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U.S. Troops Back in Tora Bora; Triple Whammy in Atlantic, Pacific, Gulf of Mexico

Aired August 15, 2007 - 17:00   ET

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


MILES O'BRIEN, HOST: You're in THE SITUATION ROOM.
Happening right now, U.S. troops back in Tora Bora -- a fierce new assault on the mountain hideout in Afghanistan where Osama bin Laden may have been cornered and got away.

They defend the Islamic Republic and are accused of exporting terror. By tightening the Revolutionary Guard, could the U.S. hit Iran where it hurts?

And a triple whammy in the Atlantic, Pacific and Gulf of Mexico. We're keeping our eye on three tropical storms.

Wolf Blitzer is off today.

I'm Miles O'Brien.

You're in THE SITUATION ROOM.

A major battle underway right now. It's happening in the rugged mountain regions where U.S. troops may have cornered Osama bin Laden in the early days of the Afghan War, only to see him slip away. Now Americans are back in Tora Bora, trading fire with Al Qaeda and the Taliban. Here is our CNN Pentagon correspondent, Barbara Starr -- Barbara, what's the goal in this operation?

BARBARA STARR, PENTAGON CORRESPONDENT: Well, it's really the same goal that it was back in 2001, Miles -- to go after the Al Qaeda.

You do remember Tora Bora. Everybody remembers seeing those pictures in late 2001 of the major aerial bomb attacks against the mountain hideout where it was thought that Osama bin Laden was holed up, by all accounts. He and his top lieutenants escaped from there back across the border into Pakistan at that time.

What's going on now?

U.S. and Afghan troops are back in those mountains. A major air and ground assault underway, according to U.S. military officials. The intelligence, they say, has shown that in the last several weeks, a number of Al Qaeda fighters, perhaps numbering in the hundreds, have very mysteriously returned to this area. They're back. They're dug in. They're in their bunkers. The U.S. has been watching this and has decided now to go after them.

Not really clear what this is all about, why these fighters have returned to this area, other than it's safe territory that they know.

But, Miles, there's another wrinkle here, because there's a bit of a squeeze play going on. Of course, just across the border in Pakistan, the military there is also moving against Al Qaeda and Taliban. Everybody's trying to keep them cornered, get them where they are and keep them from going on the run -- Miles.

O'BRIEN: Barbara, of course, when we think of Tora Bora, we think of Osama bin Laden being holed up there.

The current intelligence, the current thinking is that he is not there, correct?

STARR: Well, how do you really answer that, Miles?

Because we've been asking that question all day. We don't want to get people too excited. There's no information at this point to suggest that he is there. The latest intelligence has always seemed to indicate that he is across the border, hiding out with his faithful somewhere in Pakistan.

But make no mistake. Intelligence officials are watching this current operation pretty carefully. They can't quite figure out why this number of Al Qaeda and Taliban fighters decided to regroup in this particular area. They're trying to figure it all out. They don't think he's there. But everybody's got their eyes on the area -- Miles.

O'BRIEN: Barbara Starr at the Pentagon.

Thank you very much.

The Bush administration is looking for a new way to target Iran, meanwhile. And this time the target is the Revolutionary Guard. And that could open the way to punishing new sanctions.

Let's go to the State Department now.

Zain Verjee is there -- Zain, tell us what this is all about.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Hi there, Miles.

Well, the U.S. is really turning up the heat on Iran here. It looks set to call a powerful group within the government terrorists.

(BEGIN VIDEO TAPE)

VERJEE (voice-over): For the first time, the U.S. is taking aim at the military arm of a sovereign country. State Department officials say the U.S. is planning to declare the powerful Iranian Revolutionary Guard Corps a terrorist group.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: This is a -- an entity within the Iranian government that is engaged in a number of different activities.

VERJEE: The U.S. believes Iran is arming Shia militias in Iraq, backing the Taliban in Afghanistan and supporting extremist groups, Hamas and Hezbollah.

Just last week, President Bush warned Iran the U.S. was about to act. And now, it might.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: When we catch you playing a non-constructive role, there will be a price to pay.

VERJEE: That price could be cutting the financial lifeblood of the Guard, going after their bank accounts, as well as businesses that deal with the Guard inside and outside Iran.

MCCORMACK: We can make it much more difficult and raise the costs for them to engage in these kinds of activities.

VERJEE: But the move could backfire on the U.S.

RAY TAKEYH, COUNCIL ON FOREIGN RELATIONS: It undermines the possibility of diplomacy. But it makes military confrontation more, not less likely.

VERJEE: The commander of the Guards Corps also warns Iran has missiles that can sink ships in the Persian Gulf -- a not so subtle message to U.S. warships stationed there. Iran calls the threat "psychological propaganda warfare."

The Guard is like a state within a state. It has its own army, navy, air force and special ops. It also runs businesses like oil, transport and cell phones in Iran.

The U.S. charges some of its companies are used as fronts to get nuclear materials for a bomb.

(END VIDEO TAPE)

VERJEE: It's not clear when the terrorist designation would happen, but there is a lot of debate right now, Miles, within the administration on whether to target the entire group or just part of it -- Miles.

O'BRIEN: Well, take us behind closed doors a little bit here, Zain.

Tell us about this debate.

Who is in favor of what?

VERJEE: Well, Secretary Rice really has been pushing the diplomatic part for the past few years and many say she's been successful when it comes to Iran and diplomacy. But there are many now raising questions, saying look, it's not just working.

Vice President Dick Cheney and many in Congress want the U.S. to take a much tougher line toward Iran. Many also say, Miles, that what Secretary Rice is doing by pushing this latest move is to try and basically get a situation where she pacifies the hawks that want to see military action -- Miles. O'BRIEN: Zain Verjee at the State Department, thank you very much.

When Islamic militants took power in Iran three decades ago, they didn't trust the existing army. They created their own force, the Army of the Guardians of the Islamic Revolution. The Guards got their own intelligence wing, along with air, naval and ground forces.

Now, take a look at these military exercises earlier this year. That's not the regular army, that's the Revolutionary Guard.

Iran's president, Ahmadinejad, joined the Revolutionary Guard back in 1986. If the Bush administration follows through with its plan, this would be the first time official armed units of a sovereign state are added to the list of outlawed terror groups.

U.S. commanders in Iran's Revolutionary Guard say it's been arming and aiding militants who attack U.S. troops.

Could economic sanctions against the Guard put an end to such activity?

CNN's Michael Ware is in Baghdad.

MICHAEL WARE, CNN CORRESPONDENT: The Revolutionary Guard Corps doesn't exactly do a lot of banking or business transactions with American companies or organizations. So, no. This is merely symbolic.

And will it stop the flow of bombs and arms which have been put in the hands of Shia militias and are killing U.S. troops?

No. In fact, it may even spur it on. To General Suleimani, the commander of the elite Quds Force within the Revolutionary Guard, he may see this as such an act of desperation that he may think that I'm hurting America, let's keep going.

That's certainly what we've been seeing this year.

O'BRIEN: Let's shift gears just a little bit.

You were on patrol just recently in Diyala and you came back with some very interesting insights.

Give us a little taste of the story you have.

WARE: Well, what we're talking about is going into one of Al Qaeda's known nests. Now, this is an area just north of the capital, Baghdad, beyond the much heralded surge of U.S. troops, into a zone called the DRV, the Diyala River Valley.

Now, for years, because America has not had enough combat troops here in Iraq, Al Qaeda has owned that valley. They set up their own government, transportation units, a military wing, Sharia courts. They executed their own kind of justice.

Indeed, we have an exclusive video seized by troops during a raid on one of these Al Qaeda holdouts which shows a public execution. The entire village gathered to watch a man have his head hacked off. And it's only now, this year, that 300-odd American paratroopers have been thrown into the fight to re-take that valley and we were with them -- Miles.

O'BRIEN: Michael Ware in Baghdad.

Thank you very much.

You can see Michael Ware's full report tonight on "ANDERSON COOPER 360," 10:00 Eastern, right here on CNN.

Jack Cafferty is in New York with The Cafferty File -- hello, Jack.

CAFFERTY: Miles, parents in New York City could soon be banned from smoking in cars that carry children. "The New York Sun" reports a city council member plans to introduce a bill next week that will call for fines from $200 for the first violation to $2,000 for a third violation in the same year.

There's a similar measure that was passed and is the law in Rockland County, New York. That happened in June.

The critics say these laws are an invasion of privacy and a violation of personal liberties. But when it comes down to it, if you think about it, a child strapped in a car seat is a helpless victim forced to breathe whatever air is available inside the car. And this law is aimed at parents who are apparently too stupid to understand the harm their secondhand cigarette smoke inside a vehicle may be causing their children, or someone else's children -- too stupid or maybe they just don't care or maybe they need the cigarette that badly.

The research on the dangers of secondhand smoke is pretty compelling now. According to the Mayo Clinic a child who spends just one hour in a smoky room is inhaling as many dangerous chemicals as if he smoked 10 or more cigarettes.

So here's the question -- should it be up to the government to protect children from secondhand smoke in cars?

E-mail your thoughts on that to caffertyfile@CNN.com or go to CNN.com/caffertyfile -- Miles.

O'BRIEN: All right, Jack.

Thank you very much.

Up ahead, they track terrorists and military movements abroad. Now U.S. spy satellites may soon be tracking Americans here at home.

A new hole being drilled, another planned, as the desperate search goes on for the missing miners in Utah.

Is there any reason for hope at this point? One of the rescuers speaks out.

And a trio of tropical storms -- Hawaii dodges a bullet, Texas gets ready for trouble and then out in the Atlantic, a major hurricane may be brewing.

You are in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: The third hole is drilled, a fourth is in the works and six coal miners are still trapped beneath the surface in Utah. And while the work goes on, the hope begins to fade. Nine days now into this ordeal.

CNN's Brian Todd is on the mountain -- Brian, how are the rescuers doing at this point?

BRIAN TODD, CNN CORRESPONDENT: Well, Miles, some of the rescuers are concerned about their own safety. But most of them, including the cousin of a trapped miner, are burrowing right ahead, despite some new problems.

(BEGIN VIDEO TAPE)

TODD (voice-over): Digging, drilling -- all at a faster pace now, but never fast enough.

BODIE ALLRED, SAFETY DIRECTOR: After that seismic activity, it is -- it is definitely something I've never seen before and it's probably the worst condition I've seen.

TODD: Mine officials say a bump in the main tunnel damaged the huge machine that pulls rubble out, but operations soon resumed. A third drill hole has he reached a chamber where the six trapped men might have gone for air. But a microphone being lowered into it hit a snag and didn't reach the chamber. They'll try again and the mine owner says there's still reason to hope.

BOB MURRAY, PRESIDENT AND CEO, MURRAY ENERGY CORPORATION: Depending on the air in the specific areas of the mine and where these miners might have gone, there is plenty of void space to hold the air to keep them alive for weeks.

TODD: The safety director for the mine, whose own cousin is among the missing, got emotional when talking about this risky mission.

ALLRED: I know these men well. I know they would not appreciate us taking any chances and they know -- they know damned well that we're doing what we can do to get to them. And we're going to get there.

TODD: Twelve rescue miners have asked to be reassigned because they have safety concerns.

ALLRED: There have been some men personally come right to me and talked to me about this.

MURRAY: But, again I corrected that yesterday. No one ever said to us that they didn't feel safe.

TODD: One rescuer's wife tells us her husband is preoccupied.

MARQUITA COX, WIFE OF RESCUE MINER: He's happy to see us. He's excited to see the kids, too. But his mind, even though he's home, I think, is up where it needs to be. He's thinking about what's going on at the mine, things like that.

(END VIDEO TAPE)

TODD: And despite the new setbacks, these families and the rescuers themselves are, at least outwardly, being very stoic. When he was asked if he believes his cousin and the others are still alive, Bodie Allred said emphatically yes, I do. They're very tough men -- Miles.

O'BRIEN: Brian Todd in Huntington.

Thank you.

Well, it took the hurricane season a while to get cranked up, but we're watching three tropical storms. The Hawaiian Islands pretty much dodged the bullet that was Hurricane Flossie. At one point a category four storm, Flossie fizzled today to a tropical storm after just skimming the Big Island.

In the Atlantic, Tropical Storm Dean is strengthening as it steams toward the Leeward Islands. Forecasters expect Dean to be a hurricane by Friday. Watch that one.

And the newest named storm, Tropical Storm Erin, is in the Gulf of Mexico and chugging toward the Texas Coast.

Our CNN Gulf Coast correspondent, Susan Roesgen, is in Corpus Christi watching that for us.

But first let's go to CNN meteorologist Chad Myers in the CNN Weather Center -- Chad, you have an update on the track for one of these storms.

Tell us what's going on.

CHAD MYERS, CNN METEOROLOGIST: For Dean. Dean actually took a little jog to the north today. Now, the northwest direction is not all that significant because we expect it to continue to the west. And what Erin doesn't have is a lot of room. Erin's going to hit the Texas Coast soon, like by tomorrow morning.

What this storm, what Dean has, is a lot of room to run. And you see that number four in the middle of that hurricane there. That means category 4 -- 135 miles per hour by 2:00 Monday morning.

Now I'm not going to get anybody concerned here, but this -- when this comes here and then takes a right-hand turn into the Gulf Loop, into the loop current here, these the storms can go anywhere. They can go to Texas, Louisiana or even turn back toward Florida.

We are concerned that this is the middle of the line, but also the northern side of the cone is almost South Florida by Monday. And the southern side of the cone is Nicaragua.

Now, there's thousands of miles in there, whether it turns left or turns right. Right now it's a 65 mile per hour storm headed to 135, and that is a dangerous category four major hurricane headed into the Caribbean.

We're going to have to watch that for the beginning of next week -- Miles.

O'BRIEN: Chad, at this point, could it still potentially take a dogleg and go up the East Coast of the U.S. or is it pretty much past that?

MYERS: You know, two days ago, every computer model did turn this thing all the way up and it kind of hit Bermuda. And every model today turns it down and it hits Nicaragua. So the computers aren't happy with this yet.

We're going to have to get those planes out there, fly those planes back and forth through it, find out where it is, what the winds are like out there.

Remember, nobody lives out here. There are no weather balloons going up to know exactly what the wind direction is. And that's the problem when you have a storm in the middle of the ocean -- no one's there to tell you what's going on, really -- Miles.

O'BRIEN: Chad Myers, you're always there for us.

Thank you very much.

Let's go right to Corpus Christi, where the weather is starting to get a little rough there.

Susan Roesgen is there watching things for us. Susan, what's the latest?

SUSAN ROESGEN, GULF COAST CORRESPONDENT: Well, Miles, you know, you come to Corpus Christi for the water. But by this time tomorrow, the water may be coming to us in the marina.

I talked to sailors here behind me who have been taking in the sails and they've been tying their boats up with longer ropes so that the boats can rise with what they're expecting to be, Miles, about a two foot storm surge -- not really bad, but bad enough to keep sailors at the dock tomorrow.

I can tell you, though, what's bad news for sailors is often good news for shrimpers. The owner of the shrimp boat there behind me told me that it's actually great news for shrimpers whenever there's a storm in the Gulf. She says that shrimp tend to move around a lot right before a storm, just like people picking up storm supplies in a Home Depot. And she said today's catch was excellent.

I also, Miles, talked to emergency management folks here. They are not too worried about Erin. They say if they get a lot of rain, it might mean some flooding, but nothing too bad.

What they are really worried about, as well, is not Tropical Storm Erin, but tropical storm -- soon to be hurricane -- Dean -- Miles.

O'BRIEN: Susan Roesgen in Corpus Christi.

Thank you very much.

Up ahead on the program, thousands of workers face an uncertain fate after a recall of tainted toys leaves a Chinese factory owner to take his own life. We're on the scene with a CNN exclusive.

And an astronaut is forced to cut short his spacewalk and return to the Space Station. We'll tell you why.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

Carol Costello monitoring stories in THE NEWSROOM for us now -- Carol, what's going on?

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things, Miles.

Venezuelan president Hugo Chavez is presenting his plans for sweeping constitutional changes today. His plan is expected to do away with presidential term limits. Critics call such a provision a threat to democracy. The national assembly, controlled by Chavez allies, is expected to approve the plan within months. It would then have to clear a national referendum.

In a first for an online travel company, Travelocity.com has been slapped with a hefty fine for booking trips between the United States and Cuba. The company paid almost $183,000 to settle a complaint by the Treasury Department. It says Travelocity violated a 45-year-old embargo almost 1,500 times by booking those trips between January, 1998 and April, 2004 without a special license. Travelocity blames technical problems.

Former NBA referee Tim Donaghy has pleaded guilty in a gambling scandal that rocked pro-basketball and wrecked his own career. Donaghy pleaded guilty in federal court in New York today to two felony charges. He admitted to one charge related to betting on games he officiated and one charge of supplying inside information to co- conspirators.

Donaghy is expected to cooperate in ongoing gambling investigations.

Tens of thousands of people must have a hunk of burning love for the memory of Elvis Presley, because they are braving the extreme heat in Memphis, Tennessee. They are there for the week long festival commemorating the 30th anniversary of Presley's death. Today's high was expected to reach over 100 degrees. Tonight, thousands will parade past the King's grave at Graceland during a candlelight procession.

And I must say, Miles that does not surprise me.

O'BRIEN: No, it doesn't surprise any of us.

Carol, thank you very much.

Could the government be using spy satellites to keep tabs on you and me?

We'll tell you about a new program that has civil liberties advocates up in arms.

Plus, he escaped from a nest of crocodiles by climbing a tree. Wait until you hear how long he had to stay up there before he was finally rescued. You don't want to miss that story.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: You're in THE SITUATION ROOM.

Happening right now, a new poll shows Americans are not impressed with the job their leadership is doing. A new CNN/Opinion Research Corporation poll shows a sizable 57 percent of Americans think the Bush presidency has been a failure. Forty percent say it was a success.

The response to that same CNN opinion research survey was equally harsh on Congress. Fifty-five percent of those asked called the Democratic Congress a failure, as well. Thirty-seven percent said it had been successful.

And Wall Street keeps sliding. Stocks ended down sharply again today, landing below 13,000 for the first time since April 24th. The Dow Jones lost 167 points, to close at 12,861.

Wolf Blitzer is off today.

I'm Miles O'Brien.

You're in THE SITUATION ROOM.

Our next story has some images you may find disturbing. A top U.S. commander likens the act to genocide -- the carefully coordinated attack on a minority group which left hundreds dead and wounded in isolated regions of northern Iraq.

Let's bring in our Pentagon correspondent, Barbara Starr -- Barbara, what are the generals saying at the Pentagon about this?

STARR: Well, Miles, there is a very grim feeling about what has happened in these villages in northern Iraq. A lot of questions about what next for the Iraqis and what next for the U.S. troop surge.

(BEGIN VIDEO TAPE)

STARR (voice-over): Top U.S. commanders are using the strongest language to condemn the killing and wounding of hundreds after multiple suicide vehicle bombs exploded in remote northern Iraqi villages, home to a religious minority group known as Yazidis.

MAJ. GEN. BENJAMIN MIXON, U.S. ARMY: This is an act of ethnic cleansing, if you will, almost genocide. And when you consider the fact of the target they attacked and the fact that these Yazidis are really out in a very remote part of Nineveh Province, where they're very -- there is very little security.

STARR: Offers to help are coming in from all ethnic groups.

BRIG. GEN. KEVIN BERGNER, U.S. ARMY: And in the wake of this attack, what we have seen is Arab, Kurdish, Yazidi, all pulling together, casualties being treated in Kurdish hospitals and Arab hospitals.

STARR: The U.S. had expected major attacks, knowing insurgents are trying to make things look bad in the weeks before General David Petraeus will report on the troop surge.

MIXON: It's virtually impossible to stop these maniacs as they try to kill innocent people, but we will continue to go after them.

STARR: The surge has had some success in reducing violence, but analysts say this latest attack underscores how fragile Iraq really is, and the continuing vulnerability of its citizens.

DOUG MACGREGOR, AUTHOR: The surge ultimately was always about creating the illusion of success for the administration and its top generals long enough to postpone pressure to withdraw for yet another few months or potentially a year.

(END VIDEOTAPE)

STARR: So, Miles, what about this report from General Petraeus coming in just about a month from now? Petraeus is now talking about a smaller footprint in Iraq.

What does he mean? Well, he may be able to recommend that in areas where there's no violence or limited violence, U.S. troops can be drawn down in those specific areas. It may not mean much for any overall reduction in U.S. troops in Iraq just yet. However, there simply are not enough troops to keep that surge going much beyond the spring of '08, Miles. So the clock is ticking.

O'BRIEN: Barbara Starr at the Pentagon.

Thank you very much.

We've seen the video, deadly attacks in Madrid and London, but a new report by New York police is saying the big concern are terrorist threats right here at home.

CNN's Carol Costello studying those reports and she has more for us.

Hello, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: It's pretty interesting, too, Miles.

The NYPD says it answers an important question -- who do we fight, terrorists from overseas or terrorists at home?

(BEGIN VIDEOTAPE)

COSTELLO (voice over): The events of September 11th did not fit a pattern. That's the conclusion of a study by the New York Police Department of the roots of terror in the United States and in other Western countries.

Since 9/11, terrorists going after Western targets have been local, living in the communities they attack. They're inspired by al Qaeda, but not controlled by the group. And...

COMM. RAYMOND KELLY, NY POLICE: They don't stand out. In a phrase, they are unremarkable.

COSTELLO: NYPD's group of analysts looked at a handful of recent terror plots and attacks like the deadly bombing at the Madrid train system in 2004 and the plot to blow up a New York subway station later that year and the sleeper cell unearthed in Lackawanna, New York, where six men admitted providing material support to al Qaeda. In each case, ordinary people became terrorists through a four-stage process, eventually adopting an ideology of militant Muslim extremism.

KELLY: At some point, through exposure to various factors and Jihadi-Salafi ideology, they become motivated to carry out acts of terrorism.

MITCHELL SILBER, NYPD REPORT CO-AUTHOR: Anyone who does go through all of these different phases, we believe, has a high likelihood of being involved in a terrorist act.

COSTELLO: Those most prone to becoming homegrown terrorists are young Muslim men, and that is upsetting one Arab-American group which calls the NYPD report un-American.

KAREEM SHORA, AMERICAN-ARAB ANTI-DISCRIMINATION COMMITTEE: Hookah lounges, cab driver hangouts, non-governmental organizations, student groups, they just seem to paint everything, the entire community, as a threat.

COSTELLO: But the NYPD says the report is not stereotyping. KELLY: I don't see it as doing that at all. I see it as, again, an investigative tool.

(END VIDEOTAPE)

COSTELLO: Now also, Arab-American groups and scholars point to good news, too, in this report. American-Muslims, they say, are more resistant to the radical messages that influence would-be terrorists living in Europe. The report says European Muslims are often less integrated socially and economically into their adopted Western homelands, and that's why.

O'BRIEN: So, Carol, give us a sense. What does this mean for law enforcement in New York? How do they respond?

COSTELLO: Oh, to the Department of Homeland Security? Well, the department told us this afternoon that they appreciate local efforts to understand homegrown terrorists, since it's local officials who are more likely than the federal government to detect early signs of radicalization. Homegrown terrorism has been a concern of DHS and the FBI for several years, and it has worked to make sure it understands the threat as best it can.

O'BRIEN: Carol Costello in the newsroom.

Thank you very much.

Spy satellites are not just for overseas terrorists anymore. Now they could be keeping an eye on you.

Also, should it be up to the government to protect children from secondhand smoke in cars? Jack Cafferty is looking through your e- mail on this question of the hour.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back.

A little bit of a scare in space today. A couple of spacewalkers out, and one of them, Rick Mastracchio, as part of the normal team, as he was doing some work outside the International Space Station, was checking his glove. There was a small hole in the glove. There you see it.

NASA says there was no leak and there was no real concern, but the flight rules are pretty strict on this, and so they sent him inside. That was the end of the space walk.

They had done almost all of their tasks anyway, and everybody is just fine in the shuttle. But there is that other issue that engineers on the ground are very busy looking into right now. It's that three-and-a-half-inch gash at the base of Endeavour's belly.

All kinds of tests being run now through blast furnace, arc jet furnaces, computational simulations, all that kind of stuff. Still no decision on whether they will fill that hole and try to repair it a little late in the mission.

We'll keep you posted.

Well, normally they keep tabs on terrorists or track military movements by America's rivals. Now, U.S. spy satellites may be keeping tabs on Americans.

Here's our justice correspondent, Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Miles, homeland security officials say that Americans should be asking why it took so long for these satellites to be used to protect the homeland, but civil liberties advocates are worried about possible misuse.

(BEGIN VIDEOTAPE)

ARENA (voice over): First, there were eyes on the street, and now, there are eyes in the skies. The director of National Intelligence has given the go-ahead for the nation's spy satellites to be used regularly by U.S. civilian agencies and law enforcement.

CHARLIE ALLEN, DHS ASSISTANT SECRETARY: This is a development all Americans should have great pride in because it expands and uses national technical system which we've built for tens of billions of dollars over many decades.

ARENA: Spy satellites have primarily been used overseas to monitor things like war zones and terror training camps. They've also been used domestically, but sparingly during events including Super Bowl games, presidential inaugurals and hurricanes. Homeland security officials say the satellites will now be used to protect borders and critical infrastructure.

ALLEN: Which includes ports. And looking at potential vulnerabilities and threats, as well as consequences of attacks.

ARENA: Next in line, law enforcement agencies, which are expected to start using them next year. While they can provide crucial high-resolution images, there are limits to what these satellites can do. They can't see faces and they can't listen. At least that's what the government claims.

But privacy groups worry that because there's so much we don't know about their capabilities, they could be misused and we wouldn't even know it.

JIM DEMPSEY, CENTER FOR DEMOCRACY & TECHNOLOGY: The question always comes down to, what are the standards, are there checks and balances, and is this a power that we would trust the executive branch to use without any outside scrutiny or oversight or control?

(END VIDEOTAPE)

ARENA: Homeland security officials insist that they are subject to a great amount of oversight and review, but in many ways, this is just one more case of the government figuring out as it goes in the war on terror -- Miles.

O'BRIEN: Thank you, Kelli.

So, can the government use spy satellites to snoop on us here at home?

Joining me now, our world affairs analyst, former defense secretary William Cohen. He's chairman and CEO of The Cohen Group right here in Washington.

Mr. Cohen, good to have you with us.

WILLIAM COHEN, CNN WORLD AFFAIRS ANALYST: Nice to be with you.

O'BRIEN: Let's talk about this. Everybody imagines these satellites having tremendous capabilities, but this is -- it's very tightly-held secrets here.

First of all, how much, what can they see, if they start pointing those cameras in our direction?

COHEN: Well, the defense capability or those satellites used for defense purposes have a much greater capability than the commercial satellites, but we've seen enormous progress being made. If you look at Google Earth or some of the others, they can really zero down and get quite -- quite a resolution.

O'BRIEN: And that's just a fraction of what obviously the intelligence community has, right?

COHEN: That's right. That's in the private sector. That's commercial application.

Now we're talking about the Defense Department and the intelligence community using something far more sophisticated. And if you combine that with eavesdropping capability -- namely, the wireless -- the search -- the search warrant wiretapping...

O'BRIEN: Right.

COHEN: ... that we're doing now without search warrants, if you combine that capability with this, then you have some real civil liberties issues that we have to contend with.

O'BRIEN: It seems like we're pretty far down a slippery slope here.

COHEN: We have -- we are on a slippery slope. And I think it's really important that Congress take this opportunity as soon as it comes back into session, take an opportunity to analyze what the issues are, what sort of filters should applied.

We've had posse comitatus. This is a prohibition against using defense capabilities for domestic law enforcement purposes. Now, if you label everything "homeland security" or "anti- terrorist activity," does that mean you no longer have any kind of prohibition against the Defense Department or the intelligence community, which has its own culture and its own mission now being used for domestic purposes? This is a serious, serious issue. It ought to be debated. It ought to be really fleshed out and say, what are the standards, what are the restrictions that we can apply?

O'BRIEN: Is there a way to do it with restrictions? The problem is, because of the very nature of these things, the secrecy, it's difficult to come up with ways to restrict it.

COHEN: There has to be some level of oversight, whether it's a separate intelligence, domestic intelligence agency that's created, whether it's Congress that asserts its congressional oversight responsibilities, whether it's a special court, there has to be some insulation against the executive branch operating without any congressional oversight or prohibitions, in my judgment.

O'BRIEN: Well, give me a sense. If you watch the movies, you would have the sense that they could listen in on our conversations and see through our roofs to see what we're doing.

It's not quite like that, is it? I mean -- and I'm not asking to you violate your classifications and the secrecy you're aware of, but what can they find out?

COHEN: Well, they can find out a great deal. This technology is progressing at an exponential rate.

If you look at what's taking place just in the commercial sector, going from a meter to a half a meter resolution, you can see how fast this is evolving. So I think the capability is there. We ought to be using it, certainly for our international purposes, intelligence collection, defense purposes. But when we get into using it on domestic activities, we have to be very careful that we keep in mind civil liberties. It's something that we all should treasure.

O'BRIEN: Yes. Let's watch that one closely.

All right. Bill Cohen, thank you very much for your time.

COHEN: Thank you.

O'BRIEN: We're keeping an eye on some severe weather in Southeast Asia. A massive typhoon with wind gusts up to 190 miles an hour heading toward Taiwan.

Our Internet reporter, Abbi Tatton, is here with I-Reports of the typhoon's effects.

Abbi, what did the typhoon leave behind in the Philippines?

ABBI TATTON, CNN INTERNET REPORTER: Miles, the storm has been sitting to the north of the Philippines and wreaking havoc on the capital, Manila. Look at these I-Reports here. Chip Wilkins is actually from Dayton, Ohio, but he's living there in Makati City, just outside the capital. He called this storm a monster, dumping two and a half hours of monsoon rains on the capital, resulting in six feet of flooding in some places.

He said people were swimming through it. They were using homemade boats made from Styrofoam. He said this is the worst flooding he's seen in this area.

And other pictures here from Jose Paolo Aguado. He sent these in filming from the top of his roof there. He said he's now worried for Taiwan. That's what's next in the path of this typhoon.

Expected to feel the effects there in Taiwan in the next 24 hours -- Miles.

O'BRIEN: All right. Thank you very much, Abbi. Appreciate that.

Tainted toys and suicide. The impact of the recall of toys made in China reaches way beyond the factory where the toys were made.

We'll go there for an exclusive report.

And would you let your child smoke 10 cigarettes in an hour? The Mayo Clinic says that's what it's like for a child breathing secondhand smoke in a car. Should the government punish people who allow this?

Jack Cafferty standing by with your e-mail.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: Thousands of Chinese workers face a very uncertain future after a recall of tainted toys leads to the suicide of their factory owner.

CNN's John Vause has our exclusive report from the scene.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT (voice over): No one is working at the Shai Mung (ph) toy factory anymore. These employees are waiting for details about a memorial service for their old boss, Zhang Shuhong. Authorities said he killed himself over the weekend.

"After I heard the news, I cried. Everyone cried. It was a shock. I couldn't eat," this man told me.

"He made sure we were all paid before he died," says another.

But many of the toys made here for the U.S. giant Mattel were coated in lead paint. And earlier this month, more than a million were recalled.

Police say Zhang's body was found hanging in his warehouse a day after the Chinese government suspended his company's export license. But the real culprit in all of this, according to these employees, is not Zhang, but his best friend, a man named Leang (ph), who supplied the lead paint for the toys. His factory is part of the same complex.

"After the media coverage he just disappeared with his family," this woman says.

"He's destroyed the future for thousands of families," says this man.

Analysts say it's not unusual for subcontractors to secretly take shortcuts, even if they are your best friend.

JIANG WENRAN, ANALYST: They're not aware of the very highly cautious nature of the Western consumers.

VAUSE: Workers have now started a collection for their boss's family. While security guards and heavy gates now keep out those who are not welcome, this is the scene of another product scare China could well do without.

(on camera): Zhang's suicide, it seems, has taken many here by surprise. According to state media, he happily chatted with employees last weekend, before taking his own life. And in so doing, he's perhaps shown the high stakes for businessmen here who have been tainted by scandal and are facing economic ruin and the possibility of being severely punished by the Chinese government.

John Vause, CNN, Foshan, China.

(END VIDEOTAPE)

O'BRIEN: Wikipedia, it's a great research tool on the Internet, but oftentimes it can be just plain wrong. So what if you are the offended party? What can you do about it? Another online site says it has the answer.

Let's bring in our Internet reporter, Abbi Tatton.

Abbi, tell us about it.

TATTON: It's computers associated with 2.6 million organizations from the CIA to the Vatican that have been making these edits. You see, every time someone makes an edit on Wikipedia, it leaves an electronic trail. And now an enterprising graduate student has compiled all that data into one search (ph) site that shows who has been writing what about whom.

Computers on Capitol Hill, for example, have been editing everything from House member profiles to entries on popular games involving kegs. Now people are combining the best examples online, like the removal of criticisms about Diebold voting equipment that appears to have come from computers associated with Diebold. Calls to Diebold were not returned.

The site is completely independent of Wikipedia, but Wikipedia's founder calls the idea brilliant -- Miles.

O'BRIEN: Interesting. So you can really get a sense of who is making these changes.

TATTON: You can go right in there and see the complete history in one easy search.

O'BRIEN: And probably learn the full picture that way.

All right. Abbi Tatton, thank you very much.

Time now to check back with Jack Cafferty.

Jack, what kind of e-mail are you getting?

JACK CAFFERTY, CNN ANCHOR: The question, Miles, is, should it be up to the government to protect children from secondhand smoke in cars? As a matter of fact, there are laws like that being passed here and there around the country. And a city councilman here in New York plans to introduce a like measure next week.

Mike writes from Mississippi, "I guess since the government can't protect us from poisonous 'Big Birds' and mercury-laden catfish, they better keep us from smoking in our cars. A legal extension of our homes, according to our own Justice Department. Next, we won't be able to smoke tobacco in our own homes. This wreaks of Alberto," as in Gonzales.

Joanne in Michigan, "Yesterday, I visited my doctor's office for the second time this year for treatment of bronchitis. I am a direct result of my mother's chain smoking, which I endured for 18 years. Back then, she knew no better, but parents now have no excuse. I strongly believe the government should intervene."

Dan in Harvey Cedars, New Jersey, "Is it 2007 or is it 1984? A person's car is his property and it's up to the owner to make sure that children in a car are not exposed to secondhand smoke. This is hardly an issue the government should be worrying about."

Jim in Florida writes, "What's next, Jack, our homes, our yards? The government needs to stay out of our personal lives."

J.G. in Atlanta, "Since some smokers can't seem to get the clue that smoking is bad for everyone around them, I do think the government has to step in. This isn't about the right to smoke when and where you want, it's about protecting children. If a parent put any of the chemicals in cigarettes into their children's food, they'd be arrested for child abuse."

And Sandy in Columbus, Ohio, "Jack, I think the question's too narrow. I think they should ban stupid people from breathing in the first place. It would solve a lot of problems." If you didn't see your e-mail here, you can go to cnn.com/caffertyfile. We post more of them online, along with video clips of "The Cafferty File" -- Miles.

O'BRIEN: Where there's smoke there's fire, Jack. Thank you very much.

CAFFERTY: I heard that.

O'BRIEN: All right.

Up ahead, wilderness, a nest of crocs, and nowhere to go up but up a tree. The tale of how one man got out of such a hopeless predicament when we come back.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

O'BRIEN: Let's look at some of the "Hot Shots" coming in from our friends at The Associated Press, pictures likely to be in your newspaper tomorrow.

In India, border security. Soldiers march in unison during the celebration of the 60th Independence Day there.

In Bulgaria, a woman lights a candle during a procession marking the Virgin Mary Day. Thousands of orthodox pilgrims take part and pray for health.

In the Philippines, a student unsuccessfully tries to keep his sneakers and his school supplies dry as he wades through floodwaters. Not a good way to go off to school, is it?

And in Switzerland, two flamingos tap beaks at the Zurich Zoo.

Do flamingos kiss? I guess so.

That's this hour's "Hot Shots," pictures often worth a thousand words.

Well, just when you think you're having a bad day, imagine being this man, trapped in the wilderness, surrounded by hungry crocodiles.

Melissa Downes of CNN's Australia affiliate 9 Network picks up the story.

(BEGIN VIDEOTAPE)

MELISSA DOWNES, CNN CORRESPONDENT, (voice over): He's had nearly a week to recover, but still, David George is finding it hard to shake that feeling of being watched.

DAVID GEORGE, STOCKMAN: Every night, except for last night, I saw two sets of eyes. Well, I just naturally thought that had to be crocs. DOWNES: The stockman had fallen off his horse in remote Cape York, straight into a croc's nest. With his tucker, he sought refuge in a tree, but the unwanted attention turned it into a prison.

D. GEORGE: He made a bit of a game out of it. But, you know, I told him -- you know, I'd tell him, "Not tonight, brother."

DOWNES: Frustratingly, the 53-year-old saw search planes flying overhead. They didn't see him. He knew his family would never give up, but wrote them a farewell message on his tobacco tin.

D. GEORGE: Make a decision whether to try to get eaten by a croc or go to a safe place and wait.

DOWNES: His prayers were answered on day eight. The good news immediately radioed to his family.

LIZ KYLE, DAVID'S PARTNER: It was just great. It was one of the best feelings. I'll never forget the voice over the radio that says "I've found him" and the smile on people's faces.

ZYRON GEORGE, DAVID'S SON: It was pretty good. Mom comes screaming back. She says, "Zyron, Zyron, they found him, they found him." And, you know, I was laying down, so when I got up, I was a bit dizzy, and I ran to the door and fell down the stairs.

It was pretty good.

DOWNES (on camera): Now don't think this experience will put David off his job. He's back to work next week, admittedly with a little more caution tucked under his belt.

D. GEORGE: No, I'm too young to die yet.

DOWNES (voice over): Melissa Downes, National 9 News.

(END VIDEOTAPE)

O'BRIEN: OK.

Oh, by the way, a tucker, in case you were wondering, is in Australian, if you will, a food sack. And a stockman, we guess, is like a cowboy.

We're here every weekday afternoon from 4:00 to 6:00 Eastern and we're back on the air 7:00 p.m. Eastern, just one hour from now.

Until then, I'm Miles O'Brien, in THE SITUATION ROOM.

"LOU DOBBS TONIGHT" starts right now. Kitty Pilgrim in for Lou.

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