is the only one willing to publicly say this.

MOHAMMAD REIJEH, IRAQI CITIZEN (through translator): We want them to save us from the terrorists. We want stability.

DAMON: That was just before noon. But things were about to change.

UNIDENTIFIED MALE: It came from the rooftop on the left side of the road.

DAMON: By 3:00 in the afternoon, renewed fighting.

UNIDENTIFIED MALE: Right there. Hole in the wall. Right there. Go, go, go, go, go.

DAMON: And the heaviest air bombardment yet of Husaybah.

Neighbors describe three men shooting from the top of a building. Then, they say, a U.S. airstrike takes out the building next door -- the results, devastating, 17 killed, all but one women and children.

A U.S. commander says he is sorry for the loss of civilian life.

COLONEL STEPHEN DAVIS, U.S. MARINE CORPS: Whether a family is in that building or not, we do not know. What we do know is, when we meet significant resistance coming out of those buildings, we will not put our people's lives unnecessarily at risk, and we will reduce it in the most efficient manner we can.

DAMON: Two days later, Reijeh still desperately digging through chunks of rubble, searching for the last of the 17 bodies, that of his 7-year-old nephew, his voice strong, yet disconnected.

A week later, 500 villagers gather to regroup to tell the Americans what they want, restoration of basic services and permission to bury the dead. Mohammad Reijeh, with all that he has lost, part of a small group taking the requests to the Marines.

The man who spoke out said he wanted the Americans to save his town from terrorists, now asking the Americans to help fix the horror the war on terror has brought.

Arwa Damon, CNN, Husaybah, Iraq.

(END VIDEOTAPE)

PHILLIPS: Nearly four months after Katrina -- Katrina -- many New Orleans police officers still remain homeless. And that's just one of the problems that they're facing. John King reports when LIVE FROM continues.

(COMMERCIAL BREAK)

PHILLIPS: Well, a bad situation for New Orleans police officers could become much more difficult in the near future. The problems? They're homeless, the city can't pay them any more overtime, and their temporary housing will soon be gone.

CNN chief national correspondent John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN NATIONAL CORRESPONDENT (voice-over): To some, the are the floating post-Katrina boon dock -- $240 million in taxpayer money, spent by FEMA for cruise ships that were often half empty.

By, nightfall nowadays, though, they're mostly full. And to New Orleans Police Sergeant Eric Berger, they're home -- and a reminder that nearly four months later, the future of the city and its often maligned police force very much remains in doubt. SERGEANT ERIC BERGER, NEW ORLEANS POLICE: There is nothing for you to do on the boat, but pretty much eat and sleep. It's kind of depressing being on the boat.

KING: Tuesday was Sergeant Berger's 18th anniversary with the NOPD. The post-Katrina looting, his most searing memory.

BERGER: It was amazing. I mean, this whole meeting was covered with people, just mobs of people just taking whatever they could take in.

KING: This was Berger's home. From the outside, it looks okay. But inside, completely gutted.

BERGER: I wouldn't touch that if I were you.

KING: To visit, is to see firsthand the delays in cleanup, let alone rebuilding. And the challenges for police officers and other first-responders whose jobs require them to stay in the city, still very much a mess.

BERGER: It's just crazy to not be able to get straight answers.

KING: The city hasn't decided whether homes in this neighborhood should be rebuilt or razed. Berger's insurance company has yet to offer him a settlement.

The cruise ships are scheduled to leave 10 weeks from now. And many officers say they are still waiting word on whether they can get FEMA trailers.

And this week, two weeks before Christmas, some officers begin getting paychecks with no overtime.

City officials blame FEMA, saying federal money for overtime has dried up. FEMA says the police force has not applied for any emergency grants.

BERGER: On a regular check, I might take home $1,000 every two weeks, where before that it was probably double that. It was at least -- I'd say it was at least double that. So I'd say salaries have probably been cut in half with the overtime being gone.

KING: The force with 1,643 officers strong before Katrina, but has lost more than 300 officers. Many leaving to be with families, forced to live elsewhere. And Veteran SWAT Team Commander Jim Arey predicts a lot more will go unless things change quickly.

JIM AREY, VETERAN SWAT TEAM COMMANDER: We're battling with insurance companies, we're battling with the federal government, and we're going to lose a lot of heroes.

KING: We first spoke to Arey a few weeks after Katrina. Back then, it was a police department in crisis, facing allegations of looting and desertion. Arey is also a mental health counselor and says morale is worse now. AREY: When I say, hey how you doing? They say, hey doc. I say, how you doing? Do you have a house? 85 percent of the time the answer is no, they don't have a house. It looks like this catastrophe has fallen off the radar screen. And that's frightening.

KING: Sergeant Berger vows to bring his wife and two sons back from Texas in January -- even though, halfway through December. When asked where they will live, his only certain answer is not here.

John King, CNN, New Orleans.

(END VIDEOTAPE)

PHILLIPS: Well, religious leaders will be gathering in New Orleans to discuss interfaith relief efforts tomorrow. They will try to figure out how to distribute $20 million collected in the Katrina fund-raising drive chaired by former Presidents Bush and Clinton.

Bishop T.D. Jakes is co-chair of the Bush-Clinton Katrina Fund Interfaith Coalition.

He joins us live now from Dallas, where, of course, as you know, he's the pastor of The Potter's House Church.

Good to see you, Bishop.

BISHOP T.D. JAKES, CO-CHAIR, BUSH-CLINTON KATRINA FUND INTERFAITH COALITION: Good to see you, also.

PHILLIPS: Well, let's talk about the Interfaith Coalition and the goal and the mission of this coalition.

JAKES: Well, the coalition is really on a fact-finding mission.

On Saturday, we're going to be at the Sheraton Hotel on Canal Street at 11:00 tomorrow morning. And we're trying to invite pastors who have been affected adversely by Katrina to do a needs assessment and report back to the Clinton/Bush Katrina Relief Fund how best to execute our plans for relief and rebuilding.

PHILLIPS: And talk to me why so it's so important that religious leaders like you and -- and a number of these other bishops and pastors and -- and different types in the religious community get involved in talking about how to distribute that money? What is it that you know about this community and know about these people that could be more effective, vs. some administration official or politician deciding how to distribute the money?

JAKES: Well, I -- I think that we were first-responders during the crisis. The church community responded with evacuees in an unprecedented way of not having to plow through the bureaucracy that is traditional with government institutions.

We know the people. I myself have relatives in Mississippi and in Alabama. I have 7,000 partners that are connected to our ministry. The pastors that I'm going to be meeting with tomorrow also work with those people. And they know who they are. And they feel the pulse beat of the community.

Reverend Gray, who is co-chair, along with me, and was the president of United Negro College Fund, joins with me, along with a plethora of board members, so that we can evaluate firsthand what the needs are. We didn't want to go in and just start allocating funds to where we thought they ought to go.

We wanted to hear from the pastors themselves, not only those that are in the Gulf area, but those who have evacuated to other places, but long to come back home. We want to make it possible for them to return and take up their lifestyles that they had before.

PHILLIPS: Bishop, tell me what you, your church, the funds from your church, raised from your church, are doing specifically to help New Orleans. And do you feel that the call has been answered with regard to other churches coming forward and, financially and spiritually, supporting New Orleans and the Gulf?

JAKES: I have never seen the church do as well as they did during Katrina.

Our church was responsible for nearly $2 million worth of resources and finances pumped, not only to New Orleans, but the Gulf area and here in Dallas, working with evacuees. We were able to place 2,000 people into homes and -- and to help them to get readjusted into the Dallas lifestyle.

I toured Houston and Dallas and Baton Rouge, assessing the damage that was done there. I have been very, very involved with various faith-based institutions, trying to see how we can solve this problem. But it is not just The Potter's House that's been leading in this way.

From mega-churches, to everyday churches, to very small churches have been really out there cooking and feeding and clothing. Eventually, of course, we run out of resources.

And that's why I'm glad that the Clinton/Bush Fund has allocated $20 million to this faith aspect of our community. I think it's important also to recognize that there's a disproportionate amount of African-Americans and poor people who normally will not seek counseling, professional counseling and therapy.

They tend to look to the church for those resources. And when the s church is down and out themselves, and the pastors are homeless themselves, it creates a disparity for people...

PHILLIPS: The -- and...

JAKES: ... who are dealing with grief.

PHILLIPS: This is a -- this is a -- a great point. This is what I really wanted to talk to you about specifically.

And that is, when Katrina hit, more than anything, we saw the underbelly of this nation, and that was poverty, and how the state of Louisiana -- whether it be the state of Louisiana -- Louisiana -- or any of us, the issue of poverty has not been dealt with, especially in this state.

So, taking a look at all the money that's coming in, and -- and, as you mention, all the money from the churches as well, how do you tackle, say -- I mean, you're the only voice. The church is the only voice for those that don't have anything, that have -- that didn't have a savings account or were renters in the Lower Ninth Ward, didn't have insurance coverage.

So, your funds are -- are essential for these people. How do you bring them back into that city and give them a life and -- and integrate everybody back into that city, to where there is less of a rich vs. poor, and more of an integrated city, where everybody has a chance to come back?

JAKES: You know, you hit the nail dead on the head.

First of all, the situations that exist in New Orleans are duplicated all over the United States. America has had a tendency to ignore things that we don't want to talk about, like racism, like poverty, like the disparities that exist in our communities.

But this really made us have to face those issues and deal with them head on. There are many things that we can do. First of all, we do give a voice to people who have no voice. I have been able to sit with the president and with others and make suggestions and recommendations, to say that this is an issue that really concerns me.

We can employ many of these people. We can make sure that they get contracts, as we begin to rebuild the city of New Orleans. We can work with these families to help them to relocate and to accomplish their goals. We can become involved in communities that we normally drive by and ignore, to make sure that they have equal opportunity, access to education, computers and things that you and I may take for granted.

We cannot close our eyes any longer to this problem. We have got deal with it. And I think that how we deal with New Orleans and the Gulf area in general will be indicative of how other cities can expect our nation to respond in times of calamity and tragedy.

PHILLIPS: And, Bishop, I -- I lived and worked in that city. Of course, you have got family there. You know that city well. A lot of the crime took place in these housing developments.

It was -- it was a tough scene in New Orleans. What -- what do you -- how do you feel about public housing, specifically housing developments? Should those come back to New Orleans or should they not come back to New Orleans? And should a different type of housing be created for those that can't afford to buy a nice house in the Garden District?

JAKES: You know, I think we really need to look at this. Most of the studies that I have read indicate that, whenever we build these types of housing facilities and start driving around them and ignoring them, not only do we not see them. The police don't like to go into them. They become festered with drugs and -- and depravity and destruction. I think, personally, that one of the great solutions is to develop communities that have moderate- to low-income housing, where people can live amongst other people who are doing better and feeling better.

They feel better about themselves and they're able to transform themselves. Poverty is something that is contagious and infectious in our community. And, with it, comes disparity and the crime and the violence that maybe other people wouldn't understand.

But I have always said that desperate people do desperate things. You cannot sit in a nice living room with a remote control and say what you would do if you have never been hungry and you have never been distraught.

PHILLIPS: Yes, this is an incredible time for this city to start over.

You know, the HUD secretary came forward and said one concern that he has, that this city, culturally, it's never going to be as black as it once was. Does that concern you?

JAKES: It -- it really concerns me.

I think that we have to make sure that a significant part of our history is salvaged, that we make sure that African-Americans are treated fairly. Sixty-seven percent of the population there in New Orleans was African-American.

We have to make sure that they have access, not only back to the city, but to jobs and to opportunities, and to make sure that the educational opportunities are brought up to par, as they should be.

And I think that -- I thank God for the press. And I think that we should continue to monitor, even as changes are made in Congress. And I'm encouraged by some of the changes that are being made in Congress to accommodate these needs. We need to make sure that there is follow-through on the -- the fixing of the levee.

We need to make sure that it's raised up to a standard that we know that, should a level-five hurricane hit, that it is going to be safe. The paperwork is now put into place, but the follow-through has got to be watched.

PHILLIPS: And, of course, if people want to donate, they can go straight to the Bush Clinton Fund online and make a donation.

A lot of people counting on you, Bishop T.D. Jakes. You have a lot of influence and are able to raise a lot of money. We will be following your work.

JAKES: I'm glad to serve. Thank you so much.

PHILLIPS: Thanks for your time. The race to Ohio '8 in December -- or '08, rather -- in December 2005 -- could Santa be bringing the Democratic Party an unexpected presidential prospect? Our Candy Crowley is checking the list.

Details ahead on LIVE FROM.

(COMMERCIAL BREAK)

PHILLIPS: Cliffhanger for strap hangers in New York -- after a night of unsuccessful bargaining, New York's Transit Union has authorized a limited strike on two bus lines in Queens, beginning Monday morning. And the union is threatening a full-scale mass transit shutdown if the talks remained stalled. Initially, union officials said the strike would start today. No new talks are scheduled.

Well, your name, your money, your identity, you kind of want to keep it all to yourself, right?

Ali Velshi is here with some pretty troubling news.

Some of that, I guess, may be out there for a bit of taking -- Ali.

ALI VELSHI, CNN CORRESPONDENT: You -- you have applied for a mortgage or -- or, you know, had a mortgage in your life?

PHILLIPS: Oh, yes.

(CROSSTALK)

PHILLIPS: A number of them.

VELSHI: There's nothing that isn't on those forms that you sign.

I mean, you get a cramp from signing all those forms for the mortgage. Well, a mortgage company, ABN AMRO, tells us today on, what is it, the 16th of December, that, on November 18, it sent a computer tape with data relating to two million mortgages, the mortgage information of two million people. It was picked up in Chicago by DHL. It was supposed to go to Experian, which is one of the credit- reporting agencies in Allen, Texas.

Didn't get there the next day. November 19, it didn't get there. The tape is now presumed lost. The company tells us, they can't say that it's stolen. No reason to believe it is stolen. They haven't -- they haven't noticed any misuse of the data that was on there.

I -- I can't seem to figure out why it took them a month to tell anybody about this, but they have asked DHL to investigate. One figures that, after a month, it is probably not -- I mean, this is really a case of something falling off a truck, apparently.

The good news, Kyra, is that this is the last tape that this company, this bank, is going to send to the credit bureau. They have now adopted secure encryption transmission... PHILLIPS: Well, what do you...

VELSHI: ... for all further tapes.

PHILLIPS: What do you do if you could be one of the individuals?

VELSHI: Well, they've offered 90-days of credit watch to their customers so that the credit agency will call them if there's any unusual activity on their card.

But no, you can't actually do much. You now are potentially a victim. But, you know, Kyra, there have been millions and millions of these. Many companies have had this kind of problem.

You know, the other day we were talking about laptop security and encrypting your laptop. You could leave this thing open anywhere you want and you couldn't probably lose as much information as America's companies lose on your behalf.

I mean, somebody gets hold of my mortgage documents.

PHILLIPS: Yes, it's human error.

VELSHI: There's nothing more they need to know about me.

PHILLIPS: Right.

VELSHI: I don't even know that much stuff about me.

PHILLIPS: I know a lot about you.

But I love these emails I get from you. Oh, Kyra, I'm talking about quadruple witching, Howard Stern, DHL. Oh, and by the way, my cufflinks today in New York City's showcase.

VELSHI: Oh, yes, yes because I bailed. You know, I felt bad for bailing on New York today because of the transit strike. I got out of there really early this morning just in case. But these are tokens. These are old New York subway tokens.

I actually felt guilty while getting dressed this morning. I thought, you know, what kind of a New Yorker am I leaving when we could be facing a strike?

PHILLIPS: What if you don't sell them? You might get arrested.

VELSHI: I might have to take them out and use them.

Yes, we dodged that strike. But, you know, it's not completely out there. A couple of buses in the suburban areas around New York that are out of service today. And they're saying if they don't get a deal by Tuesday, you might see the subway shut down.

Yes, Academy that's connected to the union.

PHILLIPS: Well, it hasn't happened in a long time. So they got to work something out. I mean, that would just slam the city economically.

VELSHI: Three days before Christmas?

PHILLIPS: Yes, it's brutal, brutal.

VELSHI: That's going to be crazy. Maybe I will stay here.

PHILLIPS: There you go. You can just work all week. Just what you want to do.

VELSHI: Yes. Kind of like every other week.

PHILLIPS: Yes, exactly.

All right, Ali Velshi we'll see you in a little while...

VELSHI: Half an hour.

PHILLIPS: ...right before the closing bell.

Sounds great.

VELSHI: OK.

PHILLIPS: Well, up next, who is up, who is down and a look at who the movers and shakers say could make some noise in the 2008 presidential race. LIVE FROM returns after this.

(COMMERCIAL BREAK)

PHILLIPS: Well, a top Olympics official says that the latest chapter in the decades old divide between the U.S. and Cuba could damage U.S. efforts to host the Olympics.

IOC member Dick Pound says the U.S. decision to keep Cuba out of the world baseball classic could defeat any bid to host the future Olympics.

Early this week the Treasury Department officially denied major league baseball's request that Cuba be allowed to send a team to next year's world baseball tournament. Baseball officials say they'll ask the Bush administration to reverse that decision. Cuba's national team played in the 1996 Olympics right here in Atlanta, Georgia.

Well, polar bears and Northerners. They're the only ones comfortable outside in most of the country today. It's an icebox across much of the south and there are downed power lines. And about half a million homes in Georgia and the Carolinas without power for a second day.

Snow and sleet in the Appalachians are making conditions on the highways something of an adventure as well. They're more used to it up in New England though. Good thing because a major weekend snow dump is coming for the eastern Great Lakes all the way to Maine. It's all doing a number in travel plans.

(WEATHER REPORT)

PHILLIPS: Well, a big name means a lot in politics, but some lesser known names are lurking beneath the radar in the 2008 presidential race.

The latest CNN "Usa Today" Gallup poll of Democrats finds Hillary Clinton still a runaway favorite. She got 43 percent. John Edwards and John Kerry tied at 14 percent. They are 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 agree Senator Clinton is the one to beat. But they drop Kerry to the bottom, and they move Virginia's Governor Warner just behind Senator Clinton.

Your average voter is looking at the calendar now and thinking Christmas 2005, but your average political activist is looking at the calendar and thinking November 2008. One reason new faces like Mark Warner stepping out in the national political scene.

Our senior political correspondent Candy Crowley first reported this story for THE SITUATION ROOM.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): If there were an '08 election calendar, he would be Mr. December.

(on camera): You're already the it guy.

GOV. MARK WARNER (D), VIRGINIA: Flavor of the month to it. I'm not sure what that -- because I've got obviously a major decision to make.

CROWLEY (voice-over): Meet Virginia Governor Mark Warner, the latest frequent traveler along the presidential flight path. Just last week, he landed in the early primary state of South Carolina.

WARNER: With that kind of welcome, I'm going to come back.

CROWLEY: Over the weekend, he perked interest in the Democratic equivalent of the Alamo, Florida.

UNIDENTIFIED FEMALE: Possible presidential candidate, yes.

UNIDENTIFIED FEMALE: That's what I was thinking.

UNIDENTIFIED FEMALE: Yes.

CROWLEY: He fits the Clinton template: a moderate southern governor with cross party appeal, the kind of guy who could breach the Republican stronghold below the Mason-Dixon.

WARNER: I think we, as the Democratic Party, are crazy if we keep putting up candidates and ideas that are only going to be competitive in 16 states.

CROWLEY: Democratic activists are shopping and word of mouth from New Hampshire to South Carolina to Florida is that Mark Warner is worth a look-see but not the only see.

UNIDENTIFIED MALE: I like Vilsack. I like Warner.

CROWLEY: Iowa Governor Tom Vilsack is within the parameters of the Clinton template, a Midwest moderate with a story to tell.

GOV. TOM VILSACK (D), IOWA: First and foremost, I think the candidate has to be authentic and has to be genuine. Whatever that candidate believes or feels has to come from the heart and the gut.

CROWLEY: Orphaned at birth, an adoptive mother addicted to alcohol and drugs, Vilsack focuses on building community support systems. He is easy quoting Bible verses.

UNIDENTIFIED FEMALE: It was a wonderful leap and a great direction for us to win over the Christian -- any religious group, you know, because these are moral values, and we're losing them.

CROWLEY: Vilsack does not have the current buzz of a Warner, let alone the constant buzz of Hillary Clinton, but if there were an '08 election calendar, it would show 35 months until the election, lots of time for monthly flavors.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Well, our CNN/"USA Today" Gallup poll finds that Republican voters, much like the Democrats, are backing the big names for the White House. Rudy Giuliani received 30 percent, John McCain 22 percent, followed by Condoleezza Rice and Virginia Senator George Allen.

Next were Senator 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. Senator Allen was their top choice. He's followed by Senator McCain and Governor Romney.

JibJab Brothers are at it again. This time they've got a year in review for President Bush. CNN's LIVE FROM rolls on.

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PHILLIPS: Well, if the words JibJab put a smile on your face and a song in your heart or a grimace and a gas pain, what we're about to show you needs no further introduction. If not, we'll just say the bad boys of online no frills animation have done it again. Presenting 2005, the year in review.

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UNIDENTIFIED MALE: Mr. President, Mr. President, you've had quite a year. Can you tell us what you're thinking as it draws to a close?

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PHILLIPS: More good stuff ahead on LIVE FROM. Fat penguins and Wolf Blitzer.

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PHILLIPS: Did the Bush administration break the law when it allowed the NSA, the National Security Agency, to eavesdrop on Americans? It's a the story that we've been talking about all day. Some think that the NSA should have that capability to do so. Others say it's simply breaking the law.

Well, Jim Lehrer, one of our fellow journalists -- as you know, his "Newshour with Jim Lehrer," sat down with the president and asked him that question.

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BUSH: You're talking about a program that's important not to talk about. And the reason why is that we're at a war with an enemy that still wants to attack. After 9/11, I told the American people I would do everything in my power to protect the country, within the law. And that's exactly how I conduct my presidency.

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PHILLIPS: All right. We cut it back. Are we going to be able to rack that up again, Roger (ph), or did we lose it that much? We lost it. All right. We apologize. We're going to work a little more time on part of that interview. We're told we had about a two-minute clip.

Is Wolf ready? All right. Let's check in with CNN's Wolf Blitzer. He's standing by there in Washington to tell us what's coming up at the hour in THE SITUATION ROOM. Wolf, I know you'll be talking about this story no, doubt.

WOLF BLITZER, CNN ANCHOR: We certainly will, Kyra, thank you very much. In Washington, spying on Americans. It's a secret White House order that has now been revealed. How far should the government go to protect you from terrorism? We're covering all sides of this very contentious debate.

Plus stopping the virus. Tracking an infected air passenger into the United States. A test of the nation's defenses against a potentially devastating pandemic.

Also, during our 7:00 p.m. Eastern hour here in THE SITUATION ROOM, race politics and bold statements. The actor Morgan Freeman calling black history month ridiculous. Find out why. We have the video that's raising some eyebrows.

And a shock jock signing off. Howard Stern's last day on the radio. Is satellite radio really the wave of the future? All that, lots more, coming up, Kyra, right at the top of the hour.

PHILLIPS: All right. We'll be looking for it. Thanks, Wolf.

Straight ahead, the other part of our tease. We already brought you Wolf Blitzer. Now we're talking about fat penguins. No relation, though, I promise.

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PHILLIPS: All right, we got that tape fixed for you. Now part of that interview with the president of the United States, as he sat down with Jim Lehrer.

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BUSH: We do not discuss ongoing intelligence operations to protect the country. And the reason why is that there's an enemy that lurks that would like to know exactly what we're trying to do to stop them. I will make this point: that whatever I do to protect the American people -- and I have an obligation to do so -- that we will uphold the law and decisions made are made understanding we have an obligation to protect the civil liberties of the American people.

JIM LEHRER, HOST, "NEWSHOUR WITH JIM LEHRER": So if, in fact, these things did occur, they were done legally and properly?

BUSH: See, you're trying to get me to talk about a program that's important not to talk about. And the reason why is that we're at a war with an enemy that still wants to attack. I -- after 9/11, I told the American people I would do everything in my power to protect the country, within the law. And that's exactly how I conduct my presidency.

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PHILLIPS: And you can catch the full "Newshour With Jim Lehrer" on PBS.

All right. We're going to really switch gears here and talk about the Japanese. Guess what they're worried about? Fat penguins. Just let that sink in for a moment. And they're off. Don't ever accuse the Japanese of letting their zoo animals get too fat. This is a regular thing at the zoo on Japan's northernmost main island of Hokkaido. The 15 resident king penguins go on two escorted jogs a day during the winter months. It's to keep their weight manageable. You know how unforgiving a tuxedo can be.

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