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CNN Saturday Morning News

Security Breach Leaves 40 Million+ Vulnerable; Operation Dagger is Latest U.S. Offensive in Iraq; Downing Street Memo Raises Questions about Iraq; Life or Death for Marcus Wesson; Three-way Tie Going into Third Round at U.S. Open.

Aired June 18, 2005 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

BETTY NGUYEN, CNN ANCHOR: Good morning. This is CNN SATURDAY MORNING. From the CNN Center in Atlanta, I'm Betty Nguyen. Tony Harris is off today. But we want to thank you for starting your day with us.
Have you checked your credit? There has been a security breach at a company that handles credit card transactions. The breach affects more than 40 million MasterCard and Visa accounts. We'll have a live report straight ahead.

U.S. forces have launched two new offensives in western Iraq. You're seeing exclusive CNN pictures of Operation Spear, in which 50 insurgents have been killed since yesterday. CNN's Jane Arraf is embedded with U.S. Marines involved in this bunker battle.

Operation Dagger kicked off this morning. That one is aimed at finding hideouts and weapons.

The so-called Downing Street Memo is raising new questions about the run-up to the Iraq war. The prewar memo suggests British leader Tony Blair and President Bush were rushing to war and exaggerated the intelligence on weapons of mass destruction. Both leaders deny those claims.

Forty million people, maybe you, could be at risk after credit card account information is stolen. The case involves Visa and MasterCard. Both companies are alerting financial institutions of a security breach at the Tucson, Arizona, office of CardSystems Solutions. It is an Atlanta-based third party payment processor.

Our Allan Chernoff is live in New York with much more on this.

A lot of people hearing this today going, "I wonder if it's me."

ALLAN CHERNOFF, CNN SR. FINANCIAL CORRESPONDENT: Very good question, Betty, and that's not a question that will easily be answered, because people may be wondering for some time. What happened here was that credit card numbers were taken for 40 million people. Not just MasterCard, but Visa, American Express as well.

The risk here is credit card fraud. So that's what you need to watch out for. People who just write the check every month, pay off their credit card bill, forget about it. You've got to change the way you do that. You have to look at your statement every month and make sure that those transactions are purchases you actually made.

Now, the credit card companies won't hold you responsible for unauthorized transactions, but it's up to you to tell the card issuer, hey, I didn't buy this. And then they'll say, OK, and they'll look into it, check it all out.

Now, this is not the first time that there's been this sort of problem, data being accessed through a computer system. But under a new California law, companies have to reveal whenever they do have this sort of breach.

That's why we're hearing about all these data incursions, people having their personal I.D. given up to hackers or some other situation. So it really is -- it seems to be now, at least, a growing problem. But actually, insiders, experts in the field, say this actually has been going on for some time.

What happened here is that a hacker or hackers accessed the computer system of that data processor, a company that's actually a middleman between the merchants and the banks that issue the credit cards, CardSystems Solutions. Now, there's some dispute as to actually how it was uncovered. CardSystems Solutions says that it found a problem last month.

(BEGIN VIDEO CLIP)

LINDA FORD, CARDSYSTEMS SOLUTIONS, INC.: We called in a third party forensics investigator that happens to actually be certified with MasterCard to come in here and to do a complete investigation, scan of everything, to actually image systems and to go back and do research on what was going on.

(END VIDEO CLIP)

CHERNOFF: MasterCard says it actually identified the problem when some of its card-issuing banks identified fraud on some of the cards, and then it contacted CardSystems Solutions and found that the computer system at that data processor had inadequate security. Now, apparently, the security has been beefed up, but the lesson here, the bottom line is, we really have to watch out for ourselves. We have to make sure that everything on that statement we get every month is something we actually purchased -- Betty.

NGUYEN: All right. So the check the statements. And if you see something odd on there, report it. Allan Chernoff, thank you so much.

Well, here's how to fight back against identity theft, some other clues to what you can do. Go to the government's Web site at www.ftc.gov and click on "identity theft." There you can find out how to contact the credit bureaus and fill out an I.D. theft affidavit which will protect you from fraudulent accounts.

This security breach is just the latest in a long line of cases involving compromised personal information. We want to know, how do you protect yourself? Our morning e-mail question asks what steps do you take to keep your financial details safe? Send us your safeguarding strategies to weekends@cnn.com and we'll read them on the air.

They're accused of digging into company funds as if it were their personal piggybank. Now a jury has found Tyco's former CEO, Dennis Kozlowski, guilty of looting the company out of some $600 million in cash and illegal stock sales. Ex-CFO, Mark Swartz, was also found guilty. Both are each expected to be sentenced in August, and they each face up to 30 years in prison.

In other news "Across America" now, the prosecution in Mississippi's civil rights murder trial could rest its case today. Eighty-year-old Edgar Ray killen is on trial for taking part in the deaths of three civil rights workers back in 1964. Yesterday, a retired police officer and former Klansman testified that days after the slayings, Killen told him, "We got rid of those civil rights workers."

CNN will monitor the trial for developments.

How much time passed from when Michael Schiavo found his collapsed wife in 1990 to when he called for help? Florida Governor Jeb Bush has requested an investigation after Terri Schiavo's autopsy results were released earlier this week.

Michael Schiavo is blasting this probe, insisting he called for help immediately. He says, "It is sickening that the Schindlers and Governor Bush for their own selfish reasons want to keep this case going."

Now, to Fresno, California. It's life or death for Marcus Wesson. A jury found him guilty of murdering nine of his children in March 2004. Wesson was also convicted of rape and molestation for fathering some of the children with his underage daughters and nieces. The death penalty phase begins next Wednesday.

And in Illinois, Catholic bishops extend their policy barring child-molesting priests from holding jobs in church. The ban by the U.S. Conference of Catholic Bishops is extended for five years. The bishops initiated the policy three years ago.

Now to Aruba, where Natalee Holloway's family has many questions, but very few answers. Like, why are four men being held but none of them charged? And most importantly, where is Natalee? Missing posters still dot the island as police arrest a fourth man in connection with the case.

CNN's Chris Lawrence is on the island with a live update on the situation there -- Chris.

CHRIS LAWRENCE, CNN CORRESPONDENT: Betty, the fourth man's name is Steven Gregory Croes. He's 26 years old, so he's a little bit older than the three men already detained. The police superintendent told us that he was picked up basically based on information that he receive from one of the other three men already in custody.

Now, we've also learned that Croes worked as a deejay on this party boat. It's called The Tattoo. It used basically to run booze cruises right here out of Aruba. And last night, we talked to Croes' boss, who described him as a model employee and said his connection may be that he knew one of the two brothers that has been arrested from a local Internet cafe where that brother used to work.

Natalee Holloway's mother has been here almost from the very beginning. Last night she talked to us about this latest arrest coming after the other three.

(BEGIN VIDEO CLIP)

BETH HOLLOWAY TWITTY, NATALEE HOLLOWAY'S MOTHER: There's been no secret of my feelings and thoughts on the other individuals that I strongly feel are definitely involved with my daughter's disappearance. But, you know, I just do not have any thoughts or feelings about this one.

And, of course, I was surprised. And I'm anxious to find out further information.

(END VIDEO CLIP)

LAWRENCE: Now, investigators will have at least one more week to question the original three men detained, the Dutch teenager, Joran Van Der Sloot, and those two brothers. That's because in a hearing very particular to Aruban law, prosecutors had to go into court yesterday and argue to the judge why they should be able to continue to hold these three without actually bringing charges against them.

(BEGIN VIDEO CLIP)

JUDGE BOT WIT, ARUBAN PRESIDING JUDGE: It's not a matter of evidence. It's a matter of probable cause like in the United States. That means that we have to look at the statements made and see the contradictions in statements. And what I have heard today has convinced me that the investigation is on track and that it is necessary to detain the suspects for another eight days to -- to keep it going.

(END VIDEO CLIP)

LAWRENCE: Now, it's been nearly three weeks now since Natalee Holloway went missing. She was on her high school senior class trip here in Aruba and was last seen about 1:00 in the morning leaving one of the local bars here, Carlos 'N Charlie's.

Her mother tells CNN that her feelings have fluctuated. She's still very frustrated, but she's kind of gone from being sad and depressed to being now more angry.

She's actually staying just a few floors down from us here at this hotel where Natalee was staying when she went missing. Her bags and her passport were still in her room when they came the next morning -- Betty.

NGUYEN: A lot of questions, very few answers. Chris Lawrence, thank you. Time now to check in on international developments this morning. Millions have voted in the Iranian presidential election, but no clear winner has emerged.

For the details on that and what's next, let's go to Anand Naidoo at the CNN International desk.

Good morning, Anand.

ANAND NAIDOO, CNN INTERNATIONAL ANCHOR: Thanks, Betty. And good morning to you.

Yes, that's right, no one was able to secure the 50 percent-plus votes that were needed to emerge as the clear winner in the Iranian presidential election. So that means a runoff vote for the two top candidates next week.

Right now, it looks as though the former president, Akbar Hashemi Rafsanjani, will face a runoff against another candidate next week. With roughly three-quarters of the vote counted, Rafsanajani has about five million votes. The other two candidates scrambling for second place are a reformist cleric and the hard-line mayor of Tehran.

Now let's look at some of the other stories making news around the world. And first to Iraq.

Fierce battles reported in the western part of that country 24 hours into Operation Spear. U.S. Marines are engaged in an intense fight near the Syrian border. You are looking at exclusive video there of day one fighting.

CNN's Jane Arraf is embedded with the U.S. Marines. She says those Marines are battling insurgents holed up in a bunker. Most of the action is taking place in the town of Karabila, thought to be a major transit point for foreign fighters entering Iraq.

American military officials estimate they've killed 50 insurgent fighters since early yesterday. Two Marines have been lightly wounded.

And we just heard early on this morning that the Americans have launched a second front in that war in western Iraq. And that front is called -- that operation, rather, is called Operation Dagger, and it is taking place in Al Anbar province.

That's all from me for now. Let's send it back to Betty.

NGUYEN: All right. We'll see you tomorrow, Anand. Thank you.

We do want to say good morning, Chicago. Want to give you a live look. Look at that big blue beautiful sky there. Rob Marciano joins us now with a check on the weather.

(WEATHER REPORT)

NGUYEN: This was his last public sighting, check it out, just minutes after he was acquitted of molestation. But last night a party was thrown for Michael Jackson. So did the pop star pop in? That's next.

Plus, an odd situation at this year's U.S. Open. An underdog is on top, but can he stay there? A preview from Pinehurst, North Carolina, as players gear up for round three on the green. That's later.

You're watching CNN SATURDAY MORNING.

(COMMERCIAL BREAK)

NGUYEN: We're all bobbing our heads to that. Well, it was billed as a "thank you" to Michael Jackson's fans, but the pop star wasn't there to thank them personally.

About 400 people turned out for a party last night at a California casino near Jackson's Neverland Ranch. They included family members and one of the jurors who cleared Jackson of child molestation charges on Monday. Jackson hasn't been seen in public since the acquittal, but his fans, well, they were thrilled when they got tickets early yesterday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Right here I have tickets to the casino. We just pulled up here to see, you know, the ranch and everything. And luckily, we came at the right time because they were handing out these tickets for tonight.

(END VIDEO CLIP)

NGUYEN: All right. The juror who attended says the magnitude of what she went through during the 14-week trial finally hit her. She says she started to cry when they played Jackson's song "Beat It."

Well, as much as we love having you stay here for all your news, you can check out cnn.com for even more on what's happening in the world. Let's take a look at what is online for those news junkies out there.

Veronica De La Cruz joins us for that.

Good morning.

VERONICA DE LA CRUZ, CNN ANCHOR: Good morning. And you can do both.

NGUYEN: Yes.

DE LA CRUZ: You can...

NGUYEN: After you watch, you can go online.

DE LA CRUZ: You can even do it simultaneously.

NGUYEN: That's true.

DE LA CRUZ: Have the TV on and, you know, log on to your computer all at the same time.

NGUYEN: But you have to be watching the television. That's key.

DE LA CRUZ: OK.

NGUYEN: All right?

DE LA CRUZ: OK. You win.

All right, Betty. Well, the credit card security breach story is actually number one right now.

NGUYEN: Well, yes, no doubt. Forty million people affected.

DE LA CRUZ: Yes, exactly. But let me go ahead and share some other stories that are receiving lots of clicks.

First of all, to find them, you're going to go to our main page and click on the icon "Most Popular." That's on the right-hand side of your screen. Or you can type in cnn.com/mostpopular.

This story has been get something traffic this morning. A new law in Texas gives juries the option of sentencing murderers to life without parole. Now, previously, the only options were death or life in prison within the possibility of parole in 40 years. Some critics say the measure will lead to fewer executions in Texas, which is the number one death penalty state.

Another hot story on the Web, "Oh How Swede It Is." Swedish golfer Peter Hedblom shot a four under par 66, the lowest score ever at the U.S. Open in Pinehurst.

NGUYEN: Wow.

DE LA CRUZ: This after losing his golf clubs, Betty.

NGUYEN: What?

DE LA CRUZ: He lost his golf clubs. The golfer arrived in North Carolina Saturday...

NGUYEN: Clubless?

DE LA CRUZ: His clubs finally arrived there three days later. Now, he practiced with only a putter and a wedge, which might have served him well because Pinehurst is all about the short game. So that actually puts Hedblom at five strokes behind. Tiger Woods is one over par. And I think at this point, Hedblom is just happy to have made the cut, you know?

NGUYEN: Well, and to get his clubs back.

DE LA CRUZ: And to get his clubs back, exactly. Are you rooting for Tiger?

NGUYEN: Of course I'm rooting for Tiger.

DE LA CRUZ: Are you?

NGUYEN: I mean, he's the man to watch. Although, there are...

DE LA CRUZ: Retief Goosen.

NGUYEN: ... a couple -- yes, there are a couple of folks who are kind of the underdogs. Well, I don't know that much about golf, so...

DE LA CRUZ: Well, looking at the leaderboard, there are a couple of no-names, which...

NGUYEN: Right, exactly.

DE LA CRUZ: ... fall down to the bottom. But I think maybe Retief might be the man this year, as he was last year.

NGUYEN: OK. So I take Tiger, you take Retief, we'll see how it shakes out.

DE LA CRUZ: Sure.

NGUYEN: All right. Thank you.

He is the defending champ, as she mentioned. Retief Goosen has an underdog nipping at his heels. Round three of the U.S. is set to start in about three hours. A preview from Pinehurst, North Carolina, that's coming up.

(COMMERCIAL BREAK)

NGUYEN: You want to be sure to stick around, because coming up next, "DOLANS UNSCRIPTED." They join us live now to talk about what's on the agenda.

I hear Tyco, Medicare, a whole list of things today.

KEN DOLAN, CO-HOST, "DOLANS UNSCRIPTED": Oh, yes. Paris Hilton, hamburgers and Pinehurst.

NGUYEN: Oh, yes?

K. DOLAN: No, I'm just kidding.

DARIA DOLAN, CO-HOST, "DOLANS UNSCRIPTED": And not to correct you, but 10:00 a.m. Eastern, Betty, not next.

NGUYEN: Oh.

D. DOLAN: Close.

NGUYEN: Well, yes. Thirty minutes off.

K. DOLAN: How are you, Betty?

NGUYEN: Good morning. How are you today?

K. DOLAN: Good. It's like all Betty all the time. You're doing a great job there.

NGUYEN: All the time. Well, thanks.

D. DOLAN: Yes.

We're going to talk about the Tyco convictions. And one of the things we will focus in on is the fact that I don't think that Dennis Kozlowski will be taking the antiques the company bought him to prison.

K. DOLAN: Oh boy.

D. DOLAN: So we'll also throw in some antiquing do's and don'tsfor those of you that have summer antiques on the mind.

K. DOLAN: Also talk property tax. We'll talk the MasterCard situation which just happened, which came to light yesterday, Betty. And we will also talk about the Medicare drug plan. We've got all sorts -- drug prescription -- we've got all sorts of stuff going on.

NGUYEN: Tons of things to talk about. Especially that credit card situation.

K. DOLAN: What a mess.

NGUYEN: Forty million of us.

K. DOLAN: What a mess. We're going to talk about how maybe you can prevent it. We'll be talking about it this hour. It's a mess, Betty Nguyen!

NGUYEN: It is a big mess.

All right. See you at 10:00 a.m.

K. DOLAN: Sorry. See you.

D. DOLAN: See you.

NGUYEN: They are gearing up for round three of the U.S. Open. What can we expect on the fairways? Well, you have to stick around because that's next.

(COMMERCIAL BREAK)

NGUYEN: It's a three-way tie going into the third round of the U.S. Open golf tournament. This guy in the white hat right there isn't one of them, but he is not far off the pace. One of the leaders you may have heard of, the other two maybe not so much. Mark McKay is covering the Open for us in Pinehurst.

(BEGIN VIDEOTAPE)

MARK MCKAY, CNN SPORTS CORRESPONDENT (voice-over): As the 105th U.S. Open hit the halfway point, a pair of unsuspecting players sat atop the leaderboard, alongside the defending champion. While it appears Retief Goosen was built to compete in the most difficult of majors on the most difficult of courses, Olin Browne and Jason Gore are unaccustomed and perhaps uncomfortable with looking down the leaderboard at the world's best golfers.

JASON GORE, TIED FOR THE LEAD: I really don't have any pressure. I'm the underdog. And it's -- it's going to be kind of fun. You know? I mean, I'm just really, you know -- just saying "you know" a lot. But...

OLIN BROWNE, TIED FOR THE LEAD: Listen, I tell what you the toughest hole on this course is, the first hole. The next toughest hole is the second hole. And it goes on like that.

There are 18 beasts out here. And that is the name of this business. That's the name of this golf course.

GORE: I feel like I should belong. And that's -- you know, I haven't proved it yet with my -- with my golf, but I think deep down inside everybody out here feels like they belong. And that's the number one thing you've got to keep believing.

MCKAY (on camera): Believing is one thing. Reality, it's another. And the margin of error this weekend at Pinehurst is razor- thin.

At the 105th U.S. Open, Mark McKay, CNN, Pinehurst, North Carolina.

(END VIDEOTAPE)

NGUYEN: Yes, we'll see how that reality plays out.

Hey, all morning long, we've been asking you for your thoughts on our e-mail question. Here's some of what you had to say on those steps that you take to safeguard your financial details.

Greg from New Jersey says, "Shred, shred, shred. I bought a, I bought two crosscut paper shredders, one for my office and one for my home. Any papers that merely have my name on them hit the shredder before they hit the trash."

And Bob from Oklahoma writes, "I was called on my cell phone Thursday by the fraud group of MasterCard. They're seeing charges in Europe on my business card. I had not thought of contacting credit agencies until I saw your program this morning. Will do it on Monday."

That's a good idea. But in the meantime, we want to thank you for joining us today. I'll see you again tomorrow morning.

"OPEN HOUSE" starts right now.

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