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The Situation Room
Bush Administration and the World Send Message to North Korea; Rocket Reportedly Launched from Gaza Landed in Israel; Iraqi Chorus of Outrage About Rape and Murder of Iraqi Civilians, Allegedly by American Soldier; Atlantic City Casinos Dark; Ken Lay Has Died
Aired July 05, 2006 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.
Standing by, CNN reporters across the United States and around the world to bring you today's top stories.
Happening now, stop rattling your saber. That's the message the Bush administration and the world are sending to North Korea, telling the defiant nation to stop its taunting and start talking after it launched a series of missiles. Will the force of words work better than the force of action?
It's 6:00 a.m. in Pyongyang, where the missile launches may have tipped off the world to North Korea's military capabilities.
And it's 12:00 a.m. in Gaza, where the Middle East crisis sees yet another escalation.
Wolf Blitzer's off today. I'm John King. You're in THE SITUATION ROOM.
If North Korea's Kim Jong-il was seeking attention with a series of missile launches, as some suggest, he's getting it in spades. From the White House to the United Nations, to capitals around the world, North Korea is topic A this afternoon. And while the tone is urgent, it's also quite restrained.
We're covering all the angles for you this hour.
CNN White House Correspondent Ed Henry has reaction from there.
CNN Senior Pentagon Correspondent Jamie McIntyre has a look at U.S. defense options.
And CNN's Brian Todd looks at the unlikely scenario that the United States could take or would take military action against North Korea.
But we begin at the White House with Ed Henry -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, from the president on down, the White House is all about trying to calm the situation down. They're playing down the threat from North Korea, playing up the support they're getting from allies. In short, just the opposite of how they handled the situation with Iraq.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I view this as an opportunity to remind the international community that we must work together to continue to work hard to convince the North Korean leader to give up any weapons program. It is much more effective to have more than one nation dealing with North Korea. It's more effective for them to hear from a group of nations rather than one nation.
HENRY (voice over): A White House accused of rushing to war in Iraq moved quickly to reassure Americans the U.S. is not on the brink of another military conflict.
TONY SNOW, WHITE HOUSE PRESS SECRETARY: There are attempts to try to describe this almost in breathless World War III terms. This is not such a situation.
HENRY: An administration previously accused of not going the extra mile diplomatically is now all about making sure this is not cast as Washington versus Pyongyang.
CONDOLEEZZA RICE, SECRETARY OF STATE: We've had expressions from countries all over the world of concern about this provocation that the North Koreans have engaged in.
HENRY: Once accused of thumbing its nose at the United Nations, the White House embraced the Security Council, which met in emergency session to consider a resolution rebuking North Korea.
JOHN BOLTON, U.S. AMBASSADOR TO U.N.: No member defended what the North Koreans have done. And I think that the tenor of that discussion shows how little support there is in the international community as a whole for these North Korean missile launches.
HENRY: The president is sending State Department official Christopher Hill to the region to urge North Korea to return to the six-party talks with the U.S., China, Japan, Russia, and South Korea.
CHRISTOPHER HILL, ASSISTANT SECRETARY OF STATE: We're prepared to go ahead with it, and meanwhile, North Korea seems to want to go in a different direction.
HENRY: But former Clinton official Wendy Sherman charges the White House has failed by not taking a more assertive role in the talks earlier.
WENDY SHERMAN, FMR. STATE DEPT. COUNSELOR: We have to come to that negotiating table ready with direct talks and ready with enough incentives, as well as disincentives, much in the way that we have begun to do with Iran.
(END VIDEOTAPE)
HENRY: But Tony Snow insisted today that the firing of these North Korean missiles is due more to the irrationality of Kim Jong-il, not to a failed White House policy. Snow asserting that the White House, at least for now, has succeeded in creating a diplomatic consensus that North Korea has to come back to the table -- John.
KING: Ed, frustration at the White House in the Iran dispute got so hot that it and its allies decided to set a deadline, telling Iran, answer our package by July 12th, or else we will go to the Security Council for sanctions.
Any talk of a deadline in the North Korea case, come back to the table by date X, or that we will push more aggressively for sanctions, or some other punitive action?
HENRY: No talk of a deadline this week. But one thing to look for is that next week, when the presidential heads to Germany and then Russia for the G8 summit, there's a lot of talk now that all of a sudden North Korea is going to have a much higher place on the agenda. Iran was supposed to be at the top of the agenda. Now it will be twin issues, Iran and North Korea, and talk of a deadline certainly could come up then -- John.
KING: Ed Henry at the White House.
Ed, thank you very much.
Meanwhile, we're learning much more about the launches themselves and the response by the U.S. military.
CNN Senior Pentagon Correspondent Jamie McIntyre joins us with that part of the story.
Hey, Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Hey, John.
Well, Defense Secretary Donald Rumsfeld is talking to reporters this afternoon. He says he's been on the phone in conference calls with top U.S. commanders for days over the North Korean situation, and he says when the missiles were launched he was notified within a minute.
(BEGIN VIDEOTAPE)
MCINTYRE (voice over): When North Korea conducted its first and only other test of the long-range Taepodong back in 1998, it proudly released this video. But don't expect to see any pictures this time given the U.S. says the missile failed less than a minute after takeoff, before it even crested the horizon. Because the Taepodong-2 might have been able to reach the U.S., nine ground-based interceptor missiles were activated at Fort Greely, Alaska, and two at Vandenberg Air Force Base, California. But the U.S. Northern Command at Peterson Air Force Base in Colorado said in a statement, "Top officials from the command were able to determine quickly that the launch posed no threat to the United States or its territories."
Still, experts question whether the U.S. could have shot the missile down if it had to. MAJ. GEN. DON SHEPPERD (RET.), CNN MILITARY ANALYST: You want to stay ahead of that military threat. You don't want to stay behind it. And right now we're certainly either behind or on a par with it. We have limited capability to do anything about a missile coming into this country.
MCINTYRE: North Korea did successfully test a half-dozen old technology missiles, three short-range Scuds and three medium-range variants called Nodongs, according to Pentagon sources. Those ballistic missiles were fired from a launch facility on the northeast coast and were aimed northward away from Japan, in the general direction of Russia. All six fell harmlessly into the Sea of Japan.
The U.S. says it had no trouble tracking the launches using both satellites in space and ships off the Korean coast, including the USNS Observation Island, a high-tech monitoring ship with sophisticated radars. Also nearby were two U.S. Navy Aegis destroyers, equipped with standard missiles that could have, in theory, at least, shot down the short-range missiles much the same way this warhead was shot down by an Aegis ship in a test over the Pacific last month.
(END VIDEOTAPE)
MCINTYRE: You know, launching a missile is not an easy feat. In fact, of the nine intercept tests that the U.S. has had of its national missile defense, four failed, not because of the complex technology of hitting a warhead in space, but because of the routine technology of booster missiles failed. So, the fact that North Korea hasn't tested since 1998 shouldn't be a surprise that they haven't yet mastered the rocket science -- John.
KING: A fascinating look at that technology. Jamie McIntyre at the Pentagon.
Jamie, thank you very much.
And while no one is talking publicly about military action on the Korean Peninsula, there are some likely scenarios in the unlikely event it comes to that.
CNN's Brian Todd is here with those details.
Hi, Brian.
BRIAN TODD, CNN CORRESPONDENT: Hi, John.
None of those scenarios anything but costly and ugly. And this is after both sides have spent half a century looking at the possibilities.
(BEGIN VIDEOTAPE)
TODD (voice over): On a peninsula that's been heavily militarized and preparing for confrontation for more than 50 years, scenarios for war are detailed and frightening. We discussed them with a former senior U.S. Army intelligence officer assigned to Korea, a former Delta Force commander who also has a CIA background, and a former strategic planner at the National War College who developed a war game on Korea.
They all make clear war is a very remote possibility. So is the prospect of a U.S. pre-emptive strike.
MAJ. JEFFREY BEATTY, FMR. DELTA FORCE COMMANDER: If you're going to do a pre-emptive strike, you have got to make sure you get everything, because if you don't, they're going to launch what they have left, and they're going to probably launch a full-scale attack against the south.
TODD: Our experts say if America struck first the best case scenario is casualties in the tens of thousands on both sides. If North Korea attacked first, they say, thousands of its special operations commandos would likely swarm into the south from the air and sea, linking up with sleeper agents who've already infiltrated through tunnels.
Then...
BRIG. GEN. JAMES MARKS (RET.), CNN MILITARY ANALYST: Step two would be they have to secure the demilitarized zone that separates north from south. And they would do that with light infantry, simply to hold the shoulders of the penetration. Not go very deep, but to hold the door open, if you will.
TODD: Holding the door for North Korea's heavily armored million-man army to push toward Seoul and points south. At the same time, the North Koreans would launch missiles.
MARKS: They would be conventionally tipped. We have to assume they would be chemically tipped.
TODD: Prompting U.S. forces to launch airstrikes on North Korean artillery positions, many of which can be hidden in deep underground bunkers. And inevitably, experts say, U.S. and North Korean ground forces would engage, likely on very difficult terrain.
(END VIDEOTAPE)
TODD: Difficult terrain in what has turned into a very urbanized region over the past 50 years. That means possibly hundreds of thousands of casualties, military and civilian, and that's leaving out North Korea's nuclear capability, which our experts say is too crude to be used effectively at the moment -- John.
KING: Brian Todd for us.
Brian, I've been several times to the DMZ, and it's one of the most surreal places on earth.
TODD: Absolutely.
KING: Brian Todd, thank you very much. And we'll have much more on the fallout from North Korea's missile launches this hour. Undersecretary of State Nicholas Burns is standing by to join us right here in THE SITUATION ROOM.
But time now for what we call "The Cafferty File." Jack's standing by in New York.
Hi, Jack.
JACK CAFFERTY, CNN ANCHOR: John, the economy of the entire country will collapse if all illegal aliens are deported. That is the doom-and-gloom forecast of our mayor here in New York City, Mike Bloomberg, who was testifying before a Senate panel today.
Bloomberg says there are more than three million immigrants in New York City. A half a million of them are illegal aliens.
He encouraged Congress to offer illegals to earn permanent status. This is called amnesty. He says the House's enforcement bill is not going to stop them from getting into the country.
The mayor testified at the Senate Judiciary Committee hearings in Philadelphia, where senators are trying to build support for their version of an immigration bill that would allow a majority of illegal aliens, millions of them, to become citizens. This is called amnesty.
The House committee held its own immigration hearings. They were out in San Diego today.
Lots of hearings, no solutions. This is your Congress at work.
Here's the question: New York Mayor Michael Bloomberg says the U.S. economy will collapse if the illegal aliens are deported. Do you agree?
E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile -- John.
KING: It will be interesting to see what comes in.
Thank you, Jack.
CAFFERTY: Sure.
KING: Up ahead, the sudden surprising death of Ken Lay as he awaited sentencing for his role in Enron's collapse. We'll have the latest details for you.
Plus, the cost of crude skyrocketing. We'll show you why and what it means for you.
And rocket attacks take tension between Israel and the Palestinians to a new level. We'll take you live to Gaza for the latest on the kidnapping crisis.
(COMMERCIAL BREAK) KING: In the Middle East, a major escalation in the already tense situation between Palestinians and Israel. A rocket was reportedly launched from Gaza and landed in an orchard in Israel. Might Israeli forces now launch an incursion into the Palestinian territories?
Our Paula Hancocks is in Gaza City with more on this developing story, just past midnight there.
Hello, Paula.
PAULA HANCOCKS, CNN CORRESPONDENT: Hello, John.
Well, in the past hour or so there have been many small clashes here in Gaza. We know that two Palestinians have been killed on a beach just north of Gaza. We understand that from Palestinian security sources. But from the Israeli defense forces, they say that they actually shot the militants because they believed they were planting bombs in that particular area.
We also know that a Hamas political leader has been killed in Gaza City. Now, this, again, from Palestinian security sources. We don't know who it is at this point. But he has been shot at in Gaza City itself.
And in another clash, we know that a Palestinian navy base, they clashed with Israeli forces. Once again, four Palestinians wounded. And the Palestinians have evacuated that particular area.
Now, there's also been some -- some shooting, some gunfire in the northern part of Gaza. We know a convoy of journalists was coming through from the Erez crossing, the main crossing from Israel into Gaza in that particular area, and there was gunfire in that area. We understand that one journalist had a slight injury.
But it has been very tense in that particular area. This is an area where many Israeli tanks and troops have stationed themselves. They've been repositioning themselves all -- all this Wednesday. And we've already heard from the Israeli prime minister, Ehud Olmert, a little earlier this Wednesday that he has given the military the green light to make a deeper incursion into Gaza -- John.
KING: And Paula, all of this, of course, at least much of the escalation, because of the kidnapping, in Israel's terms, of an Israeli citizen.
Any update on that situation at all?
HANCOCKS: There's no fresh word on the fate of this 19-year-old corporal, Gilad Shalit. Now, he was taken a week ago last Sunday, and we had a deadline from the Palestinian militant groups that were holding him as 6:00 a.m. local time on Tuesday. That deadline passed, and one of the militant groups then said they were not going to give any more information.
As far as they were concerned, the case was closed. They were not going to tell the Israelis whether he was dead or alive.
Now, we have heard very little since that point. The Israelis are working under the assumption, though, that Gilad Shalit is still alive.
We've heard from Ma'an News, which is a Palestinian news agency, quoting one of the militants, saying that they wouldn't tell anything about this soldier, but they would not actually kill the soldier. But at this point the Israeli security sources still believe he's in southern Gaza. They've been bombing roads, they've been sending missiles onto bridges to make sure that it's very difficult for these Palestinian militants to move around with this soldier, to try and give them a better chance of finding him -- John.
KING: Paula Hancocks for us in Gaza.
Paula, thank you very much.
And right now in Iraq, there's a chorus of outrage about a rape and murder of Iraqi civilians, including a child, allegedly at the hands of an American soldier. Some Iraqi lawmakers are looking into the matter. Key to what happened, they say, a thorough examination of the crime scene itself.
CNN's Arwa Damon is in Baghdad with more.
ARWA DAMON, CNN CORRESPONDENT: John, outrage on the streets of Iraq from average citizens all the way up to the prime minister as more information comes out to Iraqis about the killings of four family members in Mahmoudiya.
(BEGIN VIDEOTAPE)
DAMON (voice over): This plain concrete house may have been the scene of a gruesome crime. A crime the U.S. government says was committed by U.S. soldiers. Almost four months later, despite the house being cleaned out, blood stains and evidence of burning can still be seen in these Associated Press pictures.
The crime, the alleged rape of a young woman, identified as Ibir Kasam Hamza (ph), believed to be barely in her 20s. She, her little sister, and her parents murdered, their bodies burned in what authorities say was an attempted cover-up.
"We found them dead in the house," the girl's brother, Ahmed Kasam (ph), says. "We also found the house blackened and smoke erupting from it."
Her uncle, Ahmed Taha (ph), says, "The Americans are behind this incident. People in the area saw the Americans, but they are afraid."
The bodies were buried quickly back in mid-March, but the story of what happened here is only now being told, following the arrest in the United States of Steven D. Green, a former army private 1st class, accused by the U.S. government of being one of those responsible for the rape and killings.
And now the Iraqi government is investigating, and the Iraqi prime minister expressing outrage, blaming a system in which U.S. forces in Iraq are immune to Iraqi prosecution, accountable only to the U.S. government.
NURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): We believe that the immunity given to international forces is what emboldened them to commit such crimes in cold blood. This requires that such immunity should be reconsidered. We affirm that we should participate in investigating crimes committed against the Iraqi people.
DAMON: The U.S. military says it will engage with the prime minister on the issue of immunity.
(END VIDEOTAPE)
DAMON: But with emotions already running high in Iraq, what is alleged to have happened in this house will likely make the job of U.S. forces here even more difficult -- John.
KING: Arwa Damon in Baghdad.
Thank you, Arwa.
And coming up, more on our top story, diplomatic fallout from North Korea's missile launches. Undersecretary of State Nicholas Burns is standing by to join us in THE SITUATION ROOM.
Plus, the latest on Enron founder Ken Lay, dead at 64.
You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
KING: Our Zain Verjee joins us with a look at other stories making news right now.
Hi, Zain.
ZAIN VERJEE, CNN ANCHOR: Hi, John.
Oil prices are at record high levels this hour. U.S. crude closed at more than $75 a barrel this afternoon, the highest closing price ever. Analysts say strong U.S. demand, snags in shipping and refining along the Gulf Coast, and concern over Iran's nuclear program are driving the surge. Some analysts predict that average prices for gas in the U.S. could rise to above $3 a gallon by the weekend.
Six men who were allegedly plotting to blow up buildings in the U.S. will remain in custody until their cases are resolved. Just hours ago, a federal judge in Miami denied bond for all but one of the suspects in the case. He says his decision's based on the risk of flight and the strong evidence presented by prosecutors. A seventh suspect is in jail in Atlanta. Election officials in Mexico are reviewing vote tallies amid widespread allegations of fraud. Initial counts show conservative candidate Felipe Calderon winning by a single percentage point. But the party of his leftist challenger says the tally was manipulated and is threatening to ignore the results. Now, by law the federal election tribunal could take until the 6th of September to certify a winner -- John.
KING: Thank you very much, Zain.
Astronauts from the space shuttle Discovery are inspecting the shuttle's exterior, searching for possible damage after yesterday's launch.
What exactly are they looking for? For that, let's bring in our Internet reporter, Jacki Schechner -- Jacki.
JACKI SCHECHNER, CNN INTERNET REPORTER: Well, John, they just want to make sure there's no damage. There were cameras on the shuttle, and they caught little pieces of foam falling off the external fuel tank.
NASA's got all these photos online here. You can see a little piece of the foam debris. There's another shot up here with it a little bit closer up.
Also, they have some debris that fell off of the orbiter itself. I don't know if you can see right there. Let me zoom in on it for you. They just want to make sure this hasn't done any damage.
Now, what they're using to check out the shuttle so far is this robotic arm with a boom on the end of it, and they say so far everything looks good.
So, what's next? Well, tomorrow, they're planning to catch up to the International Space Station. You can see the shuttle right there. There's the International Space Station.
This is actually a real-time tracking thing that NASA has. And if I can zoom in on it for you here, you can get a closer look at what the shuttle looks like and the International Space Station. It's going to dock, hopefully, if all goes as planned, at 10:50 tomorrow morning -- John.
KING: And were you watching when it flew over D.C. last night?
SCHECHNER: I did. I saw something that looked like it could be it. It was either that or a plane. Just not that sure.
KING: Either that or a plane. Thank you, Jacki.
Coming up, turning adversity into advantage. Did North Korea's missile launch have the reverse effect of tipping the world off to its military capabilities?
And Jack Cafferty will have your e-mails. Will the U.S. economy come to its knees if all the illegal immigrants were deported?
Stay right there.
(COMMERCIAL BREAK)
KING: You're in THE SITUATION ROOM. Wolf Blitzer's off. I'm John King.
In New Jersey today, they're upping the ante, but not at the gaming tables. Atlantic City casinos now are dark, the latest targets of a government shutdown now in its fifth day.
The shutdown stems from a budget showdown between Governor Jon Corzine, who's pushing for a big sales tax hike, and state lawmakers, who so far have told him to take a hike.
Let's go live to CNN's Mary Snow. She's in Atlantic City tracking this for us.
Hi, Mary.
MARY SNOW, CNN CORRESPONDENT: Hey there, John.
And, you know, the only games being played here right now is a waiting game, because gamblers are not spending, casinos are losing millions. And this after for the first time since casinos opened here in Atlantic City in the late '70s they've had to shut down by state order.
All of this because of a budget showdown. A lot of people thought that the threat of a showdown was just a bluff, and this morning had some angry gamblers who cut short their vacations.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm miserable. I can't believe this. This is worse than the blackout. At least the blackout happened naturally. Almost naturally.
But this is supernatural. This is like totally outrageous. OK?
I don't understand what the budget has to do with the casinos. He wants to change something, that's fine. But the casinos should remain open. All they're going to do is lose money.
(END VIDEO CLIP)
SNOW: Now, the casinos are closed because they have state monitors on site, and they have to have those monitors in order to operate. Those monitors are part of non-essential state workers being furloughed, and, therefore, the state said the casinos have to shut down. Today, earlier today, Governor Jon Corzine told lawmakers that his hands are virtually tied.
(BEGIN VIDEO CLIP) GOV. JON CORZINE (D), NEW JERSEY: In particular, I have no authority, nor is there any law to support the notion that casino inspectors are essential state employees, as has sometimes been suggested. Nor would it be legal or appropriate in a world where we have to protect the public in a homeland security context, where we need to protect people from violence in our streets, to assign state troopers to work as casino regulators.
(END VIDEO CLIP)
SNOW: This comes on day five of a government shutdown that's affected everything from state offices, and today there were some further shutdowns. Racetracks in the state, beaches state parks, and historic sites -- John.
KING: Any sense, Mary, at all, of progress in negotiations or any even real negotiations for that matter?
SNOW: It's really hard to tell. A lot of meetings going on behind closed doors today. And today really what people thought was that lawmakers would feel the pressure because this was the biggest impact of this shutdown so far. We do know that the assembly speaker met with the governor earlier this afternoon. We don't know the outcome of that or whether any kind of deal has been reached yet.
KING: Mary Snow for us in Atlantic City. Mary, thank you very much.
At 64 years old and facing a prison sentence many believe former Enron CEO Ken Lay would spend the rest of his days behind bars, not meeting an untimely death in a ski resort town. Our Ed Lavandera is live for us in Aspen, Colorado.
But let's begin with CNN's senior international -- senior correspondent, excuse me, Allan Chernoff. He's in New York. Hi, Allan.
ALLAN CHERNOFF, CNN CORRESPONDENT: Hi, John. Enron really was in Ken Lay's blood. He orchestrated the merger that led to the founding of the company. So the company's collapse, the scandal, his indictment, and ultimate conviction all must have taken a very heavy toll on him.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Before Ken Lay became the face of corporate scandal, he turned Enron from a sleepy utility to the hottest energy company the nation had ever seen. At its height Enron was number seven on the Fortune 500. Lay, who grew up in a working- class family, became one of Houston's biggest philanthropists.
He was friends with President Bush, who called him Kenny Boy. In early 2001 Lay had already given up day-to-day oversight of Enron, but when his successor Jeff Skilling abruptly resigned, lay returned as the company's leader. Just as Enron was about to collapse.
By January of 2002 Enron had unraveled, and Lay resigned as chairman and CEO.
KEN LAY, DECEASED ENRON FOUNDER: I have been instructed by my counsel not to testify based on my Fifth Amendment constitutional rights.
CHERNOFF: He invoked the Fifth Amendment at a congressional hearing. But for several years Lay was untouched as lower-level Enron officials pled guilty or were convicted. But after former Enron chief financial officer Andrew Fastow agreed to testify for the government, Ken Lay was finally indicted.
LAY: The Enron collapse was an enormous tragedy, but failure does not equate to a crime.
CHERNOFF: Several days later lay said he took hard that so many Enron employees had lost their life savings when the company's stock became worthless.
LAY: I'm incredibly sorry. I mean, I grieve for them. I honestly still grieve for them and probably will until the day I die.
CHERNOFF: Lay also told CNN's Larry King if there was criminal conduct at Enron it had been occurring without his knowledge.
LAY: I cannot take responsible -- responsibility for criminal conduct that I was unaware of.
CHERNOFF: Lay was a churchgoing man, and it was at church the Sunday before his trial that he expressed optimism to CNN.
LAY: A long trial and a tough trial, but we're going to be fine.
CHERNOFF: But on May 25th, just six weeks ago, Lay was convicted of fraud and conspiracy.
LAY: Certainly this is not the outcome we expected. I firmly believe I'm innocent of the charges against me, as I have said from day one. I still firmly believe that as of this day. But despite what happened today, I am still a very blessed man.
CHERNOFF: Lay had also been convicted of bank fraud in a separate trial. Legal experts said Lay could have been sentenced to decades in prison, where he might have spent his final days.
(END VIDEOTAPE)
CHERNOFF: Lay had been scheduled to be sentenced on October 23rd -- John.
KING: Allan Chernoff for us in New York. Thank you, Allan. And we're awaiting now the results of the autopsy on Ken Lay.
CNN's Ed Lavandera is in Aspen, Colorado with more on that. Hey, Ed.
ED LAVANDERA, CNN CORRESPONDENT: Hi, John. Well, overnight -- this is the hospital where Ken Lay was brought to. And according to the coroner he died here. We understand that the coroner's office in Grand Junction, Colorado, which is west of here, will be holding a press conference here shortly. What exactly they're going to announce is not exactly clear to me at this point.
We had been told earlier in the day that perhaps autopsy results would be released later on in the week. So we don't know if the coroner there is going to say that -- lay out a timetable for how long it might take or whether or not he might already have those results back. So we are awaiting the results of that press conference that will start here shortly.
Of course, we're here in Aspen, Colorado, which was a home away from home for Ken Lay according to many of the locals here, been quoted throughout the day, say this is a place where Ken Lay could kind of escape the glare and the intense spotlight from Houston where over the last couple of years it had been very difficult for him to live in the immediate aftermath of the collapse of Enron.
Of course, Ken Lay laying very low. Many people there said he was a man who was routinely seen at baseball games, at charity functions, essentially disappeared from the social calendar there in Houston.
But here in Aspen this was a place where he had several homes that had been sold off in recent years, but here he was able to escape, and we understand that it was here where he was renting a home from some friends where he could come up here and escape again, as he awaited the sentencing phase of his trial -- John.
KING: Now of course we are awaiting the autopsy results. Ed Lavandera in Aspen. Ed, thank you very much.
And still to come -- more on our top story. Responding to North Korea's provocative missile launch. If urging the nation back to six- party negotiations duds not work, what should the United States do next? I'll ask a top State Department official.
And in the battle for soft drink supremacy it's like an act of war. Who would want to sell Coca-Cola's top secret recipe? And why?
(COMMERCIAL BREAK)
KING: Here's a look at some of the "Hot Shots coming in from the Associated Press, pictures likely to be in your newspaper tomorrow.
In China, chemical weapons experts dig up World War II poison gas bombs abandoned near a school. The cleanup was part of a joint Chinese-Japanese operation.
To the Gaza Strip now, where Palestinian boys cover their mouths with the U.S. flag. All part of a demonstration to demand the United States pressure Israel to stop its ongoing military campaign in Gaza.
Mumbai, India. Monsoon season has left at least 250 people dead since June. Schools have been closed for three days, and downpours are in the forecast.
Anchorage, Alaska. Veterans wheelchair games. Nearly 600 athletes from around the country and Great Britain are competing in 15 Olympic style sports events.
And that's today's "Hot Shots", pictures often worth a thousand words.
Lou Dobbs is getting ready for his show right at the top of the hour. Lou, what are you working on today?
LOUD DOBBS, CNN ANCHOR: Thank you, John.
Coming up at the top of the hour here on CNN, North Korea defies the United States and the world by firing seven ballistic missiles one week after President Bush declared that a North Korean missile test would be unacceptable. We'll have complete coverage tonight and three of the country's top Korean analysts join us.
Also, new developments tonight in the showdown between the House and the Senate over our illegal immigration and border security crisis. The House and Senate holding competing hearings on opposite sides of the country. The chairman of the House Border Security Committee Hearing, Congressman Ed Royce, joins us.
And there's political chaos tonight in Mexico as two bitterly opposed candidates and their supporters on the right and left both claim victory in the presidential election. We'll have a live report for you from Mexico City and analysis. We hope you'll be with us. John, back to you.
KING: We'll be watching. Lou, see you in just a few minutes. Thank you very much. And our Zain Verjee joins us now with a look at other stories making news. Hi, Zain.
VERJEE: Hi, John.
A new study indicates that doctors often fail to identify the flu virus in children. Researchers found that doctors made the correct diagnosis only 28 percent of the time in children under five. They say the best way to alleviate problems caused by widespread misdiagnosis is to vaccinate more children.
Rush Limbaugh will not face charges in Palm Beach County, Florida for possessing Viagra that was issued under his psychologist's name. Prosecutors say Limbaugh did not break any law but the psychologist and the doctor who prescribed the pills could still face charges in the county where the prescription was written.
The psychologist apparently allowed the Viagra to be prescribed under his name to avoid a potentially embarrassing situation and publicity for Limbaugh.
It's the mother of all trade secrets. Federal prosecutors say three people have been arrested for allegedly stealing soft drink recipes from the Coca-Cola Company and trying to peddle them to PepsiCo. Prosecutors say Pepsi contacted Coke after it was allegedly offered the confidential information. Coca-Cola then contacted the FBI which began an undercover operation.
As the fight against insurgents flares up again in Afghanistan, the war on drugs rages on. Afghanistan's Interior Ministry says it burned more than 40 tons of confiscated narcotics today in a huge bonfire just on the outskirts of Kabul. The seizure was worth an estimated $500 million. Officials also say they plan to bury 23 tons of chemicals. Afghanistan produces more than 90 percent of the world's opium and heroin supply -- John.
KING: Thank you very much, Zain.
VERJEE: Up ahead, Nicholas Burns, the undersecretary of state, on the next steps the U.S. will take in the standoff with North Korea.
And Jack Cafferty wants to know what would happen if all illegal immigrants were rounded up and sent home. Would that wreck the U.S. economy? Jack has your e-mails.
And when is a kiss just a kiss? Possibly one question the Russian President Vladimir Putin will be asked during a Webcast. It concerns his peck on the belly of a little boy.
(COMMERCIAL BREAK)
KING: We told you just moments ago we were waiting for the coroner in Grand Junction, Colorado to speak about the cause of death for the former Enron CEO, Ken Lay. We want to go back now to Aspen and our Ed Lavandera for an update -- Ed.
LAVANDERA: Hi, john. Well, the press conference there in Grand Junction, Colorado, which is in the far west part of this state, the coroner in the middle of a press conference there. Dr. Robert Kurtzman, who's the coroner in Mesa County, Colorado he says that the autopsy has been completed. We'll let you listen to a little bit of what he found.
(BEGIN VIDEO CLIP)
DR. ROBERT KURTZMAN, MESA COUNTY, COLORADO CORONER: The coroner's office, we completed the postmortem examination this morning, and the cause of death is coronary artery disease. And there isn't any other particular information that we're releasing at this particular time. Any other additional information would come from the Picking County (ph) coroner's office and from the sheriff's office. There is no evidence of foul play.
The postmortem examination revealed that Mr. Lay had severe coronary artery disease. There was evidence that he had had a heart attack in the past. The only aspects of the examination that are outstanding at this particular point are toxicology and microscopic analysis of tissues, and any other additional information will come out of the Picking County office.
(END VIDEO CLIP) LAVANDERA: The coroner also says that Mr. Lay's body will be returned to his family, exactly where he'll be laid to rest and any kind of funeral services or arrangements we have not heard about yet. But the coroner also saying that Mr. Lay collapsed in his home last night and he was brought to the hospital here in Aspen, where he died overnight -- John.
KING: Ed Lavandera for us in Aspen. Ed, thank you very much. Ken Lay, former Enron CEO, dead at 64.
And back now to our top story, North Korea's flurry of missile launches. They were closely watched of course by U.S. intelligence agencies. CNN national security correspondent David Ensor is here now with a look at what those agencies might have learned. David?
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, John, as you say, North Korea in the last days has been one of the most closely watched places on earth. In addition to that, U.S. intelligence is also now tracking what the North Korean media are saying or not saying.
(BEGIN VIDEOTAPE)
ENSOR (voice-over): On North Korean television the announcer said nothing about the missile firings and nothing about the failure of the Taepodong-2 long-range missile within 40 seconds of launch.
JOSEPH CIRINCIONE, CENTER FOR AMERICAN PROGRESS: This backfired. This blew up in Kim Jong-il's face.
ENSOR: Said one U.S. official, it sounds like they're thinking about how to play this.
BUSH: One thing we have learned is that the rocket didn't stay up very long and tumbled into the sea.
ENSOR: U.S. officials and analysts say it clearly did not go as planned.
CIRINCIONE: We had six scuds and one dud fired. All of them landed in the Sea of Japan. All of them thousands of miles away from America's shores.
ENSOR: U.S. intelligence and the Pentagon have been watching the Taepodong launch pad for weeks, with spy satellites, aircraft, and surveillance ships. Officials say North Korea has more Taepodongs, though their reliability is now in question.
DAVID KAY, FORMER UN WEAPONS INSPECTOR: I think the most interesting side bar story is going to be what happens in Pyongyang? Who vouched for the reliability of this missile, and what are the consequences now that it failed?
ENSOR: Some analysts say the goal was less to test, more to make a statement. JIM WALSH, INTERNATIONAL SECURITY ANALYST, MIT: The fact that they shot off another, what, six other short-range missiles that have nothing to do with sort of verifying or collecting data shows that it really is about politics, less about security.
ENSOR: But other analysts and intelligence officers say don't assume Kim Jong-il missile launches were foolish from his point of view.
(END VIDEOTAPE)
ENSOR: The North Korean scientists will learn, both from the Taepodong tests and from the other tests that they have conducted and North Korea has shown the world once again that the military consequences of moving against North Korea would be serious indeed -- John.
National security correspondent David Ensor. David, thank you very much.
And for more I'm joined now by the third-ranking official at the State Department, Nicholas Burns is the undersecretary of state for political affairs.
Nick, let me start with a question. The president today, Secretary Rice today saying let's keep this within the framework of the six-party talks. Understandable, especially the day after such a provocation. But those talks will hit the three-year mark next month as you're well aware. Why not mix it up?
Why not call this man's bluff, have one high-profile mission to Pyongyang with Secretary Rice or the vice president and say, sir, we do not want to attack you, we want to deal with you, this is what you must do and if you do this you will get these things that you want from the United States? Why not try it?
NICHOLAS BURNS, UNDERSECRETARY OF STATE: John, I don't think this is America against North Korea. This is the world against North Korea. You saw an extraordinary number of statements today from Russia and China, from all across Asia, from Europe, and certainly from our country of condemnation of rebuking the North Koreans.
So what you want to achieve in a situation like this is you want to achieve international unity to force the North Koreans to take account of the fact that they are completely isolated on this issue. What they did was reckless and provocative and very unwise.
And we're going to be a lot stronger as the weeks and months go forward on this North Korea business if we've got the rest of the world saying essentially what we're saying. So I don't think we want to isolate ourselves one on one with the North Koreans. We're much better off with this collective approach that the president and Secretary Rice talked about today.
KING: You say you're much better off. But again, the six-party talks are about to hit the three-year mark. North Korea is still working on its nuclear program. It has not come to the table with any deal. There has been no noticeable progress in those negotiations. And in fact, North Korea popped off with these missile launches just yesterday.
So what has to be done to bring progress to the six-party talks? And as you know, some of your partners in those talks say Kim Jong-il may well be crazy, he may be unpredictable, but maybe the United States could help if it sweetened the deal a little bit. Would you do that?
BURNS: We haven't heard a single bit of advice from any of our partners along those lines today. Remember back to September of last year, when the North Koreans were at the table, when a lot of progress was made, and what we are saying today, what China and Russia and Japan and South Korea are saying, all in unison, is the North Koreans have to implement that agreement from September 19th of 2005.
And it's good to see that there's unity. We've got a Security Council session working. And of course the president and Secretary Rice have decided to send Ambassador Chris Hill to Beijing. He leaves tonight. So you're going to see over the next couple of days I think a lot of intensive diplomacy but you're going to see the spotlight shining directly on North Korea. And that's where it should be.
KING: Over the course of the past three years in these negotiations, everybody has talked about how good it is to have China at the table but officials in your building at the State Department and across town at the White House have grumbled from time to time that perhaps the Chinese could do more.
You just noted Chris Hill is going to Beijing. What is the one thing you could use from the Chinese right now to prove to Pyongyang you have to come back to the table, you are alone?
BURNS: I think all of us have to, including the Chinese, have to given straight advice to the North Koreans and tell them just how much of a mistake yesterday's firing of those missiles were. Now, some of those firings didn't go very well for the North Koreans. Some of your interlocutors talked about Scuds and a dud.
But in any case, we want all the countries that have some degree of influence on the North Koreans essentially to say to them that they've got no options. They're not going to be able to establish themselves with the way they want with these rocket launchers. They've got to come back to these negotiations that were set up several years ago.
We know that's the best way forward. So that would be our advice to China and to Russia, and I don't think we need to give them that advice. Our understanding is that China and Russia both oppose the firings of these missiles. They've told the North Koreans that over the last couple of weeks, as did most other countries around the world.
I think it's right now just a question of consultations over the next few days both in Beijing and Moscow as well as in the UN Security Council, and I think you'll see some fairly strong efforts by the international community to send a swift signal to the North Koreans.
KING: How then would you critics who say perhaps the president has the right approach, perhaps it is on paper and at least in theory the right approach but it hasn't worked and you know some of those critics say at the end of the Clinton administration Kim Jong-il had one, maybe two nuclear weapons, by most accounts right now he has six or eight and is working on more. They say despite what might have been a solid approach it hasn't worked, try something new.
BURNS: Oh, I think it's far too early to conclude that. In fact, I think as of last September you've seen we'd made a lot of progress. So we've got the right framework. And in diplomacy and international politics you've got to stick with what you believe is right. We know we have the right policy. And we know we've got to bring a considerable amount of international pressure to bear against the North Koreans.
And that's what we intend to do, John, over the next couple of days.
KING: And lastly, Nick Burns, what do we think Kim Jong-il will do next? You mentioned Scuds and a dud. That an account from one of our analysts.
He perhaps has been humiliated by the failure of the long-range missile test. But some might say in this case this man is so unpredictable that that could be more dangerous than a successful test how he might react to that.
BURNS: You know, I think it's hazardous to venture a guess as to what's in his mind and what he might do. He's entirely unpredictable, as you know. But that's the reason why it's very important that we stay measured, that we stay consistent and say and send the right signals to the North Koreans along with all these other countries that have some responsibility for making sure that they bring pressure to bear as well.
So we know what we need to do, and the president spoke for our government today in putting our positions forward, and you'll see a very concerted effort by the United States over the next few days to set this matter right.
KING: The undersecretary of state for political affairs, Nick Burns. Nick, thanks very much for joining us.
BURNS: Thank you, John.
KING: Thank you.
Up next, Jack Cafferty is wondering, will the United States economy collapse if all illegal immigrants were deported? We'll have your e-mails. Stay right there.
(COMMERCIAL BREAK)
KING: Time now to check back in with Jack Cafferty, who's in New York of course. Hey, Jack.
CAFFERTY: John, New York Mayor Michael Bloomberg says the United States economy would just collapse if all the illegal aliens were deported. We're asking if you agree with that statement.
Ron in Denver writes, "Jack, time and again if people keep listening to the rich and the politicians in this country nothing will ever change. Leave it to someone who bought his way into office to inform us that our economy would crash if immigrants are sent home. How wrong can he be? If they went home, we could then employ some of the Iraq War veterans who are homeless, U.S. citizens who have no jobs, and how about a fresh start providing Americans with health coverage?"
John in Carthage, Texas, "The major economic effect will be the significant amount of money put back into circulation when we stop the cash drain that the illegal aliens cause when they send a significant part of their earnings back to Mexico."
John in Westbury, New York, "The idea of deporting 12 million people is nuts. Who would find them? Who would provide the transportation for them? Who would decide who stays and who goes? And finally, who would pay for all of this?"
June writes from Las Vegas, Nevada, "I have an idea. Why don't we give those jobs to the unemployed Americans who can't get a job and are suffering because businesses prefer importing slave labor? The American worker deserves a job at a wage that will support their family. I don't feel that my tax dollars should pay for housing and medical care and education for citizens of another country when I can't afford some of these things for myself."
Mike in Hahira, Georgia. "Michael is half right. If all the illegal immigrants were deported and business owners had to pay real market rate wages to attract American citizens, the number of heart attacks in that group would probably shut down the economy."
And Sam in Omaha writes, "Bloomberg is no idiot, he just thinks the rest of us are."
What?
If you didn't see your e-mail here we invite you to go to CNN.com/CaffertyFile where you can read more of these little gems online -- John.
KING: It's a good mix, Jack. Thank you very much. We're here every weekday afternoon from 4:00 to 6:00 Eastern. Back in an hour. Right now let's go to Lou Dobbs in New York -- Lou.
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