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American Morning

In Najaf, Another Night of Heavy Fighting; Senator John Kerry Calls War Record Attacks Lies

Aired August 20, 2004 - 07:00   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.


BILL HEMMER, CNN ANCHOR: Muqtada Al-Sadr and his fighters are still there this morning. This as Iraqi officials give them a final call to disarm.
The stepfather of Michael Jackson's young accuser in court and on the stand -- could his testimony be devastating for the prosecution?

Embattled New Jersey governor, Jim McGreevey and the woman at his side last week, even McGreevey's wife caught off guard by the news.

And flashes of Mary Lou Retton, meet America's newest golden girl on this AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everyone. Soledad is out resting. Heidi Collins with us here in New York. She's about due, by the way.

HEIDI COLLINS, CNN ANCHOR: I know.

HEMMER: Any day now. I think we should probably take maybe some predictions as to when it's going to happen.

COLLINS: Good idea.

HEMMER: Today's the 20th of August. Think about your guesses and we'll get to them later in our show. I know Jack's thinking about it, too.

JACK CAFFERTY, CNN ANCHOR: I've got mine already.

COLLINS: You've got money on that, too.

HEMMER: Yes, I've got Sunday, by the way, the 22nd.

CAFFERTY: Mine is not soon enough.

HEMMER: For her...

COLLINS: Well, for her, too.

HEMMER: ... because she wants it to get on. That's right.

Listen from Iraq again this morning, fighting in Najaf intensified overnight. U.S. and Iraqi forces trading fire with members of the militia. Now Al-Sadr is making demands of his own for disarmament.

Back to Baghdad in a moment here. John Vause is standing by live in a minute there.

COLLINS: Also, the controversy that just won't die. John Kerry's military service continues to dog his campaign. A new poll seems to bear that out. We'll talk to senior political analyst Bill Schneider about it.

HEMMER: Also, a pretrial hearing in the Michael Jackson matter resuming today, yesterday the stepfather of the accuser on the stand. He talked about a payoff offered by Jackson's people.

Lisa Bloom from Court TV is our guest this morning on that topic.

COLLINS: Jack Cafferty is here now. Good morning to you.

CAFFERTY: Good morning. Happy Friday.

Sometimes things just work out the way they're supposed to. I think it's called poetic justice, as in when a guy who spends his whole life as a bureaucrat gets nailed by the bureaucracy. It's just a wonderful story.

The guy's initials are E.K. And he comes from Massachusetts. And we'll tell you more in a minute.

HEMMER: Thank you, Jack.

CAFFERTY: It's wonderful.

HEMMER: You got it.

Let's get to Iraq straightaway this morning. U.S. air strikes this morning have hit anti aircraft positions in Fallujah. That's west of Baghdad.

South of Baghdad, in Najaf, it's been another night of heavy fighting. The radical cleric Muqtada Al-Sadr and his followers still remain defiant today.

Here is John Vause now live in Baghdad. John, hello.

JOHN VAUSE, CNN INTERNATIONAL CORRESPONDENT: Hello, Bill. It appears that the fighting has eased in Najaf since dawn. Still the sound of explosions and gunfire around the old city, but the heaviest clashes in Najaf were, in fact, overnight.

(BEGIN VIDEOTAPE)

VAUSE (voice-over): This is not the all-out offensive on the Imam Ali mosque, but clearly the Iraqi government's patience is fast running out.

U.S. warplanes pounded militant positions close to the shrine. At least 30 powerful explosions rattled Najaf's old city just hours after the interim prime minister issued what he says is a last ultimatum.

AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: This is the final call to them to disarm, vacate the holy shrine, engage in political work and to consider the interests of the homeland above the factional and personal ones.

VAUSE: Inside the shrine, Al-Sadr's followers remained defiant.

All week long, there have been confusing and conflicting statements from Al-Sadr, calls of defiance mixed with messages that he is ready to agree to peace demands, only to add conditions shortly after.

The Iraqi government is now demanding to hear from Al-Sadr himself, the cleric has not been seen in public for days.

More than two weeks of violence in Najaf has led to uprisings in seven other Iraqi cities. In Sadr City, a sprawling Baghdad slum, U.S. tanks and troops backed by helicopter gun ships have clashed with Al-Sadr's men.

At least 10 Iraqis have been killed, more than 82 wounded.

And in Fallujah, U.S. warplanes came under attack from small arms fire and anti-aircraft fire. They responded with strikes at an industrial part of the city killing at least two people, according to doctors at Fallujah Hospital.

While in Basra, the main office of the Southern Oil Company has been set alight. Oil production there has been cut in half to one million barrels a day.

(END VIDEOTAPE)

VAUSE: Time appears to be running out for the Iraqi interim government. Twice this week it has warned that a military operation on the Imam Ali mosque was just hours away only to back down. And all this time, it seems that for Muqtada Al-Sadr, the longer he waits, the greater his support -- Bill?

HEMMER: John, thanks for that. John Vause in Baghdad.

About 30 minutes away, we'll talk with a lieutenant colonel from the U.S. Army, also heading up the operation in Najaf, about what's happening now -- Heidi?

COLLINS: The race for president is a dead heat. A new CBS poll shows Senator John Kerry supported by 46 percent of registered voters and President Bush by 45 percent. That's with Ralph Nader on the ballot.

So that's a setback for Senator Kerry who led by five percentage points after the Democratic convention. CBS reports a shift among independents, veterans and Catholics.

The same poll looked at how veterans are reacting now to the Swift Boat controversy. More on that survey in a moment from Bill Schneider.

Yesterday Senator Kerry fired back at the veterans' group that is challenging his war record. Here now, Dan Lothian.

(BEGIN VIDEOTAPE)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The first definition of patriotism is keeping faith with those who wear the uniform.

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): In an all-out effort to defend his war record, Senator John Kerry launched an attack on the group Swift Boat Veterans For Truth, which has been running a television ad in key battleground states and speaking out publicly, questioning his service and medals.

KERRY: This group isn't interested in the truth. They're not telling the truth.

LOTHIAN: Speaking in Boston to some 5,000 members of the International Association of Firefighters, Kerry took the offensive saying in public what his press releases and campaign have said in response for months.

KERRY: Bring it on!

LOTHIAN: Kerry also went after President Bush for not denouncing the ads.

KERRY: He wants them to do his dirty work.

LOTHIAN: The Bush campaign calls that claim false and insists the president has always considered Kerry's service in Vietnam noble.

But last week on "LARRY KING LIVE," Bush passed up the opportunity to call on his supporters to back down.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I haven't seen the ad, but what I do condemn is these unregulated soft money expenditures by very wealthy people.

LOTHIAN: Kerry's war record has been questioned throughout his political career, but the controversy has intensified in the presidential campaign. The Kerry campaign is firing back with another 30-second ad.

UNIDENTIFIED VETERAN, KERRY CAMPAIGN COMMERCIAL: I expected I'd be shot when he pulled me out of the river. He risked his life to save mine.

LOTHIAN: This aggressive response comes as the credibility of the leading veteran behind the critical Kerry ad is being questioned. Larry Thurlow had disputed Kerry's claim of a gun battle that led to a bronze star.

But CNN has obtained Thurlow's own military record showing that, in fact, "all the boats came under weapons fire" in the area that day. Thurlow now says his record reflects an account written up by Kerry and calls it "a lie."

(on camera) The new Kerry counter-ad will run in Ohio, Wisconsin and West Virginia. That means the Kerry campaign is deviating from cost-saving plans not to buy any television ads until September, a sign that despite the official line, there is pressure to end this controversy.

Dan Lothian, CNN, Derry, New Hampshire.

(END VIDEOTAPE)

COLLINS: Meanwhile, the group Swift Boat Veterans For Truth is launching another anti-Kerry TV ad today.

CNN senior political analyst Bill Schneider is joining us now to talk more about this from Washington this morning.

Bill, good morning to you.

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST: Good morning, Heidi.

COLLINS: Pretty strong words coming from Senator Kerry against President Bush. But this is not President Bush's ad, right?

SCHNEIDER: No, this ad is run by an independent group, although a lot of people who have funded the ad have ties to the Bush family and have supported President Bush in the past.

Some of the members of the Swift Boat group, not all of them but some of them, have ties to conservative groups and Republican campaigns, but there is no direct connection or coordination with the Bush-Cheney campaign.

COLLINS: All right, Bill, let's take a look at these numbers that we were talking about, the CBS poll. Specifically in there it is showing Kerry losing ground with veterans since the Swift Boat debate has been growing.

These numbers, as you see on the screen there, 37 percent. That's down from 46 percent, also down after the convention. What's going on here?

SCHNEIDER: What's going on is some very serious damage, apparently, among veterans and veteran voters. That is a very big shift. It was tied. The vote was tied among veterans just after the Democratic convention. Now George Bush, President Bush, appears to be 18 points ahead, a huge swing.

I think that explains why Senator Kerry has come out swinging on this. He's fighting back. He's attempting, hoping for a backlash against President Bush, claiming that these veterans are not telling the truth, that they are a front group for the Bush-Cheney campaign, even if there are no direct ties and trying to create what he hopes will be a backlash against the president. COLLINS: It does seem though, Bill, like this thing just won't die. I mean what was the genesis of the whole Swift Boat controversy? How did it begin for Kerry?

SCHNEIDER: Well, these service charges have been percolating for a long time. I mean, even back in Senator Kerry's campaigns in Massachusetts for the Senate occasionally there were doubts, charges, that came up about his war record.

He's always made his service record a central focus of all his campaigns. And in the presidential campaign, he made that his major claim for the nomination. He really didn't run on the issues. On the issues, Democrats agreed with Howard Dean, particularly on the Iraq war.

Kerry got the nomination because of his war record, because Democrats saw that he was electable against President Bush. He's a war hero. And he certainly focused on that at the Democratic convention.

So the critics say, well, that makes this fair game for an easy target. And, of course, the resentments here go all the way back 35 years to the 1960s. And very shortly, I can assure you, some of the charges are going to come out, not about Kerry's war record but about his anti-war record after he got back from Vietnam.

COLLINS: So quickly, Bill, how do you think this will impact voters? I mean, do you think it just turns them off in general?

SCHNEIDER: Well, it has a real danger for Senator Kerry. What is does is it makes this election campaign all about him -- his record, his background, the '60s. It's trying to turn him into another Bill Clinton.

Whereas, if Kerry's going to win this election, the only way he can do it is by making Bush the issue. It has to be about Bush's record as president not about his war record.

COLLINS: All right, Bill Schneider, CNN's senior political analyst for us this morning. Bill, thanks.

SCHNEIDER: Sure.

HEMMER: All right, Heidi.

From Athens now, the Olympic games, 16-year-old American gymnast Carly Patterson has made history. She started the night with a highly difficult vault, landed out of bounds, in fact; but that was forgotten later by the time she got to her floor exercise, an impressive and error-free program assured her Olympic gold.

No American gymnast in the all-around competition has won gold on the women's side since Mary Lou Retton, 20 years ago in L.A., 1984.

(BEGIN VIDEO CLIP)

CARLY PATTERSON, OLYMPIC GOLD MEDALIST: In the car ride, I talked to Mary Lou.

QUESTION: What did she say to you?

PATTERSON: She said she knew I could do it, and she knew I had it in me. And she's just really proud and excited for me.

(END VIDEO CLIP)

HEMMER: Carly Patterson out of the state of Maryland.

That's kind of cool. She talked to Mary Lou before.

COLLINS: Very cool, yes.

And you know what did it for her last night?

HEMMER: What's that?

COLLINS: The beam.

HEMMER: Yes?

COLLINS: Which is the most difficult gymnastic event. I mean, she was on it.

HEMMER: How are you staying up that late?

COLLINS: OK, so I fall asleep in the middle right as she was performing. I woke up to them putting the gold medal around her neck.

HEMMER: Good for her, huh?

COLLINS: Yes, very good.

All right. It is about 12 minutes past the hour now. Time for a look at some of today's other news with Betty Nguyen. Betty, good morning to you.

BETTY NGUYEN, CNN CORRESPONDENT: Good morning, Heidi.

We begin with a new explosion that's rocked an underground gas storage facility outside of Houston, Texas. Want to take a look at this, we give you some live pictures from affiliate KHOU. There it is.

The second blast at the Duke Energy site, but it's being called twice the size of the one we showed you yesterday. Officials are forcing some 100 more residents to evacuate within a three-mile radius of the facility. No injuries have been reported.

New testimony from the stepfather of Michael Jackson's accuser, the relative says an offer was made to the family if they appeared in a video intended to restore Jackson's reputation.

The stepfather testified at a pretrial hearing yesterday. We'll have a live report on the proceedings from Court TV's Lisa Bloom in about a half hour.

To Arkansas now, a 7-year-old girl missing since Sunday has been found dead. The family was told about the death hours after police discovered the body last night in a field where the child's shoes and bicycle were found earlier this week.

The cause of death, well, that's still under investigation. A suspect remains in custody.

And talk show host Oprah Winfrey is inviting fellow jury members to appear on her show. Winfrey was one of 12 jurors who convicted a Chicago man of murder. Winfrey calls her three days in the jury box a reality check.

The special jury episode of Oprah's show is slated for next week.

Heidi, back to you.

COLLINS: It's going to be interesting to see that one. That's for sure.

NGUYEN: Yes.

COLLINS: Betty, thanks so much.

Time for a check of our forecast now. Chad Myers is at the CNN Center with the very levist -- latest weather update, that is.

So what are we looking at for the weekend here, Chad?

CHAD MYERS, CNN METEOROLOGIST: You're going to get rain tomorrow in New York. But the rain today is actually in western New York and also in western Pennsylvania.

(WEATHER BREAK)

MYERS: Back to you.

COLLINS: Chad, I'm taking off for Minneapolis, though, not Hawaii, unfortunately.

MYERS: Take a sweater.

HEMMER: Well, you're going to miss Estelle, then.

COLLINS: Yes, OK. That's a good way to look at it.

True. It's only 66 in Minneapolis.

Chad, thanks a lot for that.

Still to come now this morning, a new record for oil, a report on what's driving those prices and how much more we'll have to pay.

HEMMER: Also, is U.S. Senator Ted Kennedy a threat to national security. What led to him not being allowed to fly? We'll check it out.

COLLINS: And New Jersey governor, Jim McGreevey, stunned nearly everyone last week when he announced he was gay. But how long did he wait to tell his wife?

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: New Jersey governor, Jim McGreevey, still plans to step down in November as he announced last week with his wife by his side. But what is unclear is what happens now to McGreevey's marriage.

(BEGIN VIDEOTAPE)

COLLINS (voice-over): They were the picture of a happy family. James and Dina McGreevey, selling the image of the Garden State as a family friendly destination.

GOV. JIM MCGREEVEY (D), NEW JERSEY: Come out. See what's new in New Jersey.

COLLINS: Married for nearly four years they appeared in public a close-knit family. The announcement he was gay caught nearly everyone by surprise, apparently even his wife.

MCGREEVEY: For this, I ask the forgiveness and the grace of my wife. She has been extraordinary throughout this ordeal. And I am blessed by virtue of her love and strength.

COLLINS: Dina stood faithfully by his side as he admitted what he called a crisis of identity.

GEORGE ZOFFINLINGER, FRIEND OF GOVERNOR: We all have issues in families that, you know, are sometimes very difficult to deal with. In this particular case, I can't imagine anything more difficult than telling your wife what Jim McGreevey had to tell his wife.

COLLINS: One of Dina's friends, Lori Kennedy told the "Newark Star Ledger" newspaper that Dina considered not attending, but decided to show her support at the last minute.

Kennedy said, "She did not know before that he was gay. And if you saw her that night when she found out, you'd know that. She was totally shocked. Never in a million years did she know."

What's ahead for the McGreevey family not even their close friends know for sure.

(END VIDEOTAPE)

COLLINS: McGreevey has one child with his wife Dina and one child with his first wife, a Canadian librarian.

HEMMER: You know who might be throwing his name into the hopper there in New Jersey? Remember the actor and comedian, Joe Piscopo.

COLLINS: Yes, funny guy.

HEMMER: He's our guest next hour. We'll talk about him.

Serious, too.

COLLINS: Yes?

HEMMER: Oil prices continue to soar, and Google has lived up to the hype. Gerri Willis working for Andy Serwer again today, "Minding Your Business." Here we are dissing Google all week long.

(LAUGHTER)

HEMMER: And now it's turning in 100?

GERRI WILLIS, CNN FINANCIAL CORRESPONDENT: Yes, well, so maybe you should have climbed onboard? Yes, it closed yesterday at $100.34. That was an 18 percent pop. That's pretty good.

But let me give you a comparison, guys, OK?

HEMMER: All right.

WILLIS: The Internet stocks, height of the bubble, how much did they go up on the first day on average? More, 65 percent, OK?

So they did great, but it could have been better I suppose. The markets, though, yesterday down. It continues to be the story. Oil, if you're worried about your investments, forget the stock market, just look at the price of crude oil. That's the most important thing now.

HEMMER: Over $47, is that right?

WILLIS: I'm telling you, $49 right now.

HEMMER: Oh.

WILLIS: $49, we're closing in on $50. There are people out in the marketplace talking about $60 a barrel for crude oil.

Now, you know, a lot of this has not shown up yet at the pump, but I got to tell you, when Labor Day comes, I think you're going to start seeing it.

HEMMER: Thank you, Gerri.

COLLINS: You're probably right.

WILLIS: You're welcome.

HEMMER: In a moment here, how close are U.S. forces to that embattled mosque in Najaf? And Michael Jackson takes exception to a new movie while a startling new allegation comes out in court. We will check into that.

And a stab at our Olympics challenge. First up today, on which continents have the Olympic games never been hosted?

Continents.

COLLINS: Antarctica.

HEMMER: That's one.

COLLINS: Sorry.

HEMMER: The answer, after a break.

(COMMERCIAL BREAK)

COLLINS: Before the break we asked you on which continents have the Olympic games never been hosted? The answer, the games have never been held in Africa, South America, and as I stated, Antarctica. That was a toughy.

HEMMER: Yes, you got the tough one.

COLLINS: It was another big night, though, for team USA in Athens. As we mentioned earlier, 16-year-old gymnast Carly Patterson from Maryland won the gold medal in the women's individual all-around competition.

Here is her final floor routine. Looking good.

And elsewhere in Athens, though, American swimmer Aaron Piersol came in first in the 200-meter backstroke but not without controversy. Piersol was disqualified for an alleged illegal kick during a turn. The ruling, though, was later overturned and Piersol was awarded his gold medal.

And Michael Phelps won his fourth gold medal after setting an Olympic record in the 200-meter medley relay. The United States, though, still holds on top -- 35 medals overall now. It's followed by China and Russia.

China was in first place before, so now we've gone ahead of them.

HEMMER: Yes, Phelps four gold, not bad.

COLLINS: Not bad.

HEMMER: And Piersol absolutely dominates that event.

COLLINS: Yes.

HEMMER: In backstroke.

COLLINS: He was just kind of laughing at them when they were making that claim.

HEMMER: What's up, Jack? Good morning.

CAFFERTY: It's a wonderful thing, Friday. You know, sometimes the lord just provides stuff.

For example, when people who spend their entire lives creating the bureaucracy that ensnares us all actually get caught up in it themselves. I love this story.

Guess who was on the government's no-fly list and couldn't get off of it for weeks? None other than the distinguished senior senator from state of Massachusetts, Ted Kennedy.

When he tried to board a flight from Boston to Washington, he was told he would not be allowed to get on the plane. Nobody told him why not, they just said, no.

When he tried to return from Washington to Boston, same story. Three times the airlines refused to let him board.

(BEGIN VIDEO CLIP)

SEN. TED KENNEDY (D), MASSACHUSETTES: And so I said, I've been getting on this plane, you know, for 42 years.

(LAUGHTER)

KENNEDY: And why can't I get on the plane back to Boston -- back Washington?

They said, you can't get on the plane back to Washington.

So my administrative assistant talked to the department of homeland security, and they said there was some mistake. It happened three more times, and finally Secretary Ridge called to apologize.

(END VIDEO CLIP)

CAFFERTY: So the next time you get held up unnecessarily at the airport, just have Tom Ridge straighten it out for you, and then he'll call you to apologize when it's all worked out.

The question this morning -- I love this story -- who else should be on the government's no fly list? Think about people that you'd like to see stranded in the airport and let us know? And since it's Friday and we tend not to take it all that seriously on Friday, you can write to us about anything else that's on your mind.

I eventually had my administrative assistant call, and Tom Ridge called me. I mean...

HEMMER: He said he's been taking that flight for what, 40 years?

COLLINS: Forty-two years, yes. CAFFERTY: I just, I think it's terrific. You know, they create these animal traps for the population. It's nice when they catch a rat with one of them.

HEMMER: What was the catch? There was some other guy who had his name, right?

COLLINS: Same name, yes.

HEMMER: Is that why he popped up? That's what they say, anyway.

CAFFERTY: Well, there's probably a few people in the world named Kennedy.

HEMMER: A few.

CAFFERTY: I would imagine, you know, probably more than one.

HEMMER: Thank you, Jack.

On a Friday, time for "90-Second Pop" this morning as well.

Twenty-seven years ago this week, the "King of Rock 'N' Roll" left the building. His legend lives on, now playing on Broadway, in fact.

And rumors of a breakup, now reports of a wedding for these two.

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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Aired August 20, 2004 - 07:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: Muqtada Al-Sadr and his fighters are still there this morning. This as Iraqi officials give them a final call to disarm.
The stepfather of Michael Jackson's young accuser in court and on the stand -- could his testimony be devastating for the prosecution?

Embattled New Jersey governor, Jim McGreevey and the woman at his side last week, even McGreevey's wife caught off guard by the news.

And flashes of Mary Lou Retton, meet America's newest golden girl on this AMERICAN MORNING.

ANNOUNCER: From the CNN Broadcast Center in New York, this is AMERICAN MORNING with Bill Hemmer and Soledad O'Brien.

HEMMER: Good morning, everyone. Soledad is out resting. Heidi Collins with us here in New York. She's about due, by the way.

HEIDI COLLINS, CNN ANCHOR: I know.

HEMMER: Any day now. I think we should probably take maybe some predictions as to when it's going to happen.

COLLINS: Good idea.

HEMMER: Today's the 20th of August. Think about your guesses and we'll get to them later in our show. I know Jack's thinking about it, too.

JACK CAFFERTY, CNN ANCHOR: I've got mine already.

COLLINS: You've got money on that, too.

HEMMER: Yes, I've got Sunday, by the way, the 22nd.

CAFFERTY: Mine is not soon enough.

HEMMER: For her...

COLLINS: Well, for her, too.

HEMMER: ... because she wants it to get on. That's right.

Listen from Iraq again this morning, fighting in Najaf intensified overnight. U.S. and Iraqi forces trading fire with members of the militia. Now Al-Sadr is making demands of his own for disarmament.

Back to Baghdad in a moment here. John Vause is standing by live in a minute there.

COLLINS: Also, the controversy that just won't die. John Kerry's military service continues to dog his campaign. A new poll seems to bear that out. We'll talk to senior political analyst Bill Schneider about it.

HEMMER: Also, a pretrial hearing in the Michael Jackson matter resuming today, yesterday the stepfather of the accuser on the stand. He talked about a payoff offered by Jackson's people.

Lisa Bloom from Court TV is our guest this morning on that topic.

COLLINS: Jack Cafferty is here now. Good morning to you.

CAFFERTY: Good morning. Happy Friday.

Sometimes things just work out the way they're supposed to. I think it's called poetic justice, as in when a guy who spends his whole life as a bureaucrat gets nailed by the bureaucracy. It's just a wonderful story.

The guy's initials are E.K. And he comes from Massachusetts. And we'll tell you more in a minute.

HEMMER: Thank you, Jack.

CAFFERTY: It's wonderful.

HEMMER: You got it.

Let's get to Iraq straightaway this morning. U.S. air strikes this morning have hit anti aircraft positions in Fallujah. That's west of Baghdad.

South of Baghdad, in Najaf, it's been another night of heavy fighting. The radical cleric Muqtada Al-Sadr and his followers still remain defiant today.

Here is John Vause now live in Baghdad. John, hello.

JOHN VAUSE, CNN INTERNATIONAL CORRESPONDENT: Hello, Bill. It appears that the fighting has eased in Najaf since dawn. Still the sound of explosions and gunfire around the old city, but the heaviest clashes in Najaf were, in fact, overnight.

(BEGIN VIDEOTAPE)

VAUSE (voice-over): This is not the all-out offensive on the Imam Ali mosque, but clearly the Iraqi government's patience is fast running out.

U.S. warplanes pounded militant positions close to the shrine. At least 30 powerful explosions rattled Najaf's old city just hours after the interim prime minister issued what he says is a last ultimatum.

AYAD ALLAWI, IRAQI INTERIM PRIME MINISTER: This is the final call to them to disarm, vacate the holy shrine, engage in political work and to consider the interests of the homeland above the factional and personal ones.

VAUSE: Inside the shrine, Al-Sadr's followers remained defiant.

All week long, there have been confusing and conflicting statements from Al-Sadr, calls of defiance mixed with messages that he is ready to agree to peace demands, only to add conditions shortly after.

The Iraqi government is now demanding to hear from Al-Sadr himself, the cleric has not been seen in public for days.

More than two weeks of violence in Najaf has led to uprisings in seven other Iraqi cities. In Sadr City, a sprawling Baghdad slum, U.S. tanks and troops backed by helicopter gun ships have clashed with Al-Sadr's men.

At least 10 Iraqis have been killed, more than 82 wounded.

And in Fallujah, U.S. warplanes came under attack from small arms fire and anti-aircraft fire. They responded with strikes at an industrial part of the city killing at least two people, according to doctors at Fallujah Hospital.

While in Basra, the main office of the Southern Oil Company has been set alight. Oil production there has been cut in half to one million barrels a day.

(END VIDEOTAPE)

VAUSE: Time appears to be running out for the Iraqi interim government. Twice this week it has warned that a military operation on the Imam Ali mosque was just hours away only to back down. And all this time, it seems that for Muqtada Al-Sadr, the longer he waits, the greater his support -- Bill?

HEMMER: John, thanks for that. John Vause in Baghdad.

About 30 minutes away, we'll talk with a lieutenant colonel from the U.S. Army, also heading up the operation in Najaf, about what's happening now -- Heidi?

COLLINS: The race for president is a dead heat. A new CBS poll shows Senator John Kerry supported by 46 percent of registered voters and President Bush by 45 percent. That's with Ralph Nader on the ballot.

So that's a setback for Senator Kerry who led by five percentage points after the Democratic convention. CBS reports a shift among independents, veterans and Catholics.

The same poll looked at how veterans are reacting now to the Swift Boat controversy. More on that survey in a moment from Bill Schneider.

Yesterday Senator Kerry fired back at the veterans' group that is challenging his war record. Here now, Dan Lothian.

(BEGIN VIDEOTAPE)

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: The first definition of patriotism is keeping faith with those who wear the uniform.

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): In an all-out effort to defend his war record, Senator John Kerry launched an attack on the group Swift Boat Veterans For Truth, which has been running a television ad in key battleground states and speaking out publicly, questioning his service and medals.

KERRY: This group isn't interested in the truth. They're not telling the truth.

LOTHIAN: Speaking in Boston to some 5,000 members of the International Association of Firefighters, Kerry took the offensive saying in public what his press releases and campaign have said in response for months.

KERRY: Bring it on!

LOTHIAN: Kerry also went after President Bush for not denouncing the ads.

KERRY: He wants them to do his dirty work.

LOTHIAN: The Bush campaign calls that claim false and insists the president has always considered Kerry's service in Vietnam noble.

But last week on "LARRY KING LIVE," Bush passed up the opportunity to call on his supporters to back down.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I haven't seen the ad, but what I do condemn is these unregulated soft money expenditures by very wealthy people.

LOTHIAN: Kerry's war record has been questioned throughout his political career, but the controversy has intensified in the presidential campaign. The Kerry campaign is firing back with another 30-second ad.

UNIDENTIFIED VETERAN, KERRY CAMPAIGN COMMERCIAL: I expected I'd be shot when he pulled me out of the river. He risked his life to save mine.

LOTHIAN: This aggressive response comes as the credibility of the leading veteran behind the critical Kerry ad is being questioned. Larry Thurlow had disputed Kerry's claim of a gun battle that led to a bronze star.

But CNN has obtained Thurlow's own military record showing that, in fact, "all the boats came under weapons fire" in the area that day. Thurlow now says his record reflects an account written up by Kerry and calls it "a lie."

(on camera) The new Kerry counter-ad will run in Ohio, Wisconsin and West Virginia. That means the Kerry campaign is deviating from cost-saving plans not to buy any television ads until September, a sign that despite the official line, there is pressure to end this controversy.

Dan Lothian, CNN, Derry, New Hampshire.

(END VIDEOTAPE)

COLLINS: Meanwhile, the group Swift Boat Veterans For Truth is launching another anti-Kerry TV ad today.

CNN senior political analyst Bill Schneider is joining us now to talk more about this from Washington this morning.

Bill, good morning to you.

BILL SCHNEIDER, CNN SR. POLITICAL ANALYST: Good morning, Heidi.

COLLINS: Pretty strong words coming from Senator Kerry against President Bush. But this is not President Bush's ad, right?

SCHNEIDER: No, this ad is run by an independent group, although a lot of people who have funded the ad have ties to the Bush family and have supported President Bush in the past.

Some of the members of the Swift Boat group, not all of them but some of them, have ties to conservative groups and Republican campaigns, but there is no direct connection or coordination with the Bush-Cheney campaign.

COLLINS: All right, Bill, let's take a look at these numbers that we were talking about, the CBS poll. Specifically in there it is showing Kerry losing ground with veterans since the Swift Boat debate has been growing.

These numbers, as you see on the screen there, 37 percent. That's down from 46 percent, also down after the convention. What's going on here?

SCHNEIDER: What's going on is some very serious damage, apparently, among veterans and veteran voters. That is a very big shift. It was tied. The vote was tied among veterans just after the Democratic convention. Now George Bush, President Bush, appears to be 18 points ahead, a huge swing.

I think that explains why Senator Kerry has come out swinging on this. He's fighting back. He's attempting, hoping for a backlash against President Bush, claiming that these veterans are not telling the truth, that they are a front group for the Bush-Cheney campaign, even if there are no direct ties and trying to create what he hopes will be a backlash against the president. COLLINS: It does seem though, Bill, like this thing just won't die. I mean what was the genesis of the whole Swift Boat controversy? How did it begin for Kerry?

SCHNEIDER: Well, these service charges have been percolating for a long time. I mean, even back in Senator Kerry's campaigns in Massachusetts for the Senate occasionally there were doubts, charges, that came up about his war record.

He's always made his service record a central focus of all his campaigns. And in the presidential campaign, he made that his major claim for the nomination. He really didn't run on the issues. On the issues, Democrats agreed with Howard Dean, particularly on the Iraq war.

Kerry got the nomination because of his war record, because Democrats saw that he was electable against President Bush. He's a war hero. And he certainly focused on that at the Democratic convention.

So the critics say, well, that makes this fair game for an easy target. And, of course, the resentments here go all the way back 35 years to the 1960s. And very shortly, I can assure you, some of the charges are going to come out, not about Kerry's war record but about his anti-war record after he got back from Vietnam.

COLLINS: So quickly, Bill, how do you think this will impact voters? I mean, do you think it just turns them off in general?

SCHNEIDER: Well, it has a real danger for Senator Kerry. What is does is it makes this election campaign all about him -- his record, his background, the '60s. It's trying to turn him into another Bill Clinton.

Whereas, if Kerry's going to win this election, the only way he can do it is by making Bush the issue. It has to be about Bush's record as president not about his war record.

COLLINS: All right, Bill Schneider, CNN's senior political analyst for us this morning. Bill, thanks.

SCHNEIDER: Sure.

HEMMER: All right, Heidi.

From Athens now, the Olympic games, 16-year-old American gymnast Carly Patterson has made history. She started the night with a highly difficult vault, landed out of bounds, in fact; but that was forgotten later by the time she got to her floor exercise, an impressive and error-free program assured her Olympic gold.

No American gymnast in the all-around competition has won gold on the women's side since Mary Lou Retton, 20 years ago in L.A., 1984.

(BEGIN VIDEO CLIP)

CARLY PATTERSON, OLYMPIC GOLD MEDALIST: In the car ride, I talked to Mary Lou.

QUESTION: What did she say to you?

PATTERSON: She said she knew I could do it, and she knew I had it in me. And she's just really proud and excited for me.

(END VIDEO CLIP)

HEMMER: Carly Patterson out of the state of Maryland.

That's kind of cool. She talked to Mary Lou before.

COLLINS: Very cool, yes.

And you know what did it for her last night?

HEMMER: What's that?

COLLINS: The beam.

HEMMER: Yes?

COLLINS: Which is the most difficult gymnastic event. I mean, she was on it.

HEMMER: How are you staying up that late?

COLLINS: OK, so I fall asleep in the middle right as she was performing. I woke up to them putting the gold medal around her neck.

HEMMER: Good for her, huh?

COLLINS: Yes, very good.

All right. It is about 12 minutes past the hour now. Time for a look at some of today's other news with Betty Nguyen. Betty, good morning to you.

BETTY NGUYEN, CNN CORRESPONDENT: Good morning, Heidi.

We begin with a new explosion that's rocked an underground gas storage facility outside of Houston, Texas. Want to take a look at this, we give you some live pictures from affiliate KHOU. There it is.

The second blast at the Duke Energy site, but it's being called twice the size of the one we showed you yesterday. Officials are forcing some 100 more residents to evacuate within a three-mile radius of the facility. No injuries have been reported.

New testimony from the stepfather of Michael Jackson's accuser, the relative says an offer was made to the family if they appeared in a video intended to restore Jackson's reputation.

The stepfather testified at a pretrial hearing yesterday. We'll have a live report on the proceedings from Court TV's Lisa Bloom in about a half hour.

To Arkansas now, a 7-year-old girl missing since Sunday has been found dead. The family was told about the death hours after police discovered the body last night in a field where the child's shoes and bicycle were found earlier this week.

The cause of death, well, that's still under investigation. A suspect remains in custody.

And talk show host Oprah Winfrey is inviting fellow jury members to appear on her show. Winfrey was one of 12 jurors who convicted a Chicago man of murder. Winfrey calls her three days in the jury box a reality check.

The special jury episode of Oprah's show is slated for next week.

Heidi, back to you.

COLLINS: It's going to be interesting to see that one. That's for sure.

NGUYEN: Yes.

COLLINS: Betty, thanks so much.

Time for a check of our forecast now. Chad Myers is at the CNN Center with the very levist -- latest weather update, that is.

So what are we looking at for the weekend here, Chad?

CHAD MYERS, CNN METEOROLOGIST: You're going to get rain tomorrow in New York. But the rain today is actually in western New York and also in western Pennsylvania.

(WEATHER BREAK)

MYERS: Back to you.

COLLINS: Chad, I'm taking off for Minneapolis, though, not Hawaii, unfortunately.

MYERS: Take a sweater.

HEMMER: Well, you're going to miss Estelle, then.

COLLINS: Yes, OK. That's a good way to look at it.

True. It's only 66 in Minneapolis.

Chad, thanks a lot for that.

Still to come now this morning, a new record for oil, a report on what's driving those prices and how much more we'll have to pay.

HEMMER: Also, is U.S. Senator Ted Kennedy a threat to national security. What led to him not being allowed to fly? We'll check it out.

COLLINS: And New Jersey governor, Jim McGreevey, stunned nearly everyone last week when he announced he was gay. But how long did he wait to tell his wife?

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

COLLINS: New Jersey governor, Jim McGreevey, still plans to step down in November as he announced last week with his wife by his side. But what is unclear is what happens now to McGreevey's marriage.

(BEGIN VIDEOTAPE)

COLLINS (voice-over): They were the picture of a happy family. James and Dina McGreevey, selling the image of the Garden State as a family friendly destination.

GOV. JIM MCGREEVEY (D), NEW JERSEY: Come out. See what's new in New Jersey.

COLLINS: Married for nearly four years they appeared in public a close-knit family. The announcement he was gay caught nearly everyone by surprise, apparently even his wife.

MCGREEVEY: For this, I ask the forgiveness and the grace of my wife. She has been extraordinary throughout this ordeal. And I am blessed by virtue of her love and strength.

COLLINS: Dina stood faithfully by his side as he admitted what he called a crisis of identity.

GEORGE ZOFFINLINGER, FRIEND OF GOVERNOR: We all have issues in families that, you know, are sometimes very difficult to deal with. In this particular case, I can't imagine anything more difficult than telling your wife what Jim McGreevey had to tell his wife.

COLLINS: One of Dina's friends, Lori Kennedy told the "Newark Star Ledger" newspaper that Dina considered not attending, but decided to show her support at the last minute.

Kennedy said, "She did not know before that he was gay. And if you saw her that night when she found out, you'd know that. She was totally shocked. Never in a million years did she know."

What's ahead for the McGreevey family not even their close friends know for sure.

(END VIDEOTAPE)

COLLINS: McGreevey has one child with his wife Dina and one child with his first wife, a Canadian librarian.

HEMMER: You know who might be throwing his name into the hopper there in New Jersey? Remember the actor and comedian, Joe Piscopo.

COLLINS: Yes, funny guy.

HEMMER: He's our guest next hour. We'll talk about him.

Serious, too.

COLLINS: Yes?

HEMMER: Oil prices continue to soar, and Google has lived up to the hype. Gerri Willis working for Andy Serwer again today, "Minding Your Business." Here we are dissing Google all week long.

(LAUGHTER)

HEMMER: And now it's turning in 100?

GERRI WILLIS, CNN FINANCIAL CORRESPONDENT: Yes, well, so maybe you should have climbed onboard? Yes, it closed yesterday at $100.34. That was an 18 percent pop. That's pretty good.

But let me give you a comparison, guys, OK?

HEMMER: All right.

WILLIS: The Internet stocks, height of the bubble, how much did they go up on the first day on average? More, 65 percent, OK?

So they did great, but it could have been better I suppose. The markets, though, yesterday down. It continues to be the story. Oil, if you're worried about your investments, forget the stock market, just look at the price of crude oil. That's the most important thing now.

HEMMER: Over $47, is that right?

WILLIS: I'm telling you, $49 right now.

HEMMER: Oh.

WILLIS: $49, we're closing in on $50. There are people out in the marketplace talking about $60 a barrel for crude oil.

Now, you know, a lot of this has not shown up yet at the pump, but I got to tell you, when Labor Day comes, I think you're going to start seeing it.

HEMMER: Thank you, Gerri.

COLLINS: You're probably right.

WILLIS: You're welcome.

HEMMER: In a moment here, how close are U.S. forces to that embattled mosque in Najaf? And Michael Jackson takes exception to a new movie while a startling new allegation comes out in court. We will check into that.

And a stab at our Olympics challenge. First up today, on which continents have the Olympic games never been hosted?

Continents.

COLLINS: Antarctica.

HEMMER: That's one.

COLLINS: Sorry.

HEMMER: The answer, after a break.

(COMMERCIAL BREAK)

COLLINS: Before the break we asked you on which continents have the Olympic games never been hosted? The answer, the games have never been held in Africa, South America, and as I stated, Antarctica. That was a toughy.

HEMMER: Yes, you got the tough one.

COLLINS: It was another big night, though, for team USA in Athens. As we mentioned earlier, 16-year-old gymnast Carly Patterson from Maryland won the gold medal in the women's individual all-around competition.

Here is her final floor routine. Looking good.

And elsewhere in Athens, though, American swimmer Aaron Piersol came in first in the 200-meter backstroke but not without controversy. Piersol was disqualified for an alleged illegal kick during a turn. The ruling, though, was later overturned and Piersol was awarded his gold medal.

And Michael Phelps won his fourth gold medal after setting an Olympic record in the 200-meter medley relay. The United States, though, still holds on top -- 35 medals overall now. It's followed by China and Russia.

China was in first place before, so now we've gone ahead of them.

HEMMER: Yes, Phelps four gold, not bad.

COLLINS: Not bad.

HEMMER: And Piersol absolutely dominates that event.

COLLINS: Yes.

HEMMER: In backstroke.

COLLINS: He was just kind of laughing at them when they were making that claim.

HEMMER: What's up, Jack? Good morning.

CAFFERTY: It's a wonderful thing, Friday. You know, sometimes the lord just provides stuff.

For example, when people who spend their entire lives creating the bureaucracy that ensnares us all actually get caught up in it themselves. I love this story.

Guess who was on the government's no-fly list and couldn't get off of it for weeks? None other than the distinguished senior senator from state of Massachusetts, Ted Kennedy.

When he tried to board a flight from Boston to Washington, he was told he would not be allowed to get on the plane. Nobody told him why not, they just said, no.

When he tried to return from Washington to Boston, same story. Three times the airlines refused to let him board.

(BEGIN VIDEO CLIP)

SEN. TED KENNEDY (D), MASSACHUSETTES: And so I said, I've been getting on this plane, you know, for 42 years.

(LAUGHTER)

KENNEDY: And why can't I get on the plane back to Boston -- back Washington?

They said, you can't get on the plane back to Washington.

So my administrative assistant talked to the department of homeland security, and they said there was some mistake. It happened three more times, and finally Secretary Ridge called to apologize.

(END VIDEO CLIP)

CAFFERTY: So the next time you get held up unnecessarily at the airport, just have Tom Ridge straighten it out for you, and then he'll call you to apologize when it's all worked out.

The question this morning -- I love this story -- who else should be on the government's no fly list? Think about people that you'd like to see stranded in the airport and let us know? And since it's Friday and we tend not to take it all that seriously on Friday, you can write to us about anything else that's on your mind.

I eventually had my administrative assistant call, and Tom Ridge called me. I mean...

HEMMER: He said he's been taking that flight for what, 40 years?

COLLINS: Forty-two years, yes. CAFFERTY: I just, I think it's terrific. You know, they create these animal traps for the population. It's nice when they catch a rat with one of them.

HEMMER: What was the catch? There was some other guy who had his name, right?

COLLINS: Same name, yes.

HEMMER: Is that why he popped up? That's what they say, anyway.

CAFFERTY: Well, there's probably a few people in the world named Kennedy.

HEMMER: A few.

CAFFERTY: I would imagine, you know, probably more than one.

HEMMER: Thank you, Jack.

On a Friday, time for "90-Second Pop" this morning as well.

Twenty-seven years ago this week, the "King of Rock 'N' Roll" left the building. His legend lives on, now playing on Broadway, in fact.

And rumors of a breakup, now reports of a wedding for these two.

Ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

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