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American Morning

In Iraq, Suicide Bombers Launch Wave of Deadly Attacks; Sudden Landslide Sends Homes Crashing Down Hill in Southern California

Aired June 02, 2005 - 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: I'm Bill Hemmer.
Troubling developments overnight in Iraq: Suicide bombers launch a wave of deadly attacks, three in only 45 minutes. Live reports from Baghdad and the Pentagon, in a moment.

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. I'm Soledad O'Brien.

It came from nowhere, a sudden landslide sends homes crashing down a hill in Southern California. Several million-dollar homes destroyed. Many more now in danger. A live report from Laguna Beach is coming up.

JACK CAFFERTY, CNN ANCHOR: I'm Jack Cafferty.

With Mr. Deep Throat finally revealed after 33 years, it remains to be seen how history will judge Mark Felt. Hero or villain? We'll take a look.

HEMMER: Also, uproar over a videotape aimed at keeping pro football players out of trouble, but the tape itself is troubling to some. We'll look at the fallout this morning, on this AMERICAN MORNING.

7:00 here in New York. Good morning, everyone.

O'BRIEN: Lots of overnight developments to talk about out of Iraq again today.

HEMMER: Certainly are. That's where we start this morning. We begin with three suicide car bombing, killing 16, wounding 53, all within a span of 45 minutes today.

To Baghdad and Jennifer Eccleston there. Who were the targets this time, Jennifer?

JENNIFER ECCLESTON, CNN CORRESPONDENT: Well, there's a variety of targets, Bill. Of course we saw this morning, and almost every morning now, that Iraqis are awaking to violence, and today's seemingly coordinated attack yet another example that the terror shadows large parts of this country, This morning, as diners were enjoying breakfast in a town called Tuz Khurmatu. That's out of the northern city of Kirkuk. A suicide car bomb ripped through a restaurant, leaving it a heap of twisted metal and gas, and killing at least 12 people and wounded 38 others. Among the dead, a bodyguard to one of Iraqi's deputy prime ministers, although the deputy prime minister was not there at the time.

And then, as you mentioned, Almost 30 minutes later, another car bomb targeted an American diplomatic convoy. That now in the city of Kirkuk. There, too, Iraqi children were killed, and some 11 were wounded.

Then the violence moved further south, to Baqubah, about 35 miles north of Baghdad. That took place about 10 to 15 minutes after the Kirkuk bombing, a regional counselor and three others were wounded in that attack when a suicide bomber attacked their convoy. And also last night, here in the capital city overnight, a mortar attack left three children injured -- left them killed actually. Two were siblings, one was a cousin, and also their uncle was killed. So it's an inauspicious start, Bill, to the Month of June, following a deadly May, where nearly 700 Iraqis were killed, and nearly 80 American troops, including the announcement today, Bill, of the death of a soldier after a roadside bomb struck his vehicle outside the hostile city of Ramadi, and that's outside of Baghdad, western Iraq, in the Al Anbar province -- Bill.

HEMMER: Jennifer Eccleston, reporting in Baghdad for us -- Soledad.

O'BRIEN: Here in this country, police in Richmond, Virginia using everything from helicopters to search dogs to try capture a dangerous killer. Three people shot to death within minutes of one another and within a three-mile stretch. At least two of the killings are being investigated as possible hate crimes.

CNN's Tom Foreman is in Richmond this morning, outside one of the crime scenes.

Tom, good morning to you. Any leads now?

TOM FOREMAN, CNN CORRESPONDENT: Well, you know, Soledad, they do have some big leads on this. They think they know who's responsible. And how this happened last night was unbelievable. In a space of about 10 minutes, this explosion of killings, all in a very small area of this town.

Take a look at these surveillance photos of what happened last night while I tell you what happened. It started in a housing project near here. This man, police say, accosted another man. There's an African-American, is the suspect, the person they're looking for, accosted another African-American man, shot and killed him. No, idea what the motive is. They have no idea why that happened.

But minutes later, the same gunman showed up over here at a food store called the James' Food Store here. He went inside, where the man who runs the place is a native of Yemen. He's been here about 12 years, father, works as a clerk in the store. He yelled a lot of racial insults at the guy, while robbing him, then shot and killed him. As soon as he was finished in that store, he walked right next door to this place called the Polly Clean Center, which is operated by a Korean man, who has also been there some time, shot and killed him while yelling out racial insults at him, again, robbing him in the process.

Police have been looking all over this town all night for this guy who they believe is involved, haven't been able to find him. That's one of the reasons they're pushing these pictures now, they want people to look at it, look around their own neighborhood, see if maybe he's shown up there, because frankly, they're saying, if he's not showing up right now in their searches here, it's possible that he's left town. But the guy they're looking for has a long record of problems and they're really wanting to nail him down now, because again, 10 minutes, a tiny area, an awful lot of violence in this town.

O'BRIEN: Tom, if it is, indeed, racially motivated, does that make a difference of how police are conducting their search?

FOREMAN: No, it make no difference in how they conduct the search. In fact, interestingly enough, it doesn't make any difference in what this is charged with in the long run, because what he did, racially motivated or not, is a capital crime. Now that adds an extra layer to it. He could face the death penalty for doing this, because string of murders, murders committed in the course of committing a robbery, and in fact police are downplaying the hate crime part of this, because they're saying clearly what this fellow did in both of these places qualified as hate crimes, but doesn't look like that was the driving force behind this. Something went very wrong with this guy, very wrong; 10 minutes, three people dead, and a massive manhunt, and they're not going to give up until they find him, and they sure think they can -- Soledad.

O'BRIEN: Tom Foreman for us this morning in Richmond. Tom, thanks for the update -- Bill.

HEMMER: Now from the West Coast this morning, they are clearly worried that more landslides could be coming in Southern California. A hillside section of Laguna Beach giving way early Wednesday, people scrambling from their beds, as homes began to slide down a 50-foot slope without warning.

After looking at this video, it may be hard to believe, but there were no serious injuries. So far, a thousand people have been evacuated.

Up early this morning before the sun comes up there is CNN's Chris Lawrence in Laguna Beach.

Chris, good morning.

CHRIS LAWRENCE, CORRESPONDENT: Good morning, Bill.

So far, this landslide has destroyed 18 homes and damaged another 20. A lot of the families who lived on top of that hill had to evacuate their homes. They're still worried this morning, because that ground is still shifting.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Some homes cracked in half as the ground gave way. Others appeared to stay in tact, even as they slid down this hillside.

JILL LOCKHART, HOME DESTROYED IN LANDSLIDE: We ran down the front side of the mountain , and we could hear this house collapsing behind us, sinking in, and I guess the driveway moved 200 feet down as we were running down it.

LAWRENCE: And the ground could keep moving for the next few weeks.

CAPT. DANELL ADAMS, LAGUNA BEACH P.D.: I certainly encourage people, one, to leave the area, and, two, to stay out of the area.

LAWRENCE: Vera Martinez doesn't have a choice.

VERA MARTINEZ, EVACUATED FROM HOME: My house is right above there.

LAWRENCE: Her home has been red tagged, which means it could collapse at any time. And the frightening this is, if that happens, she's got no insurance coverage.

MARTINEZ: What angers me, is that there is no company that will offer any kind of landslide insurance.

LAWRENCE: Insurance companies won't cover mudslides, which fall under so-called "acts of God." Laguna's been dry for the past month, but this winter dumped more than 28 inches of rain, twice what the town sees in a normal year. Geologists say that water never drained, and slowly destabilized the soil.

MARTINEZ: It's about Mother Nature saying, you know, pay attention to me a little bit more, don't build here; don't build here.

LAWRENCE: But people have and always will, because someone will always want to wake up to this view.

Here's what this hillside looked like before the landslide. And here is what it looks like now. Laguna Beach has some prime ocean- front property, but sometimes it comes at an incredible price.

(END VIDEOTAPE)

LAWRENCE: In fact, just on the other side of this hill, you can see the construction crews breaking ground on some of those new homes.

Back here, last night, scientists placed measurement devices all around the affected area. Later today, they will be going back to check those devices to see how much, if any, the ground has shifted overnight -- Bill.

O'BRIEN: Chris Lawrence, thanks, in Laguna Beach.

(WEATHER REPORT)

O'BRIEN: And also ahead this morning, Bob Woodward's firsthand account of the secret meeting with Deep Throat, how Mark Felt became the inside source on Watergate.

HEMMER: Also the true nature of the war in Iraq. Is an insurgency the right way to describe what's happening there? A closer look at that in a moment.

O'BRIEN: And a look at the defining moments of CNN's 25 years on the air. Today, we remember 9/11. That's a little bit later on AMERICAN MORNING.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: A chance meeting is what eventually led to the unraveling of the Watergate scandal. In today's "Washington Post," Bob Woodward gives a firsthand account of how former FBI official Mark Felt became Deep Throat. In the "Post" article, Woodward also offers his own suggestions for what may have prompted Felt to leak information.

CNN senior analyst Jeff Greenfield with more on that. Jeff, good morning.

Give us a -- I mean, I think that article is so interesting, because it covers a lots of ground, and answers a lot of unanswered questions. How did they get to know each other?

JEFF GREENFIELD, CNN SR. ANALYST: Well, that's funny. Actually, there's an irony here. They met in the White House. In fact, they met in the basement of the White House. In 1970, Woodward wasn't even a reporter. He was a young lieutenant working for the Office of Chief of Naval Operations. He was a courier, delivered documents, and Mark Felt was in the White House to receive them as a career FBI official. Woodward began cultivating Mark Felt, as young people do in Washington, looking for a mentor. And when he began his journalism career in Montgomery, "The Montgomery Sentinel," he stayed in touch with Felt, and he learned that Mark Felt was an ardent admirer of FBI director J. Edgar Hoover. This was a critical factor, it looks, in Felt's ultimate decision to become Woodward's Watergate source.

O'BRIEN: Why was that so critical. I mean, how did that reflect in what was going to happen?

GREENFIELD: Well, many people in the FBI believe that the Nixon White House was challenging the FBI's turf, by wanting to spy on suspected radicals, and in some cases disrupting their activities. Now this was not out of any great concern for civil liberties. I mean, J. Edgar Hoover's FBI was more than happy to bend or break a lot of rules, but Mark Felt and others in the agency did not like the idea of the White House running intelligence operations against political enemies, and then when Hoover died in 1972, by the way, just six weeks before the Watergate break-in, Nixon appointed an outsider, L. Patrick Gray, to run the agency, and Felt basically was running the Bureau, the day-to-day part of the Bureau, was really upset about being passed over, and Woodward suggests that might be a possible motive.

O'BRIEN: So that would be why he essentially became Deep Throat, do you think?

GREENFIELD: Well, what he said, was, let me show you -- he says, quote, his reverence for the FBI procedure -- I'm sorry, here it is. "The

"Reverence for Hoover and the strict Bureau procedure made Gray's appointment as director all the more shocking." Felt obviously concluded he was Hoover's logical successor.

O'BRIEN: So he's passed over. So it's just feeling betrayed that essentially made him Deep Throat, though?

GREENFIELD: No, because Woodward suggested that's maybe one reason. But here's what else Woodward says in the article. He says, "Felt believed he was protecting the bureau by finding a way, clandestine as it was, to push some of the information from the FBI interviews and files out to the public to help build public and political pressure to make Nixon and his people answerable."

Here's the money quote, "He had nothing but contempt for the Nixon White House and their effort to manipulate the Bureau for political reasons. The young eager beaver patrol of White House underlings, best exemplified by John Dean III, was odious to him."

And it also suggests a more personal or psychological reason. Woodward writes that, quote, "The former World War II spy hunter liked the game." "I suspect," says Woodward," that in his mind I was his agent. He beat it into my head, secrecy at all costs, no loose talk, no talk about him at all, no indication to anyone that such a secret source existed."

You pick, a lot of different possible motives here.

O'BRIEN: It may be a little bit of all of the above.

GREENFIELD: Probably the best answer.

O'BRIEN: There are, as you well know now, many people who say hero, and others who say, no, traitor; he betrayed his position.

GREENFIELD: Yes, that he should have gone to his superiors. All right, let's just think about this. Woodward's piece doesn't deal with this. But just consider, his boss, L. Patrick Gray, the FBI director, was leaking to the White House, and by the way, destroying documents. His ultimate superior at the Justice Department, attorney general John Mitchell, approved the Watergate break-in in the first place. Now you have top White House aides were helping with the cover-up, and Nixon himself six days after the break-in -- this is the famous smoking gun tape said, gee, maybe we could get the FBI -- I mean, maybe we should get the CIA, sorry, to tell the FBI to get off the case.

So just who should Mark Felt have gone to in this situation? If he'd gone to the Congress, which was then in the hands of the Democrats, in the middle of an election year, what would the White House have said about that? Partisan politics. So he may have felt that this was his only recourse.

O'BRIEN: Very interesting. I thought that was a terrific article, and it is our question of the day, too. Jack taking questions on whether Mark Felt was a hero or a villain. I think that's a really good question.

GREENFIELD: For some of us of a certain age, this exercise in nostalgia, it's really like revisiting amazing stuff, that your kids -- if you told your kids about this, they'd say, what happened 30 years ago?

O'BRIEN: Yes, right, right, right. Things have so changed.

All right, Jeff, thanks.

GREENFIELD: See you.

O'BRIEN: Tonight, Larry King has got a primetime exclusive interview with the reporters at the heart of the Watergate reporting, Bob Woodward and Carl Bernstein. That's at 9:00 p.m. Eastern, and of course it's right here on CNN -- Bill.

HEMMER: In a moment here, Soledad, how do you describe the conflict in Iraq? If you considered it an insurgency, some experts are now saying you might be wrong. We'll look at why in a moment, as we continue after this.

(COMMERCIAL BREAK)

HEMMER: Welcome back, everyone.

Washington is moving fast on this SEC position. Andy has more on that. Also check your 401(k). Stocks on the move again.

Here's Andy Serwer, "Minding Your Business." Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Bill. When President Bush appointed William Donaldson to head up the SEC in December of 2002, his job was to restore confidence and stability in that government agency. He came in at a very difficult time, as you remember, in the wake of Enron, and Worldcom and Wall Street scandals, and I think we can say safely that he did that.

However, he may have been a little more than the president bargained for. Donaldson ended up being a bit of activist, and ended up knocking heads with Republicans, members of the SEC, as well as business leaders. Alan Greenspan, Secretary John Snow of the Treasury were other people who Donaldson ended up disagreeing with. Donaldson, 74 years old today, as a matter of fact, will be stepping down at the end of the month. And apparently the Bush administration today will announce that it will nominate Representative Christopher Cox, of California, a conservative congressman, to replace Donaldson. And it is a job that will be very, very difficult to fill, because you have the business lobby on one side and consumer activists on the other, will constantly be giving Mr. Cox a hard time.

HEMMER: Donaldson had a lot of darts on that board, you're saying?

SERWER: He absolutely did, and it's a tough job, and I think he did an adequate job of filling that role.

Let's talk about stocks. Yesterday, the market did move upward, as Bill indicated. What was going on here, you can see the Dow above 10,500. Lower interest rates surprising everyone. Interest rates continue to fall. The thinking on Wall Street is the Fed is getting near ending raising interest rates for the short term. That's very speculative, obviously.

Interesting little couple notes here. At 3:56, the markets closed yesterday, four minutes early. A telecommunications glitch.

And then finally, this morning, we're going to keep on this. The stock was $10.73 yesterday to $288. Three-hundred is in sight.

HEMMER: Keeps on giving, doesn't it?

O'BRIEN: What did they say? Three-fifty?

SERWER: Three-fifty is the new target.

O'BRIEN: Four hundred, five hundred.

HEMMER: This glitch yesterday, I think, is somewhat significant, only in the sense that the stock market, they have precautions built in in the event that they have errors like this.

SERWER: Yes, redundant systems, as they call it in the business.

HEMMER: They were thinking for a while they were going to reopen for around four minutes.

SERWER: Yes, and they had the people stay at the posts, the specialists and traders, until 5:30. They never reopened. Kind of a pain in the neck for these people.

HEMMER: What if you have a trade just hanging out there? What do you do?

O'BRIEN: Wait until today.

HEMMER: Hang on until 9:30.

SERWER: Yes, that's what they did.

HEMMER: Thanks you, Andy.

O'BRIEN: Well, now with Deep Throat revealed, it brings us to our Question of the Day. A good one, too. Good morning.

CAFFERTY: Thank you, Soledad.

At the time, pardon me, that Mark Felt was leaking information to Woodward and Bernstein, he was also the number-two man at the FBI. He was reportedly angry that he'd been passed over for the top job at the Bureau when J. Edgar Hoover died. Without Felt's information, the Watergate cover-up probably would have never been exposed.

But the fact of the matter is, Mark Felt was breaking the law. If Felt had discovered someone at the FBI who worked under him leaking classified information to the press he probably would have fired him.

Ironically, President Nixon testified on Felt's behalf in the 1980 trial, where Felt was accusing of authorizing illegal break-ins at homes of people associated with the radical Weather (ph) underground.

The question this morning, is as Deep Throat, was Mark Felt a hero or a villain?

O'BRIEN: Interesting question, because of course it's that question that essentially led the family to pushing Mark Felt to coming forward at the end of the day.

CAFFERTY: I think wash led the family to do it, is they smelled the fact that if they didn't hurry up, they couldn't make any money after the guy died, because then Bernstein would have written a book about who he was. So it's like, let's give it to "Vanity Fair" and see if we can make a few dollars.

SERWER: I hear Woodward is going to do this book now, and their may be competing books. I mean, this story is going to keep going, I think, for a while, because there's a lot...

HEMMER: A rush order on that book from Woodward, because what, we had the guy on yesterday from the "Post" saying the "Post" got caught flat-footed, and really had to scramble on Monday into Tuesday yesterday.

Thank you, Jack, we'll look at that.

Also in a moment here, back to California, a devastating landslide there forcing hundreds from their homes, and their could be more trouble on the way. Back live to Laguna Beach. The mayor is standing by live, and we'll talk to the mayor about what's happening today.

Back in a moment after this on AMERICAN MORNING.

(COMMERCIAL BREAK)

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Aired June 2, 2005 - 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: I'm Bill Hemmer.
Troubling developments overnight in Iraq: Suicide bombers launch a wave of deadly attacks, three in only 45 minutes. Live reports from Baghdad and the Pentagon, in a moment.

SOLEDAD O'BRIEN, CNN ANCHOR: Good morning. I'm Soledad O'Brien.

It came from nowhere, a sudden landslide sends homes crashing down a hill in Southern California. Several million-dollar homes destroyed. Many more now in danger. A live report from Laguna Beach is coming up.

JACK CAFFERTY, CNN ANCHOR: I'm Jack Cafferty.

With Mr. Deep Throat finally revealed after 33 years, it remains to be seen how history will judge Mark Felt. Hero or villain? We'll take a look.

HEMMER: Also, uproar over a videotape aimed at keeping pro football players out of trouble, but the tape itself is troubling to some. We'll look at the fallout this morning, on this AMERICAN MORNING.

7:00 here in New York. Good morning, everyone.

O'BRIEN: Lots of overnight developments to talk about out of Iraq again today.

HEMMER: Certainly are. That's where we start this morning. We begin with three suicide car bombing, killing 16, wounding 53, all within a span of 45 minutes today.

To Baghdad and Jennifer Eccleston there. Who were the targets this time, Jennifer?

JENNIFER ECCLESTON, CNN CORRESPONDENT: Well, there's a variety of targets, Bill. Of course we saw this morning, and almost every morning now, that Iraqis are awaking to violence, and today's seemingly coordinated attack yet another example that the terror shadows large parts of this country, This morning, as diners were enjoying breakfast in a town called Tuz Khurmatu. That's out of the northern city of Kirkuk. A suicide car bomb ripped through a restaurant, leaving it a heap of twisted metal and gas, and killing at least 12 people and wounded 38 others. Among the dead, a bodyguard to one of Iraqi's deputy prime ministers, although the deputy prime minister was not there at the time.

And then, as you mentioned, Almost 30 minutes later, another car bomb targeted an American diplomatic convoy. That now in the city of Kirkuk. There, too, Iraqi children were killed, and some 11 were wounded.

Then the violence moved further south, to Baqubah, about 35 miles north of Baghdad. That took place about 10 to 15 minutes after the Kirkuk bombing, a regional counselor and three others were wounded in that attack when a suicide bomber attacked their convoy. And also last night, here in the capital city overnight, a mortar attack left three children injured -- left them killed actually. Two were siblings, one was a cousin, and also their uncle was killed. So it's an inauspicious start, Bill, to the Month of June, following a deadly May, where nearly 700 Iraqis were killed, and nearly 80 American troops, including the announcement today, Bill, of the death of a soldier after a roadside bomb struck his vehicle outside the hostile city of Ramadi, and that's outside of Baghdad, western Iraq, in the Al Anbar province -- Bill.

HEMMER: Jennifer Eccleston, reporting in Baghdad for us -- Soledad.

O'BRIEN: Here in this country, police in Richmond, Virginia using everything from helicopters to search dogs to try capture a dangerous killer. Three people shot to death within minutes of one another and within a three-mile stretch. At least two of the killings are being investigated as possible hate crimes.

CNN's Tom Foreman is in Richmond this morning, outside one of the crime scenes.

Tom, good morning to you. Any leads now?

TOM FOREMAN, CNN CORRESPONDENT: Well, you know, Soledad, they do have some big leads on this. They think they know who's responsible. And how this happened last night was unbelievable. In a space of about 10 minutes, this explosion of killings, all in a very small area of this town.

Take a look at these surveillance photos of what happened last night while I tell you what happened. It started in a housing project near here. This man, police say, accosted another man. There's an African-American, is the suspect, the person they're looking for, accosted another African-American man, shot and killed him. No, idea what the motive is. They have no idea why that happened.

But minutes later, the same gunman showed up over here at a food store called the James' Food Store here. He went inside, where the man who runs the place is a native of Yemen. He's been here about 12 years, father, works as a clerk in the store. He yelled a lot of racial insults at the guy, while robbing him, then shot and killed him. As soon as he was finished in that store, he walked right next door to this place called the Polly Clean Center, which is operated by a Korean man, who has also been there some time, shot and killed him while yelling out racial insults at him, again, robbing him in the process.

Police have been looking all over this town all night for this guy who they believe is involved, haven't been able to find him. That's one of the reasons they're pushing these pictures now, they want people to look at it, look around their own neighborhood, see if maybe he's shown up there, because frankly, they're saying, if he's not showing up right now in their searches here, it's possible that he's left town. But the guy they're looking for has a long record of problems and they're really wanting to nail him down now, because again, 10 minutes, a tiny area, an awful lot of violence in this town.

O'BRIEN: Tom, if it is, indeed, racially motivated, does that make a difference of how police are conducting their search?

FOREMAN: No, it make no difference in how they conduct the search. In fact, interestingly enough, it doesn't make any difference in what this is charged with in the long run, because what he did, racially motivated or not, is a capital crime. Now that adds an extra layer to it. He could face the death penalty for doing this, because string of murders, murders committed in the course of committing a robbery, and in fact police are downplaying the hate crime part of this, because they're saying clearly what this fellow did in both of these places qualified as hate crimes, but doesn't look like that was the driving force behind this. Something went very wrong with this guy, very wrong; 10 minutes, three people dead, and a massive manhunt, and they're not going to give up until they find him, and they sure think they can -- Soledad.

O'BRIEN: Tom Foreman for us this morning in Richmond. Tom, thanks for the update -- Bill.

HEMMER: Now from the West Coast this morning, they are clearly worried that more landslides could be coming in Southern California. A hillside section of Laguna Beach giving way early Wednesday, people scrambling from their beds, as homes began to slide down a 50-foot slope without warning.

After looking at this video, it may be hard to believe, but there were no serious injuries. So far, a thousand people have been evacuated.

Up early this morning before the sun comes up there is CNN's Chris Lawrence in Laguna Beach.

Chris, good morning.

CHRIS LAWRENCE, CORRESPONDENT: Good morning, Bill.

So far, this landslide has destroyed 18 homes and damaged another 20. A lot of the families who lived on top of that hill had to evacuate their homes. They're still worried this morning, because that ground is still shifting.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): Some homes cracked in half as the ground gave way. Others appeared to stay in tact, even as they slid down this hillside.

JILL LOCKHART, HOME DESTROYED IN LANDSLIDE: We ran down the front side of the mountain , and we could hear this house collapsing behind us, sinking in, and I guess the driveway moved 200 feet down as we were running down it.

LAWRENCE: And the ground could keep moving for the next few weeks.

CAPT. DANELL ADAMS, LAGUNA BEACH P.D.: I certainly encourage people, one, to leave the area, and, two, to stay out of the area.

LAWRENCE: Vera Martinez doesn't have a choice.

VERA MARTINEZ, EVACUATED FROM HOME: My house is right above there.

LAWRENCE: Her home has been red tagged, which means it could collapse at any time. And the frightening this is, if that happens, she's got no insurance coverage.

MARTINEZ: What angers me, is that there is no company that will offer any kind of landslide insurance.

LAWRENCE: Insurance companies won't cover mudslides, which fall under so-called "acts of God." Laguna's been dry for the past month, but this winter dumped more than 28 inches of rain, twice what the town sees in a normal year. Geologists say that water never drained, and slowly destabilized the soil.

MARTINEZ: It's about Mother Nature saying, you know, pay attention to me a little bit more, don't build here; don't build here.

LAWRENCE: But people have and always will, because someone will always want to wake up to this view.

Here's what this hillside looked like before the landslide. And here is what it looks like now. Laguna Beach has some prime ocean- front property, but sometimes it comes at an incredible price.

(END VIDEOTAPE)

LAWRENCE: In fact, just on the other side of this hill, you can see the construction crews breaking ground on some of those new homes.

Back here, last night, scientists placed measurement devices all around the affected area. Later today, they will be going back to check those devices to see how much, if any, the ground has shifted overnight -- Bill.

O'BRIEN: Chris Lawrence, thanks, in Laguna Beach.

(WEATHER REPORT)

O'BRIEN: And also ahead this morning, Bob Woodward's firsthand account of the secret meeting with Deep Throat, how Mark Felt became the inside source on Watergate.

HEMMER: Also the true nature of the war in Iraq. Is an insurgency the right way to describe what's happening there? A closer look at that in a moment.

O'BRIEN: And a look at the defining moments of CNN's 25 years on the air. Today, we remember 9/11. That's a little bit later on AMERICAN MORNING.

Stay with us.

(COMMERCIAL BREAK)

O'BRIEN: A chance meeting is what eventually led to the unraveling of the Watergate scandal. In today's "Washington Post," Bob Woodward gives a firsthand account of how former FBI official Mark Felt became Deep Throat. In the "Post" article, Woodward also offers his own suggestions for what may have prompted Felt to leak information.

CNN senior analyst Jeff Greenfield with more on that. Jeff, good morning.

Give us a -- I mean, I think that article is so interesting, because it covers a lots of ground, and answers a lot of unanswered questions. How did they get to know each other?

JEFF GREENFIELD, CNN SR. ANALYST: Well, that's funny. Actually, there's an irony here. They met in the White House. In fact, they met in the basement of the White House. In 1970, Woodward wasn't even a reporter. He was a young lieutenant working for the Office of Chief of Naval Operations. He was a courier, delivered documents, and Mark Felt was in the White House to receive them as a career FBI official. Woodward began cultivating Mark Felt, as young people do in Washington, looking for a mentor. And when he began his journalism career in Montgomery, "The Montgomery Sentinel," he stayed in touch with Felt, and he learned that Mark Felt was an ardent admirer of FBI director J. Edgar Hoover. This was a critical factor, it looks, in Felt's ultimate decision to become Woodward's Watergate source.

O'BRIEN: Why was that so critical. I mean, how did that reflect in what was going to happen?

GREENFIELD: Well, many people in the FBI believe that the Nixon White House was challenging the FBI's turf, by wanting to spy on suspected radicals, and in some cases disrupting their activities. Now this was not out of any great concern for civil liberties. I mean, J. Edgar Hoover's FBI was more than happy to bend or break a lot of rules, but Mark Felt and others in the agency did not like the idea of the White House running intelligence operations against political enemies, and then when Hoover died in 1972, by the way, just six weeks before the Watergate break-in, Nixon appointed an outsider, L. Patrick Gray, to run the agency, and Felt basically was running the Bureau, the day-to-day part of the Bureau, was really upset about being passed over, and Woodward suggests that might be a possible motive.

O'BRIEN: So that would be why he essentially became Deep Throat, do you think?

GREENFIELD: Well, what he said, was, let me show you -- he says, quote, his reverence for the FBI procedure -- I'm sorry, here it is. "The

"Reverence for Hoover and the strict Bureau procedure made Gray's appointment as director all the more shocking." Felt obviously concluded he was Hoover's logical successor.

O'BRIEN: So he's passed over. So it's just feeling betrayed that essentially made him Deep Throat, though?

GREENFIELD: No, because Woodward suggested that's maybe one reason. But here's what else Woodward says in the article. He says, "Felt believed he was protecting the bureau by finding a way, clandestine as it was, to push some of the information from the FBI interviews and files out to the public to help build public and political pressure to make Nixon and his people answerable."

Here's the money quote, "He had nothing but contempt for the Nixon White House and their effort to manipulate the Bureau for political reasons. The young eager beaver patrol of White House underlings, best exemplified by John Dean III, was odious to him."

And it also suggests a more personal or psychological reason. Woodward writes that, quote, "The former World War II spy hunter liked the game." "I suspect," says Woodward," that in his mind I was his agent. He beat it into my head, secrecy at all costs, no loose talk, no talk about him at all, no indication to anyone that such a secret source existed."

You pick, a lot of different possible motives here.

O'BRIEN: It may be a little bit of all of the above.

GREENFIELD: Probably the best answer.

O'BRIEN: There are, as you well know now, many people who say hero, and others who say, no, traitor; he betrayed his position.

GREENFIELD: Yes, that he should have gone to his superiors. All right, let's just think about this. Woodward's piece doesn't deal with this. But just consider, his boss, L. Patrick Gray, the FBI director, was leaking to the White House, and by the way, destroying documents. His ultimate superior at the Justice Department, attorney general John Mitchell, approved the Watergate break-in in the first place. Now you have top White House aides were helping with the cover-up, and Nixon himself six days after the break-in -- this is the famous smoking gun tape said, gee, maybe we could get the FBI -- I mean, maybe we should get the CIA, sorry, to tell the FBI to get off the case.

So just who should Mark Felt have gone to in this situation? If he'd gone to the Congress, which was then in the hands of the Democrats, in the middle of an election year, what would the White House have said about that? Partisan politics. So he may have felt that this was his only recourse.

O'BRIEN: Very interesting. I thought that was a terrific article, and it is our question of the day, too. Jack taking questions on whether Mark Felt was a hero or a villain. I think that's a really good question.

GREENFIELD: For some of us of a certain age, this exercise in nostalgia, it's really like revisiting amazing stuff, that your kids -- if you told your kids about this, they'd say, what happened 30 years ago?

O'BRIEN: Yes, right, right, right. Things have so changed.

All right, Jeff, thanks.

GREENFIELD: See you.

O'BRIEN: Tonight, Larry King has got a primetime exclusive interview with the reporters at the heart of the Watergate reporting, Bob Woodward and Carl Bernstein. That's at 9:00 p.m. Eastern, and of course it's right here on CNN -- Bill.

HEMMER: In a moment here, Soledad, how do you describe the conflict in Iraq? If you considered it an insurgency, some experts are now saying you might be wrong. We'll look at why in a moment, as we continue after this.

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HEMMER: Welcome back, everyone.

Washington is moving fast on this SEC position. Andy has more on that. Also check your 401(k). Stocks on the move again.

Here's Andy Serwer, "Minding Your Business." Good morning.

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning to you, Bill. When President Bush appointed William Donaldson to head up the SEC in December of 2002, his job was to restore confidence and stability in that government agency. He came in at a very difficult time, as you remember, in the wake of Enron, and Worldcom and Wall Street scandals, and I think we can say safely that he did that.

However, he may have been a little more than the president bargained for. Donaldson ended up being a bit of activist, and ended up knocking heads with Republicans, members of the SEC, as well as business leaders. Alan Greenspan, Secretary John Snow of the Treasury were other people who Donaldson ended up disagreeing with. Donaldson, 74 years old today, as a matter of fact, will be stepping down at the end of the month. And apparently the Bush administration today will announce that it will nominate Representative Christopher Cox, of California, a conservative congressman, to replace Donaldson. And it is a job that will be very, very difficult to fill, because you have the business lobby on one side and consumer activists on the other, will constantly be giving Mr. Cox a hard time.

HEMMER: Donaldson had a lot of darts on that board, you're saying?

SERWER: He absolutely did, and it's a tough job, and I think he did an adequate job of filling that role.

Let's talk about stocks. Yesterday, the market did move upward, as Bill indicated. What was going on here, you can see the Dow above 10,500. Lower interest rates surprising everyone. Interest rates continue to fall. The thinking on Wall Street is the Fed is getting near ending raising interest rates for the short term. That's very speculative, obviously.

Interesting little couple notes here. At 3:56, the markets closed yesterday, four minutes early. A telecommunications glitch.

And then finally, this morning, we're going to keep on this. The stock was $10.73 yesterday to $288. Three-hundred is in sight.

HEMMER: Keeps on giving, doesn't it?

O'BRIEN: What did they say? Three-fifty?

SERWER: Three-fifty is the new target.

O'BRIEN: Four hundred, five hundred.

HEMMER: This glitch yesterday, I think, is somewhat significant, only in the sense that the stock market, they have precautions built in in the event that they have errors like this.

SERWER: Yes, redundant systems, as they call it in the business.

HEMMER: They were thinking for a while they were going to reopen for around four minutes.

SERWER: Yes, and they had the people stay at the posts, the specialists and traders, until 5:30. They never reopened. Kind of a pain in the neck for these people.

HEMMER: What if you have a trade just hanging out there? What do you do?

O'BRIEN: Wait until today.

HEMMER: Hang on until 9:30.

SERWER: Yes, that's what they did.

HEMMER: Thanks you, Andy.

O'BRIEN: Well, now with Deep Throat revealed, it brings us to our Question of the Day. A good one, too. Good morning.

CAFFERTY: Thank you, Soledad.

At the time, pardon me, that Mark Felt was leaking information to Woodward and Bernstein, he was also the number-two man at the FBI. He was reportedly angry that he'd been passed over for the top job at the Bureau when J. Edgar Hoover died. Without Felt's information, the Watergate cover-up probably would have never been exposed.

But the fact of the matter is, Mark Felt was breaking the law. If Felt had discovered someone at the FBI who worked under him leaking classified information to the press he probably would have fired him.

Ironically, President Nixon testified on Felt's behalf in the 1980 trial, where Felt was accusing of authorizing illegal break-ins at homes of people associated with the radical Weather (ph) underground.

The question this morning, is as Deep Throat, was Mark Felt a hero or a villain?

O'BRIEN: Interesting question, because of course it's that question that essentially led the family to pushing Mark Felt to coming forward at the end of the day.

CAFFERTY: I think wash led the family to do it, is they smelled the fact that if they didn't hurry up, they couldn't make any money after the guy died, because then Bernstein would have written a book about who he was. So it's like, let's give it to "Vanity Fair" and see if we can make a few dollars.

SERWER: I hear Woodward is going to do this book now, and their may be competing books. I mean, this story is going to keep going, I think, for a while, because there's a lot...

HEMMER: A rush order on that book from Woodward, because what, we had the guy on yesterday from the "Post" saying the "Post" got caught flat-footed, and really had to scramble on Monday into Tuesday yesterday.

Thank you, Jack, we'll look at that.

Also in a moment here, back to California, a devastating landslide there forcing hundreds from their homes, and their could be more trouble on the way. Back live to Laguna Beach. The mayor is standing by live, and we'll talk to the mayor about what's happening today.

Back in a moment after this on AMERICAN MORNING.

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