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CNN Wolf Blitzer Reports

Florida Coast To Get Double Dose Of Hurricanes; New Book Strongly Criticizes Kerry's War Record; Interview With Adel Al-Jubeir

Aired August 11, 2004 - 17:00 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.

WOLF BLITZER, CNN ANCHOR: Happening now: double danger getting ready to bear down on the United States. We'll go live to the National Hurricane Center for the very latest warnings on Bonnie and Charley.
Standby for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Oil increase. Is this major announcement part of a well-timed secret deal? What will it mean for the election and for your wallet?

Final assault. U.S. and Iraqi forces prepare for a major attack in a hotspot that's also a holy city.

Book battle. Out today, a scathing indictment of John Kerry's war record. We'll put the author toe to toe with a high-ranking Kerry supporter.

A news legend arrested.

MIKE WALLACE, CBS NEWS: They cuffed me and charged me with disorderly conduct, took me down to the station.

BLITZER: Mike Wallace of "60 Minutes" tells his side of the story.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, August 11, 2004.

BLITZER: It's likely to have a significant but uncertain impact around the world, especially here in the United States. Saudi Arabia is about to step up the flow of oil. And while that should be welcome news to consumers, the timing is raising some eyebrows.

(BEGIN VIDEOTAPE)

BLITZER (voice over): With oil prices now at a record $45 a barrel, Saudi Arabia, as earlier promised, has announced an increase of production by 1. 3 million barrels a day. The stated hope is to stabilize or reduce the cost of oil which has dramatically increased in recent years, causing an enormous added burden on the U.S. and world economy. The price per barrel during most of the '90s, for example, was around $20 a barrel. This more than doubling of the cost not only results in record-high numbers at gasoline pumps, but increased energy bills across the board. It's one of the main reasons, if not the main reason, why the U.S. economic recovery has not been as robust as many economists had forecast.

There were mediate suspicions that the politics of campaign 2004 were behind this latest Saudi move. That's because of what "The Washington Post" reporter Bob Woodward quoted Saudi ambassador in Washington, Prince Bandar bin Sultan, as promising President Bush in recent months. In his bestseller, "Plan of Attack", Woodward writes that President Bush was deeply worried about the high price of oil and its impact on the presidential election.

"The ripple effect in the U.S. economy could be gigantic," Woodward writes, "Saudi oil policy could be the saving grace."

According to Prince Bandar, the Saudis hope to fine-tune oil prices over 10 months to prime the economy for 2004. What was key, Bandar knew, were the economic conditions before a presidential election, not at the moment of the election.

Last April, Prince Bandar offered me this reaction.

PRINCE BANDAR BIN SULTAN, SAUDI ARABIAN AMB. TO U.S.: When it comes to oil prices, Wolf, the Saudis always, as far as the media is concerned, damned if I do, damned if I don't. If the prices are high, we are blamed for it.

BLITZER: Saudi foreign policy adviser Adel Al-Jubeir insists it's pure fiction to claim the increased production is due to a private deal with the White House. He says the Saudi government is prepared to keep oil production at this new level indefinitely.

(END VIDEOTAPE)

BLITZER: And just a few minutes ago I spoke about all of this with Adel Al-Jubeir, the senior foreign policy adviser to Saudi Crown Prince Abdullah.

(BEGIN VIDEOTAPE)

BLITZER: Adel Al-Jubeir, thanks very much for joining us. Let's get right to a question a lot of people are asking right now, was this a gift to the White House, your decision to go ahead and pump oil by an additional 1.3 million barrels a day?

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: Not at all. This was a reflection of our long-standing policy to try to maintain balance in the markets which means supply and demand. This has been our policy for the past 30 years irrespective of who's in the White House.

BLITZER: But as you well remember, in Bob Woodward's book, the Saudi ambassador to the United States, Prince Bandar bin Sultan said that he would like to help the president and if they could time an oil production increase around the time of the election, that would be good.

AL-JUBEIR: I believe that story is fiction. Saudi Arabia does not play politics with oil. It's too important a commodity for us and for the world economy to fool around with. What we have always done is whenever there were shortages of supply, we have increased supply to bring the markets back into balance. Whenever we see prices being too high, we try to increase production to bring prices down.

And the reverse is also true. And we do this without regard to any timing in terms of elections or anything of that nature. And we've have been doing it with Democratic administrations as well as Republican administrations in the White House.

BLITZER: But you have to acknowledge there's an unusually close relationship between Saudi Arabia -- between your government and the Bush administration. Isn't that right?

AL-JUBEIR: Absolutely. And we're very proud of it, as there was a close relationship and continues to be with President Clinton and with President George Bush Senior and with every other president since Franklin Delano Roosevelt.

BLITZER: So you're categorically dismissing the suggestion this production increase is designed to help the U.S. economy and in turn help President Bush try to get re-elected?

AL-JUBEIR: Yes, that's true, Wolf, categorically deny it. This move is designed to bring the markets in balance. This move is designed to help the world economy of which we are a part. When the world economy suffers, we all suffer. When it benefits, we all benefit. This is the responsible move to take when you have $45 a barrel prices. This is the responsible move to take to reassure markets and customers that there are plenty supplies available if the market needs them.

BLITZER: Well, as you well remember, it wasn't all that long ago oil was going for $20 a barrel, $25 a barrel, I remember when it was in the teens. Why have you waited now, until it's $45 a barrel, to intervene?

AL-JUBEIR: Well, Wolf, we began -- we have been intervening in the oil markets for the past 30 years. And if you look at run-up that occurred over the last two years, the crisis in Iraq and the build up to the war in Iraq spooked the markets and oil prices went up, Iraqi production went down. We increased our production. In fact, last year we were producing at one point over 10 million barrels of oil to make sure that there are adequate supplies in the markets.

This year, beginning in February, we have been monitoring the markets and we have been making more oil available to the markets as our customers demanded it. And at the most recent OPEC meeting there was a decision made to increase production by a large amount and we have done so. And we have even increased our production beyond the OPEC quota to make sure that all of our customers are supplied with crude. We have not turned anyone away.

BLITZER: Adel Al-Jubeir, thanks very much for joining us.

AL-JUBEIR: My pleasure.

(END VIDEOTAPE)

BLITZER: Adel Al-Jubeir, speaking to us earlier, just a little while ago in from Jeddah in Saudi Arabia.

Let's turn to Iraq now, the radical Shiite cleric Muqtada al-Sadr is once again vowing to fight to his last drop of blood. And that just might happen at any moment in Najaf where Sadr and many of his forces are currently holed up. CNN's Matthew Chance is in Najaf with the latest on an expected major military offensive.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Military officials here on outskirts of Najaf telling us that sporadic fighting is still continuing in the center of the city between U.S. forces on the ground and those loyal to the radical Shiite cleric Muqtada al- Sadr. Much of that fighting taking place around the mosque of Imam Ali, it's one of the holy shrines in Shia Islam.

The Mehdi Army fighters are holed up inside of it. They're firing mortars and rocket-propelled grenades and automatic weapon fire at U.S. troops who are maintaining a cordon on the outside. That's how the standoff has really existed for the past week or, just a few days less than a week. In fact, that standoff developing.

And forces on both sides very eager to know how they're going to bring this to an end. There are political discussions ongoing we're told between members of the interim Iraqi government and Muqtada al- Sadr to try and get him to abandon this fight, disarm the Mehdi militia and to be brought into the political process.

But there are other options being examined as well, one of those options actually going into that sacred mosque and cleaning out those rebels who are holed up inside. The U.S. military though very mindful and sensitive of the fact that doing that with U.S. troops could make extremely big problems here amongst the Shiite Iraqis and could create some kind of very violent backlash.

And so they're looking at ways how they can limit that. But one of the ways might be to use Iraqi forces -- the Iraqi security forces of the interim Iraqi government in some kind of forward position that would involve them going into the mosque and doing the clearing out, the fighting, with those Mehdi Army fighters inside. That's just one of the options being laid on the table at this stage as perhaps this battle for Najaf reaches a new phase.

Matthew Chance, CNN, Najaf.

(END VIDEOTAPE) BLITZER: And here's your chance to weigh in on this important story. Our Web question of the day is this: should U.S. forces attack sacred sites in Najaf where militants are hiding? You can vote right now, go to cnn.com/wolf. We'll have the results for you later in this broadcast.

Elsewhere in Iraq, a roadside bomb exploded near a market north of Baghdad today, killing at least six Iraqis and wounding 11 others. Police blame the attack on terrorists.

A bomb exploded at a West Bank checkpoint just north of Jerusalem today, killing two Palestinians and wounding 13 others, including six Israeli police officers. The Al Aqsa Martyrs Brigade claimed responsibility. The group's leader says the bomb was intended for Jerusalem, but the bomber decided to detonate the device by remote control as security forces closed in.

(END VIDEOTAPE)

BLITZER: Flashpoint. Vietnam, a past war brought back to life by a candidate and his critics. One book causing an uproar. I'll speak live with the author who seeks to discredit Kerry's record and a former chairman of the joint chiefs of staff who supports the senator.

Plus, double trouble. Two major storms poised to hit land. New information out this hour on Hurricane Charley and tropical storm Bonnie. We're live from the National Hurricane Center.

Also Amber Frey on the stand for a second day of dramatic testimony. New details of the lies Scott Peterson told in the days following his wife's disappearance.

(COMMERCIAL BREAK)

BLITZER: Former rivals on the campaign trail together. Senator John McCain joins President Bush for a second day in a row with appearances in New Mexico and McCain's home state of Arizona. Yesterday they stumped together in Florida.

The Democratic rival wasn't far away, Senator John Kerry addressed a group of seniors in Henderson, Nevada, on his plan to lower prescription drug prices. Tomorrow, both Kerry and Bush will be in southern California.

A harsh critic of John Kerry's Vietnam war record is out with a brand new book entitle "Unfit For Command." Author John O'Neill is a Texas lawyer and a Vietnam veteran. Joining us now with more on O'Neill and his controversial book, CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is a very emotional personal story between men who fought in one of America's most divisive wars. And it's by no means coincidental that this story is heating up to fever pitch right now.

(BEGIN VIDEOTAPE)

TODD (voice-over): In his final sprint toward a life's ambition, John Kerry puts his wartime past front and center.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: I know what kids go through when they're carrying an M-16 in a dangerous place and they can't tell friend from foe.

TODD: But as the campaign enters a heated stretch, Kerry's war record is becoming an increasingly bitter flashpoint.

The new book "Unfit For Command" by John O'Neill seeks to discredit virtually every wartime citation Kerry received, a case O'Neill has been making for years.

UNIDENTIFIED MALE: Why are we coming forward? Because we were there. We know the truth and we know that this guy is unfit to be commander-in-chief.

TODD: O'Neill is a fellow Vietnam veteran who took command of Kerry's patrol boat after Kerry left and never served with Kerry. To back his claims in the book, O'Neill quotes superior officers, some of whom originally backed Kerry and people who served near Kerry but not on his boat.

About a dozen veterans who did serve on Kerry's boat have lined up to support him. O'Neill asserts that each of Kerry's three Purple Hearts came from self-inflicted or exaggerated wounds.

UNIDENTIFIED MALE: It's impossible 35 years later for these guys to go back and rewrite history. If you go back and look at the citations, look at the award recommendations, look at the fitness reports that were written on John Kerry in real time, they say John Kerry's service in Vietnam was heroic.

TODD: O'Neill strongly disputes Kerry's biographical claims of many incidents in Vietnam including one involving a central figure in the campaign.

UNIDENTIFIED MALE: I've witnessed his bravery and leadership under fire and I know he will make a great commander-in-chief.

TODD: Jim Rassman, official records say, was pulled from a river by a wounded John Kerry on March 13, 1969 as U.S. patrol boats took fire from both banks. Kerry's Bronze Star citation from that incident says Kerry was wounded in the arm from a mine that had exploded near his boat. But O'Neill claims that Kerry wounded himself earlier in the day by mishandling a grenade and in the book O'Neill writes, "in reality, Kerry's boat was on right side of the river when a mine went off on the opposite side." He continues, "there was no other hostile fire." And, quote, "despite the absence of hostile fire, Kerry fled the scene."

UNIDENTIFIED MALE: This is suspicious, it is dishonest, it is based on politics, it is not based on what happened in Vietnam.

TODD: O'Neill acknowledges that Kerry picked up Rassman but later Rassman says he does remember taking fire. UNIDENTIFIED MALE: All these rounds came in and John ran up and dropped down on his hands and knees and pulled me over. Had he not come out on that bow, I'd be dead.

TODD: O'Neill's book follows the release of an ad by the group Swift Vote Veterans For Truth. O'Neill serves on the steering committee. Those who appear in the ad also are quoted in the book.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know, I was there, I saw what happened.

TODD: The ad was partially bankrolled by a Texas Republican with ties to Bush aide Karl Rove. The Kerry campaign says none of the veterans in the ad served on Kerry's boat.

Former P.O.W. and Republican Senator John McCain even while campaigning for President Bush, defended John Kerry, telling the Associated Press, quote, "I think the ad is dishonest and dishonorable." McCain called on the Bush campaign to condemn the ad. Last Friday, White House Press Secretary Scott McClellan said, quote, "we have not and we will not question Senator Kerry's service in Vietnam."

(END VIDEOTAPE)

TODD: We spoke to an official at the Bush/Cheney campaign this afternoon. He said the campaign would not condemn that particular ad any more than they would others that are produced with so-called soft money. He said they do deploy the use of unregulated money to produce these commercials and the official added, quote, "I've not seen John Kerry condemn any of the ads against President Bush" -- Wolf.

BLITZER: Brian Todd, thanks very much for that report. And joining us now with more on this sensitive subject, John O'Neill. He's in New York, he's the author of this new book and retired U.S. Navy admiral, the former chairman of the joint chiefs of staff, Admiral William Crowe. Thanks to both of you for joining us.

John O'Neill, if all of these guys, virtually everyone who served on that Swift boat together with John Kerry and so many of them were at the Democratic convention attesting to his heroics, if they say he did what they believed why should they believe you when you weren't there on his boat or any of the other individuals who you quote in your book?

JOHN O'NEILL, AUTHOR, "UNFIT FOR COMMAND": Wolf, unlike Admiral Crowe, the people in our organization have no partisan tie, we didn't campaign in the last four elections for Democrats. By and large we didn't campaign for anybody, but we were there. There are 254 Swift Boat people who have signed our letter at Swiftvets.com, including 60 Purple Heart winners, for example, and include 17 of the 23 officers who served alongside John Kerry in Antoy. These were in boats literally five and ten yard away. These were people that bond together every night.

BLITZER: Let me interrupt you, John. But were any of them, was one of them on the boat with John Kerry?

O'NEILL: Yes, as a matter of fact, Steve Gardener (ph) who is the guy that broke the story that Kerry lied about Christmas in Cambodia. Steve Gardener was on his boat for the longest time of any enlisted man and he has signed our letter. He's the guy who came forward to demonstrate that Kerry's story that he had been illegally in Cambodia over Christmas Eve was a total falsehood.

BLITZER: All right. Well, let me then ask you this, there's one person that you say served with him on that boat, but there are at least a dozen others who say he was a hero, a commander and they support him. It's 12 against 1.

O'NEILL: Not quite, Wolf. It's 254 against 12. Every single commander of John Kerry in Vietnam has signed our letter condemning him. Almost 17 of the 23 officers that served with him -- these boats operated in convoys of two to six boats, they were yards apart.

In the scene you just showed, for example, Kerry's ad showed all of the boats fleeing and then Kerry coming back. But all of the boats didn't flee Wolf, they couldn't. The three boat had been blown up, it had no screws left. Everybody went to save the three boat and Kerry fled.

BLITZER: Let's let Admiral Crowe respond. Admiral Crow, you served in Vietnam. You're a former Navy Admiral, retired chairman of the joint chiefs of staff. You are a supporter, an active political supporter, now of John Kerry. I want to give you a chance to respond to what John O'Neill writes in his book, and what he's just said.

ADMIRAL WILLIAM CROWE, FRM. JOINT CHIEFS CHAIRMAN: Well, the book is a capitulation of the complaints and criticisms they've had all along. It really ads nothing new.

Because of the limits of time, I'd like to speak to the fleeing business. There were other boats there, Mr. O'Neill who I do not know, we enjoy one thing together, neither one of us never saw any of these incidents, neither one of us had ever met Kerry, and the bulk of these 257 people were not on the scene.

If one of the boats fled, under fire and the other boats didn't bring him into account with a senior officer, that makes no sense whatsoever, that defies reason. Fleeing under fire, of course, is a general court martial offense. The Navy has ways to do that. What were these other skippers are doing?

I have gone through all of the records of the action reports, fitness reports, medal citations, comments, also spot action reports, no mention of that whatsoever.

BLITZER: All right. I'm going to let John O'Neill respond. But I want to take a quick commercial break, because we have much more to discuss. A very sensitive subject indeed. We'll hear more from John O'Neill and retired Admiral William Crowe in just a moment.

Also coming up, as Florida braces for a one-two punch, the mid- Atlantic and northeast could face some serious danger. The latest from the National Hurricane Center. We'll go there live.

And a former Washington favorite now accused in Iraq, we'll speak with the daughter of Ahmad Chalabi. She's here to defend her father.

Plus, a major development in the rape case against Kobe Bryant. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Let's continue our debate on John Kerry's record as a decorated Vietnam War veteran. Joining us once again, John O'Neill. He's the author of the new book "Unfit For Command."

And retired U.S. Navy Admiral, the former chairman of the joint chiefs of staff, William Crowe.

I want you to respond, John O'Neill, to what the Admiral Crow just said before the break, but also in the context of what Senator John McCain, who himself served some six years in a Vietnam prison, a Vietnamese prison. He says that what you and your colleagues are saying is dishonest and dishonorable. But go ahead and respond.

O'NEILL: More than 22 POWs have backed our efforts. More than 60 people who won the Purple Heart in Vietnam signed our letter. And 254 people in our unit, including 17 of the 23 officers that served with Kerry have signed the letter. There's only one that backs Kerry out of 23.

And Admiral Crowe, by the way, has talked to none of them, to the best of my knowledge, and wasn't there -- and wasn't there within four years of the time of these incidents. I've talked to many of them.

BLITZER: Let's let the Admiral Crowe respond to that.

O'NEILL: Can I talk to Rassman.

BLITZER: Yes, hold on one second. We're going to get to that. But let him respond to the specific point you just made -- Admiral.

CROWE: Well, it's inaccurate. I came into Vietnam right after these incidents just as the Admiral Zimall (ph) left. But I don't think the numbers people that didn't see it, or weren't there, that are relying on hearsay, I don't understand the strength of that.

BLITZER: There's some people who suggest, Mr. O'Neill, that what you're angry at John Kerry and your colleagues are angry at him, not so much for what he did during his tour of duty in Vietnam, but for what he did when he came back from Vietnam. He testified against the war, and he threw his ribbons into that pile. Is that a fair suggestion?

O'NEILL: No one is angry at John Kerry for being against the war. People are very upset that he came back and labeled us all war criminals, but that wouldn't cause people to say things falsely. There were three other officers that day on March the 13th, 1969. They all saw what happened. And their accounts are in this book "Unfit For Command" and can be found right at swiftvets.com.

They're not Republicans or Democrats, they saw the ad at the Democratic National Convention in which he said all boats fled and he came back, no man left behind. But they didn't flee, they stayed there. They couldn't flee. The boat had no screws.

BLITZER: Let's let the admiral respond to that. Go ahead admiral.

CROWE: Well, that's a very confused situation. I can find nothing in the records that would suggest that. The war history doesn't say that. As a matter of fact, the two probably prominent impressions that came from the book, is number one, it's a very skillful, political polemic. It's not an account, it's a political polemic. And it is set out to trash John Kerry. In the process, they work over the U.s. Navy and also feel that it is corrupt, et cetera, et cetera.

BLITZER: All right. Let me let Mr. O'Neill respond to that. Go ahead, John.

O'NEILL: Let me tell you, my family was in the U.S. Navy before Admiral Crowe, who was in the Navy for a long time, got involved. My dad graduated in the class on '31, my grandfather taught there, my brothers graduated from there. And it's just false to say that our book trashing the Navy.

The guy who trashed the U.S. Navy was John Kerry, who came back and compared us to the army of Genghis Khan. With respect to the confusion, there's no confusion at all, Admiral. The people that were there, the actual people on the scene, they remember going to the 3 boat that was disabled and seeing no Kerry around.

BLITZER: Go ahead. Admiral, go ahead.

CROWE: Throughout the book it puzzled me in many incidents where you have made these conclusions there are ways for people who are in command of other boats, other units, to make one of the offender accountable, to bring it up to the Navy's attention, to complain about it, to have a voice in action reports, to complain about the medal system. None of that was done.

None of these people in the numbers that you are talking about, raised those suggestions or questions at the time. They came up when, 30 years later, he's running a prominent political office, very, very suspect.

O'NEILL: That's not what happened. Tom Wright...

CROWE: Oh yes, it is.

O'NEILL: Tom Wright, in the book, outlines the conversation that he had with John Kerry, where he asked...

CROWE: More hearsay. O'NEILL: Tom Wright, who is a retired Captain of the United States Navy said, "I will no longer operate with John Kerry. He fires without regard to human life. He's careless. I won't even operate with him." Kerry, then, left.

He was only there 3 months, Admiral. It takes a little while to figure anybody out. They did the best they could.

BLITZER: John O'Neill, I want you to respond. Over the past 24, 48 hours, there have been some serious questions raised about your co- author, Jerry Corsi. They have discovered some comments he's written on various Web sites which appear to be anti-Muslim, anti-Jewish, anti-Catholic. I could read some of them, but we don't have a whole lot of time.

I wonder if you want to disassociate yourself from what he has written.

O'NEILL: Oh, absolutely.

Jerry Corsi acted as sort of an editor of our book. And so instead of attacking the facts of the book with all these people who were in Vietnam with John Kerry, 60 of them, the attack is now on this guy who is an editor. His remarks were inappropriate. He shouldn't have made them. He's a devout Catholic, as a matter of fact. But Jerry Corsi was not in Vietnam, doesn't claim to be. He simply helped us in editing the book.

The 60 people who were with Kerry in Vietnam, this is their book.

BLITZER: All right, but he's listed as the co-author of the book, isn't he?

O'NEILL: He is. And he performed in the same way as Douglas Brinkley or anybody else a function in editing, in -- particularly in the second half of the book, in historical research, because he had done a great deal of research on the anti-war movement, the Vietnam Veterans Against the War, but not in the Vietnam section of the book.

Admiral Crowe, I gave John O'Neill the first world. I'll give you the last. Go ahead.

CROWE: Well, I think there's a lot of myth connected with this thing. If you want a balanced treatment of what -- Kerry's life and particularly in the Navy, you will not get it out of this book. This book is based on hearsay, numerous interviews, some artful writing, but nothing of great evidential impact. The official view doesn't acknowledge any of this.

BLITZER: All right.

We're going to, unfortunately, leave it there, but I'm sure there's going to be plenty of opportunity to continue this debate.

John O'Neill, thanks very much for joining us.

O'NEILL: Thank you, Wolf.

BLITZER: Admiral Crowe, thanks to you as well.

O'NEILL: Thank you, Wolf.

BLITZER: Thank you.

Two storms ready to bear down on Florida. We'll bring you the latest from the National Hurricane Center. That's coming up.

East Coast residents remember Hurricane Floyd. Should they be bracing for an encore right now?

And TV's Mike Wallace, famous for asking tough questions, we'll tell you why he was on the receiving end.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back tropical tag team Charley is now a hurricane, a Bonnie, a tropical storm. We'll have a live update from the National Hurricane Center. That's coming up.

First though, a quick check of some other stories now in the news.

Homeland Security Security Tom Ridge says there's no evidence so far linking a Pakistani man arrested in North Carolina with terrorism. He was taken into custody on immigration violations after being seen videotaping buildings in Charlotte. Court records say he also had tape of buildings and transportation systems in other cities.

Talks are underway that could lead to the release of a U.S.-born man designated an enemy combatant. Yasser Hamdi has been held by the U.S. military for more than 3 years without charges. In June, the Supreme Court ruled he should have access to U.S. courts.

Keeping you informed, CNN, the most trusted name in news.

There is double trouble brewing for Florida and the Eastern seaboard as a tropical storm and a hurricane are headed now their way. Tropical Storm Bonnie is in the Gulf of Mexico, Hurricane Charley is in the Caribbean basin. For an up to the minute report on both of these storms let's turn to the expert.

Here with us from the National Hurricane Center in Coral Gables, Florida, the director Max Mayfield. Dr. Mayfield, thanks very much for joining us. What exactly is the latest on these 2 storms?

DR. MAX MAYFIELD, NATIONAL HURRICANE CENTER: Well, Bonnie right now in the Gulf of Mexico is a strong tropical storm. We think it has a good chance to strengthen into a category 1 hurricane during the night. And will likely be making landfall in the Florida panhandle early tomorrow morning.

We have a hurricane warning in place now for Destin, Florida over to the mouth of Suwanee River. So this is Bonnie here.

Charley, we are also very concerned with. It's right now a category 1 hurricane. Some of the warmest water anywhere in the Caribbean is south of Cuba. The upper level environment looks very favorable. So we do think Charley will continue to strengthen.

And the most likely scenario, at this time, is for it to continue Northwestward over Western Cuba and to get into the Southeastern Gulf of Mexico.

We have a hurricane watch in place, now, for the entire Florida Keys and the Southwest Florida coast South of Bonita Beach.

BLITZER: So, once it hits land on the Florida coast what happens then, assuming it goes as you project right now?

MAYFIELD: We're actually forecasting it gets in the neighborhood of a category 2 hurricane by the time it makes landfall. It will start to weaken very quickly. But we're forecasting it to move over the state. It will likely reemerge over the Atlantic waters there off the Georgia coast. And then go into South Carolina and on up the East Coast. So we're going to have to watch that over the next several days.

BLITZER: As it goes up the East Coast, could it be dangerous for residents along that area?

MAYFIELD: Well, it could be depending on how far off the coast it gets. If most of that circulation stays over land, I don't think it's going to be a big problem, but we certainly could have tropical storm conditions. If it gets far enough off the coast, it could even regenerate into a hurricane.

I think it will very likely weaken considerable as it goes over the peninsula of Florida. But even the folks in Central Florida, even around Orlando, for example, will very likely have a hurricane, or at least a weakening hurricane to deal with.

BLITZER: How worried are you about flooding?

MAYFIELD: We're very worried about the storm surge flooding, right now, in the Florida Keys. They already have some mandatory evacuations for the lower Keys, for the nonresidence. The have a voluntary evacuation for the upper Keys. They have a phased evacuation and will ask for different people to likely be evacuated tomorrow.

BLITZER: Max Mayfield, we'll be checking back with you often. Thanks very much. It's that time of the season.

In between Hurricane Charley and the Florida coast is the island of Jamaica. It's first in the line of fire. Here with us on the phone from Jamaica the journalist Fitzroy Prendergast. He's in the Jamaican capital city of Kingston.

What's happening where you are right now, sir? FITZROY PRENDERGAST, JOURNALIST (via telephone): Well, Wolf it's getting very dicey. Of course now, since this morning we've had outbreaks of heavy showers and a lot of wind. We are still bracing for the major part of this storm. We're expecting that as the evening goes on it will get heavier in terms of the rain and the wind.

BLITZER: I take it they've cancelled all the flights into Jamaica. All the tourists, what, are they battened down? Are they getting ready for this storm?

PRENDERGAST: Oh yes. Yesterday, when I got my stuff, a lot of people were still not worried. But this morning, when they realized that the storm was heading Jamaica's way, everybody started to batten down and get their things together.

So, all the flights are canceled here. We're just waiting for the inevitable.

BLITZER: And it looks like it's almost over Jamaica right now based on the map we're showing our viewers. Give us a little flavor, if you were to walk outside right now, what would you see?

PRENDERGAST: Well, what you'd see is that Jamaica is basically very cloudy, very dark, and it looks very ominous. It's basically just coming -- getting ready to unleash on Jamaica.

So, we're really trying to prepare ourselves for the worst that's possible.

BLITZER: Well, good luck to you Fitzroy Prendergast. Good luck to all our friends in Jamaica. We know that CNN has a lot of viewers there. Wish you only the best as you weather this storm.

So, what else can we expect here in the United States for that? Let's go to our meteorologist Jacqui Jeras. She's over at the CNN weather center in Atlanta -- Jacqui.

JACQUI JERAS, CNN WEATHER ANCHOR: Well, Wolf, we're going to see a pretty good impact from both storms, but we're a little bit more concerned with Charley. And you mentioned it looks like they're getting nailed here in Jamaica with Charley right now. The eye is actually right here. And so it doesn't look like it's going to be making a direct hit for Jamaica. Just kind of skirting along the southern and western coastlines.

Now, we're really needing to be taking precautions for Bonnie and Charley both, especially across South Florida and then into the Panhandle and big bend areas of Florida.

The primary impact that you're going see from Bonnie are going to be moving in already, we think, by early tomorrow morning, by the time you wake up. We'll see some additional strengthening, winds of 65 plus miles per hour can be expected, because this still could become Hurricane Bonnie before it makes landfall.

Storm surge about 2 to 4 feet, and rainfall on the range of 3 to 6 inches and some flash flooding can be anticipated there as well.

Now the impact on the Keys, we already heard from Max Mayfield that some evacuations are taking place. Well, tropical storm force winds should be arriving Thursday afternoon, with hurricane winds by Thursday evening. Storm surge with high tide. Those 2 should coincide, unfortunately, Thursday evening with 3 to 6 inches of rainfall and some flooding there.

Already some flood watches in effect, because this part of the country is already getting hit with wet weather right now and this has nothing to do with Bonnie. We have a cold front trying to make its way through the region. So, unfortunately, that ground is very, very saturated.

Now over all of the hurricane season so far started out very slowly, but it looks like we're trying to make up for some lost time.

(BEGIN VIDEOTAPE)

JERAS (voice-over): This year's first named storm Alex, caused flooding in North Carolina's Outer Banks, but that was about it. This time, the East Coast may not be so lucky. The National Oceanic and Atmospheric Administration has predicted a total of 12 to 15 storms during the 2004 Atlantic Hurricane Season which runs through November 30. Two to 4 of those storms are expected to develop into major hurricanes.

Forecasters are watching the second and third named storms of the season right now, Bonnie and Charley. Both storms are expected to spread rain along the East Coast, parts of which are already saturated.

They're expected to take slightly different tracks. While Bonnie is supposed to fade away after making landfall, Charley, which is stronger, is expected to pass through Central Florida and then head into the Atlantic Ocean, where it could up more steam before making landfall again in the Carolinas.

Five years ago, Hurricane Floyd made landfall in North Carolina, killing 51 people there and starting a path of death and destruction that ran north through Virginia, Maryland, Pennsylvania and Delaware, and all the way up to New Jersey, New York and even Vermont.

(END VIDEOTAPE)

JERAS: And it's still a little too early to tell whether or not Charley could be another Hurricane Floyd, but it could be affecting as many people. And, Wolf, the U.S. Census Bureau released a statement today saying that if Bonnie continues on its same track, which we do expect it to, it will be effecting 1 million people with tropical storm force winds.

BLITZER: CNN's Jacqui Jeras with a really thorough report for us. Jacqui, thank you very much. And to our viewers, listen to the experts. If they tell you to evacuate, evacuate. This is not necessarily an easy business. There is dangers out there, even with a Hurricane -- 1 level Hurricane. Thanks very much to Jacqui Jeras, Max Mayfield and to our reporter on the scene in Jamaica.

Coming up, a former Pentagon favorite returns to Iraq to face an arrest warrant. Now here from the daughter of the controversial Iraqi politician Ahmad Chalabi. She'll join me here in the studio.

And Amber Frey on the witness stand again. New details of secretly recorded conversations between Scott Peterson and his mistress.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There was a little of a conversation and they cuffed me and charged me with -- with disorderly conduct.

(END VIDEO CLIP)

BLITZER: He went out to grab dinner and ended up in handcuffs. The veteran journalist, Mike Wallace speaks out on his arrest. We'll have details of that.

First though, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Defense Secretary Donald Rumsfeld made an unannounced visit to Afghanistan today for talks with President Hamid Karzai. Rumsfeld praised the Afghan leader for showing great courage in efforts to register 9 million voters for October's presidential election.

Deadly train crash: At least 6 people were killed and 40 injured in Turkey when 2 passenger trains crashed head on Southeast of Istanbul. An official says an accident happened after 1 train ignored a signal and failed to stop at a junction.

Jailed lottery winner: A convicted rapist serving life in a British prison has won a lottery jackpot worth almost $13 million. He was on temporary release when he bought the ticket. Officials say he's been moved to a high security prison for quote, "his own safety." Experts say victims may be able to sue for part of the winnings.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Ahmad Chalabi returned to Iraq today to face counterfeiting charges. He was born in Iran -- he was in Iran, that is, when the arrest warrant was issued last week. His nephew, Salem Chalabi, was charged with murder. The leader of a group formed to oppose Saddam Hussein, Ahmad Chalabi once was a very close U.S. ally.

In Washington today, his daughter Tamara announced a lawsuit against Jordan, which she accuses of smearing her father's reputation.

I spoke with Tamara Chalabi just a short while ago. She was joined by her family's attorney, John Markham.

(BEGIN VIDEOTAPE)

TAMARA CHALABI, DAUGHTER OF AHMAD CHALABI: He's planning on continuing to do what he's been doing, which is to ensure that free, democratic election will take place, to push forward with his agenda for Iraq, which is to establish a democratic, free, puritarian federal Iraq.

BLITZER: Do you believe it's the Iraqi government, the interim Iraqi government of Prime Minister Iyad Allawi, who's now behind these latest charges against him?

CHALABI: I don't believe he's behind these charges.

BLITZER: Who's behind it?

CHALABI: I don't know.

BLITZER: What about your cousin, Salem Chalabi, who was in charge of the war crimes tribunal effort? He's an American graduate of Yale University, of Northwestern Law School. He's now been accused of complicity in murder.

CHALABI: I mean, it's ludicrous. You know, Salem is the face of the Saddam trial. And if this is what you're doing to the administrator of the court, I think is very telling how they want to proceed with this court. I mean...

BLITZER: But if it's not the Iraqi government behind these charges, who is?

CHALABI: I don't know. I am not in a position to tell you. I don't know.

BLITZER: Let me ask your attorney, John Markham.

(CROSSTALK)

JOHN MARKHAM, ATTORNEY FOR TAMARA CHALABI: I think we have a couple of guess.

BLITZER: What are your suspicions?

MARKHAM: Well, look, first of all, the charges that he corrupted the Iraqi currency are ludicrous.

Here's a man who fought. As you said, he came back to fight. He's risked his life to try to depose Saddam Hussein for 15 years. He spoke out way before it was fashionable to do so, even in this country. Now he's supposedly over there corrupting their currency? It's a false charge. And he went back to fight it. As to who's behind it, we know he has enemies, Wolf. We know that there's certain members of the intelligence community in the United States who have no end of rumors that they are happy to call up the media and, through unnamed intelligence sources, say Chalabi did this, Chalabi did that.

BLITZER: And, finally, as a daughter right now, you see what your father is going through. How does that impact on you?

CHALABI: I believe in him. I have no doubt that he will win. I think -- I mean, I know all of these accusations are false. I think it's unfortunate, because I think the goal here is not Chalabi, really. It's about building a new Iraq. And it seems to me that somebody has gone off track.

BLITZER: Tamara Chalabi, thanks very much for joining us. John Markham, thanks to you as well.

MARKHAM: Thank you.

(END VIDEOTAPE)

BLITZER: And you can see my entire interview with Ahmad Chalabi's daughter tomorrow and her attorney, John Markham. That will air tomorrow, noon Eastern, here on CNN.

Secretly recorded phone calls between Scott Peterson and his mistress, details of their conversations in the days after Laci Peterson's disappearance.

Plus, one side requests an indefinite delay in the Kobe Bryant case. What's today's developments all about? What's going on? And what could this mean for the basketball star?

(COMMERCIAL BREAK)

BLITZER: Intimate conversations are taking center stage over at the Scott Peterson murder trial. Jurors today heard hours of recorded phone calls between Peterson and his former mistress Amber Frey, who taped them for the police.

On the stand for a second day, she testified that Peterson told her a string of lies, including that he wasn't married. Peterson is accused of killing his wife, Laci, and their unborn child. He could get the death penalty if convicted.

Also in our justice report, prosecutors have asked the judge to delay Kobe Bryant's sexual assault trial, currently scheduled to begin in just about two weeks. They say they need more time to prepare. Legal experts, however, say the prosecutors suffered a severe setback when Bryant's accuser decided to file a civil suit against Kobe Bryant. There's no word when the judge will rule on the postponement request.

Veteran TV journalist Mike Wallace has been released after his arrest last night for, allegedly, disorderly conduct. The incident occurred outside a New York City restaurant. Wallace was bringing an order of meatloaf back to his limousine when he saw the limo driver arguing with Taxi and Limousine Commission inspectors, who say he was double-parked.

The 86-year-old "60 Minutes" correspondent said, when he asked what was going on, the inspectors accused him of being overly assertive and disrespectful.

(BEGIN VIDEO CLIP)

MIKE WALLACE, "60 MINUTES": They also said something about my lunging toward one of them.

QUESTION: Did you?

WALLACE: I find it difficult to lunge into bed.

(LAUGHTER)

WALLACE: Let alone at a couple of cops who were angry.

QUESTION: How could somebody not know you?

WALLACE: It's apparent they don't watch "60 Minutes." That's quite apparent.

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: Mike Wallace due in court in October.

We'll have the results of our Web question of the day. That's coming up ahead.

Plus, D.C. debut, tiger cubs making their first public appearance right here in own backyard in the nation's capital.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing if on our Web question of the day. Remember, this is not a scientific poll.

Our picture of the day, Sumatran tiger cubs at the National Zoo here in Washington. They were born May 2, but today marked their first personal appearance. The cubs are expected to grow to 300 pounds in just 12 months.

"LOU DOBBS TONIGHT" starts right now.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

Aired August 11, 2004 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now: double danger getting ready to bear down on the United States. We'll go live to the National Hurricane Center for the very latest warnings on Bonnie and Charley.
Standby for hard news on WOLF BLITZER REPORTS.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Oil increase. Is this major announcement part of a well-timed secret deal? What will it mean for the election and for your wallet?

Final assault. U.S. and Iraqi forces prepare for a major attack in a hotspot that's also a holy city.

Book battle. Out today, a scathing indictment of John Kerry's war record. We'll put the author toe to toe with a high-ranking Kerry supporter.

A news legend arrested.

MIKE WALLACE, CBS NEWS: They cuffed me and charged me with disorderly conduct, took me down to the station.

BLITZER: Mike Wallace of "60 Minutes" tells his side of the story.

(END VIDEOTAPE)

ANNOUNCER: This is WOLF BLITZER REPORTS for Wednesday, August 11, 2004.

BLITZER: It's likely to have a significant but uncertain impact around the world, especially here in the United States. Saudi Arabia is about to step up the flow of oil. And while that should be welcome news to consumers, the timing is raising some eyebrows.

(BEGIN VIDEOTAPE)

BLITZER (voice over): With oil prices now at a record $45 a barrel, Saudi Arabia, as earlier promised, has announced an increase of production by 1. 3 million barrels a day. The stated hope is to stabilize or reduce the cost of oil which has dramatically increased in recent years, causing an enormous added burden on the U.S. and world economy. The price per barrel during most of the '90s, for example, was around $20 a barrel. This more than doubling of the cost not only results in record-high numbers at gasoline pumps, but increased energy bills across the board. It's one of the main reasons, if not the main reason, why the U.S. economic recovery has not been as robust as many economists had forecast.

There were mediate suspicions that the politics of campaign 2004 were behind this latest Saudi move. That's because of what "The Washington Post" reporter Bob Woodward quoted Saudi ambassador in Washington, Prince Bandar bin Sultan, as promising President Bush in recent months. In his bestseller, "Plan of Attack", Woodward writes that President Bush was deeply worried about the high price of oil and its impact on the presidential election.

"The ripple effect in the U.S. economy could be gigantic," Woodward writes, "Saudi oil policy could be the saving grace."

According to Prince Bandar, the Saudis hope to fine-tune oil prices over 10 months to prime the economy for 2004. What was key, Bandar knew, were the economic conditions before a presidential election, not at the moment of the election.

Last April, Prince Bandar offered me this reaction.

PRINCE BANDAR BIN SULTAN, SAUDI ARABIAN AMB. TO U.S.: When it comes to oil prices, Wolf, the Saudis always, as far as the media is concerned, damned if I do, damned if I don't. If the prices are high, we are blamed for it.

BLITZER: Saudi foreign policy adviser Adel Al-Jubeir insists it's pure fiction to claim the increased production is due to a private deal with the White House. He says the Saudi government is prepared to keep oil production at this new level indefinitely.

(END VIDEOTAPE)

BLITZER: And just a few minutes ago I spoke about all of this with Adel Al-Jubeir, the senior foreign policy adviser to Saudi Crown Prince Abdullah.

(BEGIN VIDEOTAPE)

BLITZER: Adel Al-Jubeir, thanks very much for joining us. Let's get right to a question a lot of people are asking right now, was this a gift to the White House, your decision to go ahead and pump oil by an additional 1.3 million barrels a day?

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: Not at all. This was a reflection of our long-standing policy to try to maintain balance in the markets which means supply and demand. This has been our policy for the past 30 years irrespective of who's in the White House.

BLITZER: But as you well remember, in Bob Woodward's book, the Saudi ambassador to the United States, Prince Bandar bin Sultan said that he would like to help the president and if they could time an oil production increase around the time of the election, that would be good.

AL-JUBEIR: I believe that story is fiction. Saudi Arabia does not play politics with oil. It's too important a commodity for us and for the world economy to fool around with. What we have always done is whenever there were shortages of supply, we have increased supply to bring the markets back into balance. Whenever we see prices being too high, we try to increase production to bring prices down.

And the reverse is also true. And we do this without regard to any timing in terms of elections or anything of that nature. And we've have been doing it with Democratic administrations as well as Republican administrations in the White House.

BLITZER: But you have to acknowledge there's an unusually close relationship between Saudi Arabia -- between your government and the Bush administration. Isn't that right?

AL-JUBEIR: Absolutely. And we're very proud of it, as there was a close relationship and continues to be with President Clinton and with President George Bush Senior and with every other president since Franklin Delano Roosevelt.

BLITZER: So you're categorically dismissing the suggestion this production increase is designed to help the U.S. economy and in turn help President Bush try to get re-elected?

AL-JUBEIR: Yes, that's true, Wolf, categorically deny it. This move is designed to bring the markets in balance. This move is designed to help the world economy of which we are a part. When the world economy suffers, we all suffer. When it benefits, we all benefit. This is the responsible move to take when you have $45 a barrel prices. This is the responsible move to take to reassure markets and customers that there are plenty supplies available if the market needs them.

BLITZER: Well, as you well remember, it wasn't all that long ago oil was going for $20 a barrel, $25 a barrel, I remember when it was in the teens. Why have you waited now, until it's $45 a barrel, to intervene?

AL-JUBEIR: Well, Wolf, we began -- we have been intervening in the oil markets for the past 30 years. And if you look at run-up that occurred over the last two years, the crisis in Iraq and the build up to the war in Iraq spooked the markets and oil prices went up, Iraqi production went down. We increased our production. In fact, last year we were producing at one point over 10 million barrels of oil to make sure that there are adequate supplies in the markets.

This year, beginning in February, we have been monitoring the markets and we have been making more oil available to the markets as our customers demanded it. And at the most recent OPEC meeting there was a decision made to increase production by a large amount and we have done so. And we have even increased our production beyond the OPEC quota to make sure that all of our customers are supplied with crude. We have not turned anyone away.

BLITZER: Adel Al-Jubeir, thanks very much for joining us.

AL-JUBEIR: My pleasure.

(END VIDEOTAPE)

BLITZER: Adel Al-Jubeir, speaking to us earlier, just a little while ago in from Jeddah in Saudi Arabia.

Let's turn to Iraq now, the radical Shiite cleric Muqtada al-Sadr is once again vowing to fight to his last drop of blood. And that just might happen at any moment in Najaf where Sadr and many of his forces are currently holed up. CNN's Matthew Chance is in Najaf with the latest on an expected major military offensive.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Military officials here on outskirts of Najaf telling us that sporadic fighting is still continuing in the center of the city between U.S. forces on the ground and those loyal to the radical Shiite cleric Muqtada al- Sadr. Much of that fighting taking place around the mosque of Imam Ali, it's one of the holy shrines in Shia Islam.

The Mehdi Army fighters are holed up inside of it. They're firing mortars and rocket-propelled grenades and automatic weapon fire at U.S. troops who are maintaining a cordon on the outside. That's how the standoff has really existed for the past week or, just a few days less than a week. In fact, that standoff developing.

And forces on both sides very eager to know how they're going to bring this to an end. There are political discussions ongoing we're told between members of the interim Iraqi government and Muqtada al- Sadr to try and get him to abandon this fight, disarm the Mehdi militia and to be brought into the political process.

But there are other options being examined as well, one of those options actually going into that sacred mosque and cleaning out those rebels who are holed up inside. The U.S. military though very mindful and sensitive of the fact that doing that with U.S. troops could make extremely big problems here amongst the Shiite Iraqis and could create some kind of very violent backlash.

And so they're looking at ways how they can limit that. But one of the ways might be to use Iraqi forces -- the Iraqi security forces of the interim Iraqi government in some kind of forward position that would involve them going into the mosque and doing the clearing out, the fighting, with those Mehdi Army fighters inside. That's just one of the options being laid on the table at this stage as perhaps this battle for Najaf reaches a new phase.

Matthew Chance, CNN, Najaf.

(END VIDEOTAPE) BLITZER: And here's your chance to weigh in on this important story. Our Web question of the day is this: should U.S. forces attack sacred sites in Najaf where militants are hiding? You can vote right now, go to cnn.com/wolf. We'll have the results for you later in this broadcast.

Elsewhere in Iraq, a roadside bomb exploded near a market north of Baghdad today, killing at least six Iraqis and wounding 11 others. Police blame the attack on terrorists.

A bomb exploded at a West Bank checkpoint just north of Jerusalem today, killing two Palestinians and wounding 13 others, including six Israeli police officers. The Al Aqsa Martyrs Brigade claimed responsibility. The group's leader says the bomb was intended for Jerusalem, but the bomber decided to detonate the device by remote control as security forces closed in.

(END VIDEOTAPE)

BLITZER: Flashpoint. Vietnam, a past war brought back to life by a candidate and his critics. One book causing an uproar. I'll speak live with the author who seeks to discredit Kerry's record and a former chairman of the joint chiefs of staff who supports the senator.

Plus, double trouble. Two major storms poised to hit land. New information out this hour on Hurricane Charley and tropical storm Bonnie. We're live from the National Hurricane Center.

Also Amber Frey on the stand for a second day of dramatic testimony. New details of the lies Scott Peterson told in the days following his wife's disappearance.

(COMMERCIAL BREAK)

BLITZER: Former rivals on the campaign trail together. Senator John McCain joins President Bush for a second day in a row with appearances in New Mexico and McCain's home state of Arizona. Yesterday they stumped together in Florida.

The Democratic rival wasn't far away, Senator John Kerry addressed a group of seniors in Henderson, Nevada, on his plan to lower prescription drug prices. Tomorrow, both Kerry and Bush will be in southern California.

A harsh critic of John Kerry's Vietnam war record is out with a brand new book entitle "Unfit For Command." Author John O'Neill is a Texas lawyer and a Vietnam veteran. Joining us now with more on O'Neill and his controversial book, CNN's Brian Todd -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, this is a very emotional personal story between men who fought in one of America's most divisive wars. And it's by no means coincidental that this story is heating up to fever pitch right now.

(BEGIN VIDEOTAPE)

TODD (voice-over): In his final sprint toward a life's ambition, John Kerry puts his wartime past front and center.

SEN. JOHN KERRY (D), PRESIDENTIAL CANDIDATE: I know what kids go through when they're carrying an M-16 in a dangerous place and they can't tell friend from foe.

TODD: But as the campaign enters a heated stretch, Kerry's war record is becoming an increasingly bitter flashpoint.

The new book "Unfit For Command" by John O'Neill seeks to discredit virtually every wartime citation Kerry received, a case O'Neill has been making for years.

UNIDENTIFIED MALE: Why are we coming forward? Because we were there. We know the truth and we know that this guy is unfit to be commander-in-chief.

TODD: O'Neill is a fellow Vietnam veteran who took command of Kerry's patrol boat after Kerry left and never served with Kerry. To back his claims in the book, O'Neill quotes superior officers, some of whom originally backed Kerry and people who served near Kerry but not on his boat.

About a dozen veterans who did serve on Kerry's boat have lined up to support him. O'Neill asserts that each of Kerry's three Purple Hearts came from self-inflicted or exaggerated wounds.

UNIDENTIFIED MALE: It's impossible 35 years later for these guys to go back and rewrite history. If you go back and look at the citations, look at the award recommendations, look at the fitness reports that were written on John Kerry in real time, they say John Kerry's service in Vietnam was heroic.

TODD: O'Neill strongly disputes Kerry's biographical claims of many incidents in Vietnam including one involving a central figure in the campaign.

UNIDENTIFIED MALE: I've witnessed his bravery and leadership under fire and I know he will make a great commander-in-chief.

TODD: Jim Rassman, official records say, was pulled from a river by a wounded John Kerry on March 13, 1969 as U.S. patrol boats took fire from both banks. Kerry's Bronze Star citation from that incident says Kerry was wounded in the arm from a mine that had exploded near his boat. But O'Neill claims that Kerry wounded himself earlier in the day by mishandling a grenade and in the book O'Neill writes, "in reality, Kerry's boat was on right side of the river when a mine went off on the opposite side." He continues, "there was no other hostile fire." And, quote, "despite the absence of hostile fire, Kerry fled the scene."

UNIDENTIFIED MALE: This is suspicious, it is dishonest, it is based on politics, it is not based on what happened in Vietnam.

TODD: O'Neill acknowledges that Kerry picked up Rassman but later Rassman says he does remember taking fire. UNIDENTIFIED MALE: All these rounds came in and John ran up and dropped down on his hands and knees and pulled me over. Had he not come out on that bow, I'd be dead.

TODD: O'Neill's book follows the release of an ad by the group Swift Vote Veterans For Truth. O'Neill serves on the steering committee. Those who appear in the ad also are quoted in the book.

UNIDENTIFIED MALE: John Kerry lied to get his Bronze Star. I know, I was there, I saw what happened.

TODD: The ad was partially bankrolled by a Texas Republican with ties to Bush aide Karl Rove. The Kerry campaign says none of the veterans in the ad served on Kerry's boat.

Former P.O.W. and Republican Senator John McCain even while campaigning for President Bush, defended John Kerry, telling the Associated Press, quote, "I think the ad is dishonest and dishonorable." McCain called on the Bush campaign to condemn the ad. Last Friday, White House Press Secretary Scott McClellan said, quote, "we have not and we will not question Senator Kerry's service in Vietnam."

(END VIDEOTAPE)

TODD: We spoke to an official at the Bush/Cheney campaign this afternoon. He said the campaign would not condemn that particular ad any more than they would others that are produced with so-called soft money. He said they do deploy the use of unregulated money to produce these commercials and the official added, quote, "I've not seen John Kerry condemn any of the ads against President Bush" -- Wolf.

BLITZER: Brian Todd, thanks very much for that report. And joining us now with more on this sensitive subject, John O'Neill. He's in New York, he's the author of this new book and retired U.S. Navy admiral, the former chairman of the joint chiefs of staff, Admiral William Crowe. Thanks to both of you for joining us.

John O'Neill, if all of these guys, virtually everyone who served on that Swift boat together with John Kerry and so many of them were at the Democratic convention attesting to his heroics, if they say he did what they believed why should they believe you when you weren't there on his boat or any of the other individuals who you quote in your book?

JOHN O'NEILL, AUTHOR, "UNFIT FOR COMMAND": Wolf, unlike Admiral Crowe, the people in our organization have no partisan tie, we didn't campaign in the last four elections for Democrats. By and large we didn't campaign for anybody, but we were there. There are 254 Swift Boat people who have signed our letter at Swiftvets.com, including 60 Purple Heart winners, for example, and include 17 of the 23 officers who served alongside John Kerry in Antoy. These were in boats literally five and ten yard away. These were people that bond together every night.

BLITZER: Let me interrupt you, John. But were any of them, was one of them on the boat with John Kerry?

O'NEILL: Yes, as a matter of fact, Steve Gardener (ph) who is the guy that broke the story that Kerry lied about Christmas in Cambodia. Steve Gardener was on his boat for the longest time of any enlisted man and he has signed our letter. He's the guy who came forward to demonstrate that Kerry's story that he had been illegally in Cambodia over Christmas Eve was a total falsehood.

BLITZER: All right. Well, let me then ask you this, there's one person that you say served with him on that boat, but there are at least a dozen others who say he was a hero, a commander and they support him. It's 12 against 1.

O'NEILL: Not quite, Wolf. It's 254 against 12. Every single commander of John Kerry in Vietnam has signed our letter condemning him. Almost 17 of the 23 officers that served with him -- these boats operated in convoys of two to six boats, they were yards apart.

In the scene you just showed, for example, Kerry's ad showed all of the boats fleeing and then Kerry coming back. But all of the boats didn't flee Wolf, they couldn't. The three boat had been blown up, it had no screws left. Everybody went to save the three boat and Kerry fled.

BLITZER: Let's let Admiral Crowe respond. Admiral Crow, you served in Vietnam. You're a former Navy Admiral, retired chairman of the joint chiefs of staff. You are a supporter, an active political supporter, now of John Kerry. I want to give you a chance to respond to what John O'Neill writes in his book, and what he's just said.

ADMIRAL WILLIAM CROWE, FRM. JOINT CHIEFS CHAIRMAN: Well, the book is a capitulation of the complaints and criticisms they've had all along. It really ads nothing new.

Because of the limits of time, I'd like to speak to the fleeing business. There were other boats there, Mr. O'Neill who I do not know, we enjoy one thing together, neither one of us never saw any of these incidents, neither one of us had ever met Kerry, and the bulk of these 257 people were not on the scene.

If one of the boats fled, under fire and the other boats didn't bring him into account with a senior officer, that makes no sense whatsoever, that defies reason. Fleeing under fire, of course, is a general court martial offense. The Navy has ways to do that. What were these other skippers are doing?

I have gone through all of the records of the action reports, fitness reports, medal citations, comments, also spot action reports, no mention of that whatsoever.

BLITZER: All right. I'm going to let John O'Neill respond. But I want to take a quick commercial break, because we have much more to discuss. A very sensitive subject indeed. We'll hear more from John O'Neill and retired Admiral William Crowe in just a moment.

Also coming up, as Florida braces for a one-two punch, the mid- Atlantic and northeast could face some serious danger. The latest from the National Hurricane Center. We'll go there live.

And a former Washington favorite now accused in Iraq, we'll speak with the daughter of Ahmad Chalabi. She's here to defend her father.

Plus, a major development in the rape case against Kobe Bryant. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back. Let's continue our debate on John Kerry's record as a decorated Vietnam War veteran. Joining us once again, John O'Neill. He's the author of the new book "Unfit For Command."

And retired U.S. Navy Admiral, the former chairman of the joint chiefs of staff, William Crowe.

I want you to respond, John O'Neill, to what the Admiral Crow just said before the break, but also in the context of what Senator John McCain, who himself served some six years in a Vietnam prison, a Vietnamese prison. He says that what you and your colleagues are saying is dishonest and dishonorable. But go ahead and respond.

O'NEILL: More than 22 POWs have backed our efforts. More than 60 people who won the Purple Heart in Vietnam signed our letter. And 254 people in our unit, including 17 of the 23 officers that served with Kerry have signed the letter. There's only one that backs Kerry out of 23.

And Admiral Crowe, by the way, has talked to none of them, to the best of my knowledge, and wasn't there -- and wasn't there within four years of the time of these incidents. I've talked to many of them.

BLITZER: Let's let the Admiral Crowe respond to that.

O'NEILL: Can I talk to Rassman.

BLITZER: Yes, hold on one second. We're going to get to that. But let him respond to the specific point you just made -- Admiral.

CROWE: Well, it's inaccurate. I came into Vietnam right after these incidents just as the Admiral Zimall (ph) left. But I don't think the numbers people that didn't see it, or weren't there, that are relying on hearsay, I don't understand the strength of that.

BLITZER: There's some people who suggest, Mr. O'Neill, that what you're angry at John Kerry and your colleagues are angry at him, not so much for what he did during his tour of duty in Vietnam, but for what he did when he came back from Vietnam. He testified against the war, and he threw his ribbons into that pile. Is that a fair suggestion?

O'NEILL: No one is angry at John Kerry for being against the war. People are very upset that he came back and labeled us all war criminals, but that wouldn't cause people to say things falsely. There were three other officers that day on March the 13th, 1969. They all saw what happened. And their accounts are in this book "Unfit For Command" and can be found right at swiftvets.com.

They're not Republicans or Democrats, they saw the ad at the Democratic National Convention in which he said all boats fled and he came back, no man left behind. But they didn't flee, they stayed there. They couldn't flee. The boat had no screws.

BLITZER: Let's let the admiral respond to that. Go ahead admiral.

CROWE: Well, that's a very confused situation. I can find nothing in the records that would suggest that. The war history doesn't say that. As a matter of fact, the two probably prominent impressions that came from the book, is number one, it's a very skillful, political polemic. It's not an account, it's a political polemic. And it is set out to trash John Kerry. In the process, they work over the U.s. Navy and also feel that it is corrupt, et cetera, et cetera.

BLITZER: All right. Let me let Mr. O'Neill respond to that. Go ahead, John.

O'NEILL: Let me tell you, my family was in the U.S. Navy before Admiral Crowe, who was in the Navy for a long time, got involved. My dad graduated in the class on '31, my grandfather taught there, my brothers graduated from there. And it's just false to say that our book trashing the Navy.

The guy who trashed the U.S. Navy was John Kerry, who came back and compared us to the army of Genghis Khan. With respect to the confusion, there's no confusion at all, Admiral. The people that were there, the actual people on the scene, they remember going to the 3 boat that was disabled and seeing no Kerry around.

BLITZER: Go ahead. Admiral, go ahead.

CROWE: Throughout the book it puzzled me in many incidents where you have made these conclusions there are ways for people who are in command of other boats, other units, to make one of the offender accountable, to bring it up to the Navy's attention, to complain about it, to have a voice in action reports, to complain about the medal system. None of that was done.

None of these people in the numbers that you are talking about, raised those suggestions or questions at the time. They came up when, 30 years later, he's running a prominent political office, very, very suspect.

O'NEILL: That's not what happened. Tom Wright...

CROWE: Oh yes, it is.

O'NEILL: Tom Wright, in the book, outlines the conversation that he had with John Kerry, where he asked...

CROWE: More hearsay. O'NEILL: Tom Wright, who is a retired Captain of the United States Navy said, "I will no longer operate with John Kerry. He fires without regard to human life. He's careless. I won't even operate with him." Kerry, then, left.

He was only there 3 months, Admiral. It takes a little while to figure anybody out. They did the best they could.

BLITZER: John O'Neill, I want you to respond. Over the past 24, 48 hours, there have been some serious questions raised about your co- author, Jerry Corsi. They have discovered some comments he's written on various Web sites which appear to be anti-Muslim, anti-Jewish, anti-Catholic. I could read some of them, but we don't have a whole lot of time.

I wonder if you want to disassociate yourself from what he has written.

O'NEILL: Oh, absolutely.

Jerry Corsi acted as sort of an editor of our book. And so instead of attacking the facts of the book with all these people who were in Vietnam with John Kerry, 60 of them, the attack is now on this guy who is an editor. His remarks were inappropriate. He shouldn't have made them. He's a devout Catholic, as a matter of fact. But Jerry Corsi was not in Vietnam, doesn't claim to be. He simply helped us in editing the book.

The 60 people who were with Kerry in Vietnam, this is their book.

BLITZER: All right, but he's listed as the co-author of the book, isn't he?

O'NEILL: He is. And he performed in the same way as Douglas Brinkley or anybody else a function in editing, in -- particularly in the second half of the book, in historical research, because he had done a great deal of research on the anti-war movement, the Vietnam Veterans Against the War, but not in the Vietnam section of the book.

Admiral Crowe, I gave John O'Neill the first world. I'll give you the last. Go ahead.

CROWE: Well, I think there's a lot of myth connected with this thing. If you want a balanced treatment of what -- Kerry's life and particularly in the Navy, you will not get it out of this book. This book is based on hearsay, numerous interviews, some artful writing, but nothing of great evidential impact. The official view doesn't acknowledge any of this.

BLITZER: All right.

We're going to, unfortunately, leave it there, but I'm sure there's going to be plenty of opportunity to continue this debate.

John O'Neill, thanks very much for joining us.

O'NEILL: Thank you, Wolf.

BLITZER: Admiral Crowe, thanks to you as well.

O'NEILL: Thank you, Wolf.

BLITZER: Thank you.

Two storms ready to bear down on Florida. We'll bring you the latest from the National Hurricane Center. That's coming up.

East Coast residents remember Hurricane Floyd. Should they be bracing for an encore right now?

And TV's Mike Wallace, famous for asking tough questions, we'll tell you why he was on the receiving end.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back tropical tag team Charley is now a hurricane, a Bonnie, a tropical storm. We'll have a live update from the National Hurricane Center. That's coming up.

First though, a quick check of some other stories now in the news.

Homeland Security Security Tom Ridge says there's no evidence so far linking a Pakistani man arrested in North Carolina with terrorism. He was taken into custody on immigration violations after being seen videotaping buildings in Charlotte. Court records say he also had tape of buildings and transportation systems in other cities.

Talks are underway that could lead to the release of a U.S.-born man designated an enemy combatant. Yasser Hamdi has been held by the U.S. military for more than 3 years without charges. In June, the Supreme Court ruled he should have access to U.S. courts.

Keeping you informed, CNN, the most trusted name in news.

There is double trouble brewing for Florida and the Eastern seaboard as a tropical storm and a hurricane are headed now their way. Tropical Storm Bonnie is in the Gulf of Mexico, Hurricane Charley is in the Caribbean basin. For an up to the minute report on both of these storms let's turn to the expert.

Here with us from the National Hurricane Center in Coral Gables, Florida, the director Max Mayfield. Dr. Mayfield, thanks very much for joining us. What exactly is the latest on these 2 storms?

DR. MAX MAYFIELD, NATIONAL HURRICANE CENTER: Well, Bonnie right now in the Gulf of Mexico is a strong tropical storm. We think it has a good chance to strengthen into a category 1 hurricane during the night. And will likely be making landfall in the Florida panhandle early tomorrow morning.

We have a hurricane warning in place now for Destin, Florida over to the mouth of Suwanee River. So this is Bonnie here.

Charley, we are also very concerned with. It's right now a category 1 hurricane. Some of the warmest water anywhere in the Caribbean is south of Cuba. The upper level environment looks very favorable. So we do think Charley will continue to strengthen.

And the most likely scenario, at this time, is for it to continue Northwestward over Western Cuba and to get into the Southeastern Gulf of Mexico.

We have a hurricane watch in place, now, for the entire Florida Keys and the Southwest Florida coast South of Bonita Beach.

BLITZER: So, once it hits land on the Florida coast what happens then, assuming it goes as you project right now?

MAYFIELD: We're actually forecasting it gets in the neighborhood of a category 2 hurricane by the time it makes landfall. It will start to weaken very quickly. But we're forecasting it to move over the state. It will likely reemerge over the Atlantic waters there off the Georgia coast. And then go into South Carolina and on up the East Coast. So we're going to have to watch that over the next several days.

BLITZER: As it goes up the East Coast, could it be dangerous for residents along that area?

MAYFIELD: Well, it could be depending on how far off the coast it gets. If most of that circulation stays over land, I don't think it's going to be a big problem, but we certainly could have tropical storm conditions. If it gets far enough off the coast, it could even regenerate into a hurricane.

I think it will very likely weaken considerable as it goes over the peninsula of Florida. But even the folks in Central Florida, even around Orlando, for example, will very likely have a hurricane, or at least a weakening hurricane to deal with.

BLITZER: How worried are you about flooding?

MAYFIELD: We're very worried about the storm surge flooding, right now, in the Florida Keys. They already have some mandatory evacuations for the lower Keys, for the nonresidence. The have a voluntary evacuation for the upper Keys. They have a phased evacuation and will ask for different people to likely be evacuated tomorrow.

BLITZER: Max Mayfield, we'll be checking back with you often. Thanks very much. It's that time of the season.

In between Hurricane Charley and the Florida coast is the island of Jamaica. It's first in the line of fire. Here with us on the phone from Jamaica the journalist Fitzroy Prendergast. He's in the Jamaican capital city of Kingston.

What's happening where you are right now, sir? FITZROY PRENDERGAST, JOURNALIST (via telephone): Well, Wolf it's getting very dicey. Of course now, since this morning we've had outbreaks of heavy showers and a lot of wind. We are still bracing for the major part of this storm. We're expecting that as the evening goes on it will get heavier in terms of the rain and the wind.

BLITZER: I take it they've cancelled all the flights into Jamaica. All the tourists, what, are they battened down? Are they getting ready for this storm?

PRENDERGAST: Oh yes. Yesterday, when I got my stuff, a lot of people were still not worried. But this morning, when they realized that the storm was heading Jamaica's way, everybody started to batten down and get their things together.

So, all the flights are canceled here. We're just waiting for the inevitable.

BLITZER: And it looks like it's almost over Jamaica right now based on the map we're showing our viewers. Give us a little flavor, if you were to walk outside right now, what would you see?

PRENDERGAST: Well, what you'd see is that Jamaica is basically very cloudy, very dark, and it looks very ominous. It's basically just coming -- getting ready to unleash on Jamaica.

So, we're really trying to prepare ourselves for the worst that's possible.

BLITZER: Well, good luck to you Fitzroy Prendergast. Good luck to all our friends in Jamaica. We know that CNN has a lot of viewers there. Wish you only the best as you weather this storm.

So, what else can we expect here in the United States for that? Let's go to our meteorologist Jacqui Jeras. She's over at the CNN weather center in Atlanta -- Jacqui.

JACQUI JERAS, CNN WEATHER ANCHOR: Well, Wolf, we're going to see a pretty good impact from both storms, but we're a little bit more concerned with Charley. And you mentioned it looks like they're getting nailed here in Jamaica with Charley right now. The eye is actually right here. And so it doesn't look like it's going to be making a direct hit for Jamaica. Just kind of skirting along the southern and western coastlines.

Now, we're really needing to be taking precautions for Bonnie and Charley both, especially across South Florida and then into the Panhandle and big bend areas of Florida.

The primary impact that you're going see from Bonnie are going to be moving in already, we think, by early tomorrow morning, by the time you wake up. We'll see some additional strengthening, winds of 65 plus miles per hour can be expected, because this still could become Hurricane Bonnie before it makes landfall.

Storm surge about 2 to 4 feet, and rainfall on the range of 3 to 6 inches and some flash flooding can be anticipated there as well.

Now the impact on the Keys, we already heard from Max Mayfield that some evacuations are taking place. Well, tropical storm force winds should be arriving Thursday afternoon, with hurricane winds by Thursday evening. Storm surge with high tide. Those 2 should coincide, unfortunately, Thursday evening with 3 to 6 inches of rainfall and some flooding there.

Already some flood watches in effect, because this part of the country is already getting hit with wet weather right now and this has nothing to do with Bonnie. We have a cold front trying to make its way through the region. So, unfortunately, that ground is very, very saturated.

Now over all of the hurricane season so far started out very slowly, but it looks like we're trying to make up for some lost time.

(BEGIN VIDEOTAPE)

JERAS (voice-over): This year's first named storm Alex, caused flooding in North Carolina's Outer Banks, but that was about it. This time, the East Coast may not be so lucky. The National Oceanic and Atmospheric Administration has predicted a total of 12 to 15 storms during the 2004 Atlantic Hurricane Season which runs through November 30. Two to 4 of those storms are expected to develop into major hurricanes.

Forecasters are watching the second and third named storms of the season right now, Bonnie and Charley. Both storms are expected to spread rain along the East Coast, parts of which are already saturated.

They're expected to take slightly different tracks. While Bonnie is supposed to fade away after making landfall, Charley, which is stronger, is expected to pass through Central Florida and then head into the Atlantic Ocean, where it could up more steam before making landfall again in the Carolinas.

Five years ago, Hurricane Floyd made landfall in North Carolina, killing 51 people there and starting a path of death and destruction that ran north through Virginia, Maryland, Pennsylvania and Delaware, and all the way up to New Jersey, New York and even Vermont.

(END VIDEOTAPE)

JERAS: And it's still a little too early to tell whether or not Charley could be another Hurricane Floyd, but it could be affecting as many people. And, Wolf, the U.S. Census Bureau released a statement today saying that if Bonnie continues on its same track, which we do expect it to, it will be effecting 1 million people with tropical storm force winds.

BLITZER: CNN's Jacqui Jeras with a really thorough report for us. Jacqui, thank you very much. And to our viewers, listen to the experts. If they tell you to evacuate, evacuate. This is not necessarily an easy business. There is dangers out there, even with a Hurricane -- 1 level Hurricane. Thanks very much to Jacqui Jeras, Max Mayfield and to our reporter on the scene in Jamaica.

Coming up, a former Pentagon favorite returns to Iraq to face an arrest warrant. Now here from the daughter of the controversial Iraqi politician Ahmad Chalabi. She'll join me here in the studio.

And Amber Frey on the witness stand again. New details of secretly recorded conversations between Scott Peterson and his mistress.

Plus this...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There was a little of a conversation and they cuffed me and charged me with -- with disorderly conduct.

(END VIDEO CLIP)

BLITZER: He went out to grab dinner and ended up in handcuffs. The veteran journalist, Mike Wallace speaks out on his arrest. We'll have details of that.

First though, a quick look at some other news making headlines around the world.

(BEGIN VIDEOTAPE)

BLITZER (voice-over): Defense Secretary Donald Rumsfeld made an unannounced visit to Afghanistan today for talks with President Hamid Karzai. Rumsfeld praised the Afghan leader for showing great courage in efforts to register 9 million voters for October's presidential election.

Deadly train crash: At least 6 people were killed and 40 injured in Turkey when 2 passenger trains crashed head on Southeast of Istanbul. An official says an accident happened after 1 train ignored a signal and failed to stop at a junction.

Jailed lottery winner: A convicted rapist serving life in a British prison has won a lottery jackpot worth almost $13 million. He was on temporary release when he bought the ticket. Officials say he's been moved to a high security prison for quote, "his own safety." Experts say victims may be able to sue for part of the winnings.

And that's our look around the world.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

BLITZER: Ahmad Chalabi returned to Iraq today to face counterfeiting charges. He was born in Iran -- he was in Iran, that is, when the arrest warrant was issued last week. His nephew, Salem Chalabi, was charged with murder. The leader of a group formed to oppose Saddam Hussein, Ahmad Chalabi once was a very close U.S. ally.

In Washington today, his daughter Tamara announced a lawsuit against Jordan, which she accuses of smearing her father's reputation.

I spoke with Tamara Chalabi just a short while ago. She was joined by her family's attorney, John Markham.

(BEGIN VIDEOTAPE)

TAMARA CHALABI, DAUGHTER OF AHMAD CHALABI: He's planning on continuing to do what he's been doing, which is to ensure that free, democratic election will take place, to push forward with his agenda for Iraq, which is to establish a democratic, free, puritarian federal Iraq.

BLITZER: Do you believe it's the Iraqi government, the interim Iraqi government of Prime Minister Iyad Allawi, who's now behind these latest charges against him?

CHALABI: I don't believe he's behind these charges.

BLITZER: Who's behind it?

CHALABI: I don't know.

BLITZER: What about your cousin, Salem Chalabi, who was in charge of the war crimes tribunal effort? He's an American graduate of Yale University, of Northwestern Law School. He's now been accused of complicity in murder.

CHALABI: I mean, it's ludicrous. You know, Salem is the face of the Saddam trial. And if this is what you're doing to the administrator of the court, I think is very telling how they want to proceed with this court. I mean...

BLITZER: But if it's not the Iraqi government behind these charges, who is?

CHALABI: I don't know. I am not in a position to tell you. I don't know.

BLITZER: Let me ask your attorney, John Markham.

(CROSSTALK)

JOHN MARKHAM, ATTORNEY FOR TAMARA CHALABI: I think we have a couple of guess.

BLITZER: What are your suspicions?

MARKHAM: Well, look, first of all, the charges that he corrupted the Iraqi currency are ludicrous.

Here's a man who fought. As you said, he came back to fight. He's risked his life to try to depose Saddam Hussein for 15 years. He spoke out way before it was fashionable to do so, even in this country. Now he's supposedly over there corrupting their currency? It's a false charge. And he went back to fight it. As to who's behind it, we know he has enemies, Wolf. We know that there's certain members of the intelligence community in the United States who have no end of rumors that they are happy to call up the media and, through unnamed intelligence sources, say Chalabi did this, Chalabi did that.

BLITZER: And, finally, as a daughter right now, you see what your father is going through. How does that impact on you?

CHALABI: I believe in him. I have no doubt that he will win. I think -- I mean, I know all of these accusations are false. I think it's unfortunate, because I think the goal here is not Chalabi, really. It's about building a new Iraq. And it seems to me that somebody has gone off track.

BLITZER: Tamara Chalabi, thanks very much for joining us. John Markham, thanks to you as well.

MARKHAM: Thank you.

(END VIDEOTAPE)

BLITZER: And you can see my entire interview with Ahmad Chalabi's daughter tomorrow and her attorney, John Markham. That will air tomorrow, noon Eastern, here on CNN.

Secretly recorded phone calls between Scott Peterson and his mistress, details of their conversations in the days after Laci Peterson's disappearance.

Plus, one side requests an indefinite delay in the Kobe Bryant case. What's today's developments all about? What's going on? And what could this mean for the basketball star?

(COMMERCIAL BREAK)

BLITZER: Intimate conversations are taking center stage over at the Scott Peterson murder trial. Jurors today heard hours of recorded phone calls between Peterson and his former mistress Amber Frey, who taped them for the police.

On the stand for a second day, she testified that Peterson told her a string of lies, including that he wasn't married. Peterson is accused of killing his wife, Laci, and their unborn child. He could get the death penalty if convicted.

Also in our justice report, prosecutors have asked the judge to delay Kobe Bryant's sexual assault trial, currently scheduled to begin in just about two weeks. They say they need more time to prepare. Legal experts, however, say the prosecutors suffered a severe setback when Bryant's accuser decided to file a civil suit against Kobe Bryant. There's no word when the judge will rule on the postponement request.

Veteran TV journalist Mike Wallace has been released after his arrest last night for, allegedly, disorderly conduct. The incident occurred outside a New York City restaurant. Wallace was bringing an order of meatloaf back to his limousine when he saw the limo driver arguing with Taxi and Limousine Commission inspectors, who say he was double-parked.

The 86-year-old "60 Minutes" correspondent said, when he asked what was going on, the inspectors accused him of being overly assertive and disrespectful.

(BEGIN VIDEO CLIP)

MIKE WALLACE, "60 MINUTES": They also said something about my lunging toward one of them.

QUESTION: Did you?

WALLACE: I find it difficult to lunge into bed.

(LAUGHTER)

WALLACE: Let alone at a couple of cops who were angry.

QUESTION: How could somebody not know you?

WALLACE: It's apparent they don't watch "60 Minutes." That's quite apparent.

(LAUGHTER)

(END VIDEO CLIP)

BLITZER: Mike Wallace due in court in October.

We'll have the results of our Web question of the day. That's coming up ahead.

Plus, D.C. debut, tiger cubs making their first public appearance right here in own backyard in the nation's capital.

(COMMERCIAL BREAK)

BLITZER: Here's how you're weighing if on our Web question of the day. Remember, this is not a scientific poll.

Our picture of the day, Sumatran tiger cubs at the National Zoo here in Washington. They were born May 2, but today marked their first personal appearance. The cubs are expected to grow to 300 pounds in just 12 months.

"LOU DOBBS TONIGHT" starts right now.

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