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CNN Live Today

Shuttle Foam Crack; Spain Subway Derailment; Nuclear Warning?; Bin Laden's Message; New Jersey State Shutdown; Iraq's Most Wanted; Mexico Elections

Aired July 03, 2006 - 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: Here are a few of the big stories that we are doing today.
Saber rattling or much more. North Korea threatening nuclear retaliation. Our David Ensor puts that story in context for us.

There's a tragedy in Spain to tell you about. A subway train derails killing dozens. We'll have the latest.

And a weekend washout in New Jersey's budget battle. The governor and state Democrats report no progress after Sunday's huddle. Many government offices shut tight this morning.

And we're beginning with this developing story out of Florida. A new development is threatening tomorrow's scheduled launch of the Space Shuttle Discovery. NASA workers have found a crack in the foam insulation covering the external fuel tank. So here's Miles to tell us more about what this -- where is the crack? You have your own personal toy there, I'm sure.

O'BRIEN: Naturally.

KAGAN: And you can show us where and why it might be a concern.

O'BRIEN: Let me tell you what -- first of all, yes, let's tell you exactly where this is happening. Engineers who are doing an inspection, which would normally occur in the wake of two scrubbed launch attempts, were walking at the base of the launchpad. They found a small piece of foam. And so they began a thorough inspection.

And they looked up in this area here. This is called the inter tank region. They call it inter tank because the top -- there's actually two tanks inside this orange fuel tank, liquid oxygen, liquid hydrogen. Inter tank being in the middle. There's a pipe, which is not on this particular model, doesn't have the fidelity for that, but right around that pipe there's a bracket and a four to five-inch crack in the insulating foam.

Now you see where that is. That's a critical area because it is upstream of the space shuttle. OK. That is -- anything upstream of is concern. Down here they don't worry so much because it's not likely to cause as much damage. Certainly on the back side they don't worry as much. But in this case, that's not a good place to have a crack. What could that mean? It could mean in the case of a launch that a piece of that foam would fall off and you have a scenario potentially there that would lead to a breaching of the heat shield that very sensitive heat shield -- which, of course, is precisely the scenario which led to the loss of Columbia and her crew of seven back in February of 2003.

So, as we speak, Daryn . . .

KAGAN: Yes.

O'BRIEN: Mission management team, the shuttle managers, are meeting.

KAGAN: Right now.

O'BRIEN: Talking about the options. And, you know, one of the options would be to fly with it as is. Would they do that or would they go with a fix?

KAGAN: What do you think?

O'BRIEN: I'm going to put a lot of money on trying to fix it.

KAGAN: Really?

O'BRIEN: That's just my take on it.

KAGAN: Just because there's so much up to this point?

O'BRIEN: Yes, I think so. I think so. But, you know what, I don't have enough information. I'm not going too go much further out on the limb. But any time you see a crack in foam in advance -- and just to let you know, what happened was over the weekend twice this tank was filled with super cold liquid hydrogen and liquid oxygen. It's a very thin, light alloy tank and so it flexes every time that happens.

KAGAN: Well so -- because that's my question, Miles. Why are they just finding this now? We've had these delays because of weather but shouldn't they have found this a few days ago?

O'BRIEN: Well, who knows, maybe it occurred after the last de- tanking. They do spend an awful lot of time -- they have a group of guy called the ice team that goes out there. And they're not just looking for ice. They go over that tank with a fine tooth comb using binoculars and all kinds of devices to try to spot just this kind of thing. And I was at a launch not too many years ago when they stopped the launch for a two-inch pin that had fallen off one of the scaffoldings and was resting on one of the struts. So they don't miss a trick.

And so, you know, it's quite possible that it was the combined flexing of the tank -- the two tankings and two de-tankings that caused this crack to develop. So this is, as we say, this will -- they're going to -- right around the noon hour we expect we're going to hear what happened in that meeting. They'll come out and give us a briefing. And we will tell you then precisely what this means for tomorrow's planned launch. This could mean a significant delay potentially. If they determine it's not a big problem, maybe there will be a launch tomorrow. We'll let you know.

KAGAN: Quickly, what do the astronauts do during all these starts and stops? They're not on board the shuttle this whole time.?

O'BRIEN: No, no, no. Well, you know, actually they did board in both cases, but, obviously, they're long gone from there now. They're in a building a few miles away at the crew quarters. They remain in quarantine, which means that -- there you see them as they were coming out yesterday on the second haunch attempt. Thunderstorms in both cases the problem. Not good weather for flight. Otherwise, the orbiter looked fine.

In any case, what they do is they go into -- they remain in quarantine in the crew quarters. They treat them with tender loving care. Only people who have been cleared by doctors can come see them. So close family members can if they've gone through the medical tests because they don't want them to get sick on orbit, obviously.

KAGAN: Of course not. Absolutely.

All right, Miles.

O'BRIEN: We'll keep you posted.

KAGAN: Appreciate it.

O'BRIEN: All right.

KAGAN: Thanks for putting in the OT.

O'BRIEN: No problem.

KAGAN: Thanks.

Other developing story for you today. A subway train running off the track in Spain killing dozens of people. It happened in the coastal city of Valencia. It was around lunchtime when it happened. Authorities say it looks like it was an accident. We're joined now by CNN's Al Goodman. He joins us by phone from Lisbon, Portugal.

Al, what have you been able to learn.

AL GOODMAN, CNN CORRESPONDENT: Daryn, I've just gotten off the phone with local officials in Valencia. That's Spain's third largest city on the Mediterranean Coast. They say that there are at least 30 dead and at least a dozen injured in this metro accident in Valencia.

Now this comes just days before Pope Benedict XVI is due in Valencia on this weekend to celebrate mass. So pilgrims have come in from Spain and around the world for the fifth world meeting of families. It's unclear right now whether they are among the victims or not. These local officials telling CNN they do confirm what you just mentioned that this right now appears to be an accident. The cause unclear. But they say it does not look like terrorism. It appears to be an accident where one of the cars underground between a couple of stations went off the track and that pulled the second car off the track. So the dead and injured appear to have occurred on those cars and not in the stations on the platforms.

Daryn.

KAGAN: And I would think by the time of day, noon, and the time of year, you know, you mentioned the pope coming to town, the big conference, but that a lot of tourists would have been on that train.

GOODMAN: Very well could have been. Now the accident occurred at 1:00 p.m. local time right around just coming up on lunch time in Spain. There would have been people moving around the town.

The accident occurred between two stations which are on the other side of town a few miles from where the huge platform has been built for the mass to be celebrated by Pope Benedict XVI. However, the deceased are being taken to an official morgue which is quite near where the pope will arrive.

Daryn.

KAGAN: All right, Al Goodman, live on the phone from Portugal. Al, thank you.

And it might be the day before a holiday here in the U.S., but there is a lot of news taking place all around the world. On now to the story that broke just over an hour ago and one that we're following very closely. According to the Associated Press, North Korea threatens the U.S. with nuclear war. Our National Correspondent David Ensor joins me now from Washington to put these threats in perspective.

David.

DAVID ENSOR, CNN CORRESPONDENT: Well, Daryn, this is bombast from the masters of bombast in P'yongyang and U.S. intelligence officials say they don't have any evidence that North Korea is capable yet of building a nuclear weapon that can sit atop a missile and be fired and survive that experience. So there is a missile that is on the launch site -- we've been talking about this for weeks now -- in North Korea and there are fears that North Korea might launch this missile and it is a long-range missile which would go well over Japan and could conceivably have a range to hit the United States, to hit Alaska or some other part of the United States.

But U.S. intelligence officials have no reason to believe that North Korea has a weapon atop that missile. And I think you'll probably be hearing, as the day progresses, that the view from Washington is, this is bombast. This is threats. North Korea makes them all the time without anything to back them up.

Daryn.

KAGAN: Well, so why now, though? What would have ticked them off?

ENSOR: Well, they clearly want the attention of the United States and of the world at the moment. Why is not entirely clear. But to fuel up a missile on the launchpad when they had previously promised they wouldn't do that, obviously they're trying to get the attention of the United States. Some analysts theorize that they're jealous of Iran, which has been getting so much attention lately from the west over its alleged nuclear weapons development program.

KAGAN: All right. Another threat that looks like he's looking for some attention from the west, Osama bin Laden coming out with yet another tape over the weekend, his fifth this year. What do you hear from this tape?

ENSOR: The most notable thing is an attack on Shiites and on the Shiite governments that have succeed Saddam Hussein in Iraq. And a call on supporters of al Qaeda in Iraq to attack Shiite supporters of those governments.

This is a shift, if you will, for al Qaeda central because previously bin Laden's deputy had written to the then leader of al Qaeda in Iraq, Abu Musab al-Zarqawi, who, of course, as you know, was killed in a U.S. air strike some weeks ago, saying to him, you know, you should stop killing so many innocent Muslims -- Shiite Muslims. It doesn't look good. Now you have bin Laden saying he's all for it. Do we have a piece of what he said? I think we may.

(BEGIN VIDEO CLIP)

OSAMA BIN LADEN, (through translator): Our brothers, the Mujahideen, an al Qaeda organization, have chosen the dear brother Abu Hamza al-Muhajir as their leader to succeed the emir, Abu Musab al- Zarqawi. I advise him to focus his fighting on the Americans and everyone who supports them and allies himself with them in their war on the people of Islam and Iraq.

(END VIDEO CLIP)

ENSOR: Yes, well now that piece of tape is where he names the person he thinks should be the successor to Zarqawi. The name he uses is not one that intelligence officials know. But Pentagon officials are saying it's a nom de guerre for a fellow they've already identified as the probable successor, a fellow named al-Masri.

Daryn.

KAGAN: All right, David Ensor live from Washington. David, thank you.

Let's focus on some other news taking place here in the U.S.

You can bet they're steaming in Atlantic City this holiday weekend. Not from the heat, but from the freeze. Casinos, the city's lifeblood and a huge business for the state, close up shop midweek unless lawmakers play their cards right. They have got to settle a budget dispute that shut down the state government. Robin Taylor of affiliate WTXF reports.

(BEGIN VIDEOTAPE)

ROBIN TAYLOR, WTXF: Come Wednesday morning in Atlantic City, all bets are off.

LINDA KASSEKERT, CASINO CONTROL COMMISSION: The casinos must cease gaming at 8:00 a.m. on Wednesday, July the 5th.

TAYLOR: That's the decision from the casino control commission.

KASSEKERT: Because the governor signed an executive order shutting down state government, I had to act.

TAYLOR: Saturday morning Governor Corzine shut down all non- essential government services and temporarily laid off 4,500 state workers.

ED VAUSE, AMERICAN BURGER COMPANY: They knew this was coming up and now they wait till the last minute. And it's a shame.

TAYLOR: So why do the casinos come into play? Casino inspectors are considered non-essential employees. By law, those inspectors must be on the casino floor at all times. So if they go, the casinos are out of luck.

VAUSE: Closing down these casinos would be a tragedy.

TAYLOR: Ed Voss owns American Burger Company on the Boardwalk.

VAUSE: I need two small chocolate and two small strawberry.

TAYLOR: Every burger and shake counts towards his bottom line.

VAUSE: You don't lose money but they have plenty of it. Whereas little guys like me and, you know, the other small stores and trailers on the Boardwalk, that's who it's going to affect the most.

TAYLOR: If the casinos do shut down Wednesday morning, the hotels, restaurants and shops will stay open. But there's no doubt it will be a huge blow to Atlantic City.

UNIDENTIFIED MALE: I wouldn't come if they shut the casinos down. No. I mean I wouldn't come. It would be a waste of time. You know, everybody wants to come down and see if they can get lucky.

TAYLOR: The state will be the unlucky one losing, $1.3 million in gaming tax revenue each day the casinos are closed.

UNIDENTIFIED MALE: They'll be cutting their nose off to spite their face.

(END VIDEOTAPE)

KAGAN: And that was Robin Taylor from our affiliate WTXF.

Still to come, fugitives from Iraq. Saddam Hussein's nearest and dearest making the list of Iraq's most wanted. We're live from Baghdad with details on that.

It could be a do or die situation in Israel. Palestinian kidnappers issuing an ultimatum and an Israeli soldier's life may hang in the balance.

And presidential candidates declare victory in Mexico. Plural candidates declaring victory. But election officials say, hold on, not so fast. Ahead on cnn, the most trusted name in news.

(COMMERCIAL BREAK)

KAGAN: So do you launch or don't you launch? That's what they're talking about right now at Kennedy Space Center. They have to talk about Discovery's external fuel tank. They have found a five- inch-long crack in the foam insulation that covers the external fuel tank. It was spotted during an overnight inspection. Now keep in mind NASA scrubbed a launch on Saturday and Sunday because of poor weather and had removed the fuel from the tank. So they have to decide if it's a problem or if they can go ahead and try again to launch tomorrow. Our Miles O'Brien keeping an eye on that.

They love him and defend the man. Now Saddam Hussein's first wife and one of his daughters are fugitives. Their names emblazoned on Iraq's just released most wanted list. Our Arwa Damon joins us from Baghdad.

Arwa, what have they done that has put them on this list?

ARWA DAMON, CNN CORRESPONDENT: Well, Daryn, this is all according to Iraq's national security adviser. They are both accused by the Iraqi government of being directly involved in the insurgency in, as he called it, Dr. Mowaffak al-Rubaie, the terrorism that happens here in Iraq.

Now Saddam Hussein's daughter, Raghad, resides in Jordan. She's actually a guest of the royal family there. And according to Mowaffak al-Rubaie, he said that she is being accused of directly providing finances and logistical support to the insurgent here in Iraq.

His wife is believed to be in Qatar. And she is accused of providing financing and guidance to the insurgents here in Iraq. According to Rubaie, he said that the Iraqi government had specific evidence that she took billions of dollars out of Iraq, placed them in a bank in one of Iraq's neighboring countries, and that that money, millions of dollars of it, then ended up in the hands of terrorists that are operating inside this country. Now they're taking this list of 41 very seriously and have said that they will go to all means to bring all of these 41 individuals to justice.

Daryn. KAGAN: But what kind of cooperation are they going to get from places like Qatar or Jordan who, as you mentioned, has given Saddam's daughter asylum?

DAMON: Well, that's what's tough to tell and that's where the situation actually gets sticky. Now according to Iraq's national security adviser, he says that the Iraqi government has notified the appropriate channels in Jordan so that Raghad can be brought back to Iraq and tried, as he says, in an Iraqi court.

However, a spokesperson for the Jordanian government that we spoke to earlier today said that the Jordanian government had not yet been notified. Of course Dr. Rubaie did emphasize that these governments, specifically Jordan in the case, would have to cooperate. He said that if they don't, the terrorism that is so alive and existent here in Iraq was going to spill over from Iraq's border into these neighboring countries, which is why he believes that they will eventually cooperate.

KAGAN: We'll be watching it. Arwa Damon live from Baghdad. Arwa, thank you.

To more international news now. It's too close to call in Mexico where the presidential election was so tight there's not even a winner yet. But the two leading candidates are declaring victory anyway. CNN's Harris Whitbeck reports from Mexico City.

(BEGIN VIDEOTAPE)

HARRIS WHITBECK, CNN CORRESPONDENT, (voice over): The president of Mexico's electoral institute couldn't have be clearer, the election was too close to call. And he asked the candidates to refrain from speeches that could lead to confusion.

LUIS CARLOS UGALDE, PRES, FEDERAL ELECTORAL INST., (through translator): The margin of difference between the first and second place is so narrow that it is not possible to say at this point in time who has won.

WHITBECK: The reaction from the two leading candidates was almost immediate. Both ignored the request by the country's highest ranking electoral authority.

FELIPE CALDERON, PAN PRESIDENTIAL CANDIDATE, (through translator): I am satisfied because today the voting tendencies that have been announced by the polls and according to the PAN's data, which coincide with those of the IFE, and the quick vote count carried out all indicate that we have won the presidential elections.

ANDRES MANUEL LOPEZ ORBADOR, PRD PRESIDENTIAL CANDIDATE, (through translator): I want to inform the people of Mexico that according to our data we have won the presidency of the republic.

WHITBECK: With sympathizers of both candidates celebrating their perceived victories, President Vicente Fox went on national television asking for patience. VICENTE FOX, MEXICAN PRESIDENT, (through translator): The people have spoken by voting and now we expect parties and candidates who participated in this process, will contribute to the climate of trust and peace that must prevail after a civic day like the one that we have just lived through.

WHITBECK: But supporters of Calderon and Lopez Orbador would have nothing of it.

It is now up to the electoral institute to sort everything out. It will wait until all votes are counted in all electoral districts before it declares what candidate will be able to celebrate victory.

Harris Whitbeck, CNN, Mexico City.

(END VIDEOTAPE)

KAGAN: Back here in the U.S., we're on the eve of Independence Day. How about some financial independence. Gerri Willis is giving us some tips towards that.

Gerri, hello.

WILLIS: Hey, Daryn, good to see you.

You know this holiday is all about fighting for our rights. Today we're going to tell you about your financial rights. That's coming up next in "Five Tips."

(COMMERCIAL BREAK)

KAGAN: At this hour at Kennedy Space Center, they are holding a meeting, trying to decide what do you do about the space shuttle. They have found a five inch crack in the foam insulation that covers the shuttle Discovery's external fuel tank. They're trying to decide if that's a problem. You might remember that they were trying to launch the shuttle on Saturday, on Sunday and were hoping to do so again tomorrow weather permitting. We'll let you know what we find out after that meeting. It's supposed to conclude at noon Eastern.

Meanwhile we'll check the markets. They've been open almost an hour. Things kind of popping for a Monday right before the holiday. The Dow, you can see, is up 51 points. The Nasdaq is moving up not quite as strongly but it is up about seven points. Six or seven points.

All right, you know this because you're probably not working. Tomorrow is Independence Day. It's a good time to take stock of your financial rights. Our Personal Finance Editor Gerri Willis here with her "Top Five Tips" on how the law protects you and your wallet hopefully.

WILLIS: And hopefully you do some protecting yourself. You have the right, for example, Daryn, to get what you pay for. If you buy something with a credit card in particular, you can dispute the charge on your credit card using a quality claim. That's what they call it. Of course, first you have to make a good faith effort to resolve the problem with the merchant. And that charge, it has to be over $50.

KAGAN: What about when like financial advisers try to sell you certain products. How can you find out what their incentive is?

WILLIS: You know, sometimes they forget to disclose to you that they're being paid by somebody else to sell you something. But you can find out these dirty little secrets. If your financial adviser recommends any specific investments, you can ask them -- pardon me -- but you can also get a form ADV and that will list any possible conflicts of interest, disciplinary actions taken against your financial adviser. You can find all of this at sec.gov. And you can also take action if you think you've been treated unfairly by filing with the National Association of Securities Dealers at nasd.com.

KAGAN: What if you, when it comes to your mortgage, if you fear you're being discriminated against?

WILLIS: Well, you know, you don't have to put up with discrimination when it comes to getting a mortgage. It's your right not to be discriminated against on the basis of race, on the basis of religion, whatever, national origins, sex, marital status. The Office of Fair Housing and Equal Opportunity. And you can find them at hud.gov. Ensures Americans have equal access to the housing of their choice. Go there. You can complain if you think you're being treated unfairly.

KAGAN: Collection agencies. Boy, they can really come after you.

WILLIS: Absolutely. And you have the right not to be harassed, OK. Make sure you know the rules out there. They can't call you before 8:00 a.m. in the morning or after 9:00 p.m. And they can't call you at work if you ask them to stop. Agents can't talk to anybody but you or your lawyer about your debts.

KAGAN: And then your credit score, boy, that can make or break making your life easier or more difficult.

WILLIS: You bet. You have the right to know your credit score. You can get it for free, yes I said free, at annualcreditreport.com or call 1-877-322-8228. You have the right to dispute any information in your file that is incomplete or inaccurate. And let me tell you, there's a good chance it is. One in four credit reports has a problem. So be sure to check yours out and exercise your financial rights.

KAGAN: All right, Gerri, thank you.

WILLIS: You're welcome.

KAGAN: You exercise your holiday rights. You have a good day.

WILLIS: You too.

KAGAN: All right. Thank you.

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