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Former CIA Official Under Investigation; Protesters on Both Sides of Immigration Debate Demonstrate at Capital: Authorities Say Vandalism Caused Deadly Pipeline Explosion

Aired May 12, 2006 - 13:00   ET

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

KYRA PHILLIPS, HOST: Hello, everyone, I'm Kyra Phillips at the CNN world headquarters in Atlanta.
Oil pipeline explosion. More than 100 people killed in Nigeria. Will the blast explode gas prices in the U.S.?

Vigilantes or illegal immigrant hunters? The Minutemen rally in Washington this hour. Border defense, will the National Guard soon be redeployed on American soil? LIVE FROM starts right now.

First this just in to CNN. The CIA's third ranking official investigated right now. Let's get straight to Carol Lin for the developing story.

Carol, what do we know?

CAROL LIN, CNN ANCHOR: We know that search warrants have been issued on the home and office of Kyle "Dusty" Foggo. He was the No. 3 man under Porter Goss, and just past this week has resigned his position when the director does leave.

The question right now, because he is being investigated by the FBI, the IRS and the CIA inspector general. Did he break the law in helping to award defense contracts to a certain Brent Wilkes?

This is the defense contractor who has been implicated in a congressional bribery scandal. Reporters have been saying that Wilkes was checked into the CIA, cleared through into the CIA building at least once by Foggo during his time in office.

Also, Foggo has admitted to attending poker parties that Wilkes had thrown. Social parties, that also included not only poker games but prostitutes, though Foggo says that he had never seen a prostitute at one of those parties.

Kyra, it looks like this investigation is getting down to brass tacks right now. They have issued search warrants on his Virginia home, Foggo's Virginia home, as well as his CIA office. This story just hit right before the hour, so we're going to be working it and tying to get reporters the scene, as well.

PHILLIPS: All right, Carol, we'll -- of course we know that they -- investigators, I believe, are at his Virginia home still right now, Carol. Is that right?

LIN: Yes.

PHILLIPS: OK. And there might be other -- and I know there were some other investigators that have also been deployed, as you said, to his office there at the CIA.

LIN: Right.

PHILLIPS: Any word on if we will get any kind of update within the next hour or so?

LIN: These are sealed search warrants. So it's unlikely that the FBI wants the general public to know what exactly they are looking for.

This just hit, Kyra. So obviously our Washington bureau is working this really hard. We're going to get you more as soon as we can.

But once again, the fact that they've served these search warrants, we do know that this man is in the eye shot of the FBI. Even his own agency inspector general is looking at his conduct and whether he awarded -- intervened illegally in awarding as much as $2.5 million in defense contracts, Kyra.

PHILLIPS: All right, Carol Lin, stay with us. We're going to continue to stay on top of this story.

John Roberts now joining us from Washington, D.C.

Should we talk about the San Diego connection, John? Foggo and also possibly Duke Cunningham. As we know we saw what happened to him and all the controversy surrounding him. Could there be a possible San Diego connection here?

JOHN ROBERTS, CNN CORRESPONDENT: I think what you need to do, Kyra, right now is, for the benefit of our viewers, is sort of put this all together to let you know what is going on.

The FBI is looking at the tangled web surrounding the Duke Cunningham bribery case. He's accused of taking some $2.4 million in bribes over the years in exchange for handing out lucrative contracts to people who were willing to give him money.

There are some outstanding issues in this case, which is what the FBI's looking into now. And they really surround three people. A fellow by the name of Mitchell Wade, who is suspected of giving bribes to Cunningham, who is cooperating with the FBI. Another fellow named Brent Wilkes, who is a defense contractor who is described in court papers as an unindicted co-conspirator in the Duke Cunningham case.

And then there is Kyle "Dusty" Foggo, who is the former executive director of the CIA, the former No. 3. He announced on Monday that he's stepping down. CIA officials said there was nothing unusual in that, that the career trajectory of the executive director typically follows that of the director of central intelligence, Porter Goss. He was Porter Goss's pick from the job. So it's not surprising that he's out.

And you know that's a pretty reasonable explanation. But there is all of this other stuff swirling around him.

The FBI is looking into whether or not Kyle "Dusty" Foggo improperly awarded a contract to provide bottled water for CIA personnel who were stationed in Iraq and I also believe Afghanistan.

These two go back to high school. They've also played poker together. At hospitality suites that Brent Wilkes set up in the Watergate and Westin Grand hotels in Washington, D.C. And the FBI is checking to see whether or not that relationship played any role in the awarding of this contract to a company that is associated with Wilkes. It's actually run by a relative of his but definitely has ties to him.

As well, the inspector general's office of the CIA is looking into the same thing. And the FBI wants to know whether or not this all could be tied into the broader Duke Cunningham case.

There are other people's names who are beginning to come up, as well, now, but currently it seems that the major focus of the investigation is Kyle Foggo. The FBI has executed search warrants on both his home and his office at the FBI. Sorry his office at the CIA, which would seem to indicate that he probably has not vacated that office yet, but -- because if he did what would be the purpose in searching it?

And because these search warrants were sealed, we don't know exactly what they were looking for, but it would probably be a pretty reasonable assumption to say that they're looking with anything that could possibly connect the awarding of that contract to that company associated with Wilkes and see if there is anything inappropriate in the awarding of that contract.

PHILLIPS: Well, John, just real quickly, we're mentioning Cunningham, Wade, Wilkes, and Foggo. Porter Goss, could we see a connection? Could Porter Goss be involved with these same issues of corruption?

ROBERTS: You know, no one has suggested that there is a connection with Porter Goss and the Duke Cunningham case. The only vulnerability that Goss would seem to have is that Foggo was his guy. I mean, he's known him for a long time. He picked him out of relative obscurity at the CIA and elevated him to the No. 3 position.

There have been past supervisors of Foggo's who did not give him glowing performance reviews. So you have to wonder why did Goss pull Foggo to be his No. 3? And it's a very powerful position in the CIA, because that is the position that really runs the business of the agency and is responsible for awarding all of these contracts.

So, it would appear, and you know, somewhat based on observances and opinions from other people, but it would appear that if there was no direct connection between Goss, Foggo and the Duke Cunningham case -- or even between Foggo or the Duke Cunningham case, because nobody is sure yet, it would seem the thing that Goss could be vulnerable on is whether or not people that he picked who were high places at the agency were somehow bringing disrespect or disrepute to the CIA.

PHILLIPS: John Roberts, appreciate it.

Guest workers or felons? Future citizens or deportees? Both views are loud and clear on Capitol Hill today. Not in Congress but just outside.

Members and supporters of the Minutemen Project, the self- appointed ad hoc border watchers, are rallying right now near the Capitol and so are supporters of legalizing illegal immigrants. The Minutemen traveled all the way from Los Angeles this week, along the way holding rallies in several cities, including the president's adopted home town of Crawford, Texas.

CNN's Tom Foreman is right in the middle of that rally. He joins us live with more.

Hi, Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hi, how you doing?

It's all over here but shouting, but boy there's been plenty of that on both sides.

Take a look as we zoom in here. These are the remaining members of both the protesting side, over here on the left. And the Minutemen over here on the right. They've hung around after this rally.

Throughout the rally the protesters were here yelling at the Minutemen, telling them they should go away, calling them racist, many things. But many of the people in the Minutemen crowd, who did outnumber the protesters pretty clearly.

Many of these people here made a real point saying, look, what they're fundamentally for is a legal following of the laws of this country. They just don't want people here illegally. There are a lot of issues they're concerned about.

But a lot of folks who are here make a point in saying they've never been involved in anything like this before. They only got caught up in the Minutemen cause because they felt like it wasn't being addressed enough by the government.

And as this rally moved across the country it got little bits of news coverage along the way. Many people decided they were going to come here today to send a message to Congress, to make sure that the administration and Congress heard that Americans are concerned about this issue.

The fundamental issue for them time and again coming back to the question of illegal entry into the country. Many of them say that they're not so much concerned about immigration overall. They feel that that can be dealt with and talked about in a rational manner. But they're saying that until Congress backs away entirely from any idea of amnesty, or of saying to people who are here illegally they can just stay, they're not going to be happy. And they came to send that message today.

Not a real big rally, but as we were discussing here earlier, it's the nature of the people who are showing up. Whenever you have rallies that produce a lot of people who openly say they've never been involved in politics, don't really want to be involved in politics, but have been triggered by this issue and they're taking days off from work to be down here, it's not the professional protester crowd. It's normal voting Americans who are concerned, and those people often can get the attention of Congress. That's what they're hoping for today.

PHILLIPS: And of course the president with his speech right in the middle of this immigration debate coming up on Monday. We'll talk more, Tom, no doubt throughout the next two hours.

We want to get to another story we've been working on right now. We've got Jeff Koinange on the line. We're talking about that ghastly scene in Nigeria that we've been seeing throughout the morning. Dozens of charred bodies littering a beach after an oil pipeline explosion just outside of Nigeria's main city of Lagos. As many as 200 people may be dead.

CNN's Africa correspondent, Jeff Koinange, on the phone with us now.

Jeff, what do you think? Terrorism, vandalism?

JEFF KOINANGE, CNN CORRESPONDENT: Good questions, but the Nigerian government is saying strictly vandalism with some very devastating consequences.

It looks like a bomb dropped here, Kyra. Just like you described. Charred bodies everywhere, smoke billowing into the skies. It looks really, really bad.

And the police here were explaining to us that basically what happened is vandals, they tap into these gas pipelines in order to siphon the fuel and sell it on the open market. What happens is maybe one of them just lit a cigarette or maybe a motorcycle backed up, sparks flew and literally went boom, incinerating everything in sight, Kyra. Terrible, terrible sight.

PHILLIPS: Jeff, we're seeing the video. We're obviously reporting how many people have died. But this is not a common occurrence, is it?

KOINANGE: It is very common, Kyra. We only hear about it only when it gets to this stage but pipelines are always being siphoned because a lot of them are over ground. And you know, opportunists see, you know, they go in there, they siphon them, they bring the fuel to the market and they sell it.

A couple of years ago, up to a thousand people died when a very similar situation happened. Someone lit a cigarette and boom, incineration all over. PHILLIPS: Search and rescue operations still taking place, Jeff?

KOINANGE: No, firemen have finished their job. They say the fire's out. Rescue, there's no one to rescue anywhere. The tough task is now taking the bodies to the morgue, because if they stay there another night, it's going to get pretty bad. So they're trying to secure the area and remove the bodies, Kyra.

PHILLIPS: Jeff Koinange, we'll stay in touch. Jeff, thanks so much.

Now the question we're asking here, will this blast set off another surge in oil and gas prices? Let's check in with Ali Velshi. The Dow right now pretty low, yes?

ALI VELSHI, CNN CORRESPONDENT: Yes, we're off almost 100 points on the Dow and another 25 on the NASDAQ.

But, no, interestingly enough, this is not -- oil is down right now, $1.32 a barrel to $72. But we've seen oil surge in the last week again from below $69 up to $72, and it was higher than that. Part of that is because of Nigeria. The two biggest concerns on the minds of traders right now is -- are Iran and Nigeria.

Now after Saudi Arabia, Mexico and Canada -- those three countries export the most oil to the United States. After that, you've got Nigeria. Nigeria's the fourth largest supplier of crude oil to the United States. So it's a major concern.

Now that area in which this happens, all the drilling for oil in Nigeria is from the delta area, the Niger Delta. It's a very impoverished region. And these thefts that Jeff was just talking about, that's common. Because the people who live there don't feel like they have a piece of the action.

But what's happened is in the last few months, they've had militias and sort of vandalism, and it's sort of coalesced into a bit more of a rebel movement in that Niger Delta, and they've been attacking western oil installations.

Royal Dutch Shell is the biggest installation in Nigeria. But just yesterday, two more Italian oil workers were taken hostage while under police guard. They were being escorted in an escort with police. They were taken hostage. And on Wednesday, an oil executive from Texas-based Baker Hughes, the exploration company, was shot dead, Kyra. Maybe not political, but there's a lot going on.

PHILLIPS: But you touched on something Jeff said right now. It's not being reported as terrorism, but you're talking about the vandalism. Are they stealing the fuel because they're not feeling like they have a piece of the pie?

VELSHI: Yes, because they're poor. And they know there's a lot of wealth coming from their area. So taking hostages tends to be a way to get ransom and stealing the fuel to be able to either use it or sell it. But in this particular part the world, they're very tightly connected because what started as an impoverished, we're upset that we don't get a piece of this action, has developed and has coalesced with political tensions in Nigeria already and there are elections next year. And the two have started to come together in the Niger Delta.

So people have taken advantage of that unrest and have started forming militias which can now easily disarm police who are guarding oil workers. It's becoming a very serious problem. And the world oil traders have taken into account that there's a lot of oil that comes out of Nigeria. If it really does stop or gets slowed down, that's a problem.

PHILLIPS: It's interesting to see if western-based companies will even stay there, considered all this. Ali, we'll keep talking about it throughout the hour. Thanks so much.

VELSHI: OK.

PHILLIPS: President Bush, also we want to mention, is going prime time at a crucial time in the immigration debate. He asked the networks for air time Monday night. Our White House correspondent, Elaine Quijano, has a preview now -- Elaine.

ELAINE QUIJANO, CNN CORRESPONDENT: Good afternoon to you, Kyra.

That's right, President Bush did, in fact, ask the networks for air time on Monday night to weigh in on the red-hot topic of immigration as the Senate gets ready to take up this issue next week.

Now earlier today, the president's focus was on Iraq, as he sat down with current and former defense and secretary of states.

But on the issue of illegal immigration, certainly, this is a highly-charged topic, one that has put the president at odds with member of his own party, primarily Republicans in the House, who believe tougher penalties and tougher border security measures are needed. They have been vehemently opposed to the idea of a guest worker program, which the president supports.

For his part, President Bush has insisted that a guest worker program would not mean amnesty. He says he supports the idea of some illegal immigrants not getting into the front of the citizenship line but getting into the back of the citizenship line.

The president has said in the past, as well, that he wants to see comprehensive immigration legislation that includes not only a guest worker program but interior enforcement and border security. And Kyra, we are told by officials here that border security will, in fact, be a main focus of those remarks on Monday night -- Kyra.

PHILLIPS: All right, Elaine Quijano, thanks so much. Let's talk more about.

The U.S. military stretched thin abroad and now this proposal to send American troops to a politically sensitive area for a job they technically didn't sign up for. Our senior Pentagon correspondent, Jamie McIntyre, joins me now.

Let's talk about these National Guard troops that we are -- have been discussing all morning. And what exactly would they do?

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, first of all, these are -- these are options that are being considered and drawn up by the Pentagon to see if there are ways that the U.S. military, specifically the Guard, can provide more support to states along the border.

And there are already National Guard troops supporting U.S. border patrol and local law enforcement with things like surveillance and logistics and some intelligence.

What they're looking at is substantially increasing the number of those troops that could help out local law enforcement from several hundred to perhaps several thousand across four states -- California, Texas, New Mexico and Arizona -- that border Mexico.

And again, keeping them basically in a support role but perhaps using the model that they used during the Hurricane Katrina, where they're activated by the state and under state control but are paid for by the federal government to try to relieve some of burden on the states. And that's one the options they're looking for and could be part of the plan proposed by President Bush on Monday.

PHILLIPS: Now, Jamie, you mentioned Katrina, and there was a lot of talk about, "Hey, wait a minute, are the military troops doing work of local law enforcement?"

But then, DHS, DOD said, "Look, this is a disaster. We've got to call NORTHCOM. Get help. Let military troops come in and try and fix the problem."

And that has been a big debate. So it looks like we're going to see same debate with regard to guarding the border.

MCINTYRE: Well, don't look for a line of tanks along the border with Mexico with heavily armed troops patrolling them. What you're going to see, again, is those troops in a support role.

And you know, under the Posse Camitatus law from the Civil War days, U.S. military troops are barred from law enforcement, although when they're in a state function, they can perform some law enforcement-like activities, such as patrolling, monitoring road blocks, that sort of thing.

But basically they're looking -- they're looking at providing more support to free up the border patrol. And again as you point out, critics say, you know, if you really need more manpower on the border, maybe you ought to hire more border agents, rather than activate Guard troops. That's part of the controversy, as well.

PHILLIPS: All right. So just so I understand this, if the states have the ability to activate the National Guard troops, then why don't they just do it? Versus having to go through Department of Homeland Security, which then has to go to Department of Defense. The Department of Defense goes to NORTHCOM, and then they're activated?

MCINTYRE: Well, you know, the simple answer to that is money. The states can -- the governors can call up the National Guard and operate them under the state control, and they have to pay for them with the state.

What they're looking at here and what I think some the governors of those states have made the case to the White House is that, look, you know, protecting the border is not just a Texas issue. It's not just an Arizona issue. It's a national issue. And so why shouldn't federal government pick up some of that cost?

And again, looking at the Katrina model, that's what they're looking at, picking up the tab for some of those troops but letting them remain under the control the states so that they could support.

The other option would be to so-called federalize the troops. Then they're under federal control, federal government pays for them. But most of the states don't want that. They don't want federal troops outside of their control operating in the states. That's what we saw in Katrina, as well. That was talked about, but it was ultimately rejected.

PHILLIPS: And that's where you see all the controversy among all the various leaders, state, local, federal.

Jamie McIntyre, thanks so much.

Straight ahead, hopes for the future amid a highly uncertain present. It's graduation day in Baghdad. All of the pomp and circumstance straight ahead on LIVE FROM.

Plus, more on our top story: The CIA's third ranking official, Kyle "Dusty" Foggo, being investigated.

The news keeps coming. We'll keep bringing it to you.

(COMMERCIAL BREAK)

PHILLIPS: Well, here's a look at how life goes on even in times turmoil. A joyful rite in passage today in the midst of the chaos in Baghdad.

CNN's Ryan Chilcote reports.

RYAN CHILCOTE, CNN CORRESPONDENT: Hey, Kyra. Well, we're used to report on the sectarian violence here. Just earlier this week the Iraqi president reporting that more than a thousand bodies had been found this month in the Iraqi capitol, many of them due to sectarian violence.

But at -- during this same week, it is also the time of graduation. So we went to one of them to find out what life is a little bit behind the scenes.

(BEGIN VIDEOTAPE) CHILCOTE (voice-over): It's not all death and gloom in Iraq. Certainly not at this Baghdad university, where it's graduation day for budding young scientists and engineers. Though, thanks to the violence, barely a third of the original members the class of 2006 are around to party.

UNIDENTIFIED MALE: Hi, there.

CHILCOTE: Frolicking to Iraqi folk songs and dancing to Baghdad's beats, everyone, it seems, was either armed with a camera or posing for one.

What makes this graduation party different from most others is the choice of dress.

(on camera) Alongside all the traditional costumes that the party, there are a lot of costumes that talk about the very contemporary, real problems that Baghdad faces today.

(voice-over) A couple dozen students dressed up like emergency workers and the teams that dispose of Baghdad's bombs, comic relief to cope with the violence that this year alone took the lives of eight students from the engineering department.

Students were warned by faculty not to talk to us about the war or politics.

"This graduation party means life doesn't have to stop even with all the violence and suffering," Ali (ph), an engineering graduate, says. "We have to move forward."

Away from the public displays of happiness, some express concern the student body itself might fall victim to the sectarian division growing outside the campus's walls.

Even inside the colleges, Jamil, an engineering student says, there are some sectarian problems.

(END VIDEOTAPE)

CHILCOTE: And more problems lie ahead for these students, Kyra. Unemployment in Iraq stands at 40 percent. And there are particularly few jobs for students like these with specializations in the natural sciences. Remember it's still a time of war here in Iraq -- Kyra.

PHILLIPS: But it's an interesting slice of life that we don't often see. I think this is the first graduation ceremony, Ryan, that we have had a chance to see. So obviously, they're looking forward, even in the midst of this war, to -- going into a profession and trying to live somewhat of a calmer life.

CHILCOTE: That's right, Kyra. That's what struck me, you know. It's difficult for us to get out, as you're well aware, with all of the security issues. It's difficult for these students to get out.

You know last month, the month of April, was one the bloodiest in Iraq, in particular for civilians, as I said earlier, the Iraqi president saying the Iraqi capitol alone more than a thousand bodies turned up.

These kids are surrounded by a whole lot of violence, a whole lot of negativity. Some of them are even a little bit pessimistic about the future, but despite all of that, they are still determined to make a go at it, to do the best they can to try to make a future for themselves.

PHILLIPS: Ryan Chilcote, we sure appreciate your report. Thanks so much.

Well, it doesn't look much from above, but it's what's underground that matters. Ahead on LIVE FROM, a cushion for the next oil crunch. A firsthand look at the nation's strategic oil reserve. Stay with us. More LIVE FROM straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: National Park's roughing it, and their budget squeeze could put a crump in your summer vacation, in terms of closed facilities, fewer rangers and higher fees. "USA Today" reports even the Gettysburg Civil War battlefield has had to cut staff. And 22 sites around the country have jacked up prices.

Adjusted for inflation, federal funding for the parks is lower than five years ago.

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