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United Nations Meets to Discuss North Korean Missile Crisis; Former Enron Chairman Ken Lay Dies; New Jersey Casinos Shut Down

Aired July 05, 2006 - 15:00   ET

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

FREDRICKA WHITFIELD, CNN ANCHOR: The skies over Earth were busier than we realized yesterday. While many of us were focused on the launchpad at the Kennedy Space Center, North Korea was already seeing some rockets' red glare.
The first missile was test-fired at 2:32 p.m. Eastern, six minutes before the shuttle lifted off, the next at 3:04 p.m. Eastern. And, then, 3:59 Eastern, the long-range Taepodong-2 missile launched. Analysts say it's capable of reaching U.S. shores, but this one failed 40 seconds after the launch.

Other firings came at 6:12 p.m., at 6:31 p.m., and at 7:12 p.m., all Eastern times. A seventh missile was launched right there at 4:15 a.m. today.

Right now, the Japanese navy is searching for debris. All the missiles fell into the Sea of Japan.

North Korea is isolated economically, politically, ideologically, and, as of today, even more so. That's according to President Bush speaking to reporters today in the Oval Office on Pyongyang's test launch of seven various-range missiles.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The North Korean government can join the community of nations and improve its lot by -- by acting in concert with those who -- with those of us who believe that she shouldn't possess nuclear weapons, and by those of us who believe that there's a -- a positive way forward for the North Korean government and her people.

In other words, this is a choice they make. Yesterday, as you know, they fired off a series of rockets. The world had, particularly those of us in the six-party talks, had asked for that not to happen as a matter of good faith. The government made a different decision. And, so, it's -- it's their choice to make.

What these firing of the rockets have done is, they have isolated themselves further. And that's sad for the people of North Korea. We -- I spoke with Secretary Rumsfeld yesterday. He called me right after the launch, and he said they had preliminary information that they were going to analyze about the trajectory of the -- of the larger rocket.

The other five rockets that were fired, the Scuds were -- you know, their performance was pretty predictable. It's kind of a routine weapon that some of these nations have. I asked him this morning again when I met with him about the information. They're still analyzing, trying to figure out the intention of the -- the North Korean leader, as to why he would have fired the rocket and what they were trying to learn from it.

One thing we have learned is that the rocket didn't stay up very long. It tumbled into the sea, which -- which doesn't, frankly, diminish my desire to solve this problem. It's -- so, the first part of your question is, we're still analyzing what -- what the intentions were.

(END VIDEO CLIP)

WHITFIELD: President Bush is hosting Mikhail Saakashvili today. He's the president of the Republic of Georgia.

Not so much outrage, as disappointment from North Korea's neighbor -- frustration between North and South Korea is certainly nothing new. And the feeling in Seoul is, the missile crisis could undo what little progress the two have made.

CNN's Sohn Jie-Ae reports.

(BEGIN VIDEOTAPE)

SOHN JIE-AE, CNN CORRESPONDENT (voice-over): South Korean and U.S. troops on the Korean Peninsula are on constant vigil against North Korea. But when North Korea test-fired missiles, they were not the biggest concern of the people who live within range of North Korean artillery.

"This time, North Korea's firing will worsen its diplomatic isolation, as well as inter-Korean relationships," warns the foreign minister, Ban Ki-Moon.

People on the streets of Seoul echoed his sentiments.

"Isn't this a way for North Korea to become isolated in this age of peace? It's going backwards," says this man.

This office worker expressed disappointment. "We try to approach them as a same nation, but they return this gesture by resorting to brinkmanship again. This is selfish of them."

Some South Koreans took to the streets to express their outrage at North Korea and its leader. South Korea has made great strides in recent years in improving relations with the North. Hundreds of South Koreans vacation at a mountain resort in the North.

South Korean firms employ North Korean workers at an economic free zone just north of the heavily fortified border between the two Koreas. Perhaps more importantly to the North, South Korea provides its impoverished neighbor with a significant amount of fertilizer and food. How all that is affected by the missile test is not quite clear. PETER BECK, NORTHEAST ASIA PROJECT DIRECTOR, INTERNATIONAL CRISIS GROUP: Well, South Korea is really in the most awkward position right now, because, as the crisis with the North deepens, they're in a position where they're being asked to choose. Follow the line of the United States or -- or (SPEAKING FOREIGN LANGUAGE) stick with -- stick with Korean, you know, Koreans only, basically. And -- and Seoul really doesn't want to make a choice.

SOHN: But South Korea may soon have to make that tough choice, the hard-line stance that its friends in Washington and Tokyo seem to want, or continuing to try to warm relations with its neighbor to the north, a choice made tougher and tougher with each missile North Korea launches.

Sohn JIE-AE, CNN, Seoul.

(END VIDEOTAPE)

WHITFIELD: The launch heard around the world -- North Korea's test-firings light an international fuse. The U.N. Security Council is meeting today in emergency session.

CNN's Richard Roth joins me now with more on the global response -- Richard.

RICHARD ROTH, CNN SENIOR U.N. CORRESPONDENT: The United Nations Security Council will now consider a resolution backed by several countries, including Japan and the U.S., that would try to cut off funding and shipment of material and goods that could be used by North Korea in the production or use of nuclear -- excuse me -- of weapons such as missiles.

U.S. Ambassador John Bolton explained what Washington wants.

(BEGIN VIDEO CLIP)

JOHN BOLTON, UNITED STATES AMBASSADOR TO UNITED NATIONS: Because no member defended what the North Koreans have done. And I think that the tenor of that discussion shows how little support there is in the international community as a whole for these North Korean missile launches.

We will now begin discussion, as Ambassador Oshima said, of their draft resolution, and proceed in a deliberate fashion, hoping to reach agreement on it at an early date.

QUESTION: Ambassador Bolton...

BOLTON: Thank you.

(END VIDEO CLIP)

ROTH: It's correct that all countries deplored or condemned what North Korea has done. But Russia and China are not ready at this time to back a formal resolution that would impose sanctions of any kind on North Korea. Russia's ambassador explained. (BEGIN VIDEO CLIP)

VITALY CHURKIN, RUSSIAN AMBASSADOR TO UNITED NATIONS: I don't -- I don't -- I don't want to make any hypothetical assessments of -- of thresholds.

I think you can -- you can start from the point of very serious concern by Russia, shared by other members of the Security Council or Russia sharing the concerns of other members of the Security Council, whatever way you want to take it, and working together with other members of the Security Council in making it clear to North Korea that this is not the way to go about it, that this is -- this has been a deplorable development, and that we should work towards a diplomatic solution.

(END VIDEO CLIP)

ROTH: There will not be any vote tonight on any resolution, and it appears there will not be a statement by all 15 countries.

The North Korean ambassador to the United Nations made a rare appearance here at the United Nations headquarters building. He came over from his country's offices nearby, and was questioned by reporters on the street in the rain.

(BEGIN VIDEO CLIP)

QUESTION: ... tell us something, please, sir, Mr. Ambassador, please?

(CROSSTALK)

QUESTION: Why you broke the treaty?

(END VIDEO CLIP)

ROTH: That is the North Korean ambassador. That's earlier in the day, I believe, as he used his umbrella to fend off questions. Later in the day, he put the umbrella down a little bit, offered it to a reporter, but invited everyone to join him at the U.N., and declined to answer questions about motivation for his country and the missile launches -- Fredricka.

WHITFIELD: All right, well, the umbrella worked for him there at that moment.

Richard Roth, thanks so much.

And now on to the Middle East, where reports of a rocket fired from Gaza into Israel.

Our Paula Hancocks is in Gaza with the very latest.

Paula, what happened?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Fredricka, we do know that a rocket had landed in a city called Ashkelon. Now, this is an Israeli city about 12 kilometers, seven miles, away from Gaza.

Now, this is the second rocket that we know has come from militants to land in this particular city in the past two days. Now, on Tuesday, we saw one that hit the center of this city, the furthest that one of these militant rockets had ever reached before.

And the reaction from the Israeli prime minister after that one was that this was an unprecedented and severe escalation in the terrorist war. Now, directly after that first Kassam rocket, Olmert gave the green light to the Israeli military to do whatever necessary to move further into Gaza and also to try and create a buffer zone in northern Gaza, so to move tanks into northern Gaza, so these rockets cannot be -- cannot continue to be launched from that particular area.

Now, it's -- it's tense in Gaza City this evening. Everyone here knows that airstrikes do happen from Israeli air force, and they do happen in the early hours, from midnight onwards.

Now, in the early hours of this Wednesday, we saw the Interior Ministry being hit. That's the second time it's been hit in one week. And five people were injured in that particular airstrike.

Also, a Hamas school...

(GUNFIRE)

HANCOCKS: You may be able to hear some shooting behind me. That's actually a wedding going on at the moment, celebratory shooting.

So, Palestinians are getting on with it. They are carrying on with life. But it is tense, as people are waiting for the next airstrikes and future sonic booms -- Fredricka.

WHITFIELD: And, so, Paula, still at the center of all this is the Israeli soldier that's being held against his will. Any update on him?

HANCOCKS: Well, we're hearing very little on the word -- on the fate of the soldier himself.

We did have that deadline, 6:00 a.m. local time Tuesday morning from the militants who are holding him, saying: If our demands for Palestinian prisoner releases are not met by that 6:00 a.m. deadline, then it would be case closed for them. And they're -- that's exactly what has happened.

We heard on Tuesday morning, when that deadline passed, from one of the militants, saying: We're not going to tell the Israelis now whether or not he's dead or alive.

So, from that point of view, we're hearing very little. They're sticking to their word of not publicizing exactly what's happening. But this is one reason why they could postpone the -- the incursion into northern Gaza and have been for the past few days, because they are -- the Israelis are still working under the assumption that this soldier is alive, and they're still hoping to get him out of Gaza alive as well -- Fredricka.

WHITFIELD: All right, Paula Hancocks in Gaza City, thanks so much for that update.

The leader of a company, a defendant in court, but what was Ken Lay really like as a friend and as a family man? We will hear from one of his longtime friends, as we mark the life of the beleaguered businessman in our next hour of LIVE FROM.

(COMMERCIAL BREAK)

WHITFIELD: Ken Lay, tied to one of the biggest business failures in U.S. history, died this morning in Colorado. Lay was the former chairman and chief executive of Enron, a huge energy trading company before its collapse.

On May 25 of this year, Lay was found guilty of fraud and conspiracy. He and Enron's CEO were accused of lying about Enron's financial health. Lay was convicted on six counts, and, at the time of his death, was awaiting sentencing.

Ken Lay's extraordinary rise and excruciating fall is rooted in humble beginnings. Here's a CNN "Fact Check."

(BEGIN VIDEOTAPE)

WHITFIELD (voice-over): Ken Lay's story is straight out of a Dickens novel. He was born into a poor family in Tyrone, Missouri, 1942. His father became a Baptist minister, after an attempt to sell farm equipment ended in bankruptcy.

The young Lay helped the family make ends meet by delivering newspapers and mowing lawns. Lay was a Phi Beta Kappa graduate from the University of Missouri, where he received his bachelor's and master's degrees in economics. He then went on to earn his doctorate and served a stint in the Navy as an economist.

Out of the Navy, Lay landed a job as undersecretary of energy in the Nixon administration in 1971. He left government three years later and became his meteoric rise in the world of big business. In 1984, he took over the helm of Houston Natural Gas, which, a year later, merged with InterNorth, to form the new corporation Enron.

Nicknamed "Kenny-boy" by President Bush, Lay was known for his extravagant lifestyle. He rubbed shoulders not only with President Bush and his father, but also U.N. Secretary-General Kofi Annan and other celebrities. Lay's extraordinary fall from grace was triggered when Enron filed for bankruptcy amid an accounting scandal in 2001.

(END VIDEOTAPE)

WHITFIELD: When Enron was riding high, Ken Lay did, too. But when his company collapsed, when vast amounts of money and jobs were lost, the view of Lay took a very hard turn. After his death this morning, this reaction from people in Houston.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm shocked, speechless.

UNIDENTIFIED MALE: Very surprised, extremely surprised, but not -- not really that surprised, due to the stress that he was under at the time.

UNIDENTIFIED FEMALE: You know, I pray condolences to his family, and I hope that they're OK.

(END VIDEO CLIP)

WHITFIELD: More reaction now from someone who knew Ken Lay, Philip Carroll, a friend and neighbor, also former chief of Shell Oil. He joins us by phone.

Mr. Carroll, how shocked were you to hear of this news?

PHILIP CARROLL, FORMER SHELL OIL CEO: Fredricka, I was absolutely shocked. It's still very hard for me to -- to take in and believe. I -- I was both shocked and very saddened. And my heart goes out to Linda Lay and the whole family.

WHITFIELD: Did you know Mr. Lay to have heart problems or to be suffering physically late -- as of late?

CARROLL: No. I -- I had absolutely no idea that he had a problem with his heart. In fact, Ken was always one to take very good care of himself, and seemed to be in perfect health.

WHITFIELD: So, it's your view, then, that the stresses that came with the trial and everything surrounding it really helped promote his failing heart?

CARROLL: I think there's no question. The -- the enormous stress that he and his whole family have been under for the last couple of years was undoubtedly a contributing factor to this very, very sad event.

WHITFIELD: What were you able to see in your friend and neighbor what this trial, what the charges, what the ultimate conviction had done to him?

CARROLL: Throughout the trial, I -- I saw Ken very frequently and talked with him quite often.

And he -- he was entirely convinced of his innocence. He recognized that the fall of Enron was a great tragedy and one that he very sincerely regretted, but he was convinced that he had not done anything wrong, and would ultimately be vindicated by the -- by the trial.

Unfortunately, that -- that did not happen. But throughout it, he -- he kept his good grace and manner and an air of confidence that, ultimately, he would be vindicated.

WHITFIELD: He said he was a religious man, a family man. How would you describe him?

CARROLL: I think both of those are very good adjectives to use to apply to Ken Lay. He was deeply religious. And that showed in almost every element of his life.

And his family was extremely important to him. And he was always as good to them and loving to them as -- as any good father and husband would be.

WHITFIELD: Did you think a lot was revealed about his character, even during the trial, even what would ordinarily be a demoralizing walk in handcuffs into the courtroom, that he would still turn and smile and acknowledge members of the press and everyone else out there? What did that say about his character to you?

CARROLL: Well, I think it -- it said that he was basically a good and very outgoing man, and one that, as I said, had supreme confidence that he had done nothing wrong. And, in spite of the undoubted embarrassment, he bore up well under it, and he didn't take it out on -- on other people.

WHITFIELD: Philip Carroll, we thank you for your time. And we're sorry for your loss...

CARROLL: Thank you, Fredricka.

WHITFIELD: ... in the passing of your friend Ken Lay.

When Enron went bust, so did the lives and life savings of thousands of employees. Employees, investors in several Western states all sued Enron in civil court. But Lay's estate may not face any legal liability.

We checked with CNN senior legal analyst Jeffrey Toobin, who says that Lay had invested much of his money in Enron, and not much was left after paying his lawyers.

Coming up: The lights are on, but nobody's home. Why are casinos the big losers in New Jersey's budget showdown? I will speak with a man who needs customers to spend their money -- more LIVE FROM next.

(COMMERCIAL BREAK)

WHITFIELD: Ouch. Oil prices have closed at an all-time high today.

Susan Lisovicz is live from the New York Stock Exchange.

We're talking over $75 a barrel. Why?

SUSAN LISOVICZ, CNN CORRESPONDENT: That's right, Fred. Yes, crude closed at an all-time high of $75.19 per barrel. This is higher than what we saw last August, in the wake of Hurricane Katrina, higher than what we saw in April, with escalating tensions with Iran, which is an OPEC nation. And there are a few reasons. One is that the demand, of course, remains high. But we also got word today of postponed talks between the European Union and Iran over incentives to try and end that stalemate over Iran's nuclear ambitions. And, then, we also have a new fiscal quarter, when there's typically new speculative money coming into the market, and then something we have been talking about for the last 24 hours. And that is the possibility of a confrontation with North Korea, after word got out that it had launched seven missiles into the Sea of Japan.

So, it's just made for a very nervous time on Wall Street today. This is a day typically when you think that you might be baby-siting on Wall Street. But you have seen it, on the other hand, Fred, translate into a very broad-based sell-off. We saw it happen in Asia, continue through Europe, and here in Wall Street, declining issues beating advancers by a 3-1 margin here at the New York Stock Exchange and the Nasdaq.

The Big Board right now, the Dow industrials are down 76 points, or about two-thirds of a percent lower. The Nasdaq is down 35, or 1.75 percent lower. And that's actually -- the Dow was actually down triple digits earlier in the session. No question about it, though; it's been a tough day on the Street -- Fred.

WHITFIELD: Indeed. All right, Susan Lisovicz, thanks so much from New York.

Well, it's the one word no one visiting Atlantic City ever expected to hear: closed. Ever since gambling was legalized there 28 years ago, the casinos have been open day and night. But, this morning, the slot machines went silent, the roulette wheels stopped spinning, and the poker players threw in their cards, all because of New Jersey's budget crisis.

The casinos can't operate without state inspectors. And the governor says the inspectors can't work until the legislature approves a new budget.

(BEGIN VIDEO CLIP)

GOV. JON CORZINE (D), NEW JERSEY: The issues are the same today as they were yesterday. The Senate and I have laid down a framework to put New Jersey's people back to work, a sensible and honest compromise to end this crisis. It's time for leadership to act on that compromise or propose an acceptable alternative.

(END VIDEO CLIP)

WHITFIELD: Joining us from Atlantic City is Rob Stillwell, spokesman for one of the casino operators, Boyd Gaming.

Good to see you.

I know there's a lot of disappointment in Atlantic City, a lot of long faces there. ROB STILLWELL, VICE PRESIDENT, BOYD GAMING: Yes. When we woke up this morning, we were really in a state of dismay to start the day, just holding hope that during -- some time during the night, we would have got the call that would have allowed us to avert the closure.

But our gaming floor closed at 8:00 a.m., as ordered by the state.

WHITFIELD: And explain, for a lot of folks who don't understand, that, while many of those casinos are privately owned, they're impacted directly by this state budget crisis because of the state inspectors that have to be present at all of the casinos?

STILLWELL: Well, that's exactly right.

There -- there are state inspectors at each of the casinos here in Atlantic City that are monitoring the cash going in and out of the casinos, so that they can make sure that their tax revenue is protected and accounted for. It's really simply an auditing measure.

They're just here to observe. And we actually pay the salaries of those state workers directly. And that's one of the reasons that made this especially disheartening. Because of the large amount of tax revenue that our casinos generate for the state of New Jersey, the fact that we are paying their salaries, and we pay for that expense, you would think the governor and the lawmakers would have been able to find an exception for those employees, so that we could continue to operate.

WHITFIELD: S, do you have any options as a casino operator?

STILLWELL: No.

The government officially -- not at this time. I mean, we're exploring a number of different options, obviously. We have known about this since Saturday. And he had to grant a certain amount of time. We were fortunate enough to have the Casino Control Commission grant us a period of time in which we could prepare for the potential of a closedown.

And it was during that time that we exercised a number of legal options, which we're still pursuing in a number of different areas. But, at the end of the day, we need the budget impasse to be resolved in Trenton, and -- so that we can continue and -- and pick up where we left off.

You know, last week, Fredricka, we just opened a $200 million expansion to Borgata Hotel Casino and Spa here in Atlantic City, where we welcomed the likes of Wolfgang Puck, Bobby Flay, and Michael Mina.

And we had a lot of momentum going into the weekend. And it's a real shame that that has come to an abrupt halt. I think we will be able to pick up where we left off, but the sooner the better.

WHITFIELD: So, what kind of timetable are you guys expecting?

STILLWELL: Well, right now, it's basically hour to hour.

We're -- we're hopeful that there will be a -- a decision at some point tonight, so that we can resume operations. The Casino Control Commission has people in place on standby ready to help us expedite the opening of all of our casinos, should that order come down. We're ready to go.

I mean, our employees, most of them, some of them are still working here. As you know, it's just the gaming floor that was closed. So, our -- our hotel, our restaurants, our spa amenities, all of them are still operating and have skeleton crews.

But the lion's share of our employees are at home on paid time off at this time.

WHITFIELD: So, how much money do you think this is costing the casino industry up there right now?

STILLWELL: Well, I think the long -- once we get this resolved, the longer we get outside of this blip on the radar, I think it will, at the end of the day, be fairly minimal. What the important number to understand is the $1.3 million in tax revenue this industry generates for the state of New Jersey every single day. And that's really the number that the lawmakers need to be focused on.

WHITFIELD: And that's being lost as well. All right, Rob Stillwell, thank you so much, vice president of Boyd Gaming.

Well, this story we're following for you. We've got some live pictures right now out of Milwaukee. Firefighters are battling a three-alarm fire at a place called Auto and Scrap Recyclers. It's taking place in Milwaukee's northwest side. They're not quite sure why this fire started, but there happened to be a controlled burn either at the salvage yard or next door, and that took place earlier in the day.

Not sure if those are related, but you're looking at firefighters there on the scene trying to put out the active burning flames in some portions and putting out smoldering areas in others.

Coming up, in the market for a new house? Well, maybe you're looking for a certain number of bedrooms or bathrooms, or maybe this would sell you.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He walked us through the basement and said, hey, there's a bomb shelter here.

(END VIDEO CLIP)

WHITFIELD: Well, if current events are giving you the jitters, you're not alone. LIVE FROM ducks and covers, coming up next.

(COMMERCIAL BREAK) WHITFIELD: Big fire we're keeping an eye out now for in northwest Milwaukee. You're looking at firefighters actively trying to get ahold of this raging inferno there taking place at what's called an Auto and Scrap Recyclers business near 40th Street and Mill Road, if you know Milwaukee. In some areas, it seems like the smoke is kind of smoldering. They have a bit of it under control.

But then in others, you see the fire is actively burning. We don't know exactly why this fire started, how it may have been sparked, nor have we learned about whether any lives are in jeopardy there. We know the firefighters are on the ground and also in their fire engines nearby. When we get more information on this scene, we'll be able to bring it to you.

Meantime, another big story being watched around the world. North Korea, it's isolated economically, politically, ideologically and as of today even more so. That's according to President Bush speaking to reporters today in the Oval Office on Pyongyang's test launch of seven various range missiles.

(BEGIN VIDEO CLIP)

BUSH: The North Korean government can join the community of nations and improve its lot by acting in concert with those who -- with those of us who believe that she shouldn't possess nuclear weapons, and by those of us who believe that there's a positive way forward for the North Korean government or people. This is a choice they make.

Yesterday, as you know, they fired off a series of rockets. The world had -- particularly those of us in the six-party talks, had asked for that not to happen as a matter of good faith. The government made a different decision, and so it's their choice to make.

What these -- firing of the rockets have done is they've isolated themselves further. And that's sad for the people of North Korea. We -- I spoke with Secretary Rumsfeld yesterday. He called me right after the launch and he said they had preliminary information that they were going to analyze about the trajectory of the larger rocket.

The other five rockets that were fired, the scuds, were -- you know, their performance was pretty predictable. That's kind of a routine weapon that some of these nations have. I asked him this morning again when I met with him about the information. They're still analyzing, trying to figure out the intention of the North Korean leader as to why he would have fired the rocket and what they were trying to learn from it.

One thing we have learned is that the rocket didn't stay up very long. It tumbled into the sea, which doesn't, frankly, diminish my desire to solve this problem. It's -- so the first part of your question is we're still analyzing what the intentions were.

(END VIDEO CLIP)

WHITFIELD: President Bush is hosting Mikhail Saakashvili today. He's the president of the Republic of Georgia.

And we're giving you a rare opportunity to ask the president or the first lady a question. They're on "LARRY KING LIVE" tomorrow. E- mail us your questions via our Web site, CNN.com, and tune in tomorrow at 9:00 p.m. Eastern.

North Korea's one long-range missile barely made it off the pad before it failed. That's the one that some analysts believe could make it to the western U.S. As long as we're talking hypotheticals, Fort Greely, Alaska, is one place that could be called to respond with U.S. interceptor missiles.

CNN's Ted Rowlands is tracking that angle.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT (voice-over): Fort Greely, Alaska, is called the first line in America's missile defense, and this is the reason why. It is one of nine ground-based interceptor missiles here that the U.S. military says were ready for launch yesterday, and are ready if North Korea or anyone else sends a long- range missile at the United States.

LT. GEN. RONALD KADISH, MISSILE DEFENSE AGENCY DIR.: Our mission in the Missile Defense Agency is to defend the United States, our deployed forces, our allies and friends against all ranges of missiles.

ROWLANDS: Since 9/11, the U.S. has been building up a missile defense system. The first 55-foot interceptor was loaded into a silo at Fort Greely two years ago. In addition to the nine in place here, there are two interceptors at Vandenberg Air Force Base in California. There are plans, according to the military, for dozens more to be added at Fort Greely.

While nobody knows if the missiles defense system would actually work, at this point the military will still look to use it in an emergency. Only 10 ground-based interceptors have ever been tested and only five of those actually hit the target. Critics argue that in a real life scenario, success would be more difficult.

Ted Rowlands, CNN, Fort Greeley, Alaska.

(END VIDEOTAPE)

WHITFIELD: The man presumably responsible for North Korea's missile test is a so-called dear leader, Kim Jong-Il. Defiance is one of his most prominent characteristics.

Here's a CNN "Fact Check."

(BEGIN VIDEOTAPE)

WHITFIELD (voice-over): Brutal dictator, recluse, enigmatic cult leader -- just a few of the words western analysts use to describe North Korean leader Kim Jong-Il. In North Korea, Kim is officially referred to as "Dear Leader" or "Great Successor," a title bestowed after the death of his father, Kim Il-Sung, in 1994.

Some regard him as a dangerous madman, but not veteran Asia journalist Jasper Beckar (ph). In his view, Kim is a skilled tyrant whose each move is aimed to gain North Korea the international respect he believes it deserves.

Diplomats who have served in North Korea report Kim is vain and paranoid, a man known to drink comrades under the table, and who has an entourage of sex slaves. Kim also is said to wear platform shoes and favor the bouffant hairstyle in order to appear taller than five feet, three inches.

Western analysts Kim was born in Siberia in 1941, when his father was in exile in the former Soviet Union. According to North Korean accounts, Kim was born in a log cabin at his father's guerrilla base in North Korea's highest mountain in 1942.

Western analysts say Kim played a major role in two of the north's most infamous national acts: the 1983 bombing in Rangoon, Burma that killed several South Korean cabinet members, and the bombing of a South Korean airliner in 1987.

(END VIDEOTAPE)

WHITFIELD: Another rocket attack. For the second straight day, Palestinian militants take aim at the Israeli city of Ashkelon. A.P. is reporting that Hamas' military wing is claiming responsibility for the hit. Israeli television reports it landed in an orchard. No injuries, no damage. No one was hurt in yesterday's attack, either, which was the first time a rocket had traveled so far into Israel.

The prime minister called it, quote, "a major escalation in hostilities," and the security cabinet signed off on a wider military campaign. Israel's offensive in Gaza began last week after militants kidnapped this young soldier. They're demanding the release of hundreds of Palestinian prisoners.

A postponed meeting and a strong warning. Iran skipped a scheduled meeting with the European Union's foreign policy chief today. The E.U. wants to persuade Iran to accept incentives from the U.S., Russia, China and Europe in exchange for putting its nuclear program on hold. Secretary of State Condoleezza Rice had a warning today: she said Tehran shouldn't try to stall talks and that a substantive response is needed before G-8 leaders meet later this month.

In jail, and there they will stay. A federal judge denies bond for six terror suspects in Miami. A seventh is jailed here in Atlanta. All are charged in an alleged plot to blow up the Sears Tower in Chicago, among other buildings. The U.S. magistrate said he found the Miami Six to be a flight risk.

A developing story out of Miami right now. A bus carrying elderly passengers has overturned. We're getting live pictures from our affiliates in the region. At least one vehicle involved. More on this story right after a quick break. (COMMERCIAL BREAK)

WHITFIELD: More live pictures right now of a scene in Miami, a bus crashing; a bus which we believe to be loaded up with a number of elderly people. There's the intersection right now. That bus somehow intersecting with one other vehicle possibly. And apparently, the emergency crews there have set up a triage unit there, as well as you saw the EMS truck there on the scene to treat any of the people who may have been injured.

We don't know how many people were involved, but you can see that one vehicle right there. And then to the left of that yellow vehicle, which is pretty smashed up there, you will eventually see an overturned bus, which was carrying a number of the elderly people right there. And you can see some of the people there being treated there on the scene, as well as a number of spectators. More information when we get it.

Meantime, deep cover. It's not just a strategy for top level spies, it's a natural human response in times of crisis. People have been digging in to escape danger for centuries, including now.

CNN's Jim Huber goes underground to check it out.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The sky is falling! The sky is falling!

JIM HUBER, CNN CORRESPONDENT (voice-over): Where do we go to hide when the sky is falling or the river rising? If the air becomes thick with flu or tainted with poison, where do we run? There are several versions of the story of Chicken Little, all of which teach courage and an avoidance of foxes' den.

But as the warning screams grow louder by the day, of hurricanes and terrorism and a mutating strain of avian sickness, underground would seem the most logical direction. In fact, it always has. Archaeologists have only recently uncovered caves deep within the mountains north of Jerusalem, believed to have been constructed prior to the first Jewish war in 66 A.D.

It was when man began flying, however, and thus developed the ability to strike from above that we took sheltering to a new level. And when the threat of atomic annihilation became a reason for planetary panic, we built our own foxes' dens. Let the sky fall, Chicken Little. It can't get us down here.

UNIDENTIFIED MALE: It's OK, everyone!

HUBER: Beneath the old Woolworth's building in downtown Greensboro, North Carolina, for instance, remains a room today large enough to shelter 100 people standing. On a tiny spit of land off the coast of Palm Beach, Florida, called Peanut Island, a five-minute helicopter ride from the old Kennedy compound, remains the secretly- built emergency fallout shelter built by President Kennedy and his staff during the Cuban Missile Crisis. Inside one of the arched structures under the Brooklyn Bridge's main entrance, workers discovered just weeks ago a nearly half century old bomb shelter, still stocked with water, medical supplies, blankets, cookies, thousands of packs of crackers, all marked "for use only after enemy attack." Relics of a time long gone by, reminders of our childhood fears or our own little private foxes' dens.

Bob and Kelly Frater bought this 40-year-old house in Madison, Wisconsin, in 2002...

KELLY FRATER, MADISON, WISCONSIN: Watch your head.

HUBER: ... only to later discover the secret compartment in the basement.

FRATER: We didn't know it existed. And we were looking at the house with the homeowner and the realtor and he walked us through the basement and said, hey, there's a bomb shelter here.

HUBER: It has no water source, but there's still the hand crank to pump out radiation. Likely one of thousands just like it below the American soil line; what seemed like great ideas at the time, so much better than simply hiding under our school desks, as we were instructed to do.

UNIDENTIFIED FEMALES (singing): Just duck...

UNIDENTIFIED MALE: And cover.

UNIDENTIFIED FEMALES (singing): And cover.

HUBER: But in the years since not just 9/11, but Hugo and Andrew and Katrina and a hundred unnamed disasters, the trend toward personal protection seems to have returned.

The O'Dells, for instance, are just one of several families in Bonneau Beach, South Carolina, who installed an egg-shaped underground shelter in which they ride out storms. It has air ducts, but no filtration, can seat up to 10 people, but only a couple comfortably, and has the space to store supplies for several days. The $45,000 price tag seemed cheap, especially after the devastation Hurricane Hugo unleashed.

ARLIE O'DELL, BONNEAU BEACH, SOUTH CAROLINA: I didn't want to have to get up and drive every time I wanted -- every time I got someplace, when a hurricane or something come through. And I said, this is -- seemed like a cheap, easy way to do it and I don't have to leave. I'll be right here when it's over, I'll come out of my hole.

HUBER: And there are other, more elaborate, shelters both underground and in house, designed to withstand almost anything thrown at them, ranging in price from $5,000 to elaborate six-figure extravaganzas. The market, obviously, is there and growing.

(on camera): So where do we go when the sky is falling and the world seems ready to implode, when the sea is lapping at the topsoil and down is no longer an option? Maybe Stephen Hawking had it right after all. Perhaps driving to the moon is the song we all should be singing.

I'm Jim Huber for CNN.

(END VIDEOTAPE)

WHITFIELD: Well, this time yesterday, all eyes were on the sky following the launch of Shuttle Discovery. We'll check in on the crew. More LIVE FROM next.

(COMMERCIAL BREAK)

(MUSIC)

(BEGIN VIDEO CLIP)

VOICE OF STEPHANIE WILSON, DISCOVERY ASTRONAUT: After the day of our nation's independence, it's very fitting because it remind us that anyone and everyone can participate in the space program. Thanks very much and good morning.

(END VIDEO CLIP)

WHITFIELD: The music much better than a buzzer, right? Well, Discovery's crew woke up to strains of "Lift Every Voice and Sing," a request from Stephanie Wilson, only the second black woman in space. Job one for her and the other astronauts, however, checking the orbiter to make sure the heat shield was not damaged by falling foam during yesterday's launch.

They're using the robotic arm with remote cameras attached to check the shuttle's wings. Tomorrow, they dock at the International Space Station for about 10 days. So far, so good. That's the pronouncement from NASA.

As the crew of Discovery undertakes one of the most extensive in- flight inspections ever, the astronauts are using laser, digital and video cameras attached to the shuttle's robotic arm to capture every angle of Discovery. They're looking for any damage from yesterday's launch indeed.

They're also getting bit busy, ready for tomorrow's rendezvous with the International Space Station. Flight director's say everything's a go. LIVE FROM will be right back.

(COMMERCIAL BREAK)

WHITFIELD: Well, now the "Closing Bell" is about to ring on Wall Street. Let's go straight to Susan Lisovicz at the New York Stock Exchange -- Susan.

(STOCK MARKET REPORT)

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