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Ohio Men Arrested on Terrorism Charges; GOP Upset Over Controversial Port Deal; Bird Flu Killing Desire for Chicken; Bush Acknowledges Mixed Messages on Renewable Energy; Rumsfeld, Pace Hold Pentagon Briefing

Aired February 21, 2006 - 13:00   ET

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

TONY HARRIS, CO-HOST: From the CNN world headquarters in Atlanta, I'm Tony Harris.
BETTY NGUYEN, CO-HOST: And I'm Betty Nguyen. Kyra Phillips is on the assignment today. LIVE FROM starts right now.

Topping our security watch this hour, alleged terror plot overseas, a major indictment back in the U.S., and it is all connected. We are waiting for an official announcement from Washington.

Our justice correspondent, Kelli Arena, already has some of those details. Let's talk to her right now about what she knows.

Hi, Kelli.

KELLI ARENA, CNN CORRESPONDENT: Hi, there, Betty.

Well, three Ohio men were arrest over the weekend. They'll make their first court appearance today. All three were indicted on terrorism charges, alleging that they plotted to kill U.S. and coalition military personnel in Iraq and some other countries. It's part of a plot which, authorities say, began back in November of 2004.

Now, the indictment was just unsealed today. It says that the three recruited others to train for a violent jihad against the United States. It says that they practiced shooting guns and that they studied how to make explosives. One of the men is even charged with threatening to kill or to harm President Bush while he was speaking with others publicly.

Now, two of the men are naturalized U.S. citizens. The third is a permanent resident of the U.S. Their names are Mohammad Zaki Amawi, Marwan Othman El-Hindi and Wassim Mazloum.

As you said, Betty, we expect to hear more at a press conference from the Department of Justice in about a half an hour from now.

NGUYEN: And we will be watching for that. Kelli Arena, thank you.

ARENA: You're welcome.

NGUYEN: Tony. HARRIS: Well, also in our security watch, you didn't know about it. I didn't know about it, neither did President Bush. That is, until now.

Members of his own party are knocking on his door, angry that the administration wants to let an Arab-based company manage six major U.S. ports. They're also angry they weren't told earlier.

CNN has learned the president himself was unaware of the deal until word of it sparked an uproar in Congress. And that's where we're going right now, to Capitol Hill and our Ed Henry.

Hello, Ed.

ED HENRY, CNN CORRESPONDENT: Good afternoon, Tony.

That's right. In fact, the pressure now mounting, and it really was ratcheted up big time today when the Republican Senate majority leader, Bill Frist, declared that he now wants the White House to delay this and have a further review of this entire port deal.

And short of that, Senator Frist warned that when Congress comes back from recess next week, he will introduce legislation that basically will put a stop to this deal, delay it.

And that is a major development, because so far, we've only heard from rank and file lawmakers in both parties. It's been bipartisan pressure, and that's been interesting. But no real leaders in Congress, no one with the stature of Senator Frist, certainly, within the president's own party.

That is going to put even more heat on the White House to maybe at least stall this for awhile, give a further, more extensive review of the process that led to all of this.

We're also hearing later today, in fact, later this hour, New York Democratic Senator Chuck Schumer's going to introduce emergency legislation, much like Frist is planning to do. It's not a surprise, because Schumer's a Democratic critic of the White House.

But what's interesting is he's going to be joined by Republican Congressman Peter King -- he's chairman of the House Homeland Security Committee -- in introducing that emergency legislation.

And we're seeing, all up and down the East Coast, rank and file Republican lawmakers really putting pressure on the White House. New York Republican Vito Fossella flying down to Miami today, 2 p.m. Eastern Time. He's going to have a press conference with Florida Republican Mark Foley, who's also denouncing this deal. Two other Florida Republicans, Clay Shaw, Ileana Ros-Lehtinen, also today announcing they're opposed to this deal.

So that's why you're seeing people like Fritz, very senior members of the party, acting. They see the pressure from within the rank and file, and they realize the White House has a real political problem here, Tony. HARRIS: OK. CNN's Ed Henry for us on Capitol Hill. Ed, thank you.

HENRY: Thank you.

HARRIS: And stay tuned to CNN day and night for the most reliable news about your security.

NGUYEN: Well, it wasn't quite an apology, but it was an admission. Three weeks after his State of the Union address calling for energy independence, President Bush acknowledged today that his administration has been sending some mixed signals.

Mr. Bush visited one of the nation's top renewable energy labs in Colorado. He praised the work that's being done there and acknowledged that just two weeks ago the government laid off 32 workers there. Those jobs have now been restored, just in time for the president's visit.

And we're going to talk to Kathleen Koch about that in just a moment. But we do want to take you to the Washington, where we are waiting on that briefing by the Pentagon and Defense Secretary Rumsfeld. Tony has a little bit of information before we get there, though, as we look at the podium and stand waiting -- Tony.

HARRIS: Well, the kill zone expands in western India, dooming any poultry found within a ten kilometer circle of the country's three known cases of bird flu.

Amid the carnage, confusion also reigns. People in this remote area have little access to television or newspapers, so many residents are being caught unaware by the arrival of culling teams. Medical workers are also going house to house, screening for human cases. At least eight people have been hospitalized for observation with flu- like symptoms.

And chilling scenes in northern Germany as soldiers don biohazard suits at disaffection checkpoints. Today, 22 more cases of bird flu were confirmed, bringing the control's total to more than 100. All of the cases detected in Germany have been in wild birds -- Betty.

NGUYEN: Well, Tony, not only is it a looming health issue. Bird flu's also poised -- it's created a major economic problem, especially for poultry and egg farmers.

CNN's Robin Oakley has more on how consumers are already feeling a bit chicken.

(BEGIN VIDEOTAPE)

ROBIN OAKLEY, CNN CORRESPONDENT: For farmers with free range chicken farms like this with 10,000 birds, these are worrying times. H5N1 virus has been found in wild birds now in seven of the 25 countries across the European Union. If it ever crosses to domestic foul, commercial flocks of this kind, they would have to be culled, destroyed, and farmers would be starting again from scratch. Already, worries about the poultry industry's future have seen consumers in Italy drive down sales of poultry by 70 percent. Sales are down 40 percent in Greece, 20 percent in Poland.

And many people's livelihoods at risk: 30,000 jobs lost already in Italy.

The big debate now among European Union experts is what should be done further to help prevent the risk of the flu that has been picked up by wild migrating birds, spreading to these domestic fowl.

One possibility is a widespread vaccination program. That's favored by the Netherlands, Italy, other countries. But others say no, that is too expensive and impractical. Britain, for example, is not backing the idea of vaccination.

Another idea is that free range fouls like these should be penned up permanently, in their quarters. But that, again, say farmers, like the one who owns this particular flock, say that can lead to considerable troubles with the fowls. They start behaving like soccer hooligans if they're shut up all the time.

So there are real problems to be faced and many livelihoods at risk, as the European Union's experts debate what to do next.

Robin Oakley, CNN, in East Sussex, England.

(END VIDEOTAPE)

NGUYEN: Well, President Bush is touring the nation, talking about energy independence today. He's in Colorado. And that's where CNN's Kathleen Koch is.

Kathleen, this is really interesting, because at the lab where he is today, what, 32 workers were laid off, and then all a sudden they were hired back on the eve of this speech today.

KATHLEEN KOCH, CNN CORRESPONDENT: Quite so, Betty. And potentially embarrassing situation for the White House. This very important cutting-edge laboratory in the federal government, developing renewable energy, be it solar, wind, biomass, geothermal.

The president on his visit here, first he toured the facility, took a look at some of the raw materials that they're experimenting with here to create ethanol, looking at materials like poplar, switch grass and corn stalks.

But the work of this lab has definitely been impacted by what has been a series of congressional budget cuts over recent years; $28 million cut last year, a $9 million cut in the budget the year before.

And in his panel discussion that the president participated in with the director of the lab, that the National Renewable Energy Laboratory, he talked about how the Energy Department itself had to step in at the 11th hour this weekend with $5 million to bring back those 32 fired workers. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Part of the issue we face, unfortunately, is that there are sometimes decisions made, but as a result of the appropriations process the money may not end up where it was supposed to have gone. I was talking to -- I was talking to Dan about our mutual desire to clear up any discrepancies in funding, and I think we've cleaned up those discrepancies.

My message to those who work here is we want you to know how important your work is. We appreciate what you're doing. And we expect you to keep doing it.

(END VIDEO CLIP)

KOCH: Now, the workers who were fired are being notified that their jobs -- they will be able to take their jobs back again. Not all of them, of course, are on the clock yet. But though they're grateful, they're frustrated that this back and forth had to occur at all. Still, they are very encouraged by the president's commitment that he has made, pledging to up spending 22 percent on technology involving renewable energy sources -- Betty.

NGUYEN: Kathleen Koch, thank you, from Colorado. Appreciate that -- Tony.

HARRIS: Betty, some news just coming in to CNN. Harvard University's president is resigning. Lawrence H. Summers is resigning at the end of this academic year, the 2005/2006 year. That announcement posted on the university's web site. Once again, Harvard's president Lawrence H. Summers, resigning at the end of the school year.

We'll get more information on this announcement and pass it along to you in just a couple of minutes.

LIVE FROM the Pentagon. Defense Secretary Donald Rumsfeld briefs reporters and takes their questions. It's expected to start in just a few minute. We will bring it to you when it happens.

The news keeps coming. We'll keep bringing it to you. More LIVE FROM after this.

(COMMERCIAL BREAK)

NGUYEN: The Supreme Court with two new appointees on the bench wastes little time jumping back into the abortion fray. The justices say they'll review whether Congress has the right to ban a certain late-term procedure.

You're looking right now live at the Pentagon, where Defense Secretary Donald Rumsfeld is briefing reporters there. Let's take a listen.

(JOINED IN PROGRESS) DONALD RUMSFELD, SECRETARY OF DEFENSE: ... United States armed forces as our personnel come to the aid of those that have been injured or made homeless in the mudslides, devastating mudslides in the Philippines that buried an entire village.

The A.P. photo on the front page of several newspapers this morning showed pictures of our military folks doing what they do to help others -- just as the world saw the United States military come to the aid of earthquake survivors in Pakistan, those injured in mudslides in Guatemala, and to the rescue of hundreds of thousands of people after the devastating tsunami in Southeast Asia.

These efforts are an indication of the organizational talents of the United States military. They're able, at a moment's notice, to respond to the pleas of millions across the world, while at the same time fighting wars in Iraq and Afghanistan and elsewhere on the globe.

I think it's also a tribute to our free system of government that rewards creativity and innovation, attributes that have been essential to the transformation of our armed forces into a more agile and more capable institution.

I mention this not only to salute the folks in the military, but also to make a larger point about the war in which we're now engaged.

As the president has said, this war we are in really cannot be won by military means alone. We need to find ways to win the ideological battle, as well; to convince people who might otherwise be attracted to the message of violent extremism, that there is a better way of life, and that free political and free economic systems are forces for good in the world, which indeed they are, not as the enemy would suggest -- responsible for the plight of people who have needs and hopes and aspirations that are as yet unachieved.

Every effort we undertake to demonstrate the depth of America's compassion and generosity is an important step in the global war on terror. I recall that when I was in Pakistan a few months ago to survey the U.S. military's assistance in the Pakistan earthquake, I came across what might prove to be one of the most important weapons in the war on terror.

It was not conventional military technology. It was that MASH unit, the clinic there, that had given treatment to so many Pakistanis and provided them with a very different view of America and our mission in the world.

So, too, our efforts to help Afghans and Iraqis build their futures in their countries will prove to be as important as was the defeat of their regimes that had threatened American security.

As one Iraqi leader reportedly said of his new country, Iraq was the North Korea, the Middle East and now it has a chance to be the South Korea.

General Pace?

GEN. PETER PACE, CHAIRMAN, JOINT CHIEFS OF STAFF: Thank you, sir.

I'd like to add my word of condolence to those of the secretary for the families of those mudslide victims in the Philippines.

We were fortunate that at the time of the mudslide that we had U.S. forces in the Philippines for an exercise: three ships, 5,000 U.S. servicemembers, helicopters, landing craft, air cushion, bulldozers and the like.

And you can see by this picture how the top of that mountain just came down and covered the village at the bottom. At the bottom of the picture, you see a village. There was a similar village across the river where the mudslide hit.

And as the folks work to assist the Philippine government in trying to find anyone who may still be alive, you can just imagine the way that, that mud -- the consistency of the mud makes it very, very difficult to operate.

We're hopeful that we'll find folks, but we're thankful that our service members are able to help the government of Philippines in any way we can.

Thank you.

RUMSFELD: Be happy to take some questions.

Charlie?

QUESTION: Mr. Secretary, Iraqi Prime Minister Jaafari met this morning with British Foreign Secretary Straw and responded to questions afterward and said rather tersely that Iraq did not want a sectarian government and that Baghdad didn't need to be reminded by the U.S. ambassador or the British that was a bad thing.

Nonetheless, is this building? Are you and this administration concerned about continuing sectarian violence in Iraq, reports of Shia death squads and the fact that perhaps some people in the Iraqi government are turning a blind eye to that?

RUMSFELD: The Iraqis are going through a political process. And until they have agreed upon who their new leadership will be, the president and the prime minister and the various ministry officials, you're going to see a lot of public statements by a lot of people on a lot of different subjects reflecting a lot of different views.

And that's perfectly natural. If you think about our country here, we do that here all the time. You hear senators and Congressman and people in the administration and people outside of government talking about various perspectives. And it's a part of that political process.

Obviously, we believe in the Transitional Administrative Law principles which were put forward and which the constitution followed in large measure. And we expect that that will continue to be the general approach of the Iraqi government. QUESTION: Mr. Secretary, is the U.S. military going to be able to leave Iraq as long as sectarian violence -- sectarian politics translates into sectarian violence?

PACE: If you're coming from the standpoint of how we're training, we are training, as agreed to, between the U.S. government and Iraqi government, to train an Iraqi army that is an Iraqi army; not a Shia army, not a Kurd army; not a Sunni army, but an army that is representative of all the people, to train them to be supportive of and subordinate to the central government.

QUESTION: Mr. Secretary, I'd like to ask you about the U.S. government's decision to have a company from the UAE run six U.S. seaports. Is that a decision that the Defense Department weighed on? And what, if any, national security issues do you think that raises?

RUMSFELD: First, let me say I'm not expert on this subject. And my understanding, that I've been told secondhand by others, is the following: that there's a process that exists in the government, that six departments and agencies are involved and five or six offices in the Executive Office of the President and the White House are involved.

And there's a time limit of something like 30 days during which this process is to be executed. That process worked. It was chaired by the Department of Treasury. The deputy, Bob Kimmitt, was the chairman.

In the normal order of things, what they do, as I understand it, is they select a lead agency or department based on the substance of it. And in this case, it was Homeland Security, obviously, because the Coast Guard has the responsibility for the security of ports.

And the process went forward. And, in the course of it, the Department of Homeland Security and the interagency process negotiated a letter with the company that had purchased -- I believe a British company -- setting forth exactly how security would be handled. I've not seen it, so I can't describe it, but that's my understanding.

I guess the only other thing I'd say is that we all deal with the UAE on a regular basis. It's a country that's been involved in the global war on terror with us. It's a country that we have facilities that we use. And it's a country that was very responsive to assist in Katrina, one of the early countries that did that, and a country that we have very close military-to-military relations, as well as political and economic relations.

Do you want to comment?

PACE: The military-to-military relationship with the United Arab Emirates is superb. They've got great seaports, capable of handling, and do, our aircraft carriers. They've got airfields that they allow us to use, and their airspace, their logistics support. They've got a world class air-to-air training facility that they let us use and cooperate with them in the training of our pilots.

In everything that we have asked and worked with them, they have proven to be very, very solid partners.

And as the secretary said, they were the very first country -- $100 million is what they offered to Katrina victims.

RUMSFELD: I should add that I wasn't aware of this until this weekend, as I think is the case with Pete.

PACE: Correct. Yes, sir -- the ports.

RICE: And I'm told that Deputy Secretary of Treasury Kimmitt and others will be briefing on this who do have the background of the discussions and the information on it.

QUESTION: There was a Defense Department representative in the decision-making process, is that what you're...

RICE: There were Defense Department and I think -- as I said, there were six departments that were involved in the process in one way or another and the Defense Department was one of them. The lead was the Department of Homeland Security.

QUESTION: Are you confident that any problems with security -- from what you know, are you confident that any problems with security would not be greater with a UAE company running this than an American company?

RUMSFELD: I am reluctant to make judgments based on the minimal amount of information I have because I just heard about this over the weekend.

I'm told that nothing changes with respect to security under the contract; that the Coast Guard is in charge of security, not the corporation. And the corporation -- is this correct?

PACE: Sir, that's true.

And there are many companies in various ports around the United States that are not U.S. owned that help do this kind of cargo handling. And of course, our Coast Guard are the ones who make the judgments about the security of the ports and how that all interfaces. And that was part of the dialogue, as I understand it, that took place amongst the various departments.

RUMSFELD: And the Coast Guard, of course, has the responsibility for the ports. And they should be the ones who would describe how it would be handled and why it is acceptable, because they signed off on it.

QUESTION: Mr. Secretary, I wanted to ask you about a memo that was written by Alberto Mora, the former Navy general counsel, which details the internal debate about the interrogation techniques at Guantanamo.

The memo is first reported on by the New Yorker and has now become public. And in the memo, he refers to your December 2nd, 2002 memo authorizing some procedures which you then rescinded in January. And he says that you got, essentially, very bad legal advice in signing that memo and that the memo itself had a deeply flawed representation of what the law was.

Do you feel that you were ill served by the advice you got when you signed that memo, considering that you then had to rescind it just a month later, or a little over a month later?

RUMSFELD: That's roughly my recollection of the situation, that Chairman Myers and I were -- recommended that I sign this, I did sign it, and it was staffed around in the department.

And as always, there are people who have different views. It went out. And then, I think, within four, five or six weeks we heard that there was concern about that, in which case, we stopped it immediately, retrieved it and put it on hold, and then undertook an investigation and consulted with the people who were in the judge advocate offices and had a discussion about what the concerns were, because we didn't want to be doing something that people were concerned about in the department. And I had not been aware about any debate or concern prior to that. And, in which case, then, it was revised in some ways and sent back out.

You know, I expect to have differing views. It's my responsibility to listen to different views and to make judgments, and I do. And if, after the facts it turns out that there's concern about it that concerns me, then I'm happy to rescind it and take another fresh look at it, and talk to more people about it and see what ought to be done.

QUESTION: Do you recall on this memo that you wrote a little notation at the bottom about standing more than four hours, because you stand at your desk...

RUMSFELD: I do, I do.

QUESTION: This attorney argued that that was -- badly advised to allow it to go out with that notation on it, because that could be interpreted by some as a wink and a nod that it would be OK to go beyond the techniques that were prescribed in the memo.

RUMSFELD: No, no, no. There's no wink and a nod about anything. It was a semi-humorous remark that a person in his 70s stands all day long. And there was one provision in there that they would have people stand for several hours, and I just mused that -- and maybe it shouldn't have gone out, but it did -- and I wrote it. And life goes on.

QUESTION: The point was that you should have gotten much better advice from your legal staff...

RUMSFELD: I heard your question the first time. I get differing views all the time, and it's not their fault for having differing views. If there's something that's done that is not the best as it might have been done, then it's my fault for having agreed to it, not the advice I could get. PACE: If I could add, as I recall, when the advice from the Navy was made -- the secretary became aware of it, it was a Friday or Saturday and the Navy was having a meeting and the secretary -- if I remember correctly -- walked down to sit down and talk to those folks about what their concerns were.

So to my recollection, as soon as we became aware of concerns about the memo that it went all stop and the secretary went about gathering up more data.

QUESTION: Mr. Secretary, were you mistaken or misinformed Friday when you said you ordered the stop to the process by the U.S. military to pay for positive stories...

RUMSFELD: Mistaken.

QUESTION: Could you give us an update on...

RUMSFELD: Apparently it was stopped, it was put under review. And I don't have knowledge as to whether or not it's been stopped. I do have knowledge it was put under review. I was correctly informed. And I just misstated the facts.

QUESTION: So where do we stand on that investigation then?

RUMSFELD: It's under review. General Casey is reviewing it.

QUESTION: And it is expected soon?

RUMSFELD: I don't know. You can ask Dorrance or Eric or somebody, and they can find out when he thinks they'll know.

Do you know?

PACE: I do not, sir.

QUESTION: I want to go back to the UAE port security issue. There's an undercurrent in all the stories, in a lot of the political pronouncements, that we can't trust an Arab country, especially one that had...

RUMSFELD: Well, I think that would be an unfortunate implication.

QUESTION: Two of the 9/11 hijackers were from the United Arab Emirates. It's an undercurrent. Can you...

RUMSFELD: We've had people from the United States we've picked up in Afghanistan.

QUESTION: OK.

RUMSFELD: So, I mean, one ought not, in my view, to hold a country of origin responsible for every citizen they may have at any given time, particular when people have multiple passports. PACE: I haven't seen it today, but there's something like three U.S. citizens who today are going to be charged with being willing to try to kill U.S. citizens.

So as I stated up front, the United Arab Emirates has been a very, very solid partner in our workings in the Gulf.

QUESTION: Do either of you have concerns that this debate may weaken our reliance -- our relationship with the UAE if it turns out -- they get pounded over this subject?

RUMSFELD: Most countries after a while understand the advantages and disadvantages of dealing with the United States. We have debates all the time and we have public discussions, and things are said and charges are hurled and allegations are made. And when the dust all settles, generally, the truth comes out. And I would, certainly, think not and hope not, but time will tell.

QUESTION: Mr. Secretary, the U.S. prosecutor in San Diego over the weekend released more information on former Congressman Cunningham's deals to take bribes in exchange for funding millions dollars in defense contracts to his favorite people, including one for IED defenses.

On top of the Boeing tanker thing, do you have any concern, or should taxpayers have any concern, about the integrity of our procurement process?

RUMSFELD: I have not seen the latest things you're referring to. Obviously, any time there's wrongdoing that is either alleged or confessed or concluded and judged, it is a matter of concern.

I don't know the details in this instance, of whether that was an earmark, the ones you're talking about, or not...

QUESTION: From his role on a House Appropriations Committee...

RUMSFELD: Without addressing that, which is a matter, as I understand it, that's in the courts -- and it's not for me to be injecting myself into it -- obviously, when there's an earmark by the Congress, any department of government ends up obeying the law and it becomes part of the law.

QUESTION: So it's Congress' problem to deal with or...

RUMSFELD: I don't know what you're talking -- I can't -- because I don't know what you're talking about, I'm not about to start hurling blame anywhere. I know that's old fashioned. It could be a lot more fun if you could do it willy-nilly, without being held accountable for it, but that's not the case here.

QUESTION: General Pace, on the Iraqi highway patrol, this is the organization that is believed to be sort of at the center of the militias and violence coming out. What's the U.S. involvement with the Iraqi highway patrol? Are we funding them? Are we training them? Do we have any influence? And do we have any responsibility for what's been going on?

And, Mr. Secretary, last Friday...

RUMSFELD: Let's do one at a time here.

QUESTION: OK. But can I have my second one?

RUMSFELD: We'll vote on it.

(LAUGHTER)

PACE: The Iraqi government has made it perfectly clear that they expect their armed forces and their police to uphold Iraqi law and to act in a reasonable, responsible way. And we are training their military and their police to those standards.

I do...

QUESTION: And...

RUMSFELD: We had not been training the police until very recently.

PACE: The 1st of October, we picked up the responsibility and we'll continue on with that.

I need to find out the exact unit you're talking about to see if we've had any contact with them at all. I'm not aware of it.

QUESTION: Last week, you gave a speech to the Council on Foreign Relations talking about media and public perception and what the U.S. has to do in the war on terror.

A few years ago, you were brushed back on this offensive strategic information, which seemed to me to be similar to what you were talking about on Friday. Are you contemplating any new structures or any new campaign plans? What is the way that you expect to do this? Because you had lots of problems put out there, but not so many solutions.

RUMSFELD: Well, if I'd have known the answers, I would have proposed them. I just don't. I'm in a question-asking mode. I'm in a thinking mode.

We're talking about these things internally. We've got one of the Quadrennial Defense Review road maps on this subject, which is going to proceed during the calendar year 2006, to think it through.

And we're talking to people inside and outside of the Department of Defense and inside and outside of the government.

It is not easy and I wish I knew all the answers to it, but I just don't.

QUESTION: General Pace, I wanted to ask you about the state of the insurgency in Iraq and your current military assessment. Do you believe you have fundamentally yet reduced their capacity to wage attacks against both U.S. troops and Iraqis? What do you see in the attack trends right now in terms of IEDs or other attacks?

And do you still think you see involvement potentially of Iran especially in the south, in shipping weapons across the border? What's your overall assessment?

PACE: If you take a look at year-to-year attacks, January of '06 versus January of '05, February of '06 versus February '05, the trend is down.

If you look at the last couple of months, the month of January was a little bit higher than was December and November.

There could be multiple reasons for that: Certainly the fact that the insurgents tried to stop the elections in January of '05 and failed; they tried to stop the writing of the constitution and failed; that they tried to stop the elections in December and failed; they are now trying to stop the peaceful organization and stand-up of the government that's been elected through peaceful elections.

So all of those things add into the attacks that they've been conducting, because they know that every single one of those steps that the Iraqi people have taken for themselves makes it more and more likely that the Iraqi people will have the kind of freedom and government that they would like to have in the future.

Difficult to know specifically how many insurgents still remain. What is knowable is that there are more and more Iraqis who believe that their government will provide a future for them that will be beneficial for them and their families, the fewer and fewer will feel a need to accept payment, so to speak, for attacking.

QUESTION: In the past, with the military and the senior leadership, you have talked in rough orders of magnitude about numbers of insurgents, both foreign fighters and Iraqi insurgents, if you will.

Do you feel at this point, now in this war, that we have altered, degraded, reduced, their ability to conduct attacks? Are there less insurgents than there were before?

What is their capacity to launch attacks?

PACE: I have never used a number. We have certainly degraded their leadership team. But it will be up to the Iraqi government and the Iraqi people to seize the opportunity they have right now and to allow their people to have jobs and a future that would tell their people that the insurgency offers nothing and that the new government is the way ahead.

RUMSFELD: Let me go back to your question about sectarian violence. I may not have answered the last half of it as fully as I would like. Needless to say, any time there's violence, sectarian or otherwise, it's something that one has to be concerned about and oppose and attempt to do something about.

There has been sectarian violence in that part of the world for decades. And I think the important thing to do is for us to be concerned about it, and for General Casey and his folks to work on it, and for the political process to go forward in a way that it would mute it and minimize it.

I think we also have to recognize that there's criminal elements at work here. And it's not trivial. It's fairly significant.

And I would add that it ought to be put in context. Think back.

I don't know whether the numbers for sure -- 100,000 or 200,000 or 300,000 dead Iraqi people; men, women and children filling mass graves in that country. And to isolate out violence today and say, "Oh, my goodness, there's violence today; isn't that different?" -- which you did not do, of course, but I'm stating it myself -- would be out of context, because in fact there's been incredible violence in tat country for year after year after year. And that does not minimize what's taking place today, but at least it puts it in a broader context, one would think.

QUESTION: Do you consider what Iran said about its security and the presence of British soldiers on its frontiers in southern Iraq, do you consider this as a threat?

And do you think...

RUMSFELD: What as a threat: Iran's statement or the presence of British troops in Basra?

QUESTION: Iran said that the presence of British troops in Basra is a threat to its security. So do you consider them as threatening the coalition forces and interfering in what's going on in southern Iraq?

RUMSFELD: Well, I do not consider the British forces in the Basra area as a threat to anybody except people inside of Iraq who are doing things they shouldn't do -- terrorists, outsiders making mischief, criminals, whatever -- but certainly not to Iran.

QUESTION: Iran will interfere more in southern...

RUMSFELD: It's not clear to me how they could interfere more. They've been very busy for several years now.

QUESTION: Can you expand on that a little bit?

RUMSFELD: No.

(LAUGHTER)

RUMSFELD: I could, excuse me, yes, I could, but I shan't. (LAUGHTER)

QUESTION: Will you?

RUMSFELD: No.

QUESTION: Turning to Asia, there's a report this weekend that the department is considering whether or not to allow the sale of F- 22s to Japan. So I'm wondering, could you comment on that issue, and can you talk a little bit about what...

RUMSFELD: It's not gotten to me, it just hasn't.

QUESTION: Could you talk a little bit about how you balance the need to protect sensitive military technology against the need to protect sensitive military technology against the need to bolster the capabilities of allies like Japan?

RUMSFELD: Very skillfully, I hope and I pray.

I mean, it's a process that the entire government's involved in: the Department of State, the Department of Commerce, the Department of Treasury, the White House, the Department of Defense. And they look at all of the advantages and disadvantages and they make calculations, and ultimately they decide to do something or not to do something. In this instance, I'm just simply up to speed, so I can't respond either.

QUESTION: Mr. Secretary, I wanted to see if I could get the benefit of your many years in Washington on the earmarks issues. It may be something you've commented on before, I don't know, but there are some members of Congress who feel that earmarks are a very legitimate way to do business. Others say that they're a source of corruption.

I presume that running an executive department, you'd rather not have them for the most part. What is your attitude about them? Are earmarks legitimate?

RUMSFELD: Of course, we spend a year with all the senior people and everyone throughout the department and every service, military and civilian, fashioning a budget. Then we work our way through OMB and the White House. And then it goes up to Congress in February.

And our hope is that it will be received, head nods and smiles and say, "Wonderful job, department. You have produced a perfect document." And they would then put "Approved" on it.

It has never happened. Never, ever, has it happened.

Indeed, the bill lengths have grown and grown and grown. They were in the less than 100 pages when I was here last time, 30 years ago. Now, they're in the 700 page, 800 page, 900 page range, depending on which one you're looking at.

And a lot of it is very specific requirements that you shall turn left here and turn right here and do this this day and do that that day.

Under the Constitution, that's Article I of the Constitution, the legislative branch. And the president proposes and the Congress disposes. And we do our best to get them to dispose as close as possible to what the president proposed.

And they have every right to do what they do. And it's really a matter for the legislative branch to sort through. And I just hope I live long enough to see them simply stamp on it, "Good job; approved."

QUESTION: (OFF-MIKE)

RUMSFELD: Not going to happen. Right?

QUESTION: General Pace, a new Turkish movie portrays U.S. soldiers in Iraq as heartless killers. Do the Joint Chiefs plan on sending any kind of protest to the filmmakers or voicing their opinion on this?

PACE: No. Never. There are filmmakers in many countries that have portrayed all kinds of fictitious things.

It's a fictitious movie. It clearly does not have any basis in fact, and there is no reason for us to comment on fiction.

QUESTION: How is this different than, say, the Washington Post cartoon, which the Joint Chiefs found very offensive?

PACE: We did find the cartoon in The Washington Post offensive because it was used as a means of getting across a message, and what message was being portrayed was up to the cartoonist.

But the fact that they've used a servicemember of the armed forces of the United States who in that portrayal had lost both arms and both legs was crude, crass, unnecessary to get the cartoonist's message across, and I thought was very disrespectful to the service of the men and women.

If you go out to Bethesda hospital today, you go out to Walter Reed Hospital today, you visit with those young men and women, you'll come away understanding why we felt that, that cartoon was inappropriate.

RUMSFELD: Second, the other distinction is that Turkey is a foreign country. The Washington Post cartoonist is not, the last time I looked.

And a foreign country is a diplomatic issue that's handled by the Department of State anyway. And what they may or may not do, I don't know. But it's not something that normally would be handled the way you're characterizing it.

Thank you very much.

NGUYEN: You've been listening to Secretary of Defense Donald Rumsfeld and chairman of the Joint Chiefs of Staff General Peter Pace talking about a number things, including Iraq and the deal that would let the United Arab Emirates, a company based in Dubai, run six U.S. ports. Of course we'll be monitoring this. And if you want to keep watching it, you can check it out on CNN Pipeline. I do want to let you know about another live event that we're waiting for, and that deals with the U.S. attorney general, Alberto Gonzales, going to be announcing just momentarily. We're going to put up a picture of the podium and show you as we're waiting for that press conference, dealing with charges on counterterrorism.

What we know so far is that three men have been arrested and charged in Ohio with providing material support to terrorism abroad. We hope to learn much more about these men and the plot, and that will take place live in just minutes. And when it happens, we will bring it to you right here on CNN.

You're watching LIVE TODAY. Stay tuned.

(COMMERCIAL BREAK)

HARRIS: A marketplace in southwestern Baghdad, scene of a deadly car bombing in the dinner hour today. The blast killed at least 20 people and wounded 25 more. It's the deadliest car bombing against civilians in the Iraqi capital in weeks. That attack followed two roadside bombings in central Baghdad. We are going to take you now to the Justice Department for an announcement on charges in connection with an alleged conspiracy to provide material support to terrorists.

Attorney General Alberto Gonzales.

ALBERTO GONZALES, ATTY. GENERAL: The U.S. attorney for the northern district of Ohio, Greg White, and assistant Attorney General Alice Fisher of the criminal division.

The Justice Department is charging Mohammad Zaki Amawi, Marwan Othman El-Hindi and Wassim Mazloum with conspiracy to commit terrorist acts against persons or individuals overseas, and with providing material support to terrorists. Their efforts to engage in this type of violent jihad, or holy war, occurred in Toledo, Ohio over the last year.

Amawi is also charged with two counts of making verbal threats against the president. Let me be clear about why criminal charges such as these are important in our fight against terrorism. We cannot wait until an attack happens. We will continue to use our criminal laws as Congress intended, to charge individuals once they conspire to provide support to terrorism or conspire to kill abroad.

As alleged in the indictment, these defendants had been living in the United States, where they have been engaging in weapons training and seeking to provide help in order to kill people abroad, including our troops.

Further, as alleged, all three defendants discussed training, making or manufacturing or using improvised explosive device, or IED. Amawi engaged in instructional session on the construction and use of IEDs and timing devices. Amawi stated that his aim was to target U.S. military assets.

As we know, one of the greatest dangers to our men and women fighting overseas in Iraq is the IED. Let me give you a snapshot of their efforts to wage violent jihad against the United States.

The three defendants educated themselves on how to make and use explosives and suicide bomb vests. The materials included both plastic explosives and nitroglycerin. The three carried out their own jihad military training exercises, which included the use of firearms and the shooting of weapons. One sought mortar training.

The three defendants also conspired to provide material support, including money, training, communications equipment, computers or personnel, including themselves, to co-conspirators in the Middle East.

The three also planned to use a business to justify travel to Iraq and conspired to establish a dummy nonprofit tax education organization to raise funds for the jihad.

Amawi also downloaded a video from a mujahideen Web site, which included step-by-step instruction on how to use a suicide bomb vest and passed this information on to another individual. Amawi also made verbal threats to kill or inflict bodily harm against the president of the United States.

If convicted of the most serious charges of conspiring to kill or maim people outside of the United States, the defendants could receive sentences of up to life in prison. I should point out that this is an indictment and that the defendants have not yet been convicted of a crime.

Individuals who aid terrorists from within our borders threaten the safety of all Americans. And this case stands as a reminder of the need for continued vigilance in the war on terrorism.

We are committed to protecting Americans, here and overseas, particularly the brave men and women of the U.S. Armed Forces who are serving our country and striving valiantly to preserve democracy and the rule of law in Iraq.

President Bush summarized our situation well during his recent remarks to the National Guard when he stated, "we are safer but we're not yet safe. America remains at risk. So we must remain vigilant. We will stay on the offense. We will hunt down the terrorists. And we will never rest until this threat to the American people is removed."

I want to conclude by thanking the FBI and the Toledo Joint Terrorism Task Force for their hard work on this case. John Pistole, deputy director of the FBI, will now make a few remarks and then we will be happy to take questions when he finishes speaking -- John.

JOHN PISTOLE, FBI DEPUTY DIRECTOR: Thank you, General. Good afternoon. The Department of Justice and the FBI remain committed to protecting Americans and keeping America safe. Through extraordinary cooperation, enhanced intelligence capabilities, and improved information sharing, we have achieved considerable victories against national security and criminal threats facing the United States.

Counterterrorism investigations are not simple. They are very calculated, and often complex, investigations. It is through the hard work, dedication and ingenuity of federal, state and local law enforcement that we have been able to detect the enemy amongst us and thwart terrorist plots.

These individuals are often hiding in plain sight and in cities like Lackawanna, Lodi, Torrance and now Toledo. I'm reminded of an inscription on the wall of the courtyard at our FBI headquarters across the street, which is attributed to a former director and which I'll paraphrase.

It says, in essence, the most effective tool against crime is the cooperation of the American people. I would suggest an updated version of that, in our post-9/11 environment would be, the most effective tool in combating terrorism is the cooperation of freedom- loving people worldwide.

We will continue to be vigilant and work hard to identify and disrupt terrorist operatives here in the United States and to help dismantle terrorist networks worldwide. Thank you.

UNIDENTIFIED MALE: We'll take questions.

QUESTION: Sir, how far had this group gotten in terms of enacting their conspiracy? Hey they actually gotten any explosive devices? How far were they along in the training?

GONZALES: Again, Pierre, I can't go beyond what's in the indictment. But, clearly, the folks had the motivation. And I think that they demonstrated they had the means. And so I think that because of the good work of the law enforcement community, I think America is safer today.

We think we have a very strong case here. But obviously, again, this is -- we're at the indictment stage and these folks are presumed innocent until proven guilty. But we feel like we have a strong case here. Yes.

QUESTION: The information that led to the arrest gained by the warrantless surveillance program?

GONZALES: Somehow anticipated that question might be coming. We feel very, very strong about this case, otherwise, obviously, we would not have brought forth the indictment.

And as I have said in previous discussions about the terrorist surveillance program, we are very much concerned about ensuring that we have done everything we can do to not jeopardize any prosecution, to not jeopardize any investigation, and I'll just leave it at that. So, again, we feel very, very good about this case and being able to move forward to a successful prosecution.

QUESTION: Can you tell me whether these arrests have any ties to KindHearts state organization in Toledo that's being investigated by the Treasury Department for ties to Hamas?

GONZALES: What I can say is that they are separate investigations. They also happen to be coordinated investigations. And so there's nothing in the indictment with respect to KindHearts, and so that's all that I can say about the relationship. Again, they're separate investigations but they're coordinated.

QUESTION: General, can you tell us which Iraqi insurgent group or groups these guys were linking up with or trying ...

GONZALES: Again, the indictment doesn't allege the specific ties to groups that these individuals might have had. And so I'm not going to go beyond anything that's not set forth in the indictment.

QUESTION: Attorney General, follow up question on the use of court authorized wiretaps, or non-court authorized wiretaps. Did this investigation start domestically? You had alluded to enemies hiding in our midst. That seems to suggest it was somebody in the U.S. ...

GREG WHITE, U.S. ATTORNEY: My name's Greg White. I'm the U.S. attorney in the northern district of Ohio. And I would say that information came to the bureau under the Joint Terrorism Task Force in Toledo from the community prior to this investigation being started.

QUESTION: Would that be the trainer listed in the indictment?

WHITE: The trainer would be one source of that information. But not the only source.

QUESTION: May I suggest that you had all the tools that you needed under the existing criminal laws to investigate this and bring it to indictment stage?

WHITE: I think the attorney general addressed that issue. But the allegations in this indictment are based upon traditional law enforcement kinds of efforts. Yes, sir.

QUESTION: What was the genesis of this alleged plot? Did these guys dream this up on their own or do you think they were they recruited?

GONZALES: Well, again, I can't go into -- I'm not going to speculate as to facts that are outside the indictment.

QUESTION: The indictment refers to recruits from outside of Toledo. Do you have -- can you give us some sense of the scale of the operation, how many people were recruited?

GONZALES: I'm sorry, but I can't do that. I'm not going to go, again, into facts that are outside the indictment.

QUESTION: Any sense for why these people would be directed -- directing jihad in Iraq and not conducting a domestic attack?

GONZALES: Again, that would be, again, speculating on facts that are not included in the indictment. I'm sorry.

QUESTION:: Now, I'm wondering was Amawi arrested in Jordan and brought back here?

GONZALES: Again, I'm not going to talk about facts that are not set forth in the indictment.

QUESTION: You can't say where he -- where he was arrested?

GONZALES: I'm not -- unless it's set forth in the indictment, relating to specific facts about this investigation, I can't talk about it. Yes, ma'am.

QUESTION: Can you tell me what part of Toledo they were residing in?

WHITE: Well, it's the general Toledo area. They were in different part of town. So the addresses I think are available to you.

HARRIS: OK, there you have it, the Justice Department announcing charges in connection with an alleged conspiracy to provide material support to terrorists. That these men, three men, in custody right now, under arrest. Scheduled to make an initial court appearance sometime today in Toledo.

The men are charged with conspiracy to kill people, planning terrorist attacks to carry out violent jihad. We will talk to our justice correspondent Kelli Arena in just a few minutes to get a wrap on this announcement.

But right now, President Bush has been crossing the country, as you know, talking up his plan for energy independence. As we reported a little earlier, he was in Colorado today, touring a lab that studies renewable energy resources.

Joining us from the White House to discuss details of the president's energy initiative is Energy Secretary Samuel Bodman.

Mr. Secretary, thanks for joining us.

SAMUEL BODMAN, ENERGY SECRETARY: I'm really happy to be here. This a great day for the Energy Department, so I'm particularly pleased to be here today.

HARRIS: Well, tell us why that's so.

BODMAN: Well, we have a lot going on. The president has announced a major commitment to advance the energy agenda. That's part of what he was visiting with the people out in Colorado about. Before that, he was in Wisconsin, dealing with -- that was yesterday, to deal with the initiative to create new lithium ion batteries. And before that, he was in a solar energy facility in Michigan. So in all of those cases, we're just -- we're very pleased with the increased commitment that the president has made to not just energy, but to science and technology generally.

HARRIS: Well, Mr. Secretary, the president is calling for a $1.2 billion investment in the development of the resources that you just talked about, advanced batteries, hydrogen and those things.

BODMAN: Right.

HARRIS: Is this -- just clear this up for me. Is this a new investment on top of where we are now and the money we're spending now?

BODMAN: It is a new investment in that each of the parts that you mentioned have had significant increases. For example, solar energy has seen a 50 percent increase, up to a level of $150 million. Cellulosic ethanol has got another $50 million increase, also up to $150 million. So we're seeing the -- in totality, a 22 percent increase in the president's commitment to renewable energy.

HARRIS: Well, Mr. Secretary, respond to this. There are a lot of people that say renewable energy sources will do actually little to relieve our dependence on traditional energy sources.

BODMAN: Right.

HARRIS: We're talking about oil and natural gas and those sort things, and nuclear energy. How do you respond to that?

BODMAN: Well, first of all, on nuclear energy, we believe that nuclear energy is the only way that we're going to be able to meet the increased demand for electricity in our country over the next 20 years. I mean, think that's generally accepted.

In terms of the commitments that are being made, our goal is to -- by the year 2025, is to reduce the demand for oil in our country by five million barrels a day. That's the goal. And we think that, with this commitment to cellulosic ethanol, that there is reason to believe that we can accomplish this. This is research, sir, and it's not a commitment, but it's something we think is reasonable.

HARRIS: OK. You're talking about 2025. I have to ask you, would this investment, this $1.2 billion investment the president is talking about, would that be money better spent finding more oil, A, in the United States, and, B, maybe from non-OPEC aligned countries?

BODMAN: Well, we believe that the -- this country going to be better off if we are able to produce domestically the renewable sources of energy that other parts of our economy in this country can benefit from.

We are all for the oil and gas business in this country. They've been great supporters of our economic growth. But it is pretty clear that we're running short of the capability of ever producing oil and gas at the same rate that we used to. And so we're trying to plan for that. And so we think 15, 20-year timeframe is the right timeframe in which to do that.

HARRIS: OK, so which of these alternatives -- we're talking about biofuels, we're talking about hydrogen battery, solar panels.

BODMAN: Right.

HARRIS: Which of these alternatives has -- I guess holds the most promise of coming online the quickest and offering real meaningful relief?

BODMAN: Well, I think that the cellulosic ethanol, I think, has a terrific opportunity to have a meaningful impact over a 15-year period. We believe over a 10-year period that we can get the price down where the ethanol that is produced is more than competitive with oil, as we now -- as we now price it.

And so I believe that we then would have a period of time to get that material into the system and, over the next ten years, could realize the savings of five million barrels a day. I think that's realistic. It's not a certainty, but it's realistic.

Solar energy is also very important component, and that's the reason the president made the call on the company in Michigan yesterday.

HARRIS: Energy secretary Samuel Bodman. Mr. Secretary, thank you for taking the time to talk to us. We appreciate it.

BODMAN: I'm very happy to be here, sir.

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