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The Edwards Affair; Russia's Assault on Georgia Continues; Looking for Caylee Anthony

Aired August 11, 2008 - 23:00   ET


ANDERSON COOPER, CNN ANCHOR: We begin tonight with "Breaking News." Late word on Russian tanks rolling through Georgia and Russian warplanes above; terror on the ground, charges of ethnic cleansing, bombing civilian targets and people fleeing for their lives.
There's also late word this evening, Russia has rejected a U.N. resolution calling for a cease fire and their tough talk is sparking fear of a new Cold War. Very real confusion however, about what is really happening on the ground. What Russia wants and what, if anything, the U.S. can do to stop it.

President Bush spoke out earlier today.


GEORGE W. BUSH, PRESIDENT OF THE UNITED OF AMERICA: Russia's actions this week have raised serious questions about its intentions in Georgia and the region. These actions have substantially damaged Russia's standing in the world. And these actions jeopardize Russia's relations with the United States and Europe. It is time for Russia to be true to its word and to act to end this crisis.


COOPER: We're going to have a live report from Georgia as well as reaction from John McCain and Barack Obama in a few moments.

But first, the latest on the political bombshell John Edwards unleashed. His admission of an affair on a Friday night during the Olympic opening ceremonies was no doubt timed by him to try to disappear quickly. Most likely he hoped to avoid a lot of awkward questions.

Instead, he merely postponed them and has fueled new ones; questions about money, secret payments, politics and paternity.

The questions in "Raw Politics" tonight from "360's" Joe Johns.


JOE JOHNS, CNN CORRESPONDENT: Unanswered questions abound in the John Edwards case and they start with the money that apparently changed hands.

There's a well-known Dallas lawyer, Fred Barren, who reportedly has paid tens of thousands of dollars to arrange housing in Santa Barbara for Rielle Hunter and Andrew Young; the man who is on the record as saying he's the father of Hunter's child. But we'll get to him in a second.

So why has the lawyer been paying? He said he paid out of his own pocket and did it because Hunter and Young were being hounded by the news media and needed financial help. That Dallas lawyer, Fred Barren, used to be the finance chairman for the Edwards' campaign. But Edwards told ABC news he knew nothing of the payment.

JOHN EDWARDS, (D) FORMER PRESIDENTIAL CANDIDATE: I've never paid a dime of money to any of the people that are involved. I've never asked anybody to pay a dime of money, never been told that any money has been paid. Nothing has been done at my request.

JOHNS: Meanwhile, speaking of money, Federal Election Commission Records say John Edwards' One America Political Action Committee paid ricin Hunter's company, Midline Productions, $114,000 in eight payments between July of 2006 and February of 2007.

So what was she getting paid for? web site Internet Services, according to the FEC reports. Hunter actually produced Web videos for Edwards as he asserted during this interview with Bob Woodruff on ABC.


EDWARDS: She was hired to come in and produce films and that's the reason she was hired.

BOB WOODRUFF, ABC ANCHOR: So this had nothing to the fact that you were having an affair with her?

EDWARDS: It was financial. No, it did not.

WOODRUFF: So you'd hired her before it even started?

EDWARDS: That is correct.


JOHNS: Which leads to the next question; when did the relationship start any way? Edwards says the affair started in the second half of 2006. Others have questioned that. And finally, the biggest question looming over this entire episode, just who is the father?

Is it Andrew Young, who claims to be the father, or is it the senator himself? Edwards said it could not be him because the baby was conceived after the affair ended. He says he's willing to take a paternity test. But Hunter now says she won't submit the child to testing.

Joe Johns, CNN, Washington.


COOPER: And as for why no paternity test, Miss Hunter's attorney released a statement that reads in part -- "She wishes to maintain her privacy and her daughter's privacy." But even if she fights to keep the spotlight off her daughter, it continues to shine white hot on her.

Her story now, "Up Close" from David Mattingly.


RIELLE HUNTER, EDWARDS' ALLEGED MISTRESS: One of the great things about John Edwards is that he's so open and willing to try new things and do things in new ways.

DAVID MATTINGLY, CNN CORRESPONDENT: Rielle Hunter, in one of her few TV interviews, speaking on the Syndicated Entertainment Show "Extra" in 2007. "Newsweek" magazine's Jonathan Dormann who interviewed Hunter in July of 2006 says the fledgling film maker was obsessed with Edwards' potential political future, comparing him to Ghandi and Martin Luther King Jr. And believing the candidate had the power to change the world.

Dormann says, Edwards met several times with Hunter in 2006, she called the senator her next project, used new age terms to describe Edwards, and called him an old soul who is "driven by competing impulses to feed his ego and serve the world."

According to Dormann, her feelings about Elizabeth Edwards were not as enlightening. Dormann says Hunter told him Mrs. Edwards does not give off a good energy. He says Hunter would later blame Elizabeth for her firing, allegedly saying "Some day the truth about her is going to come out."

Piecing together Rielle Hunter's life based on published media reports, here's the picture that emerges. Hunter was born Lisa Druck in Ft. Lauderdale, Florida, in 1964. After dropping out of the University of Tampa, she moved to New York where she met James McInerney, the author who chronicled the drugs and decadence of the '80s and books like "Bright Lights, Big City." McInerney also wrote a book "Story of My Life" whose heroine he has said in several interviews was inspired by Lisa Druck.

From New York, Druck would relocate to Los Angeles as an aspiring actress. In 1991 she married Kip Hunter whose father was the Boulder, Colorado DA leading the JonBenet murder case. The couple divorced in 2000.

By then, Lisa Druck had become Rielle Hunter hoping to find success in Hollywood. Hunter rolled and starred in a short film "Billy Bob and Then." She would also co-found a production company and she reportedly was immersing herself in spiritualism, creating "Being is Free," a web site devoted to New Age philosophies and beliefs.

Sometime in 2006, Rielle Hunter would find herself back in New York at a bar with the former senator.

HUNTER: It was a random meeting. He was in a business meeting in New York and I was in the same place. He was very real and authentic. He was inspirational to me.

MATTINGLY: ABC news says when their affair began Hunter even had a nickname for Edwards, referring to him as "love lips." Even though her experience was limited, Edwards' Political Action Committee hired Hunter to produce documentary films of his campaign. They were candid, with Hunter behind the camera.

John Edwards' future is uncertain. He says he wondered if he had a future in politics even before news of the affair broke. As for Rielle Hunter, after years of trying to make a name for herself, she will most likely be remembered as the other woman of a presidential candidate.

David Mattingly, CNN, Atlanta.


COOPER: All right, let's "Dig Deeper" now with our panel; CNN's senior political analyst David Gergen; Steve Kornacki "The New York Observer" and Jennifer Donahue, political director of the New Hampshire Institute of Politics at St. Anselm College.

David, does John Edwards' explanation that he met this woman, then hired her, then started this relationship after she was already on the payroll, does that pass the smell test to you?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Anderson, there may be people out there who believe his story. But so far I haven't met any. Everyone has questions about, you know, when this actually started up and whether she did on the payroll as after, and there have been various reports showing a timeline suggesting she went on the payroll after the relationship started; about the paternity of the child, about the money payments since then.

And now there are questions, of course, about whether John Edwards himself was a victim to some degree, whether he was set up at the Beverly Hilton. Perhaps even by her friend.

COOPER: Because it seems to me the question of when the relationship started, I mean beyond what other people's concerns may be, for me what's interesting is if people are donating money to stop poverty in the world and poverty in America and he's having a relationship with someone who he then gives a job to in order to just keep her happy, or whatever the reason is, then it's odd that that money is going to that purpose.

GERGEN: Absolutely. And you started raising this question Friday night. I do think it's one of the central questions here. And whether -- there had been people who have traced out the timelines that suggested that their relationship did indeed start before he put her on the payroll. That he paid her out of his pack money. That this was money he had taken from others for various political purposes and for his campaign against poverty. And therefore, he betrayed the donors.

But I must say that there is a much larger sense of betrayal here, that hangs over this, and that is having run, had he won the nomination of the party, all sorts of people are now asking the question we talked about Friday. And that is what if this had blown up at any time along the way, would somebody else have been nominated and if it had blown up very late, would he have cost his party if he had been the nominee of the party, would he have cost his party a chance to take this one?

COOPER: We're going to talk with the rest of our panel about that, shortly. We're also going to talk about the other what if, and this is of course the biggest what if, the question to come out of the Edwards affair, what if voters found out before Iowa, could it have thrown the nomination to Hillary Clinton? And one of her supporters are saying yes.

As always, we're blogging throughout the hour. Join the conversation, go to and join in.

Also tonight, new details about Hillary Clinton's role at the convention and what her die-hard followers say they're going to do if they don't get their way.

And new developments in the search for Caylee Anthony; her third birthday was Saturday. It has been nearly two months now since she was last seen. Her grand parents believe her mom knows who took her but she is protecting someone. That's what they believe.

Now Caylee's mom isn't talking and what she has said according to police is a pack of lies. The latest ahead on "360."


COOPER: That was Senator Hillary Clinton on Friday making her first solo campaign appearance outside Las Vegas where she urged her supporters to unite behind her former rival Barack Obama.

The fact is Democrats are still short on unity and harmony and the Convention is now just two weeks away. We learn more today about Senator Clinton's role at the convention and some of her supporters are suggesting that if John Edwards hadn't run, Hillary Clinton would have won.

CNN's Candy Crowley is on the trail.


CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: As the nominee in waiting beaches it in Hawaii, his convention reps made it official, Hillary Clinton gets a primo speaking spot Tuesday night and in the run-up, she toes the party line on his behalf.

SEN. HILLARY CLINTON, (D) NEW YORK: We are one party. We share one vision.

CROWLEY: But the ghosts of primary past threatens the unity theme with "might have beens."

EDWARDS: I did not want the public to know what I had done, very simple.

CROWLEY: In the wake of John Edwards' admission to ABC news that he cheated on his wife, one of Hillary Clinton's advisers is musing that if that had been known early, Clinton would have won the Iowa caucuses, perhaps changing the course of history.

"Our voters and Edwards' voters were the same people..." said Communications Director, Howard Wolfson, "maybe two-thirds of them would have been for us and we would have barely beaten Obama."

KEATING HOLLAND, CNN POLLING DIRECTOR: The exit polls don't support that. Edwards' voters, a plurality of them, said that Obama, not Hillary Clinton, was their second choice.

CROWLEY: Beyond the facts, there is the politics. It is another in a series of signals that not everybody is over it. Really unhelpful two weeks before a Convention designed to show that everybody is over it.

PAUL BEGALA, DEMOCRATIC STRATEGIST: When you throw this thing up there, saying well, but for this, my gal would have won, it reopens old wounds.

CROWLEY: The worst is yet to come. A lengthy piece in "Atlantic Monthly" looks at the inner workings of the Clinton campaign with documents and emails.

According to the article, Clinton's top strategist Mark Penn suggested that the campaign emphasized Obama's "lack of American roots." "Let's explicitly," he wrote "own American in our programs, the speeches and the values. He doesn't."

"I cannot imagine," Penn wrote, "America electing a president during a time of war, who is not at his center, fundamentally American in his thinking and in his values."

Really, really unhelpful in the pursuit of unity, though there is absolutely no sign Clinton ever considered the tactic. CNN was unable to immediately reach Mark Penn for comment.

In the same category, a group of the truly faithful, Hillary or bust voters, who placed an ad in an influential Capitol Hill paper promising revolt if the nomination process is quote, "a coronation."

It doesn't take many delegates to cause a ruckus in a convention, designed to be news-free, but it probably won't be anything a good speech can't cure.

BEGALA: If Barack does his job in his speech, nothing else will matter. And he is never disappointed in a major speech.

CROWLEY: And where it matters at the candidate level, they're saying and doing the right things. He put both Clintons in a primetime speaking slot. They say they'll do whatever he asks. Conventions have been declared successes on a lot less.

Candy Crowley, CNN, Washington.


COOPER: Of course, Candy mentioned, Hillary supporters feel strongly the up-coming Convention would have been a lot different if the Edwards affair had come out at the start of the campaign. Do the facts back it up? We'll "Dig Deeper" with our panel.

And with tanks in the streets and soldiers locked in combat, the United Nations has called for a cease fire. Russia flatly turned down the idea. We have a live report from the Georgian capital on why Russia is once again flexing its muscle.

And Caylee Anthony, new details in the search for the little girl and why her grandparents are holding out hope and say they are expecting good news soon.



UNIDENTIFIED MALE: We got a little tail wind. We'll be fine.


COOPER: One of the webisodes Rielle Hunter produced for the Edwards' campaign. Her liaison with then candidate Edwards, still leaving a lot of political questions unanswered, including one of those tantalizing what ifs. What if this had come out sooner? Like say before the Iowa caucuses?

Back with us now, "Digging Deeper" CNN senior political analyst, David Gergen, Steve Kornacki of the "New York Observer" and Jennifer Donahue of St. Anselm College.

Steve, so according to exit polling, Obama was getting about 43 percent of Edwards' voters. Howard Wolfson says Hillary Clinton would have won; if those folks had known about this, they would have gone to her. Do you buy any of that?

STEVE KORNACKI, NEW YORK OBSERVER COLUMNIST: Not in the least. And I hate to take a cheap shot here. But I mean, if this really is the kind of strategic thinking that was going on behind the scenes with the Hillary campaign, I think we have a real explanation for why they lost.

On no level does this make sense. Not only do the exit polls in Iowa say, what the entrance polls technically say that, most of the second choices for John Edwards would have gone to Barack Obama. The basic profile of Iowa is consistent with the states that Barack Obama did well in, states like Vermont, states like Wisconsin next door, states like Oregon and the Pacific Coast.

The Democratic electorate in Iowa, there's a lot of working class element to it, but we saw a distinction between the working class voters in states like Iowa and Wisconsin who are more progressive on social issues and more progressively-minded than they are in states like Ohio and Pennsylvania.

When Howard Wolfson starts talking about the working class voters flocking to Hillary's as the second choice, he's thinking where in Ohio and Pennsylvania. Yes, he's not talking about Iowa which is a totally a different state.

COOPER: And Jennifer, you think it would have worked against Hillary Clinton?

JENNIFER DONAHUE, POLITICAL DIRECTOR, N.H. INSTITUTE OF POLITICS: Well, I think Wolfson suggested that campaigns had information about this and they with held it for fear that they would get burned. Well, no one would have been more burned than Hillary Clinton whose own bags in history includes her husband's impeachment process, perjury charges and the fact that his last two years as president were bogged down as well as the entire legislative process by his infidelity.

So you can't have it both ways. You can't say that if this had come up, it wouldn't have tarnished our candidate with similar baggage and then also say that gee, we would have gotten the votes. It certainly would have hurt Hillary Clinton if this had come out by association.

And I would even argue that Bill Clinton and Clinton fatigue is what actually arrested her campaign throughout. And even back to Gore that it did to him. This is not news. This is just not fun.

COOPER: David, let's move on to what's happening now, what's happening in the next couple of weeks in terms of Clinton supporters. They plan on holding several rallies. They're trying to get Clinton's name nominated on the floor. How much of a distraction is this all going to be at the convention?

GERGEN: Well, other than the question of his vice-presidential candidate, it's about the only story the press has to deal with over the next two weeks. So I think, it's interesting how the press is coming back to the Hillary Clinton story.

As you know, I continue to believe that Hillary Clinton ought to be on the short list and be very seriously considered for the vice- presidential spot.

COOPER: Do you think she still is on the short list?

GERGEN: Personally, I'm in Chicago and my impression on the Obama campaign is that she is not. And I think they're scrambling to make sure that she is honored at the Convention. I do think Chelsea is likely to introduce her now and there will be a magic moment and that will be a chance to have quote, "a catharsis" that she thinks is necessary at the convention. It will be a big, big rally for her at that moment, and then her husband will have a chance to speak. So they're going to get plenty of major, major airtime.

But the reports from the field are, Anderson, and I run into this all the time now, there are an awful lot of people out there, who are Hillary supporters, especially older women who are not yet reconciled to the Obama candidacy, who are resisting it in a variety of ways. And I think they still have a job to do on both sides, the Clinton side as well as the Obama side, to bring this together and the convention is going to be critical.

COOPER: Steve, one poll showed 1 in 5 Clinton supporters say they're not going to vote for Obama at this point. She hasn't really done anything to kind of dampen down this. I mean she was talking about the need for catharsis, something which Obama says they don't think he doesn't think they need it.

KORNACKI: There is a little bit of irony here historically because in 1992, the Clinton's were in sort of the same position Barack Obama is now. They came to the Democratic Convention the winners and there was some dissent in the party from Paul Song and Jerry Brown the two main competitors go against Clinton in the primaries.

Both of them held on to their delegates all the way up to the convention and the Clintons took a very hard line in 1992. They said you need to endorse us first, then you need to release your delegates so there will be no roll call vote we'll have the unanimity on the conventional floor, then you'll get a primetime speaking spot.

Now Paul Song disagreed to do that. Jerry Brown who was like the student radical of the race said there's no way I'm going to do that. So they nominated Brown. They had a roll call. Something interesting though happened in the roll call that can happen this year as well, if there is a roll call, which they're probably will be. Even and Song as this case you know he told his delegates go ahead and vote for Clinton 209 will still voter for Song.

Hillary Clinton comes in this convention with 1,700 delegates. She's not going to have to tell them go ahead and nominate me, go ahead and vote for me. They're probably going to do it any way because the only alternative at a convention like this for Obama's people is to try to do it by acclimation.

If you try to do the nomination by acclimation, all those in- favor say aye, all oppose say nay, you're going to have 1,700 very angry Hillary Clinton supporters, and this is going to make a very devastating television clip.

So they're also almost obligated to go forward to the traditional roll call. If you go forward with the traditional roll call, you're going to lose 1,000 Hillary votes automatically, just no matter what she says.

COOPER: And in terms of waiting -- hanging on every word, there are going to be thousands of reporters there, Jennifer, hanging on every word that Bill Clinton says in his speech trying to figure out how exactly he is going to -- or what he's going to say about Barack Obama.

DONAHUE: Yes. And in fact, it's amazing to me that Obama is the inevitable nominee. And yet most of our discussion, not just here but in the press right now, is about the Clintons and Edwards. I mean this is a fundamental problem Obama has to address.

If he's going to allow people who are not the nominee to tell him what to do, to call the shots, if he's going to allow McCain to define him in negative ads and not hit back in real-time, which right now is instant time on the Internet, he's going to be defined and he's going to be badly hurt by it.

It's his convention, it's his party and he's the nominee, so he really should be calling these shots. I would even add quickly that I think the Wolfson's timing and Bob Kerrey today saying, that we don't know Obama, these could be intentional ways to get Hillary Clinton considered as VP.

COOPER: David, ten seconds.

GERGEN: Just very briefly. I think he is controlling the convention, he's being gracious and I'll bet dollars to doughnuts that both Hillary Clinton and Bill Clinton will come out as unifiers out of this convention. I do not think their speeches will be divisive. I do think they're going to be very supportive.

COOPER: Jennifer Donahue, David Gergen, Steve Kornacki, thanks for being on, I appreciate it.

Coming up, "Breaking News" crisis in Georgia as Russian forces continue their attacks. John McCain and Barack Obama respond. That story in a moment.

First though, Erica Hill joins us with a "360 Bulletin" -- Erica.

HILL: Anderson, Pakistan's president is facing growing political pressure to quit. Today, one of Pakistan's four provincial assemblies passed a resolution calling for Pervez Musharraf to step down. If he declines and also does not schedule a vote of confidence, the assembly will urge parliament to pursue impeachment. Musharraf's political opponents won the elections in February. He has made it clear though, he has no plans to resign.

New York's so-called "preppy killer" heading back to prison. Robert Chambers has already serve 15 years for killing a he woman in Central Park, he is now facing nearly 20 additional years for selling drugs. He pleaded guilty today.

And one of the largest and most photographed rock formations in Utah's Arches National Park, no longer looks like this. That wall arch collapsed due to gravity and erosion. Last time there was a collapse like that Anderson, was 17 years ago.


All right Erica, here's tonight's "Beat 360" photo. President Bush, First Lady Laura Bush and their daughter Barbara attend a swimming competition in the summer Olympic Games in Beijing. Here's the caption from our staff winner Kay. "Sure, France, you'll smash us in the relay. Whatever." Wow.

HILL: Fantastic.

COOPER: What, that?

HILL: Yes, well, did you see the competition, last night the relay? Yes, and so I think the caption works.

COOPER: All right. Think you can do better? Go to our web site and click on the "Beat 360" links send us your entry and we'll announce the winner at the end of the program. And you get a t- shirt, for award.

Just ahead, Russian tanks roared deep into Georgia today and air strikes created terror below. Take a look, there's a picture of Georgia's president running for cover. The warning turned out to be a false alarm but the crisis in Georgia is very real. We'll have the latest on the breaking story ahead.

Plus, new details in the search for little Caylee Anthony, including new tests that are being conducted on her mother's car. Why her grandparents are convinced the little girl is still alive.


GEORGE ANTHONY, GRANDFATHER OF CAYLEE ANTHONY: I wish this person or persons would call up and say CNN, I have this little girl. I believe she's the little girl from Orlando, Florida.



COOPER: More now on the breaking news out of Georgia where Russian tanks and troops widened their assaults for a fourth day. Tonight, the international community is scrambling to respond. The crisis erupted on Thursday when Georgia, which is a U.S. ally and of course once part of the Soviet Union, cracked down on separatist fighters in South Ossetia, one of its breakaway provinces.

Russia supports the separatists and responded by attacking Georgia the next day. Now, since then the fighting has intensified moving deeper inside Georgia.

CNN's Matthew Chance has the latest.


MATTHEW CHANCE, CNN CORRESPONDENT: Georgia's tiny army is beating a rapid retreat. Routed by the Russians in South Ossetia, their tanks and battle weary troops are now falling back to the outskirts of the country's capital. The strategic town of Gori has been evacuated. But Georgia's president says Tbilisi itself is not at risk.

"If Tbilisi comes under threat, I will inform the residents 12 hours in advance," he told national television. "At this stage, the enemy does not have the resources needed to occupy Tbilisi," he said. There have also been Russian advances in key western towns near Georgia's other breakaway flash points, Abkhazia (ph). Russian military action outside the main conflict zones is provoking alarm.

Georgia's president at least is clearly on edge. Visiting heavily bombed Gori earlier in the day, there was a security alert. Bodyguards pushed him to the ground, piling flak jackets on top of him. They apparently feared an air strike, but no jets were seen or heard.

Georgian troops have been in action in South Ossetia. Despite declaring a cease fire, we witnessed their guns firing into the breakaway province.

North of its main town, Tskhinvali, Russian troops and South Ossetian rebels came under attack on the main road to the Russian border. They were quick to return fire.

This is where the fighting began last Thursday when Georgian forces moved against separatists inside Ossetia. Russia accuses Georgia of ethnic cleansing.

VLADIMIR PUTIN, RUSSIAN PRIME MINISTER (through translator): Saddam Hussein was hanged for having exterminated several Shiite villages. But the current Georgian rulers, who razed to the ground ten Ossetian villages in one go, whose tanks rolled over children and old people, who burned civilians alive, are being given protection.

CHANCE: And Russia's forces are on the offensive. As Moscow flexes its military muscles, Georgia is in no real position to resist.


COOPER: Matthew Chance joins us live now from Tbilisi. Matthew, there are a lot of conflicting reports about Russian troops being near Tbilisi. Do we know where the Russian troops are in terms of the capital?

CHANCE: Well, there is a lot of confusion out there. They're not on the outskirts of the capital. There are thousands of Georgian troops that have dug in, in defensive positions outside Tbilisi, fearing of course some kind of Russian push on the Georgian capital.

I can tell you that overnight, and it's dawn now, overnight that Russian push has not happened. They've stayed in the positions they were last in, kind of 12, 24 hours ago; basically in the main conflict area of south Ossetia elsewhere in the country as well. They haven't made a concerted push into Georgia proper.

But there's still a great deal of insecurity about what Russia might do; what the intention of Moscow is. Is it to establish control over those breakaway territories on behalf of the rebels it supports or does it intend to move into Georgia proper perhaps to overthrow the government of Mikhail Saakashvili? We just don't know at this stage, Anderson.

COOPER: All right. Matthew Chance, stay safe. Thanks, Matthew.

Up next, how will the next president of the United States handle Russia flexing its military muscle? We'll hear from both candidates and you can decide for yourself who has the right solution.

But first, she's been missing for two months yet Caylee Anthony's grandparents are convinced she's still alive. Investigators are far less certain. We'll get a live report from Orlando where this is all unfolding.

And Barack Obama uses his blackberry like no other candidate in history; brought in unprecedented campaign dollars using the web. It shouldn't surprise you he's using technology to announce his running mate.

We'll tell you how when "360" continues.


COOPER: Caylee Anthony turned 3 on Saturday. There was a cake for her. There were also gifts sent from people all over the country. But, of course, there was no Caylee. She's not been seen for nearly two months.

Tonight, there are new developments in the search for her. The family telling "360" why they think she is alive.

Tonight, an appeals court denied to lower the bond for Caylee's mother, Casey Anthony is being held on child neglect charges and making false statements after saying her daughter vanished with her babysitter. She also refused jail visits this weekend from her parents as well as from brother; she's not talking.

But Caylee's grandparents are talking to "360's" Randi Kaye. Here's tonight's "Crime and Punishment" report.


RANDI KAYE, CNN CORRESPONDENT: Have you seen me? Three-year-old Caylee Anthony's grandparents hope so. That's why they spent the day towing this billboard around Orlando.

George and Cindy Anthony believe Caylee is alive and that the billboard may spark the phone call they've been praying for.

GEORGE ANTHONY, CAYLEE ANTHONY'S GRANDFATHER: The person or persons that have my granddaughter, I'm hoping something will click in their brain or in their heart that's going to save my daughter. I can't believe that we've kept this girl away from her family. I'm hoping that somebody is just going to realize she belongs with us, not with them.

KAYE: Her grandparents believe without doubt Caylee's mom, Casey Anthony knows who took her; just not where she is.

This is video of Caylee from June 15th; Father's Day. Her grandfather says the last time he saw her was the following day when Caylee left the house with her mom. But Casey did not report the little girl missing until a month later.

Now Casey is in jail charged with child neglect and obstructing a criminal investigation. You see, Casey lied to investigators and won't tell her parents much since all jailhouse visits are recorded. Her parents say she's only trying to protect Caylee.

What do you say to the people who say your daughter has lied, they think that she was up to no good and that she might have harmed your granddaughter?

CINDY ANTHONY, CAYLEE'S GRANDMOTHER: Well, those people don't know my daughter. Anybody that knows Casey knows that she's a loving mother and she would do anything including sitting in a jail cell to protect her daughter.

KAYE: Who might she be protecting Caylee from? Someone who may have threatened to harm Caylee because of something her mom was mixed up in?

Some have suggested that Casey may owe somebody money.

G. ANTHONY: It's a possibility. I don't know. It could be -- maybe she saw something that somebody did and my granddaughter happened to be there. I don't know.

KAYE: Casey's (sic) grandparents are certain she's alive. But investigators aren't so convinced. We've learned investigators they're testing the air found in the car Casey was driving when Caylee disappeared.

It's happening 600 miles from here at the body farm at the University of Tennessee which specializes in body decomposition. They're testing the air found in the trunk of the car, looking for chemical compounds only cadavers.

The Anthonys believe they're on the verge of finding Caylee alive and well. George says he's so convinced she's okay he thought he saw her just today in their neighborhood.

G. ANTHONY: For a second, I'm like, but it wasn't her. But it was just so close. Her little walk, seeing her walk from behind. Your emotions are here; your heart starts to beat. It's tough.


KAYE: It could, of course, just be wishful thinking, but George Anthony says they are so close. He really believes they're on to something, Anderson. He believes that this week he says we'll get what he's calling some very good news.

COOPER: We're going to have more with Randi in a moment

Caylee's mother is in jail, of course, tonight; not talking even though she may have information that could lead investigators to Caylee.

Why the silence? That's the question so many people are asking. Why the alleged web of lies?

We'll get some answers ahead and see why the family has people under surveillance. That's next.

And later, a troubling twist in the story of the phony Rockefeller; the man who allegedly kidnapped his own daughter is now connected to a disappearance out west.

Details when "360" continues.



G. ANTHONY: The person or persons that have my granddaughter right now, I'm hoping something will click in their brain or in their heart that's going to save my daughter. I can't believe that we've held her; we've kept this girl away from her family.

I'm hoping that somebody is just going to realize that she belongs with us, not with them. No matter what this reason is, she needs to be with us.


COOPER: Holding on to hope there, the grandfather of Caylee Anthony telling "360's" Randi Kaye he's certain the 3-year-old was kidnapped nearly two months after Caylee disappeared. The family is hopeful Caylee is alive and that Caylee's mom maybe lying to police to protect her child.

The grandparents also say they expect good news possibly as early as this week. Authorities, however, are not so optimistic and are clearly frustrated by the lies they say Caylee's mother has repeatedly told them.

With us for more details, in "Crime and Punishment" "360's" Randi Kaye. Randi, why haven't Caylee's grand parents been able to get the information they need from their daughter? She's in jail; she could have given it to police and gotten Caylee home.

KAYE: Yes, she might have some very critical information, Anderson. They believe she does have that information. What they really need is some private time with her. And at jail right now, they're not going to get it.

All of the visits that they get with her are recorded and they don't want this information on tape. Apparently whatever Casey knows, she doesn't want that information recorded either.

She's being held on $500,000 bond. Once again, the judge today, just today refused to reduce that bond. Again, her parents say, Caylee's grandparents want Casey out so she can give them this information; hopefully they can go on and find Caylee.

COOPER: It's a strange relationship, though because early on in those recordings, Casey seemed mad at her parents for what hey said to television cameras. Then her parents became more supportive publicly of their daughter.

Now we learned this weekend the daughter didn't want to see her parents. When was the last time that the grandparents actually saw Casey?

KAYE: That would have been last week. She gets about three visits a week apparently. And on Friday night, her brother was supposed to see her. And then he got a note saying that she wasn't taking any visitors.

Her mother was supposed to see her last night on Sunday night. Got a phone call saying Casey wasn't taken any visitors so they haven't been able to see her.

They chalk it up to her frustration, not being able to talk to them openly and give them the information that they feel that they really need to get Caylee back. Her mother, Cindy says that she has been able to pass along some clues creatively to them but certainly not enough to find little Caylee.

Right now they're really worried about her safety because they say that they have an idea who has her. George Anthony, the grandfather told me just tonight that they're watching these people; that these people who they believe are behind this may not know they're being watched. But he says they are watching them.

His main concern though is that maybe they've changed Caylee's appearance, that they may have cut her hair or started dressing her like a boy, making her look like a boy so she can't be recognized on the street -- Anderson.

COOPER: And authorities aren't saying anything publicly about where the investigation is at this point?

KAYE: No, all we're told is that there are 1,200 tips right now that continue to roll in. Nothing new on the investigation and there may not be until, as Casey says, she can get out of jail and give them the information that they need.

COOPER: Well, I guess we'll see. Randi, thank you. Randi Kaye, reporting tonight.

We're following a number of other stories. Erica Hill joins us with a "360 News and Business Bulletin" -- Erica.

HILL: Barack Obama has run a pretty unconventional campaign from the start so why stop now? His campaign is now offering supporters a chance to be the first to know his running mate choice through e-mail and text messaging. It's lively anticipated Senator Obama will make that decision once the Olympics ends perhaps shortly before the convention. So keep that Blackberry close. A "360" follow. Turns out he's no Rockefeller; shocking. Word today from authorities in Los Angeles County about Clark Rockefeller's true identity; they say he is in fact a German man named Christian Gerhartsreiter. Whatever his nationality, we do know this; he's likely in a heap of trouble because in addition to being held for allegedly kidnapping his daughter, he is already considered to be a person of interest in the disappearance of a California couple in 1985.

The price of gasoline fell for the 25th day in a row, down 7 percent from record highs in July. Gas prices though still remain more than $1 higher than they were last august. Oil prices falling as well. Also major stock indices, of course, heading the other way which is what you want to hear, finishing in positive territory -- Anderson.

COOPER: Up next, the conflict in Georgia may prove to be an issue here at home for voters. Which candidate do you think has a better approach to the international crisis? You can be the judge. We'll play both their comments and we'll check them against the facts, "Keeping Them Honest.

Also, it's a summer tradition like no other, keeping cool in the summer heat on a slip and slide sauce down with ketchup; mmm, ketchup. It's our "Shot of the Day." Stick around.


COOPER: We're following the breaking news out of Georgia where fighting has raged for a fourth day. As we reported earlier, Russia has widened its attacks on Georgia, once part of the former Soviet Union.

For the U.S. presidential candidates, the escalating crisis is a real-time foreign policy test. John McCain and Barack Obama both spoke publicly today about the fighting. And right now, you're going to hear what they said in their own words and we'll check their words against the facts as part of our commitment to bringing you every night the raw information that you can use to make up your own mind who's right on the issues.

Here's what Senators McCain and Obama said staring with McCain.


SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRESIDENTIAL NOMINEE: We must remind Russia's leaders that the benefits they enjoy from being part of the civilized world require their respect for the values, stability and peace of the world.

World history is often made in remote obscure countries. It's being made in Georgia today. It's the responsibility of the leading nations of the world to ensure that history continues to be a record of humanities progress towards respecting the values and security of free people. SEN. BARACK OBAMA, (D) PRESUMPTIVE PRESIDENTIAL NOMINEE: The United States, Europe and all other concerned countries must stand united in condemning this aggression and seeking a peaceful resolution to the crisis. We should continue to push for a United Nations Security Council resolution, calling for an immediate end to the violence.

This is a clear violation to the sovereignty and internationally recognized borders of Georgia. The U.N. must stand up for the sovereignty of its members and for peace in the world.


COOPER: That's what they said tonight about the breaking news. Now, for the fact check, here's CNN's Tom Foreman "Keeping Them Honest."


TOM FOREMAN, CNN CORRESPONDENT: Anderson, both candidates right now have to be thinking about that Hillary Clinton ad, if the phone rings at 3:00 in the morning with an international incident, who's going to answer? And accordingly, both of them seem to be trying very hard just to not make a mistake that might scare away voters.

They have each condemned Russia for hitting so hard and so deeply into Georgian territory. At the same time, neither candidate has suggested we should jump into the fight. All of that is in line with the State Department's efforts, urging mediation, negotiation and a quick end to the violence.

So, as former NATO ambassador, Robert Hunter, now with the RAND Corporation, told me today, the candidates have it about right. They're reminding Russia that there could be serious diplomatic and economic consequences if Russia keeps pressing the fight. But they're also remaining mindful of an important reality. And that is this right now.

Many foreign affairs analysts says the United States quite simply needs Russia right now to help keep Iran under control on nuclear weapons and involvement in Iraq. So give both of the candidates credit for diplomatically knowing when to speak up and when to shut up, too -- Anderson.


COOPER: Tom Foreman.

The "Shot" is next, condiments, not just for food apparently. See what goes the distance

Up next, more on the Edwards affair; the former presidential candidate admitting to cheating on his wife. His family and others are standing by his side. We'll get reaction from the "AC360" blog, next.


COOPER: All right, time now for the "Shot." Here's something you will not see in Beijing covered by NBC. Welcome to the 20th Annual Burger Festival in Seymour, Wisconsin.

HILL: Now this is a true sport.

COOPER: Apparently so, yes.

This is the third place contestant. Good job there. And now they're sweeping the ketchup around.

Here's the second place winner -- I'm doing it play by play -- getting some good distance for the ketchup, this has to be gross, it's got to smell bad, too.

Finally the crowd pleaser, the first place champion going all the way on the slip and slide. Seymour, Wisconsin; part of its meat patty past; it is home of first hamburger flipped back in the 1880s, apparently.

HILL: Hence the ketchup slip and slide.

COOPER: I guess so.

HILL: I don't know.

COOPER: I don't know, yes.

HILL: I'm not doing it.

COOPER: Yes, I'm not doing it either. You can see all -- kids, don't try this at home.

You can see all the most recent shots on our web site at You can see all the segments for the program, the blog. You can check out the "Beat 360" because the kids stay up this late.

HILL: They do. They do. Wish you have recipes or something. Let's mix it up.

COOPER: Recipes?

HILL: You have any recipes you want to share?

COOPER: Recipes? Why would we do recipes?

HILL: We have everything else on the "360" blog. Why not?

COOPER: Oh, in the blog. OK, yes. OK, sure. I guess. Yes, why not? I don't have any recipes.

Time for our "Beat 360" winners, our daily challenge to you to come up with a caption better than the one our staff can come up with. Tonight's picture, President Bush, First Lady Laura Bush and their daughter, Barbara, at the swimming competition in the games, Olympics, the games, Olympics.

Staff winner tonight, Kay. Her caption, "Sure, France, you'll smash us in the lay, whatever."

Our viewer winner Dan from Toronto, his caption: "And if I do the same thing with my left hand, I can use them as binoculars."

COOPER: That's pretty good.

HILL: I think it's clever.

COOPER: The crew was laughing.

HILL: Dan, Anderson liked yours way better than poor Kay.

COOPER: Dan, your "Beat 360" T-shirt is on the way. Kay did a great job, as she always does.

You can check out all the entries and play along, going to I'm trying to just skip words here.

On the radar tonight, John Edwards extra marital affair; his confession upsetting some, others say it's not story all.

Christine writes on the "360" blog, "I do not care who sleeps with whom. It is not my concern. An affair is not the end of the world and does not mean that a man or woman is a bad person or can never be trusted in any other aspect of their lives."

Michelle sees it differently. She says: "I can't help but feel disappointed and hurt. John Edwards was the first politician I ever believed in. He inspired me and gave me hope that he could make a real difference in America."

Laura writes, "What else would you expect from a guy that purchased a $400 haircut? It's all about him."

Thanks for sharing your thoughts. To weigh in and read the other comments on the blog, go to

That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts now. I'll see you tomorrow night.