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More Details Emerge on Terror Arrests; Heathrow Airport Getting Back to Normal; Former Talk Show Host, Mike Douglas, Dies; Al Qaeda Connection to Terror Plot?

Aired August 11, 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.
Suspects arrested. Who are the young men accused of planning the transatlantic airline plot?

New details on the everyday liquids that could have been deadly explosives.

Plus, long lines, short tempers. American passengers continue to get a big no for carry-on items.

And later, Mike Wallace joins me live. In 1979, he sat down with the infamous leader of Iran. In 2006, he's done it again. Different times, different leaders, same Mike Wallace.

LIVE FROM starts right now.

Transatlantic terror alert day two. Airports less of a mess, passengers still under stress. Here's what we know right now.

Heathrow Airport, London, getting back to normal, slowly but surely, we're told. Small comfort to weary air travelers, all queued up and under the critical threat level.

No more arrests overnight. Still 24 suspects in British custody. The British government froze the assets of most of them.

And how many degrees of separation from al Qaeda? Investigators are following a clue and money trail. We're hearing two of the suspects may have met with an al Qaeda operative in Pakistan.

CNN's reporters are all over this story from London to Los Angeles. As always, stay with CNN. You'll be the first to know.

Well, British police first learned of the alleged plot from a tipster inside London's Muslim community.

CNN's justice correspondent, Kelli Arena, joins me with more on that. Now, yesterday, all the talk was about Pakistan and Pakistani intelligence. But now it looks like it was inside the community, the Muslim community, right there in Britain.

KELLI ARENA, CNN CORRESPONDENT: That's right there was someone, according to officials in both countries, the U.S. and the U.K., there was someone from the Muslim community right after the attacks last summer that the bombings in London, a time when everyone was very tense. And someone said, "Hey, you know, I've got this acquaintance, acting very strange, some peculiar activity going on. I think you guys should check it out." They did. And the investigation begins.

PHILLIPS: So that's how the months and months of investigations...

ARENA: That's right.

PHILLIPS: ... began?

ARENA: Yes, from a tip.

PHILLIPS: So that individual, I'm curious, under protective care? Is that -- I mean, do you need to worry about this individual?

ARENA: Probably not.

PHILLIPS: Could it lead to more?

ARENA: Well, you know, we have heard, at least here in the United States that there has been a real good communication between Muslim communities and law enforcement.

You know, look, it's in nobody's interest to have anything go wrong. And so we have been told this repeatedly, that FBI field offices have been reaching out to, you know, leaders, religious leaders, and political leaders, and community leaders, within the community, to say, hey, talk to us. If you see something that's strange, let us know. And apparently...

PHILLIPS: It's working.

ARENA: It's getting through. Yes.

PHILLIPS: What about the fact that these suspects met with these, this al Qaeda operative in Pakistan?

ARENA: Right. There are two suspects of the group, that we're told by government officials, have traveled to Pakistan to meet with an al Qaeda operative, what's called an al Qaeda operative. And that means a lot of different things these days.

His name is Matiur -- oh, his name just flew out of my head.

PHILLIPS: That's all right.

ARENA: Matiur Rehman. There's too many names I'm dealing with. And he is an explosive expert. So there's one connection.

There's also money, the money trail that leads by wire transfer back to the British group, as well. So lots of bubbling. And a lot of counterterrorism people and terrorism experts that I've spoken to today said, more and more we're going to see that there is a larger Pakistan connection than maybe is obvious right now. And maybe even some of the planning that took place there. We don't know that yet. We'll see.

PHILLIPS: Some of the suspects apparently -- one possibly for sure, maybe more, worked at Heathrow. What more do we know about that? Is that airport secure? Are authorities looking into more employees being connected?

ARENA: I mean that, you know, look, they're doing what they have to do over in Britain. There are still some suspects on the loose, as you know. We've heard, you know, half a dozen, four and five. That number's going to fluctuate. It will fluctuate throughout the investigation, because it's an ongoing investigation. And every time they get a new tip, it leads to more people.

But -- but we are assured that London, at least Heathrow, is doing all that it can, to make sure that there are no more people that may have been affiliated that are anywhere near the airport or the airline industry.

The same going on here. And as we spoke yesterday, there are leads that are coming back to the U.S.

PHILLIPS: Right, you mentioned that, because of phone records, et cetera. I know you're checking with sources. Let us know when you have anything new. All right. Kelli Arena, thanks so much.

Well, Europe's busiest airport is a lot busier today than yesterday but still not back to normal. CNN's Becky Anderson watching the comings and goings at London's Heathrow -- Heathrow, rather -- Becky.

BECKY ANDERSON, CNN CORRESPONDENT: That's right. I'll bring you up to date on what's going on here at Heathrow. There are planes taking off behind me. There were planes taking off late last night, but things are pretty chaotic here. Let me just bring you up to date on the investigation.

We now know the identity of 19 of the 24 who are suspects in a plot to blow up as many as 10 U.S.-bound aircraft. How do we know that? Well, the Bank of England froze the assets on demand of the British authorities and published the identity of those 19 there, between 17 and 35 years old.

And they tend to be British Muslim men. So the focus very much back on the British Muslim community, although reports in the newspapers here suggesting not everybody may have been of Pakistani descent. There are some, it is suspected -- or it appears at least, sources say -- there are some who may have been recent converts to Islam.

Anyway, back at the airport here, things are beginning to get back to normal. We just heard from the CEO of the British Airports Authority that runs Heathrow here, and he said this to us. "The situation is very challenging."

The flights schedule is very different to that which one would have expected on a Friday midway through August. It is extremely busy still in the terminals. There are delays, although the cooperation and patience of passengers and staff, he said, have allowed them to deliver this amended schedule.

The weekend will be extremely busy. And for anybody traveling, he had two points to make, and they are these. Do not leave home without checking your flights, particularly if your flight is U.S.- bound or U.K.-bound, effectively, and do come prepared to the airport.

Some notes for anybody who may be in the U.S. traveling to the U.K. anytime soon. This is what will happen as you get to the Heathrow Airport here. And expect to be able to buy things, for example, plane side.

First of all, remember that you can't bring any hand luggage on to your U.S.-bound plane. Everything that you take on -- and it's very, very little, we know that now -- your travel documents, your wallet, for example, must be in a clear bag.

When you get plane side, you can buy things at duty free. But you cannot take them on the plane. So if you are traveling to the U.K. and back to the U.S. any time soon, do remember that. Don't buy anything at duty free because you won't be able to get it onto the plane.

That's the situation. Extremely chaotic here at Heathrow Airport still.

Back to you.

PHILLIPS: All right. Becky Anderson, thanks so much.

Meanwhile, we get straight to the newsroom now. Fredricka Whitfield working details on a developing story. Some sad news actually to come across the wires, we've now confirmed.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Sad news, indeed, Kyra. Born Michael Delaney Dowd Jr., the well-known entertainer, talk show host, singer, all of the above, Michael Douglas, dying today at the age of 81. He died in West Palm Beach, Florida, where he lives with his wife.

You'll remember that his talk show ran from 1961 to 1982. He was, indeed, a fixture on American television sets across the country. He had a lot of admirers from ordinary citizens to a lot of entertainers, particularly comedians who loved being showcased on his show. Michael Douglas dying today and, by the way, Kyra, dying on today, what is his 81st birthday -- Kyra.

PHILLIPS: All right, and we're -- actually, our own Larry King knew him very, very well, Fredricka. And we're working to get Larry on the phone line any second now. We are dialing him up. So we'll talk more about Mike Douglas and just the impact he had on so many people within television and, of course, the arts.

And I'm told -- Angie, do you have him in the system? OK. We're going to have Larry in just a second. I'll get back to that. Meanwhile, we want to get back to the U.K. and the airline plot right now. High drama in High Wycombe and other London suburbs after a tip about possible terror afoot in one Muslim neighborhood.

A British agent was able to infiltrate a group of alleged plotters, blowing the whistle before they could blow up as many as ten planes. Now, thanks to the Bank of England, which froze the assets of 19 of the 24 suspects, we now know the names of most of the young men arrested yesterday. The youngest is 17.

CNN's John Vause is in London with more on this foiled plot -- John.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT: It's believed nine of the suspects came from this neighborhood in London, Walthamstow. Just across the road, police remain on guard outside one of the properties which was raided over the past 24 hours.

Earlier today, police arrived, removing bags of evidence: four, maybe five clear bags taken away. Inside those bags, VHS videotapes, as well as DVDs, what looked like ordinary everyday movies, but also handwritten documents and printed documents, as well.

This house here at Walthamstow, just across the road from the main mosque here. Many worshipers arriving for Friday prayers. The people inside this mosque say they do feel as if they're under siege. Earlier, all they would say is that "We know nothing. We know nothing about this alleged terror plot"

This scene here with the media and the police on guard outside this house being repeated in a number of streets here in Walthamstow. But also across neighborhoods in London, in particular High Wycombe and also in Britain's second largest city, Birmingham, searches still under way. Police taking away computers, as well as looking for any other documents which may give them evidence about anybody else who is possibly involved in this alleged terror plot.

John Vause, CNN, London.

(END VIDEOTAPE)

PHILLIPS: Damage control at the National Press Club in the wake of comments President Bush has made about the continuing war with Islamic fascists. The head of Washington's FBI's field office is meeting with leaders from the Muslim and Arab-American community. The goal, to stress the importance of their continuing relationship. They are to hold a news conference, and we'll monitor that and keep you posted.

And we're covering breaking news. You, of course, are the eyes and ears of CNN, as well. If you capture a great picture or video on your camera or your cell phone, send it to us. Just log on to CNN.com or punch "iReport" at CNN.com on your cell phone. We'll get it on the air. All right. Now I'm told we are finally able to connect with our Larry King. We wanted to get in touch, of course, with Larry. He knew Mike Douglas very well. Right now, the Associated Press reporting that Mike Douglas, one of the greatest American entertainers, has died.

Even on his -- today, Larry, his 81st birthday.

LARRY KING, HOST, "LARRY KING LIVE": Yes, he was -- Kyra, he was an innovator and he was the first of the -- well, among the first of the daytime talk shows to have a co-host every week. The show was produced by Roger Ailes who now runs FOX News.

He started and kept it for a long time in Philadelphia, which also made it special. The guests who appeared had to go to Philadelphia. That's where the studios were.

He originally started a local show in Cleveland and then moved to Philadelphia and gained his fame, syndicated in Philadelphia, seen on a multitude of stations.

And then, oddly enough, he at the end of his career was on CNN for a while. He did a late-night talk show that didn't quite make it. And then he was on Westinghouse, and that quite didn't work and then he retired.

He was -- he certainly didn't need any money. He was quite well off. He had a piece of his own show. And he lived in Florida. And he would appear occasionally on "LARRY KING LIVE." I don't know the most recent, probably within the last year, when we would -- someone famous would die that he knew or we'd pay tribute to someone and Mike would come on.

PHILLIPS: What stands out in your mind -- I mean, he's -- everything from being in the Navy to dabbling in television and entertainment. It seems like he did so much in his life, Larry. As you got to know him and developed a relationship with him, what stands out to you? What do you think made him so special and so good with people?

KING: The first thing you think of and anyone would say this about Mike Douglas, is nice guy. He was a genuine nice guy. You didn't see a mean bone in his body.

He was -- and he was a heck of a singer. He had a major hit record once called "The Man in My Little Girl's Life". It was impossible to listen to that record and not cry.

He had a geniality about him. It was easy to be around him. He wasn't the world's most incisive interviewer, but he had a relaxed measure about him. And he also had an incredible ability to get great guests. Every major figure in entertainment -- you had to do the "Mike Douglas Show".

And he had a co-host. Every week there would be a co-host who would share the podium -- not the podium, the table with him, the roundtable, as part of the show. And the co-host would do cooking and would sing songs and would -- it was part of the routine. He was -- he was special.

PHILLIPS: Let me ask you about that, Larry. I mean, you have the hour show that gets all the great guests. Everybody -- so many people from politicians to entertainment wants to be on your show. Did you look up to Mike? Did he influence you? Did he ever give you advice?

KING: Not so much advice, but he was certainly an influence, in that when I started doing talk, he had already established place on television. I first met him when he came down to Florida to interview Jackie Gleason. Jackie was a friend of mine. And so Mike came on my show with Jackie. And we had a great time, the three of us. And that's when I got to know him. And we went to dinner a few times.

And then I would occasionally run into him and see him when I would go to Florida. He's -- there's nothing more to say but that he was a genuine nice guy. He lived a long and fruitful life. I think he was a little disappointed at the end that things didn't work out with him. He did not leave broadcasting happy.

PHILLIPS: Why didn't he leave broadcasting happy?

KING: Because the last two shows didn't work, the one on Westinghouse didn't work, the brief try at CNN, that didn't work. He was out of place. He was not a nighttime host. He was a daytime host. Both those shows were nighttime shows. It just didn't fit.

You know, sometimes time passes you by. And time passed Mike by. He was best in his format, the daytime daily format. He got hurt at the end of the career when they left Philadelphia. They went to Los Angeles. He should have stayed in Philadelphia. It was one of the things that made him special. He did a lot for Philadelphia; Philadelphia did a lot for him.

PHILLIPS: You bring up...

KING: So I don't want to say he was bitter, because he had done so well in his life. I mean, his career spoke for itself. But he was not happy.

PHILLIPS: Well, you bring up a good point, especially in this business, Larry. I mean, it's addicting. I mean, look at Mike Wallace. He's 88. He doesn't want to stop working. He retires, comes out of retirement, you know.

And there is a point where you don't want to let it go, because it is such a wonderful career. At the same type, you don't want to outlive your renown, and it's tough to hear that maybe those last few shows were tough for Mike Douglas, considering how much he did and what a great life he did have and all the amazing people that he interviewed and spent time with.

KING: That's right. It was an entertaining (UNINTELLIGIBLE). It's very hard to give up anything, Kyra. PHILLIPS: Isn't that the truth?

KING: You don't want to let go. And so he did not go out gently into this good night.

PHILLIPS: Well...

KING: At the end of his life, he was very happy, you know, in retirement and -- I'm sure we have some clips from his last appearances on our show.

PHILLIPS: I know you'll be pulling those.

KING: In the archives there.

PHILLIPS: And talking about it.

Well, one funny note, Larry. Well, I don't know. Maybe some wouldn't think it was so funny. But remember -- I think I remember -- I'm hoping I remember this correctly, and that was when his show was live. It went into national syndication out of Cleveland.

And remember Zsa Zsa Gabor used some sort of inappropriate language and from then, that point on, they didn't do his show live anymore? It sort of taught everyone a lesson about live television.

KING: Except it didn't teach us a lesson, because she used the same word on "LARRY KING LIVE".

PHILLIPS: Did she use the same word?

KING: Fifteen years later.

PHILLIPS: Do we dare -- do we dare -- I was going to say, do we dare say the word, Larry?

KING: She was -- she was on our show and she had been involved in a traffic accident with a police officer.

PHILLIPS: Oh, that's right.

KING: The police officer said she cursed him. And she denied that. And a lady called in and she said, "Wait a minute. I was there."

And she said get that punk (ph) lady off the air. Although she sent us now into delay. We do go into delay.

PHILLIPS: Interesting. All right. Well, Zsa Zsa Gabor taught us a lot of lessons.

Mike Douglas gave a lot of great memories.

KING: Sure did.

PHILLIPS: We'll be talking about him, of course, more. I know you'll be talking a lot about him and paying tribute to him. Larry, thanks for getting on the horn with us.

KING: Thank you, Kyra, anytime.

PHILLIPS: All right. Remember Mike Douglas as we're getting word that the great American entertainer has passed today on his 81st birthday.

Well, coming up, chasing leads in the airline terror plot.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, CNN CORRESPONDENT (voice-over): As we look for a possible al Qaeda connection, the question is, have we already been warned?

(END VIDEO CLIP)

PHILLIPS: Christiane Amanpour investigates, only on CNN, the most trusted name in news.

(COMMERCIAL BREAK)

PHILLIPS: Well, if you thought al Qaeda when you learned of the airline plot, you may have cracked the case, you and everybody else in the world. There's no hard and fast evidence, so far as we know, and no claim of responsibility. But CNN's Christiane Amanpour reports the circumstantial evidence is unmistakable.

(BEGIN VIDEOTAPE)

AMANPOUR (voice-over): With the benefit of hindsight, the path to this the thwarted plot is clear. Just 13 months ago, four bombs struck London, all on subways and buses. They left 52 dead and hundreds injured.

That attack may point the way to what's happening now. What they learned then may also help investigators as they seek to unravel an al Qaeda connection. Is this a case of home-grown terror?

The July 7 London subway bombers were British born. That sent shivers through the country. Home-grown terror, it was said, not the work of al Qaeda, but sympathizers. But the truth turns out to be different.

A recent video from al Qaeda reveals two of the subway bombers not only went to Pakistan but actually received explosives training and direction from al Qaeda's senior most leaders.

PAUL CRUICKSHANK, TERRORISM EXPERT: British authorities have indicated that the bombs used in the operation were of such sophistication that they must have been the result of some form of al Qaeda training, probably in Pakistan.

AMANPOUR: So is there a Pakistani connection in this case? Something that might point investigators toward that al Qaeda connection? The early answer seems to be yes. New information from two U.S. government officials reveals that two of the suspects recently traveled to Pakistan. Government sources in the U.S. and Pakistan tell CNN that arrests in Pakistan may have made the difference. Intelligence from Pakistan led British authorities to speed up their investigation, make arrests, and shut down the plot.

CRUICKSHANK: Pakistan is the new Afghanistan for al Qaeda. The crucial thing is that individuals involved with al Qaeda are now in Pakistan. That savoir-faire, that knowledge is now in Pakistan, and it's been speculated now that the people involved in this current plot in London were also able to take advantage of that one.

AMANPOUR: Is this part of a terrorist game plan? Indeed, simultaneous attacks like the four London bombings on subways and buses, and the four hijacked jets of 9/11, are hallmarks of al Qaeda.

But the framework for this kind of attack seems to date back more than a decade to 1994. Back then, al Qaeda was already experimenting with blowing up planes, using liquid explosives. In fact, a year later, they plotted to blow up 12 planes flying from Asia to the United States.

And there was Richard Reid, the shoe bomber, now in federal prison. Just three months after 9/11, he tried to blow up a plane flying from the U.K. to the U.S. Reid was also a member of al Qaeda.

Finally, as we look for a possible al Qaeda connection, the question is, have we already been warned? Listen to what Osama bin laden had to say earlier this year. Propaganda, perhaps, but one can't help but wonder if he was sending a message.

OSAMA BIN LADEN, LEADER OF AL QAEDA (through translator): They're in the planning stages and you will see them in the heart of your land as soon as the planning is complete.

AMANPOUR: Christiane Amanpour, CNN, London.

(END VIDEOTAPE)

PHILLIPS: And Christiane Amanpour, uniquely qualified to cover al Qaeda and the war on terror. Later this month, see Christiane's investigative documentary on Osama bin laden, new insights into the man who declared war on the United States, from the people who know him: "In the Footsteps of bin Laden." See the two-hour premiere Wednesday, August 23, 9 p.m. Eastern, only on CNN.

Let's see. Fishing, scrapbooking, bird watching, or interviewing the president of Iran? Clearly retirement means something different to Mike Wallace then it does to the rest of us. Months after he tried to make us believe he was going to take it easy, Mike scores a journalistic coup. He'll clue us in, a little bit later on LIVE FROM.

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