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CNN Live Today
British Police Today Questioning a Dozen Men Rounded Up in Anti-Terror Raids; Issue of Terrorism, How Best to Guard Against It Again Topic on Capitol Hill
Aired August 04, 2004 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We'll get started here at CNN head headquarters Atlanta. I'm Daryn Kagan.
We begin with a look at what is now in the news. Police in Britain are interrogating 12 men in connection with possible terrorist activities. Police nabbed the suspects in raids Tuesday across the country. Pakistani authorities say at least one of the arrests was made after a Pakistani intelligence official shared information with British authorities. Another man also picked up in the raid has since been released. More in a live report in just a few minutes.
To Iraq, sources say 12 Iraqis are dead after bloody clashes between police and insurgents in Mosul. Explosions, grenades and rifle fire were heard around the city. Twenty-six people were hurt. Earlier in Mosul, a roadside bomb exploded slightly damaging vehicles in a U.S. military convoy. Officials from a nearby hospital say the blast killed two Iraqi civilians and injures two others.
Four Jordanians are safe this morning after being released by their hostage takers. A family member of one hostage says two tribal chiefs in Fallujah negotiated the group's release, five days after they were taken into custody, and hours before the proposed deadline for their beheadings. All four are back in Jordan and said to be in good health.
Newly updated travel warnings from the U.S. State Department urge Americans to leave Gaza immediately and to hold off travel to Israel and the West Bank. The warning cites strong potential for violence against Americans, following the recent kidnapping of another U.S. citizen and foreigners there.
We're keeping you informed. CNN, the most trusted name in news.
Live this hour, on Capitol Hill a hearing is under way on the 9/11 Report and its recommendations on improving the nation's first line of defense, its intelligence community. We'll take you there live with our Ed Henry in just a few minutes.
We're going to begin this hour in the war on terror and the latest offensive. British police today are questioning a dozen men rounded up in anti-terror raids that were launched across the country.
CNN's Jim Boulden is in London with details on a possible connection to Pakistan.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (on camera): British police are refusing to confirm that information from Pakistan led to some of the arrests that took place on Tuesday. Behind me is the Paddington Green Police Station where 12 men continued to be interrogated by the British police. They were arrested on Tuesday and charged under the Terrorism Act of 2000.
CNN has learned that information from the alleged al Qaeda computer expert, Muhammad Naeem Nor Khan, who was arrested in mid July, led to at least one of the arrests on Tuesday. Now, British police very rarely give information on terror arrests and these men can be held for up to 14 days without charge. These men were arrested yesterday throughout London and in the north of the country. And witnesses say it was quite dramatic during the day when the police raids were taking place.
UNIDENTIFIED MALE: I was up the ladder and I noticed the flashing lights. And I realize they block the traffic down there and they prevent the traffic coming down here and turning. Police were standing there with his weapon. I don't know what -- a rifle, whatever it was. Then I realized there was a brown car and the front door was open and an officer was holding this guy over the car. And he must have held him there for well over an hour.
BOULDEN: The police say that ongoing intelligence-led information led to these arrests and that it concerns, quote, "international terrorism." Now, under the Terrorism Act of 2000, the 12 men currently under arrest can be held without charge for the next 14 days. And then they must be charged or let go. It must be noted that over 600 people have been arrested under the Terrorism Act of 2000 since 9/11, and the vast majority of them have been released without charge.
Jim Boulden, CNN, London.
(END VIDEOTAPE)
KAGAN: Meanwhile, a senior U.S. military official sells CNN of a new thread connecting Osama bin Laden and Jordanian terrorist Abu Musab al Zarqawi. The source says that intelligence indicates that al Zarqawi was trying to communicate with bin Laden about the insurgency movement in Iraq within the past few weeks. Zarqawi is blamed for a number of deadly attacks and kidnappings in Iraq. More on that story with our Barbara Starr just ahead.
First though, the latest break from the intelligence community has reportedly come from a man at the hub of al Qaeda's communications. It's not just how much he knows but how much he is saying as well.
Our Justice correspondent Kelli Arena has details on that.
(BEGIN VIDEOTAPE)
KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Homeland Security secretary Tom Ridge defended the decision to partially raise the nation's terror alert, even those investigators say surveillance of potential targets was mostly done before September 11.
TOM RIDGE, SECRETARY, HOMELAND SECURITY: One could argue logically if you've taken a looked at potential sites with this kind of information, at least if you're thinking about it, we've got to take that very seriously.
ARENA: Law enforcement sources say the intelligence indicates there are about 20 potential financial targets, broken down into three categories depending on how much information was gathered on them. For example, the New York Stock Exchange is in Category 1. Al Qaeda had collected a lot of detail and conducted extensive surveillance. The Bank of America in San Francisco is in Category 2, meaning there is less information in databases.
While the potential targets have received a lot of attention, U.S. and Pakistani officials say the real intelligence coup is coming from interrogations of alleged al Qaeda computer expert Muhammad Naeem Nor Khan.
SHEIKH RASHID AHMED, INFO. MINISTER, PAKISTAN: We have some valuable information from them and we are interrogating an investigation in this case. and I think this is a great achievement of the security forces.
ARENA: As one source put it, Khan is emerging as a key player in the communications network of al Qaeda. According to intelligence officials, Khan told interrogators al Qaeda used couriers to get messages and computer disks to him. He then posted coded messages on web sites and quickly deleted the files. According to Khan, he used e-mail addresses and web sites only a few times to avoid detection.
KEN PIERNICK, FMR. FBI COUNTER TERROR. OFFICIAL: I think he was profoundly significant, that we've penetrated into their communications node is just an utter -- an absolute coup.
ARENA (on camera): U.S. government sources say they've asked Pakistani officials to present specific questions to Khan related to ongoing investigations. If he's being as candid as it sounds, they say there is great potential to move the ball forward.
Kelli Arena, CNN, Washington.
(END VIDEOTAPE)
KAGAN: The issue of terrorism and how best to guard against it is again the topic on Capitol Hill. The House Select Intelligence Committee is reviewing the 9/11 Report and discussing the recommendations.
Our congressional correspondent Ed Henry joins us now to take a closer look.
Ed, good morning. ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Daryn. These congressional hearings taking a close look at the 9/11 Commission's recommendations for reform. They really started off with a bipartisan note, but we're starting to see some partisanship flare up yesterday at a House hearing. We saw Democrats, like Henry Waxman saying the president's plan for a national director of intelligence falls short. They believe that this official will not have enough power, will wind up being a figurehead.
Then this morning at that House Intelligence Committee hearing, that you mentioned, there has been a little battle developing here between the Republican Chairman Porter Goss, and the Democratic ranking member Jane Harman. Basically Mr. Goss had announced there would be a series of high-profile witnesses there, including the 9/11 Commission leaders Tom Kean, Lee Hamilton, also former CIA director George Tenet.
But then we found out, at the last minute this morning, that none of those top witnesses would actually be showing up. A Goss aide told me earlier that this was just a scheduling mix-up. The 9/11 Commissioners and others are trying to get there; they're trying to actually show up at a future date. But what Democrats are saying privately is they believe this shows that Republicans have just been slapping some of these hearings together, not putting enough time into it. Just trying to show like they're acting.
And in fact, Democratic ranking member Jane Harman a little earlier at the hearing said she thinks it's enough -- we've had enough hearings, it's time for legislative action.
(BEGIN VIDEO CLIP)
REP. JANE HARMAN (D), CALIFORNIA: So why isn't our committee moving faster? As we all know, our intelligence community was created in 1947 to fight an enemy that no longer exists. Put another way, we are using a 1947 business model to confront a 21-century threat.
(END VIDEO CLIP)
HENRY: Meanwhile, the 9/11 Commissioners are hitting the road. They're actually trying to drum up support from coast to coast for their recommendations for this reform plan that they've put forth. And here is what Slade Gorton, one of the Republican 9/11 Commissioners, said yesterday in Seattle.
(BEGIN VIDEO CLIP)
SLADE GORTON (D), MEMBER, 9/11 COMMISSION: We are causing congressional members and staffers to work during August when they really didn't want to, in many respects, so that Congress can consider a significant number of these recommendations in September and October. This is a good thing. It's an important matter, because essentially we have said there is a bomb out there and the fuse is lit.
(END VIDEO CLIP) HENRY: Daryn, these commissioners are basically saying that with these new terror threats there is new urgency for Congress to act, to follow up quickly. And they're urging that lawmakers put aside some of those partisan differences and actually get something done this fall --Daryn.
KAGAN: Which leads to my -- that leads to my first question of the morning for you. And that is, let's talk bottom line here. And that is dollars. Isn't that what the real debate is over here, when you're talking about a new intelligence chief? How much power -- how much budgetary power he or she would have versus the Defense Department?
HENRY: Absolutely. What the commission called for is what they basically term a "quarterback," someone who can call the plays and take charge of the field, and basically try to prevent another 9/11 by actually being in charge. There is no one intelligence official that currently can pull all the information together and really lead the effort in trying to prevent another 9/11.
And what critics are saying is that the way it is currently structured, the way that President Bush has put it forth, he has not actually given this official budget authority. So you're right, what Democrats are complaining, and what actually some bipartisan 9/11 Commissioners said yesterday on Capitol Hill, is that it will wind up being a figurehead -- Daryn.
KAGAN: Ed Henry on Capitol Hill, we will be back with you in the next hour. Thank you, Ed.
Police have returned to a Salt Lake City landfill to resume their search for the body of Lori Hacking. Meanwhile, a judge has set a half million-dollar bail for her husband Mark. He is now being held in the presumed murder. During that hearing, prosecutors said that Hacking has admitted the murder while a patient at a psychiatric hospital. He is described as saying he killed his wife when she was asleep and discarded her body in a dumpster.
This surveillance tape that we're looking at from a convenience store might be the last time that Lori Hacking was seen alive. The tape comes from a convenience store. Four hours after this tape, Mark Hacking returns to the store in his wife's car for cigarettes. It is 1:18 a.m. in the morning, hours before he reported her missing.
A story that exploded in tabloid headlines almost eight years ago has quietly entered a new chapter in the dead of night. Prison officials in Washington State this morning quietly released Mary Kay LaTourneau, the former grade school teacher convicted of rape in a long-running affair with a pre-teen student.
CNN's Kimberly Osias joins us. She is at the state women's prison in Gig Harbor, Washington.
Kimberly, good morning.
KIMBERLY OSIAS, CNN CORRESPONDENT: And good morning to you, Daryn. Well, they called it love. Prosecutors, however, saw it a little bit differently calling it rape. But today Mary Kay LaTourneau can be called an ex-convict. She walked out quietly about 1:00 a.m. here at the Washington State Correctional Facility for Women to a number of demonstrators outside carrying signs saying "I'm 18" and "Take me."
She was behind bars for seven years for having sex with a sixth grader, Vili Fualaau. She did what many would consider taboo, crossing ethical, moral and legal lines as his teacher. Pregnant by Fualaau, Mary Kay LaTourneau pled guilty to two counts of child rape back in 1997. After only five months in jail, a judge gave her leniency, gave her a second chance. But right after her release, she defied a court order and was caught having sex in a car with Fualaau.
She had about $6,000 cash and clothes. She landed back in jail, where she gave birth to the pair's second child. Now, she is starting again. But this time, she has to register as a Level 2-sex offender. She will obviously be under very close scrutiny for three years: where she works, where she lives.
And speaking about where she works, she will no longer be able to work with or teach children again. And as far as any kind of relationship, she will have to report that to authorities as well. And speaking of relationships, there is a still a restraining order against Mary Kay LaTourneau and Vili Fualaau. However, Vili Fualaau is now 21, so he can petition a judge to rescind that band -- Daryn.
KAGAN: Kimberly Osias in Washington State. Kimberly, thank you.
We're going to take a look at a custody case of a different kind. There is a settlement in a bizarre case of a woman who gave birth to a baby who was conceived from the wrong embryo. Now another couple wants custody of that child.
Later, the duel in Davenport. President Bush and John Kerry battle for Iowa voters in almost the same spot, and just about the same time. Which rally would you go to? A live report is just ahead.
And if all this politics is leaving you a little bit dizzy, you're not alone. We'll take you to Florida, where they're lining up to vote in the bobble head election.
This is CNN LIVE TODAY.
(COMMERCIAL BREAK)
KAGAN: Well, this is the morning after, Alex. Clean-up crews are combing the coast of North Carolina this morning checking the damage. And officials have called in the National Guard. The hurricane is now well out to sea, but not before it pounded the coast with 100 mile per hour winds, high tides and flooding. No injuries have been reported.
Just having a little bit of fun? That is how Lynndie England is said to have described the now infamous photos of her at the center of her prison abuse hearing. We'll tell you what else she had to say as the second day of pre-trial hearings open today.
And mortgaging your future. There is Gerri Willis; she has some thoughts on that.
Hi, Gerri.
GERRI WILLIS, CNN-FN PERSONAL FINANCE EDITOR: Hey, Daryn. Good to see you. Thirty-year fixed rates hovering at about 6 percent right now, but they could go higher. We'll tell you what you need to know when CNN LIVE TODAY continues.
(COMMERCIAL BREAK)
KAGAN: If you are shopping for a home of your own, we have just the person for to you talk to. In fact, now might be a good time to buy one. Experts interest rates to rise over the next month or so. So, how can you get a good deal?
Here with her "Top Five Tips" is our Gerri Willis live in New York City.
Gerri, good morning.
WILLIS: Good morning. Good to see you, Daryn. First off, you've got to know the jargon when you're shopping for a mortgage. Most people know what a 30-year fixed rate mortgage is but what about an "adjustable?" And what do all the ins and outs mean? Well, if you're getting a three in one or five in one mortgage, that means that the initial rate is fixed for three or five years. And then the rate readjusts each year and every year. So you can expose yourself to rising rates.
Make sure you understand "annual caps." That's the annual limit on how much rates can go higher on your mortgage. Keep in mind all those technical details, Daryn. It will be very important.
KAGAN: There will be a quiz in the morning.
(LAUGHTER)
KAGAN: And not just on what's happening now but you have to look into the future as well.
WILLIS: That's right. You know, Daryn, we've got the fed meeting next week. And they could raise rates, which ultimately could impact mortgage rates. Expectations among mortgage professionals out there is that rates will go higher. Keep in mind here that at about 6 percent, which is where the 30-year fixed rate is right now, we're really at lows. The long-term average is about 8 percent. So you're still looking good on that rate. But every tiny little hundredths of a percent counts, because it means so much to what you pay each and every month.
KAGAN: And the key word is "you." Because what works for one person might not work for someone else's life and lifestyle. WILLIS: That's right. You know, we've seen the popularity of these adjustable rate mortgages go right through the roof. Here's what's going on. People can buy more house if they get an ARM; their monthly payments are lower. But you've got to be careful here, because you're probably getting your ARM in the middle of a rising interest rate environment.
So, try to match the term of your ARM with the length of time you expect to be in that house. So if you think you're going to be in that house for seven years, try to get the 7-in-one ARM. And you can see these rates are still attractive here, a 7-in-one ARM, 5.09 percent. It doesn't get much better than that.
KAGAN: But the devil is in the details.
WILLIS: That's right. You want to understand words like "index," "margin." Your loan is going to be pegged, the rate you pay to some sort of index out there. You need to know what it is. And then the bank is going to charge you a margin over and above that. That's their profit. You need to know how much that margin is before you sign on the dotted line.
KAGAN: We wish for everyone out there to get the exact house that they want, that it doubles in value. Everything goes perfectly. And yet you have to plan for a different scenario as well.
WILLIS: That's right. If you're buying and getting your mortgage today, make sure you understand the worst-case scenario for your ARM. If rates were to go up, as much as they can under the terms of the loan, can you afford that monthly payment? You can use calculators on the web at money.com and other web sites to find out how just much it will cost you right out of your pocket -- Daryn.
KAGAN: Gerri Willis, thank you so much. Great to have you on with us.
WILLIS: Thank you.
KAGAN: President Bush and John Kerry can seem miles apart. Not today though. Today they literally will be blocks apart dueling in Davenport. We'll take a look at that straight ahead.
(COMMERCIAL BREAK)
KAGAN: Taking a look at what's happening now in the news, a hearing taking place on Capitol Hill on the 9/11 Report. Lawmakers are considering its recommendations for improving the nation's first line of defense, its intelligence community. George Tenet is scheduled to testify this afternoon.
The pilot of a Staten Island ferry that crashed and killed 11 people last year is expected to plead guilty to an unspecified charge this hour. Shortly after the accident, Richard Smith said that he passed out at the controls. This afternoon, prosecutors are expected to unveil indictments against Smith and the ship's captain resulting from a 10-month investigation. You've heard of black boxes in airplanes and trains. Now there is a move to install a version in your car. The NTSB says the devices could record your speed and your seat belt use. Critics worry about who would wind up with that information.
California Governor Arnold Schwarzenegger has a 2500-page plan to terminate excessive state spending. The sweeping overhaul aims to save as much as $32 billion over the next five years by consolidating departments, cutting growth in state jobs and privatizing some state work. Opponents already are raising concerns about cuts in education and environmental controls.
Keeping you informed, CNN, the most trusted name in news.
Here is some interesting things happening on the presidential campaign trail today. It's not unusual for the campaigns to crisscross, but it's rare to see the two virtually collide.
Take a look at this map of Davenport, Iowa. Today President Bush and his Democratic rival, John Kerry, will both appear in Davenport. Their rallies will be separated by mere minutes and are only about a quarter mile apart. Interesting stuff.
Let's take a look at the campaigns. Begin with White House correspondent Suzanne Malveaux, who is in D.C. at the White House.
Good morning.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Daryn. I spoke with Bush aides -- campaign aides who say they swear they are not following Kerry. They say it takes weeks to coordinate Secret Service, law enforcement to travel, to move the president. They're putting that on the Kerry camp. One of the Kerry officials I spoke to says that, "The Bush folks have been stalking us, he says, for months now. But it is clear that both sides understand this is bound to happen at some point and that this is really a critical area for both of them.
This is not only a key battleground state, Iowa, but Davenport a key battleground community. It is part of Scott County. It is the third largest county in Iowa. This is where Bush lost to Gore by just 3,000 votes. This is a place where they have what they call Reagan Democrats.
Also of course the president facing a number of challenges here, job losses, as well as four units of the National Guard being sent off to Iraq. The Bush administration performs much better statewide with about 4 percent unemployment.
Now we expect today the president today will talk about an economy that's on the mend. He'll talk about a flex time program to help everyday workers.
Yesterday he was also in a very important area in Dallas, Texas. That is where he was courting the catholic vote. He spoke before the Knights of Columbus to highlight social values. (BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Knights of Columbus are transferring lives with works of compassion, and just as importantly, you're defending the values of faith and family that bind us as a nation.
I appreciate your fight to protect children from obscenity. I appreciate your working to protect the pledge allegiance, to keep us one nation, under God.
(END VIDEO CLIP)
MALVEAUX: Now, Daryn, President Bush's next stop is going to be a Minnesota farm. That is where he's going to be talking about his conservation programs. We understand that the Kerry camp is not heading in that direction; they're heading to Missouri -- Daryn.
KAGAN: Very good. So they don't have to worry about running into each other again.
Suzanne, thank you for that.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired August 4, 2004 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We'll get started here at CNN head headquarters Atlanta. I'm Daryn Kagan.
We begin with a look at what is now in the news. Police in Britain are interrogating 12 men in connection with possible terrorist activities. Police nabbed the suspects in raids Tuesday across the country. Pakistani authorities say at least one of the arrests was made after a Pakistani intelligence official shared information with British authorities. Another man also picked up in the raid has since been released. More in a live report in just a few minutes.
To Iraq, sources say 12 Iraqis are dead after bloody clashes between police and insurgents in Mosul. Explosions, grenades and rifle fire were heard around the city. Twenty-six people were hurt. Earlier in Mosul, a roadside bomb exploded slightly damaging vehicles in a U.S. military convoy. Officials from a nearby hospital say the blast killed two Iraqi civilians and injures two others.
Four Jordanians are safe this morning after being released by their hostage takers. A family member of one hostage says two tribal chiefs in Fallujah negotiated the group's release, five days after they were taken into custody, and hours before the proposed deadline for their beheadings. All four are back in Jordan and said to be in good health.
Newly updated travel warnings from the U.S. State Department urge Americans to leave Gaza immediately and to hold off travel to Israel and the West Bank. The warning cites strong potential for violence against Americans, following the recent kidnapping of another U.S. citizen and foreigners there.
We're keeping you informed. CNN, the most trusted name in news.
Live this hour, on Capitol Hill a hearing is under way on the 9/11 Report and its recommendations on improving the nation's first line of defense, its intelligence community. We'll take you there live with our Ed Henry in just a few minutes.
We're going to begin this hour in the war on terror and the latest offensive. British police today are questioning a dozen men rounded up in anti-terror raids that were launched across the country.
CNN's Jim Boulden is in London with details on a possible connection to Pakistan.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (on camera): British police are refusing to confirm that information from Pakistan led to some of the arrests that took place on Tuesday. Behind me is the Paddington Green Police Station where 12 men continued to be interrogated by the British police. They were arrested on Tuesday and charged under the Terrorism Act of 2000.
CNN has learned that information from the alleged al Qaeda computer expert, Muhammad Naeem Nor Khan, who was arrested in mid July, led to at least one of the arrests on Tuesday. Now, British police very rarely give information on terror arrests and these men can be held for up to 14 days without charge. These men were arrested yesterday throughout London and in the north of the country. And witnesses say it was quite dramatic during the day when the police raids were taking place.
UNIDENTIFIED MALE: I was up the ladder and I noticed the flashing lights. And I realize they block the traffic down there and they prevent the traffic coming down here and turning. Police were standing there with his weapon. I don't know what -- a rifle, whatever it was. Then I realized there was a brown car and the front door was open and an officer was holding this guy over the car. And he must have held him there for well over an hour.
BOULDEN: The police say that ongoing intelligence-led information led to these arrests and that it concerns, quote, "international terrorism." Now, under the Terrorism Act of 2000, the 12 men currently under arrest can be held without charge for the next 14 days. And then they must be charged or let go. It must be noted that over 600 people have been arrested under the Terrorism Act of 2000 since 9/11, and the vast majority of them have been released without charge.
Jim Boulden, CNN, London.
(END VIDEOTAPE)
KAGAN: Meanwhile, a senior U.S. military official sells CNN of a new thread connecting Osama bin Laden and Jordanian terrorist Abu Musab al Zarqawi. The source says that intelligence indicates that al Zarqawi was trying to communicate with bin Laden about the insurgency movement in Iraq within the past few weeks. Zarqawi is blamed for a number of deadly attacks and kidnappings in Iraq. More on that story with our Barbara Starr just ahead.
First though, the latest break from the intelligence community has reportedly come from a man at the hub of al Qaeda's communications. It's not just how much he knows but how much he is saying as well.
Our Justice correspondent Kelli Arena has details on that.
(BEGIN VIDEOTAPE)
KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Homeland Security secretary Tom Ridge defended the decision to partially raise the nation's terror alert, even those investigators say surveillance of potential targets was mostly done before September 11.
TOM RIDGE, SECRETARY, HOMELAND SECURITY: One could argue logically if you've taken a looked at potential sites with this kind of information, at least if you're thinking about it, we've got to take that very seriously.
ARENA: Law enforcement sources say the intelligence indicates there are about 20 potential financial targets, broken down into three categories depending on how much information was gathered on them. For example, the New York Stock Exchange is in Category 1. Al Qaeda had collected a lot of detail and conducted extensive surveillance. The Bank of America in San Francisco is in Category 2, meaning there is less information in databases.
While the potential targets have received a lot of attention, U.S. and Pakistani officials say the real intelligence coup is coming from interrogations of alleged al Qaeda computer expert Muhammad Naeem Nor Khan.
SHEIKH RASHID AHMED, INFO. MINISTER, PAKISTAN: We have some valuable information from them and we are interrogating an investigation in this case. and I think this is a great achievement of the security forces.
ARENA: As one source put it, Khan is emerging as a key player in the communications network of al Qaeda. According to intelligence officials, Khan told interrogators al Qaeda used couriers to get messages and computer disks to him. He then posted coded messages on web sites and quickly deleted the files. According to Khan, he used e-mail addresses and web sites only a few times to avoid detection.
KEN PIERNICK, FMR. FBI COUNTER TERROR. OFFICIAL: I think he was profoundly significant, that we've penetrated into their communications node is just an utter -- an absolute coup.
ARENA (on camera): U.S. government sources say they've asked Pakistani officials to present specific questions to Khan related to ongoing investigations. If he's being as candid as it sounds, they say there is great potential to move the ball forward.
Kelli Arena, CNN, Washington.
(END VIDEOTAPE)
KAGAN: The issue of terrorism and how best to guard against it is again the topic on Capitol Hill. The House Select Intelligence Committee is reviewing the 9/11 Report and discussing the recommendations.
Our congressional correspondent Ed Henry joins us now to take a closer look.
Ed, good morning. ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Daryn. These congressional hearings taking a close look at the 9/11 Commission's recommendations for reform. They really started off with a bipartisan note, but we're starting to see some partisanship flare up yesterday at a House hearing. We saw Democrats, like Henry Waxman saying the president's plan for a national director of intelligence falls short. They believe that this official will not have enough power, will wind up being a figurehead.
Then this morning at that House Intelligence Committee hearing, that you mentioned, there has been a little battle developing here between the Republican Chairman Porter Goss, and the Democratic ranking member Jane Harman. Basically Mr. Goss had announced there would be a series of high-profile witnesses there, including the 9/11 Commission leaders Tom Kean, Lee Hamilton, also former CIA director George Tenet.
But then we found out, at the last minute this morning, that none of those top witnesses would actually be showing up. A Goss aide told me earlier that this was just a scheduling mix-up. The 9/11 Commissioners and others are trying to get there; they're trying to actually show up at a future date. But what Democrats are saying privately is they believe this shows that Republicans have just been slapping some of these hearings together, not putting enough time into it. Just trying to show like they're acting.
And in fact, Democratic ranking member Jane Harman a little earlier at the hearing said she thinks it's enough -- we've had enough hearings, it's time for legislative action.
(BEGIN VIDEO CLIP)
REP. JANE HARMAN (D), CALIFORNIA: So why isn't our committee moving faster? As we all know, our intelligence community was created in 1947 to fight an enemy that no longer exists. Put another way, we are using a 1947 business model to confront a 21-century threat.
(END VIDEO CLIP)
HENRY: Meanwhile, the 9/11 Commissioners are hitting the road. They're actually trying to drum up support from coast to coast for their recommendations for this reform plan that they've put forth. And here is what Slade Gorton, one of the Republican 9/11 Commissioners, said yesterday in Seattle.
(BEGIN VIDEO CLIP)
SLADE GORTON (D), MEMBER, 9/11 COMMISSION: We are causing congressional members and staffers to work during August when they really didn't want to, in many respects, so that Congress can consider a significant number of these recommendations in September and October. This is a good thing. It's an important matter, because essentially we have said there is a bomb out there and the fuse is lit.
(END VIDEO CLIP) HENRY: Daryn, these commissioners are basically saying that with these new terror threats there is new urgency for Congress to act, to follow up quickly. And they're urging that lawmakers put aside some of those partisan differences and actually get something done this fall --Daryn.
KAGAN: Which leads to my -- that leads to my first question of the morning for you. And that is, let's talk bottom line here. And that is dollars. Isn't that what the real debate is over here, when you're talking about a new intelligence chief? How much power -- how much budgetary power he or she would have versus the Defense Department?
HENRY: Absolutely. What the commission called for is what they basically term a "quarterback," someone who can call the plays and take charge of the field, and basically try to prevent another 9/11 by actually being in charge. There is no one intelligence official that currently can pull all the information together and really lead the effort in trying to prevent another 9/11.
And what critics are saying is that the way it is currently structured, the way that President Bush has put it forth, he has not actually given this official budget authority. So you're right, what Democrats are complaining, and what actually some bipartisan 9/11 Commissioners said yesterday on Capitol Hill, is that it will wind up being a figurehead -- Daryn.
KAGAN: Ed Henry on Capitol Hill, we will be back with you in the next hour. Thank you, Ed.
Police have returned to a Salt Lake City landfill to resume their search for the body of Lori Hacking. Meanwhile, a judge has set a half million-dollar bail for her husband Mark. He is now being held in the presumed murder. During that hearing, prosecutors said that Hacking has admitted the murder while a patient at a psychiatric hospital. He is described as saying he killed his wife when she was asleep and discarded her body in a dumpster.
This surveillance tape that we're looking at from a convenience store might be the last time that Lori Hacking was seen alive. The tape comes from a convenience store. Four hours after this tape, Mark Hacking returns to the store in his wife's car for cigarettes. It is 1:18 a.m. in the morning, hours before he reported her missing.
A story that exploded in tabloid headlines almost eight years ago has quietly entered a new chapter in the dead of night. Prison officials in Washington State this morning quietly released Mary Kay LaTourneau, the former grade school teacher convicted of rape in a long-running affair with a pre-teen student.
CNN's Kimberly Osias joins us. She is at the state women's prison in Gig Harbor, Washington.
Kimberly, good morning.
KIMBERLY OSIAS, CNN CORRESPONDENT: And good morning to you, Daryn. Well, they called it love. Prosecutors, however, saw it a little bit differently calling it rape. But today Mary Kay LaTourneau can be called an ex-convict. She walked out quietly about 1:00 a.m. here at the Washington State Correctional Facility for Women to a number of demonstrators outside carrying signs saying "I'm 18" and "Take me."
She was behind bars for seven years for having sex with a sixth grader, Vili Fualaau. She did what many would consider taboo, crossing ethical, moral and legal lines as his teacher. Pregnant by Fualaau, Mary Kay LaTourneau pled guilty to two counts of child rape back in 1997. After only five months in jail, a judge gave her leniency, gave her a second chance. But right after her release, she defied a court order and was caught having sex in a car with Fualaau.
She had about $6,000 cash and clothes. She landed back in jail, where she gave birth to the pair's second child. Now, she is starting again. But this time, she has to register as a Level 2-sex offender. She will obviously be under very close scrutiny for three years: where she works, where she lives.
And speaking about where she works, she will no longer be able to work with or teach children again. And as far as any kind of relationship, she will have to report that to authorities as well. And speaking of relationships, there is a still a restraining order against Mary Kay LaTourneau and Vili Fualaau. However, Vili Fualaau is now 21, so he can petition a judge to rescind that band -- Daryn.
KAGAN: Kimberly Osias in Washington State. Kimberly, thank you.
We're going to take a look at a custody case of a different kind. There is a settlement in a bizarre case of a woman who gave birth to a baby who was conceived from the wrong embryo. Now another couple wants custody of that child.
Later, the duel in Davenport. President Bush and John Kerry battle for Iowa voters in almost the same spot, and just about the same time. Which rally would you go to? A live report is just ahead.
And if all this politics is leaving you a little bit dizzy, you're not alone. We'll take you to Florida, where they're lining up to vote in the bobble head election.
This is CNN LIVE TODAY.
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KAGAN: Well, this is the morning after, Alex. Clean-up crews are combing the coast of North Carolina this morning checking the damage. And officials have called in the National Guard. The hurricane is now well out to sea, but not before it pounded the coast with 100 mile per hour winds, high tides and flooding. No injuries have been reported.
Just having a little bit of fun? That is how Lynndie England is said to have described the now infamous photos of her at the center of her prison abuse hearing. We'll tell you what else she had to say as the second day of pre-trial hearings open today.
And mortgaging your future. There is Gerri Willis; she has some thoughts on that.
Hi, Gerri.
GERRI WILLIS, CNN-FN PERSONAL FINANCE EDITOR: Hey, Daryn. Good to see you. Thirty-year fixed rates hovering at about 6 percent right now, but they could go higher. We'll tell you what you need to know when CNN LIVE TODAY continues.
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KAGAN: If you are shopping for a home of your own, we have just the person for to you talk to. In fact, now might be a good time to buy one. Experts interest rates to rise over the next month or so. So, how can you get a good deal?
Here with her "Top Five Tips" is our Gerri Willis live in New York City.
Gerri, good morning.
WILLIS: Good morning. Good to see you, Daryn. First off, you've got to know the jargon when you're shopping for a mortgage. Most people know what a 30-year fixed rate mortgage is but what about an "adjustable?" And what do all the ins and outs mean? Well, if you're getting a three in one or five in one mortgage, that means that the initial rate is fixed for three or five years. And then the rate readjusts each year and every year. So you can expose yourself to rising rates.
Make sure you understand "annual caps." That's the annual limit on how much rates can go higher on your mortgage. Keep in mind all those technical details, Daryn. It will be very important.
KAGAN: There will be a quiz in the morning.
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KAGAN: And not just on what's happening now but you have to look into the future as well.
WILLIS: That's right. You know, Daryn, we've got the fed meeting next week. And they could raise rates, which ultimately could impact mortgage rates. Expectations among mortgage professionals out there is that rates will go higher. Keep in mind here that at about 6 percent, which is where the 30-year fixed rate is right now, we're really at lows. The long-term average is about 8 percent. So you're still looking good on that rate. But every tiny little hundredths of a percent counts, because it means so much to what you pay each and every month.
KAGAN: And the key word is "you." Because what works for one person might not work for someone else's life and lifestyle. WILLIS: That's right. You know, we've seen the popularity of these adjustable rate mortgages go right through the roof. Here's what's going on. People can buy more house if they get an ARM; their monthly payments are lower. But you've got to be careful here, because you're probably getting your ARM in the middle of a rising interest rate environment.
So, try to match the term of your ARM with the length of time you expect to be in that house. So if you think you're going to be in that house for seven years, try to get the 7-in-one ARM. And you can see these rates are still attractive here, a 7-in-one ARM, 5.09 percent. It doesn't get much better than that.
KAGAN: But the devil is in the details.
WILLIS: That's right. You want to understand words like "index," "margin." Your loan is going to be pegged, the rate you pay to some sort of index out there. You need to know what it is. And then the bank is going to charge you a margin over and above that. That's their profit. You need to know how much that margin is before you sign on the dotted line.
KAGAN: We wish for everyone out there to get the exact house that they want, that it doubles in value. Everything goes perfectly. And yet you have to plan for a different scenario as well.
WILLIS: That's right. If you're buying and getting your mortgage today, make sure you understand the worst-case scenario for your ARM. If rates were to go up, as much as they can under the terms of the loan, can you afford that monthly payment? You can use calculators on the web at money.com and other web sites to find out how just much it will cost you right out of your pocket -- Daryn.
KAGAN: Gerri Willis, thank you so much. Great to have you on with us.
WILLIS: Thank you.
KAGAN: President Bush and John Kerry can seem miles apart. Not today though. Today they literally will be blocks apart dueling in Davenport. We'll take a look at that straight ahead.
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KAGAN: Taking a look at what's happening now in the news, a hearing taking place on Capitol Hill on the 9/11 Report. Lawmakers are considering its recommendations for improving the nation's first line of defense, its intelligence community. George Tenet is scheduled to testify this afternoon.
The pilot of a Staten Island ferry that crashed and killed 11 people last year is expected to plead guilty to an unspecified charge this hour. Shortly after the accident, Richard Smith said that he passed out at the controls. This afternoon, prosecutors are expected to unveil indictments against Smith and the ship's captain resulting from a 10-month investigation. You've heard of black boxes in airplanes and trains. Now there is a move to install a version in your car. The NTSB says the devices could record your speed and your seat belt use. Critics worry about who would wind up with that information.
California Governor Arnold Schwarzenegger has a 2500-page plan to terminate excessive state spending. The sweeping overhaul aims to save as much as $32 billion over the next five years by consolidating departments, cutting growth in state jobs and privatizing some state work. Opponents already are raising concerns about cuts in education and environmental controls.
Keeping you informed, CNN, the most trusted name in news.
Here is some interesting things happening on the presidential campaign trail today. It's not unusual for the campaigns to crisscross, but it's rare to see the two virtually collide.
Take a look at this map of Davenport, Iowa. Today President Bush and his Democratic rival, John Kerry, will both appear in Davenport. Their rallies will be separated by mere minutes and are only about a quarter mile apart. Interesting stuff.
Let's take a look at the campaigns. Begin with White House correspondent Suzanne Malveaux, who is in D.C. at the White House.
Good morning.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Daryn. I spoke with Bush aides -- campaign aides who say they swear they are not following Kerry. They say it takes weeks to coordinate Secret Service, law enforcement to travel, to move the president. They're putting that on the Kerry camp. One of the Kerry officials I spoke to says that, "The Bush folks have been stalking us, he says, for months now. But it is clear that both sides understand this is bound to happen at some point and that this is really a critical area for both of them.
This is not only a key battleground state, Iowa, but Davenport a key battleground community. It is part of Scott County. It is the third largest county in Iowa. This is where Bush lost to Gore by just 3,000 votes. This is a place where they have what they call Reagan Democrats.
Also of course the president facing a number of challenges here, job losses, as well as four units of the National Guard being sent off to Iraq. The Bush administration performs much better statewide with about 4 percent unemployment.
Now we expect today the president today will talk about an economy that's on the mend. He'll talk about a flex time program to help everyday workers.
Yesterday he was also in a very important area in Dallas, Texas. That is where he was courting the catholic vote. He spoke before the Knights of Columbus to highlight social values. (BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Knights of Columbus are transferring lives with works of compassion, and just as importantly, you're defending the values of faith and family that bind us as a nation.
I appreciate your fight to protect children from obscenity. I appreciate your working to protect the pledge allegiance, to keep us one nation, under God.
(END VIDEO CLIP)
MALVEAUX: Now, Daryn, President Bush's next stop is going to be a Minnesota farm. That is where he's going to be talking about his conservation programs. We understand that the Kerry camp is not heading in that direction; they're heading to Missouri -- Daryn.
KAGAN: Very good. So they don't have to worry about running into each other again.
Suzanne, thank you for that.
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