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ANDERSON COOPER 360 DEGREES

New Clues in Veepstakes?; Iraqi Oil Outrage

Aired August 6, 2008 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight, the race to pick a vice president, possible new clues in the veepstakes. Barack Obama, Michelle Obama each spending time today with potential V.P. candidates. And a possible pick for McCain speaks on what Republicans need to do to win. The latest from on the trail and some inside analysis from the best political team on television.
Also tonight, oil outrage -- new word that Iraq is rolling in oil money. So, what's America doing sending them cash? It's your money, billions to Iraq every month. We're "Keeping Them Honest."

And later, new developments in the mystery of Caylee Anthony. Police make a new visit to the little girl's home, as new questions arise about the case against her mom.

We begin tonight, though, with the race to pick a vice president, and new evidence today that who they pick matters, certainly more than it has in recent elections. Take a look at the CBS News poll. Thirty percent of people say running mate choose -- running mate choices will have a great deal of influence on their presidential decision. That is twice the number who said so in 2000.

Potential V.P.s were all over the trail today, Barack Obama with Evan Bayh, Michelle Obama with Tim Kaine, and Tim Pawlenty campaigning for John McCain.

Our new CNN poll of polls now shows a five-point Obama lead, very close, making the choice of a vice president and the timing of that choice crucial.

Candy Crowley is on the trail.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): It is vice presidential season. Every picture looks like a campaign brochure. Introductions sound like tryouts.

SEN. EVAN BAYH (D), INDIANA: Now, Barack Obama's opponent, John McCain, is not a bad man. But he is badly mistaken when he has embraced the Bush and Cheney economic policies.

CROWLEY: Few know what's going on. Everybody gets asked about it.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: And this is a very personal decision for Senator Obama, and I have no inside information as to how he is proceeding with this decision.

CROWLEY: Hillary Clinton lost her V.P. buzz weeks ago. Last week it swirled around Virginia Governor Tim Kaine, who brings both demographic and geographic elements to the table, a devout Catholic, a moderate Democrat who might help pull his changing Southern state into the Democratic column.

Kaine escorted Michelle Obama to a Virginia fund-raiser this evening, brushing aside those pesky V.P. inquiries.

GOV. TIM KAINE (D), VIRGINIA: You know, I'm not running for anything. My highest and best use is trying to be a good governor and trying to help Senator Obama in Virginia.

CROWLEY: Hundreds of miles to the west, in Indiana, Senator Evan Bayh and Barack Obama were looking chummy co-campaigning, and there was an Obama ad team crew shooting video of Bayh at this Elkhart event.

QUESTION: What does the vice president want?

CROWLEY: There are knowing -- or unknowing -- smiles in response. A former governor and a current senator, Bayh is a Midwest moderate and a platinum name in Indiana, a Republican stronghold. But Obama might be able to change the pattern of history and shake up Electoral College calculations if he put an Indianan on the ticket.

BAYH: Well, I would like to think that kind of thing wouldn't hurt his chances.

CROWLEY: It could be either Bayh, or Kaine, or neither of them. Also in play, former policy power player Joe Biden, and the well- credentialed governor of New Mexico, Bill Richardson.

It is showtime on the Republican side too. Mitt Romney has been sporting his abilities in the role frequently left to number twos, attack dog.

MITT ROMNEY (R), FORMER MASSACHUSETTS GOVERNOR: I didn't know that Barack Obama had -- had stooped to dishonesty.

CROWLEY: With deep political roots in Michigan, Romney is geographically well-suited to help McCain. A former governor, and a hugely successful CEO, Romney's economic prowess would also complement McCain's foreign policy credits.

Minnesota Governor Tim Pawlenty sparred with reporters today. He is energetic and innovative with a Washington-free resume. Pawlenty could take some of the same-old/same-old feel off the Republican ticket, counterbalancing John McCain's age and decades in Congress with a light touch.

UNIDENTIFIED MALE: What are the most important qualities in a vice presidential candidate?

GOV. TIM PAWLENTY (R), MINNESOTA: Discretion. (LAUGHTER)

CROWLEY: There is truth in humor. They are all like that, these vice presidential maybes, skirting, flirting, trying not to seem eager, while still being available.

(END VIDEOTAPE)

COOPER: And that is the trick, trying not to seem too eager.

Let's talk strategy with Candy, along with former White House Press Secretary Dee Dee Myers, and Ed Rollins, senior CNN contributor and GOP strategist.

Dee Dee, does Bayh make sense as a V.P.?

DEE DEE MYERS, FORMER CLINTON WHITE HOUSE PRESS SECRETARY: Absolutely.

I think he brings a lot to the ticket. He's an experienced politician. He doesn't make a lot of mistakes on the trail. He's got a lot of foreign policy experience, I think, which is -- which is important to Senator Obama.

And I think most Americans would judge him to be qualified to be president. And I think, for Senator Obama, that's the most important test. He's young. He's not that well-known. This is really about his judgment. And the most important quality in any vice presidential choice is, is that person really qualified to be president? I think Evan Bayh passes that test.

COOPER: Candy, I think the other counter to that, though, is that he might want somebody who's more experienced, or who's older, who might, you know, put to rest some people who say that -- that Obama is not experienced enough.

CROWLEY: Absolutely.

And that's -- that's always what these presidential candidates have to look at. Do you go geographic? Do you go with who you're comfortable with? Do you find someone that fills in your weaknesses?

There are many ways you can go about picking a vice presidential candidate. But I think Dee Dee is right. I think what Barack Obama has said all along and the first thing out of his mouth when you ask him about this is, I want someone who can step into the job. And the second thing is, I want someone I'm comfortable with.

And I think that holds true for both he and McCain. They're looking for different types, but they're both looking for someone they can actually work with.

COOPER: Ed, Candy was saying in her piece that the buzz on Hillary Clinton has faded. But should it fade? I mean, do you believe she's -- she's the best choice? ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: Well, she's -- she's the only one who creates a real buzz and a real excitement, and that ticket gets stronger by her being put on it. Evan Bayh may help win Indiana, which is 11 electoral votes, which would make a difference. Tim Kaine, 13 electoral votes in Virginia, may help there.

But you're going to spend a lot of time explaining who these people are.

COOPER: Right.

ROLLINS: She moves in, and, instantaneously, you have a unified party. You have a lot of excitement.

COOPER: Candy, when do we expect to know? I mean, when do -- when do -- traditionally...

CROWLEY: Well...

COOPER: ... when does somebody get selected?

CROWLEY: Right.

I mean, among the many things I don't know this year, that is one of them, which is, when is this going to happen? Listen, they have -- they have -- a lot of people have been all over the map. But, mostly, it's been in the week leading up to the convention.

We do know that Barack Obama is going on vacation this week. He will be on vacation all next week. He will not announce while he's on vacation. So, we are looking at, at least 10 days before we begin to sort of say, it's going to be this week. So, you know, I would wait 10 days, at least on the Democratic side, and, I judge, on the Republican side, too.

COOPER: Dee Dee, how much do you believe that John McCain, to Candy's point, will try to go with somebody who he feels comfortable with?

MYERS: You know, I think that's an important quality in a vice president. Again, it speaks to the -- to the nominee's judgment.

But I think that John McCain has the same threshold test, which is, is this person qualified to be president, for a completely different reason? And that's because John McCain will be 72 years old on the 29th of August. And, so, I think voters are going to be looking to see, God forbid something happens, you know, is this person qualified? I think that's the most important thing.

COOPER: Dee Dee, who do you think makes sense -- who do you -- for McCain?

MYERS: Well, I -- I think that the person who makes the most sense also makes the least sense, and that's Mitt Romney. You know, Governor Romney is somebody who could potentially help in Michigan, which is a critical swing state. He ran second among GOP candidates for president. He's shown he can be a real attack dog. And those are all important qualities in a vice president.

And, yet, it seems like a very conventional choice. And, so, I think he's both the best choice and in some ways the worst choice. But, you know, if I had to put -- bet my house on it, that's where I would put my money, where McCain will end up.

COOPER: Ed, you have talked about it from your own experience, how presidents often end up with vice presidents they -- they like least. But you think, for McCain, it is important to have somebody he feels comfortable with?

ROLLINS: I think -- that's just the way John is. John is not a traditional candidate. John is a very unique guy, and he has a comfort level.

And I think the key thing here is, there's no magic name here. I mean, anybody he picks is going to have some -- some detractors. Mitt Romney is going to have his detractors. He's already eliminating Mike Huckabee, who might have helped him with evangelicals, for whatever reason. There's no magic name out there that's automatically going to move -- move voters to that ticket.

COOPER: In terms of people he's most comfortable with, I mean -- and here's a list right now. You have got Tom Ridge there. You have got Lieberman, Jindal, Bobby Jindal, Mitt Romney, and others.

Does Lieberman make sense?

ROLLINS: No. Lieberman would hurt him tremendously among Republicans in the base. Tom Ridge, who is a fine guy, but he's -- but he is pro-choice. That would antagonize the base, wouldn't guarantee anything in Pennsylvania.

And then you to have a whole debate on Homeland Security. The others are -- are -- once again, they're are not well-known. And I think, to a certain extent, you would have to go out and spend two or three weeks getting them known. And that's a waste of time in a very short campaign.

COOPER: Candy, when you look at that poll that says, you know, the choice of vice president for 30 percent of voters is more important this time around than it has been in other years, why do you think that's the case? Just that so much is not known, or there's just a lot of questions about both these men?

CROWLEY: I think it -- yes, I think it's two different things.

I think it's what Dee Dee hinted at, which is that, with Barack Obama, it's because people don't know him very well, so that this is the first really big thing they do, which is select their running mate. So, it's an important decision, not just for who it is, but how people judge your judgment is. I think, for John McCain, it clearly is somebody that people are going to look at and say, can he step in? So, I think it is elevated this year for -- for different reasons. Now, I -- I also don't think that that it's what people are going to vote on. It may be important to them this year, but I don't think it's like a definitive choice for most people.

COOPER: We are going to leave it there.

Candy Crowley, Dee Dee Myers, Ed Rollins, thanks.

MYERS: Thank you.

COOPER: New polling as well tonight with something of a surprise for the pundits who says one candidate is seen as risky and the other is seen as safe. The fact is, voters see them both as risky.

Take a look at this raw data -- 57 percent of voters telling CNN/Opinion Research they think Obama would be a risky choice for president. Fifty-four percent said the same about John McCain, margin of error plus or minus 3 percent, bottom line, a statistical tie.

The conversation is continuing on our blog right now. I will be joining during commercial breaks. You can weigh in by going to AC360.com.

Up next: Paris Hilton getting political, kind of, sort of, maybe. The question now, will her answer to John McCain's attack ad, in which she calls him -- calls him out on his age, will that actually hurt McCain, or will it do the opposite? We will look at how age is playing out on the campaign trail.

Also tonight, new developments in the search for Caylee Anthony, police today back at her home. We will show you what they were looking for.

And later, Iraq's oil wealth creating a massive budget surplus, so why is the administration still sending of your tax dollars to help rebuild Iraq? The Iraqis say it's not real money, but you can bet yours is. We're "Keeping Them Honest" -- tonight on 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PARIS HILTON, ACTRESS: Now, if you will excuse me, I have to go pick out a vice president. I'm thinking Rihanna. I will see you at the White House. Oh, and I might paint it pink. I hope that's cool with you guys.

(END VIDEO CLIP)

COOPER: All right. So, we have always tried to avoid mentioning her name, but Paris Hilton has managed to put herself front and center in the campaign, at least for today, in her Paris for president ad. John McCain, whom Hilton refers to as the WWG, says he likes the clip. But the video and the huge amount of publicity it's generating does once again focus attention on the age issue, one both candidates sometimes have a hard time dealing with.

The "Raw Politics" tonight from Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Paris Hilton is looking for payback for John McCain using her image in an ad slamming Barack Obama.

HILTON: And I'm a celebrity, too, only I'm not from the olden days, and I'm not promising change, like that other guy. I'm just hot.

HENRY: But what's not so hot for the 71-year-old McCain, Hilton's spoof video has several references to the Republican candidate's age.

HILTON: Then that wrinkly, white-haired guy used me in his campaign ad, which I guess means I'm running for president. So, thanks for the endorsement, white-haired dude.

HENRY: Admittedly, Hilton knows more about handbags and hookups than the horse race of politics. But, in fact, age is an issue on the minds of some voters, as Obama awkwardly found out this week at a town hall meeting in Ohio.

UNIDENTIFIED MALE: What is your opinion -- not being disrespectful to the elderly, but what is your opinion as far as setting term limits or age limits on these people, so that we get younger people in there?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: This is kind of a tricky question for me. You know, I have got colleagues in the Senate who are doing just outstanding work. And they are well into their 70s.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: The next president...

HENRY: Obama, who then mentioned Ted Kennedy, but not McCain, turned 47 this week. He has to be very careful about how he handles this issue.

KEN VOGEL, "THE POLITICO": He doesn't want to be seen as picking on the old guy. So, what his campaign has done, very astutely, is they have put him in positions that have highlighted his youth and his energy.

HENRY: So, while Obama has been on the basketball court, McCain has been seen in a golf cart with former President Bush.

But McCain himself has handled this with humor, appearing on "Saturday Night Live" to joke about how America needs a very, very old president.

And when a voter asked the senator how it felt to know he may be rejected because of his age, McCain pretended to fall asleep.

UNIDENTIFIED MALE: Wake up, sir.

(LAUGHTER)

HENRY: He's also trying to use the issue as an asset.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I admire and respect Senator Obama. For a young man with very little experience, he's done very well.

(LAUGHTER)

HENRY (on camera): And when the debates come, McCain could steal a page from Ronald Reagan, who turned the tables on Walter Mondale in 1984.

(BEGIN VIDEO CLIP, 1984)

RONALD REAGAN, PRESIDENT OF THE UNITED STATES: I'm not going to exploit, for political purposes, my opponent's youth and inexperience.

(LAUGHTER)

(END VIDEO CLIP)

HENRY: If McCain wins, he will eclipse a record once set by Reagan, oldest person elected to a first presidential term.

Ed Henry, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, investigators searched the house of Caylee Anthony's grandparents again today -- that's where Caylee lives, and left with four bags of evidence. The question is, are they any closer to solving the mystery of the little girl's disappearance?

That's coming up.

But, first, Erica Hill joins us with a 360 bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, eight firefighters and a pilot are presumed dead tonight. Their helicopter crashed in flames shortly after picking up firefighters battling a blaze in a Northern California forest. Three other firefighters and a co-pilot are hospitalized with severe burns. Recovery efforts for those nine missing, though, have been hampered by the remote location.

A military jury today delivered a mixed verdict in the trial of Osama bin Laden's former driver, Salim Hamdan, finding him guilty of providing material support in the September 11 terrorist attacks, but not of conspiracy to aid a terrorist organization. Hamdan faces a possible life sentence.

And Greyhound is pulling an ad campaign featuring the untimely slogan, "There's a reason you have never heard of bus rage." Last week, a Greyhound passenger stabbed, then decapitated a seat mate on a bus in Canada -- Anderson.

COOPER: Unbelievable.

All right, Erica, here's tonight's "Beat 360" photo: former Speaker of the House Newt Gingrich scratching his face during a news conference in Washington.

Here's the caption from our staff winner, Joey: "No, Paris was talking about the other wrinkly, white-haired guy."

(LAUGHTER)

HILL: I like it.

COOPER: That's Joey. That's just bad karma for Joey.

(LAUGHTER)

COOPER: Think you can do better. Go to our Web site, AC360.com.

HILL: Even when he's racked up that many wins? Doe Joey have any bad karma? Come on.

(LAUGHTER)

COOPER: Probably not.

Go to our Web site, AC360.com. Click on the best -- "Beat 360" link and send us your entry. We will announce the winner at the end of the program. The winner, of course, gets the "Beat 360" T-shirt.

Still ahead: Obama's energy fix and McCain's plan for what he calls an economic surge. That's what they were talking about today on the campaign trail. But how much of what they said was true? We're "Keeping Them Honest."

Also ahead tonight, new developments in the search for Caylee Anthony. Police paid a new visit to the 2-year-old's home. We will tell you what they found -- "Crime and Punishment" coming up.

(COMMERCIAL BREAK)

COOPER: Barack Obama on the trail today getting a warm reception at Concord High School in Elkhart, Indiana, where he held a town meeting. Energy was the focus. Obama and his rival, John McCain, of course have been hammering each other's energy plans a lot lately.

Well, tonight, as part of our commitment to letting you make up your mind on these issues, who is right, who is wrong, we are going to bring you the candidates in their own words. And then we will check those words against the facts. Here's what Barack Obama said in Indiana.

(BEGIN VIDEO CLIP)

OBAMA: If we're going to be serious about this problem, we need an all-hands-on-deck approach, an effort from scientists and engineers, businesses, homeowners. All of us are going to have to get behind a new approach to energy.

(APPLAUSE)

OBAMA: We know this is the challenge that we can meet.

(APPLAUSE)

OBAMA: That's one of the reasons I voted for an energy bill in the Senate that was far from perfect, but doubled our use of alternative energy. We've got to develop it. That's why, as president, I will put the full resources of the federal government and the full energy of the private sector behind a single overarching goal. In 10 years, we're going to eliminate the need for oil from the entire Middle East and Venezuela, all of it.

(CHEERING AND APPLAUSE)

OBAMA: Now, to do this, we're going to invest $150 billion over the next decade and leverage billions of dollars more in private capital to harness American energy and create five million jobs in the process, jobs that cannot be outsourced, good paying jobs that will be created right here in Indiana and all across the United States of America.

(END VIDEO CLIP)

COOPER: Well, how do his words check with the facts?

"Keeping Them Honest," here's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Anderson, eliminating all the oil we use from the Middle East and Venezuela, it certainly sounds impressive, sounds like a lot, but the numbers suggest he has some relatively crude ideas here that might need some refining.

(voice-over): The American Petroleum Institute says only about 20 percent of all the oil we burn is from those places. We get a lot more from Canada, Mexico, Nigeria. So, we would still be depending heavily on foreign oil.

Part of Obama's new energy plan is investing $150 billion in green technology, and much of the green for that would come from a windfall profits tax on oil companies. Problem is, the Tax Foundation, a nonpartisan nonprofit group, points out we have tried that before. In the 1980s, a windfall profits tax on oil companies produced less than a quarter of the money that was expected. Worse -- big surprise -- when the oil companies were taxed more and their profits went down, you know what they did? They produced less oil. And that made us even more dependent on foreign oil.

(on camera): And what about those five million new clean-energy jobs Obama is promising? Sounds nice, but industry and economic analysts say they may come at the cost of just as many jobs lost by Americans who work in the old energy sector, with coal and oil -- Anderson.

(END VIDEOTAPE)

COOPER: Well, just ahead, John McCain in his own words talking about jobs and his plans to create more of them. Tom Foreman also keeping him honest.

Also, are investigators any closer tonight to knowing what happened to this little girl, Caylee Anthony, 2 years old, still missing, missing for more than a month now? Police collected four bags of evidence from her grandparents' house today. We will have the latest -- coming up.

(COMMERCIAL BREAK)

COOPER: Senator John McCain stopped by football practice this morning at Marshall University in Huntington, West Virginia, before heading to Ohio to talk about jobs. The economy is a crucial issue in that pivotal swing state.

We brought you Barack Obama in his own words earlier, as part of a commitment to letting you make up your mind on the issues by actually hearing extended clips of what the candidates are saying.

Now, here's John McCain.

(BEGIN VIDEO CLIP)

MCCAIN: America has the second highest business rate in the entire world. It's any wonder that jobs are moving overseas. We're taxing them out of the country.

Unfortunately, Senator Obama's plans would raise taxes on businesses even more. He's promised tax increases on income, tax increases on investment, tax increases on small businesses. That's exactly, exactly the wrong strategy. Raising taxes in a bad economy is about the worst thing you can do, because it'll kill even more jobs when what we need are policies that create jobs.

What we need today is an economic surge. Our surge has succeeded in Iraq militarily. Now we need an economic surge to keep jobs here at home and create new ones. We need to reduce the tax burden on businesses that choose to make their home in the United States of America. We need to open new markets to U.S. products. And we need to reduce the cost of health care. And we need to end the out of control spending in Washington that's putting our debt on the backs of our children. Now's the time for action, and when I'm president, we are going to get it done.

(END VIDEO CLIP)

COOPER: John McCain in his own words.

So, how does what he said hold up under the microscope? Once again, CNN's Tom foreman "Keeping Them Honest."

(BEGIN VIDEOTAPE)

FOREMAN: Anderson, McCain is right. If you are a big corporation doing business in America, you would better be pulling in big bucks, because you're going to get a big tax bill.

(voice-over): The United States has the second highest tax rate on corporate profits in the world, behind only Japan. And that should matter to regular voters because tax analysts have been saying for years now, this is a significant reason that we are losing jobs to other countries.

Beyond that, however, they suggest McCain may be stretching things a bit. Obama has proposed tax increases on some individuals, some income, and some businesses, but certainly not all. And although the nonpartisan Tax Foundation says, in the long run, in, say, five or 10 years, Obama's increases may indeed hurt investments and economic expansion, probably not so much in the short run.

(on camera): And that is really a bit of a problem for both of the candidates. When they are talking about the immediate economic problems we face today, there is a general consensus among economists that neither candidate's plan will solve anything fast. But, of course, that's not a great message to be selling on the stump -- Anderson.

(END VIDEOTAPE)

COOPER: Tom, thanks very much, keeping the candidates honest every night.

Up next, "Crime and Punishment," new developments in the search for Caylee Anthony -- police back at her home searching for clues, her mother still behind bars. Still, bottom line, where is Caylee?

Later, oil outrage -- Iraq showing an almost $80 billion budget surplus -- a surplus -- and we're paying $4 for gas and sending them billions. How could that happen?

We're "Keeping Them Honest" -- next.

(COMMERCIAL BREAK)

COOPER: New developments in the search for little Caylee Anthony. Today crime scene investigators went back again to the family's home in Orlando, Florida. They were looking for evidence that could lead them to Caylee. They also say they have her DNA.

Caylee, of course, turns 3 this weekend. Her grandmother calls her little angel. She's also defending Caylee's mother, who tonight remains behind bars, accused of lying to police about Caylee.

There are a lot of new details in the case. We'll get to all of them in a moment. First, the facts: what we know and what Caylee's mom says happened to her daughter. Here's 360's Randi Kaye.

(BEGIN VIDEOTAPE)

CHRISTINA, FAMILY FRIEND: If anything happens to Caylee, Casey, I'll die. Do you understand? I'll die if anything happens to that baby.

RANDI KAYE, CNN CORRESPONDENT (voice-over): Casey Anthony's friend talking with her in jail. The phone call is recorded.

CASEY ANTHONY, CAYLEE'S MOTHER: Oh, my God, calling you guys, a waste, huge waste. Honey, I love you. You know I would not let anything happen to my daughter. If I knew where she was, this wouldn't be going on.

KAYE: The search for Caylee Anthony, and police say the truth begins on June 9. That's when Casey, a single mother living with her parents, says she dropped her daughter Caylee off at the babysitter before heading out on a business trip to Tampa. A few days later, Casey claims she returned to find Caylee and the sitter gone.

Casey insists she spent the next five weeks trying to find her daughter on her own, but look at this video. That's Caylee during a visit with her grandparents. Her grandmother says it was taken June 15, six days after Casey claimed to have last seen Caylee. This is also the last time the family says they saw Caylee alive.

June 20 or June 21, a photographer says Casey went to an Orlando club. He took these pictures showing her partying at the Fusion Ultralounge.

By July 15, Casey's parents confront their daughter. Casey tells them Caylee vanished. Cindy Anthony calls 911.

CINDY ANTHONY, CAYLEE'S GRANDMOTHER: I told you my daughter was missing for a month. I just found her today, but I can't find my granddaughter. She just admitted to me that she's been trying to find her herself. There's something wrong. I found my daughter's car today, and it smells like there's been a dead body in the damn car.

KAYE: Using cadaver dogs, investigators later report a strong odor, possibly human decomposition, in the trunk of the car. Cindy now says it was likely pizza.

The next day, July 16, Casey is arrested for child neglect, obstruction of justice, and making a false statement. Police are convinced Casey's story is a web of lies. (on camera) Why? Police say the home Casey said the babysitter lived in had been vacant for months. And even though Casey said she had gone on a business trip for Universal Studios, she wasn't working for them at the time.

(voice-over) July 17, from jail Casey calls her family and has this heated exchange with her mother.

CINDY ANTHONY: I don't know what your involvement is, sweetheart. You're not telling me where she's at.

CASEY ANTHONY: Because I don't (EXPLETIVE DELETED) know where she's at. Are you kidding me?

CINDY ANTHONY: Whose fault is -- whose fault is you sitting in the jail? You're blaming me that you're sitting in the jail? Blame yourself for telling lies.

KAYE: That same day Casey has a bond hearing. The judge reprimands her.

JUDGE STAN STRICKLAND, ORANGE COUNTY CIRCUIT COURT: Not a bit of useful information has been provided by Miss Anthony as to the whereabouts of her daughter.

KAYE: While Casey is in jail and, police insist, not cooperating, volunteers look for Caylee. There are posters, pleas for information.

UNIDENTIFIED FEMALE: We're just trying to get Caylee to come home safe.

KAYE: July 22, bond is set at half a million dollars, and Casey's story changes again. She can try to help police find Caylee, but only if she's released.

GEORGE ANTHONY, CAYLEE'S GRANDFATHER: She knows who has her daughter. She knows her daughter's safe. You know, I've got to believe her that she knows everything is OK.

KAYE: August 1, armed with a search warrant, police take evidence from Casey's home. This week Casey is formally charged with child neglect and filing a false report. Police say they have Caylee's DNA, reportedly from a stain in a car driven by Casey.

And nearly two months after her mother said she left her daughter with a babysitter, the only thing police know for sure, a little girl who turns 3 this Saturday is missing.

Randi Kaye, CNN, Atlanta.

(END VIDEOTAPE)

COOPER: So many missing pieces in this. We'll have more details in the search for Caylee. Next on 360 we'll talk to attorney Lisa Bloom. We'll also take a closer look at her mother. Why won't she talk, and why did she allegedly lie when she did talk? That's coming up.

Later, e-mails and evidence, the government's case against the scientist it says was responsible for the deadly anthrax attacks. Details and the questions ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CINDY ANTHONY: I don't know what your involvement is, sweetheart. You're not telling me where she's at.

CASEY ANTHONY: Because I don't (EXPLETIVE DELETED) know where she's at. Are you kidding me?

CINDY ANTHONY: Whose fault is -- whose fault is you sitting in the jail. You're blaming me that you're sitting in the jail? Blame yourself for telling lies.

(END VIDEO CLIP)

COOPER: Well, who is telling the lies? That was a jailhouse phone call between Casey Anthony and her mom Cindy. As you just heard, Casey says she doesn't know where her daughter Caylee is. But that story has changed.

Casey now says she knows where Caylee is but won't reveal where unless she's released from custody. Police in Florida, convinced Casey's hiding the truth about Casey, they've charged her with filing a false report as well as child neglect. They also say they have Caylee's DNA.

Let's talk about the latest on the investigation and dig deeper with attorney and anchor Lisa Bloom.

So crime scene investigators went back to the grandmother's house for the fourth time. They went to the grandmother's house because that's actually where Casey and Caylee lived.

LISA BLOOM, ATTORNEY/ANCHOR: That's where they were living before that month-long gap. And so they're probably looking for follow-up evidence from the first three researchers. They're going to have bags, as you just saw there in the piece.

COOPER: If they're going back a fourth time, though, that doesn't seem like -- I mean, it seems like a fishing expedition.

BLOOM: Well, not necessarily. We don't know what they got the first three times. And we know that DNA test results did come back yesterday. The results have not been released, so we don't know what they were. But they are continuing their investigation vigorously.

The one thing they should be looking at is computer forensics. If, indeed, the mother had a computer and she left it there, who she was communicating with, who she was setting up times to be with people.

COOPER: Well, it certainly shouldn't be too hard to figure out.

BLOOM: That would not be hard to figure out if she had a computer and if they seized it and it they have a forensic analyst looking at it.

COOPER: Right. She doesn't seem like a rocket scientist. I mean, she's telling all these stories which are easily disprovable.

BLOOM: The lies just change constantly, because she talks to her mother when she's in jail. You know, she's holding her daughter hostage. According to her story, she's not going to tell anybody where the baby is until they release her. So she's willing to have her child be in jeopardy?

COOPER: It's ridiculous. I was just rereading the transcripts of the 911 call that the grandmother originally made, the third one that she made, and the 911 operator actually asked for Casey to get on the phone. And Casey then said -- this is the day her grandmother called 911, or her mother called 911. Casey said that -- she said, "I actually received a phone call today now from a number that's no longer in service. I got to speak to my daughter for about a moment, about a minute."

She says she actually spoke to her daughter the day that they took her into custody.

BLOOM: And then, you know, later her story was that June 9 was the day that the babysitter ran off with her and she's been looking for her ever since. She's told conflicting stories about whether she was looking for the baby or not, whether she thinks the baby is safe.

I mean, it's just like the Drew Peterson case. He's told so many stories, and yet there isn't enough to charge him. And the same with her. We need some more hard evidence. That's why they're going back in and really, I think, combing this home, trying to get some hard evidence, because it's so suspicious. Her stories are just preposterous.

COOPER: I want to play part of a phone conversation between Casey Anthony and an unidentified woman. Casey is speaking, of course, from jail. Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: How come everybody's saying that you're not upset, that you're not crying, that you showed no caring of where Caylee is at all?

CASEY ANTHONY: Because I'm not sitting here (EXPLETIVE DELETED) crying every two seconds, because I have to stay composed to talk to detectives, to make other phone calls, to do other things. I can't sit here and be crying every two seconds like I want to. I can't.

(END VIDEO CLIP) COOPER: For a person whose child is allegedly missing, it does seem pretty unemotional.

BLOOM: It's very hard to understand, and the police say that in her first interview with them, she was even laughing at various points in the interview.

Everybody reacts to stress differently. Some people are more composed. But for this much time to go by and your child is missing and hasn't turned up. You have no idea if she's healthy or not. I mean, that's just really hard to understand.

COOPER: Let me play this other part of the conversation she had with her brother Lee, again, when she was behind bars.

(BEGIN VIDEO CLIP)

LEE ANTHONY, BROTHER OF CASEY: What do you think -- where do you think -- do you think Caylee's OK right now?

CASEY ANTHONY: My gut feeling? As mom asked me yesterday and even Jose asked me last night, the psychologist asked me this morning that I got through the court, in my gut, she's still OK. And it still feels like she's -- she's close to home.

LEE ANTHONY: OK.

CASEY ANTHONY: So, I mean, that's still my -- my best feeling at the moment. Again, if that changes, I mean, obviously, I'm going to reach out and say something immediately.

(END VIDEO CLIP)

BLOOM: You know, this is even like a third story now.

COOPER: It doesn't make sense. That doesn't make sense.

BLOOM: This is a story in between "I don't know where she is" and "I do know where she is." "Well, in my gut I feel she's OK." It implies she really doesn't know.

COOPER: And then if something changes, meaning something changes in her gut, she's going to, what, then tell people something?

BLOOM: It's just -- it would be laughable if it wasn't a real little baby that was missing here and probably in harm's way. I mean, it's just preposterous.

You know, the real question is she's talks a psychologist evaluating her. Does she have some kind of a psychological problem? Because this woman really does seem to be off.

COOPER: It's interesting, though, how the family seems to have changed.

BLOOM: Yes. COOPER: Early on -- obviously, it was the mother, it was the grandmother, the mother to Casey, who made the 911 call. She got the police involved.

BLOOM: And who said that she smelled decomposition in the car.

COOPER: It smelled like a dead body.

BLOOM: That's right. And the cadaver dogs backed it up, and the police detectives backed it up.

COOPER: Then she back -- backtracked saying...

BLOOM: The grandmother now says it smelled like an old pizza. And you know what? A local radio station down there actually did a little test where they put an old pizza in the trunk of a car and waited 12 days and then pulled it out to see what it smelled like. Rock hard, no smell whatsoever.

COOPER: Like in an oven. It comes out rock hard.

BLOOM: There's no smell after 12 days. So that's a preposterous theory. The family is circling around, and the mother really seems to be protecting Casey. We don't know why.

COOPER: All right. Lisa Bloom, thanks very much.

Up next, prosecutors say Army scientist Bruce Ivins was the anthrax killer. They release new details about how they say he pulled off the deadliest bio attack in our country's history. A lot of people still have doubts, though.

Plus, Iraq's huge oil profits: $80 billion. So why are we giving them billions more? Billions of dollars of your money? We're "Keeping Them Honest," next.

COOPER: While, the candidates debate the war. there's one fact they cannot dispute: the oil. Iraq has a lot of it. They have the third largest oil reserves in the world, and it's profiting from it in a huge way.

According to a U.S. government watchdog agency, Iraq has a four- year budget surplus of $80 billion, most of it from oil exports. So the question is why then are our tax dollars still paying for all the reconstruction costs?

"Keeping Them Honest," 360's Joe Johns joins us tonight from Washington -- Joe.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): And even before the war, the Defense Department was saying that Iraq's oil was going to pay for both the military expenses and the cost of Iraq's reconstruction, but now oil revenues are making Iraq very rich while you, the taxpayer, are paying a fortune for reconstruction in Iraq. The issue hit the presidential campaign trail today after the Government Accountability Office released a new audit. Here's how Senator Barack Obama teed it up.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, if you need one more example of what's wrong with our energy policy or George Bush's policies in general, there's a new report today -- some of you may have read in the newspaper -- Iraq has been getting a windfall because of rising oil prices. They have a $79 billion budget surplus.

At a time when we're spending $10 billion a month in Iraq, they've got almost $80 billion that's not being invested in services for suffering Iraqis or reconstruction.

(END VIDEOTAPE)

JOHNS: So here's what that new audit says. Iraq has gotten so much money it literally can't get rid of it all. Iraq generated $96 billion in revenues in just two years, from 2005 to 2007, and this year Iraq's oil revenues could be as high as $86 billion.

And that means Iraq's budget surplus could hit $50 billion. But Iraq will only spend $35 billion.

COOPER: So is there any way to compare how much of is own money Iraq has actually been spending on reconstruction compared to how much America has been spending?

JOHNS: Yes, the GAO pretty much did a study on that. Iraq has paid about 10 percent of the cost. But get this> over the last two years, Iraq only spent $947 million to pay for maintenance of roads, bridges, vehicles, buildings, water and electricity installation, and weapons. These are projects the U.S. was in on too.

Meanwhile, the U.S. was spending money like it was going out of style. The GAO said that since 2003 Congress has appropriated $48 billion for so-called stabilization and reconstruction, rebuilding Iraq's security forces, helping them set up a government and so on, rebuilding the oil, electricity, and water sector.

COOPER: So why aren't they spending more of their own money?

JOHNS: Well, the official reason is that Iraq has a shortage of trained staff. Their procurement and budgeting systems are weak.

But there are some people who simply aren't buying that. Senator Carl Levin of Michigan said it doesn't make any sense to think people don't know how to write checks. Basically, if you know how to deposit, you should know how to withdraw.

And there's one final note, maybe a final insult. You decide. But about four miles away from where you are in our Manhattan studios, Iraq has $10 billion on deposit at the Federal Reserve Bank of New York, and so far it's earned $435 million in interest, and that's just until the end of last year.

COOPER: It's a lot of money. All right, Joe, "Keeping Them Honest." Thanks, Joe.

A lot more happening tonight. Erica is back with a "360 News and Business Bulletin" -- Erica.

HILL: Anderson, the federal government says one man alone is responsible for the worst bioterror attack in American history. The Justice Department today unsealing evidence it says makes the case against Army biologist Bruce Ivins, including DNA testing that traces the strain of anthrax used in those attacks directly to the germs in Dr. Ivins' flask.

Five people were killed in those attacks, 17 sickened. Ivins' lawyers say the government's evidence wouldn't have stood up in court. Their client took his own life last week before any charges were filed.

Just moments ago, President Bush speaking in Bangkok, Thailand, where he called on China to let its people speak and pray freely. Mr. Bush will attend the Olympic opening ceremonies in Beijing on Friday.

Encouraging news for consumers and investors alike. The price of oil dropping again today. Stocks rising, and all three major indices finishing higher.

And you can add another creditor to Wesley Snipes' ledger. A judge today ordering him to pay court costs in his tax evasion case, about $217,000. That is, of course, on top of the money he already owes the IRS. Yes.

COOPER: I still don't get that story.

HILL: It's a crazy one.

COOPER: Yes.

All right. Time for the "Beat 360" winners, our daily challenge to viewers to show up our staffers by coming up with a better caption. Tonight's picture -- well, you know who it is, Newt Gingrich, former speaker of the House -- scratching his face during a news conference in Washington today.

Now Joey, our staff winner, his caption was: "No, Paris was talking about the other wrinkly white-haired guy."

Our viewer winner is Mike from Tracey (ph), California. His caption: "Since his retirement, nude has found it increasingly more difficult to talk out of both sides of his mouth."

HILL: Shame, Mike.

COOPER: Yikes. Mike, your "Beat 360" T-shirt is on the way. Congratulations. Check out all the entries on our blog, AC360.com.

HILL: Wear that shirt with pride, Mike.

COOPER: That's right. HILL: Anderson wears it with pride to the gym every day. Love it.

COOPER: Love that shirt.

"The Shot" is next. Cute, cuddly, and in crazy, kooky costumes. Look at those little guinea pigs. It's a little guinea pig pageant, but it doesn't end like you might expect. Yes. We'll tell you coming up.

And at the top of the hour, the veep stakes heats up as both candidates get closer -- there they are -- both candidates get closer to naming a running mate. We're on the trail when 360 continues.

(COMMERCIAL BREAK)

COOPER: Time now for "The Shot," Erica. We take you to a town in Peru, where, as you can see, it's dress up your guinea pig day.

HILL: They're just too cute.

COOPER: They're adorable.

HILL: It's a little -- that's a maintenance worker guinea pig.

COOPER: We're told this is a yearly festival. It's a yearly tradition for the guinea pigs and for the people there. The animals are paraded down the streets wearing snazzy costumes. They have bright colors on their little hats.

HILL: If only they knew, though, where they were really going, Anderson.

COOPER: That's right. At the end of the parade, they're cooked.

HILL: Yes.

COOPER: Yes.

HILL: Hey, why don't we get you all dressed up. You look super cute like a stuffed animal that you just want to cuddle, and then we'll throw you on a fire pit.

COOPER: They're dressed for dinner, and there's the dinner.

HILL: No.

COOPER: Yes. It doesn't -- it doesn't end well. And they're served up right at the parade. So I don't understand like...

HILL: It's a competition between chefs at the parade.

COOPER: That's just not right.

HILL: It's an annual festival.

COOPER: It's -- it's terrible. Terrible.

HILL: And now finally we're getting some sympathy. The turtle man was great, but, oh, don't hurt the guinea pigs. Just because the turtle don't dress up.

COOPER: Are you saying it wasn't sympathetic enough to -- the turtles?

HILL: I'm a little concerned that you don't care enough about the turtle.

COOPER: Really?

HILL: Yes.

COOPER: I care about turtles.

HILL: OK, good.

COOPER: All right. I don't know -- do we have turtle man? We don't have time for it.

HILL: I don't think we have time. Sorry about that.

COOPER: You can see the most recent shots, AC360.com is the address right there. You can see everything right there. Do I have to read the rest of it? I hope not.

HILL: No.

COOPER: I must not.

HILL: It's your show. You don't have to do anything...

COOPER: Coming up at the top of the hour, the veep stakes heating up. We're reading the signs as the candidates get closer to making their pick. We've also got striking new data on how important voters see their choice for vice president this time around.

And later the Paris Hilton shot at John McCain's age. Does it actually help him? "Raw Politics" tonight on 360.

(COMMERCIAL BREAK)

COOPER: Tonight the race to pick a vice president. Possible new clues in the veep stakes. Barack Obama, Michelle Obama, each spending time today with potential VP candidates.

And a possible pick for McCain speaks out on what Republicans need to do to win. The latest from on the trail and some inside analysis from the best political team on television.

Also tonight, oil outrage. New word that Iraq is rolling in oil money. So what's America doing sending them cash? It's your money, billions to Iraq every month. We're "Keeping Them Honest." And later, new developments in the mystery of Caylee Anthony. Police make a new visit to the little girl's home as new questions arise about the case against her mom.

COOPER: We begin tonight, though, with the race to pick a vice president. And new evidence today that who they pick matters, certainly more than it has in recent elections.

Take a look at the CBS News poll. Thirty percent of people.