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ANDERSON COOPER 360 DEGREES

Washed Away - Severe Weather in the Midwest; Heartbreak and Heroics - Tornado Terror; Are the Presidential Candidates' Spouses Fair Game in Politics?; Al Qaeda's Secrets; Wall Street Tycoon -- Dead or Gone

Aired June 12, 2008 - 23:00   ET

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


CAMPBELL BROWN, CNN ANCHOR: Tonight, breaking news: rising rivers, growing misery out in the Midwest. And even if you're high and dry, you're going to be paying for it every time you feed your family. We're on the flood lines with the latest on inches of rain, feet of water and dollars, your dollars, at the supermarket.
Also tonight, remarkable stories of survival and loss after a tornado hits a Boy Scout camp. How these kids got through it will inspire you and what they are going through right now will break your heart.

Then, a little bit later on, she is taking hits, even being called Obama's "baby mama." So, dissing Michelle, what kind of strategy is that? Will it backfire? The Obamas already fighting back. We have got the "Raw Politics."

We begin tonight, though, with breaking news, extreme weather. At this hour, there are new tornado threats, as well as multiple flood warnings, the danger of storms and the rising waters adding to the fears of many people.

Let's get the very latest now.

Tracking it all for us is CNN severe weather expert Chad Myers.

Chad, what can you tell us?

CHAD MYERS, CNN METEOROLOGIST: Campbell, tornadoes and severe weather all the way from Minnesota now through Wisconsin, into Illinois, and all the way down to Kansas. A tornado was on the ground a little bit ago south of Wichita, Kansas, down near the Air Force base down there.

Otherwise -- that was Sedgwick County -- the whole area here from -- you don't want that -- there we go -- we want this one -- all the way from Green Bay through Milwaukee and down into Des Moines, Kansas City, this is the area where the weather is the most severe. And that little box that's going to pop up there near Rose Hill, that's your tornado warning south of Wichita. The weather is not moving into Wichita. It already moved through without a tornado for you.

Kansas City, you are just getting pounded, 5,000 lightning strikes in the past hour right over your city. And it continues right now all the way here back into Des Moines seeing more rain. Iowa City and all those areas that had so much flooding already into Iowa, again, still flooding and raining tonight, Southern Wisconsin at least right now, no tornado warnings.

One thing I want to switch to, flooding. Flooding is going to be very dangerous tonight. Water is up tonight like you haven't seen, like I have never seen. If you get to and are somewhere around the Iowa City area, you will be able to see, especially as this water goes down, the Iowa University campus, an absolute mess.

There are the pictures from Cedar Rapids, WWL. Let me tell you what happened. This morning, the water was at 21 feet. That's just a number. Right now, it is 29 feet. The water went up eight feet in one day. And it's going to 32 -- 32 feet. Just think of that number. That's 32 feet from some point at some bottom of the river.

But the old record flood set back in 1851 was only 20 feet. This flood is 12 feet higher than the oldest record flood that, right now, Campbell, is almost 160 years old. So, the flooding, to say it's epic is not even the word. This might be a 500- or a 1,000-year flood, whatever that means, if the oldest record is 150 years ago is going to be shattered by 12 feet.

BROWN: All right, Chad.

We want to go right now to Gary Tuchman, because he's there, where that flooding is happening that Chad was just talking about on the soggy ground. He's joining us live.

Gary, what's happening?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: We're here in Cedar Rapids. And the potential for danger here is vast. The rains are torrential. (INAUDIBLE) dry just a few hours ago. We parked our car in this street. Now it's a tributary of the Cedar River. And for this neighborhood and for this city, this has been a devastating day.

(BEGIN VIDEOTAPE)

TUCHMAN (voice-over): This is a catastrophic flood in progress; dazed people watching their neighborhood fill with water, not knowing what to do next.

(on camera): It's pretty startling, isn't it?

UNIDENTIFIED FEMALE: Yes, I -- I can't even think right now.

TUCHMAN (voice-over): When we first arrived in the southwestern part of Cedar Rapids, Iowa, water from the nearby Cedar River was just starting to rise.

(on camera): Here we go.

(voice-over): But it was only the beginning. Suddenly, we saw telephone poles floating down the streets. The powerful currents of the rapidly escalating waters started pushing huge dumpsters. The water started lapping up to homes.

(on camera): We have been on the street for just 15 minutes, and the rain is now coming down heavily. Before, when I walking here the water was up to my knees; now it's getting closer to my waist. Within a couple of hours, who knows how high it will go?

(voice-over): And that's a frightening feeling for the people who are helplessly watching a river come perilously close to their living rooms.

(on camera): How worried are you?

ROCHELLE CHARNOWSKI, RESIDENT OF CEDAR RAPIDS, IOWA: I think I'm past worried. I'm just sad. But this is where I grew up.

TUCHMAN (voice-over): We are with Rochelle Charnowski as the water starts coming into her home. It's the first house she ever bought.

CHARNOWSKI: I got off of work at about 12:00, and this has come up probably four feet in the last, what, hour-and-a-half. I don't even know what time it is right now.

TUCHMAN (on camera): When you look outside the window right now, you see wood floating around and refrigerators. And it looks like you're living on a canal in Venice. Is there anything you can do?

CHARNOWSKI: Just hope and pray that we might be able to salvage something out of it all.

TUCHMAN (voice-over): This man rescued his dogs out of his home that's already underwater.

(on camera): It's such a helpless feeling, isn't it?

UNIDENTIFIED MALE: Yes. Yes. You can't do nothing. I was going to ride it out, but you can't.

TUCHMAN (voice-over): Good Samaritans in monster trucks prowl the streets, looking for people who might need rescue. It looks like New Orleans after Katrina. The roadways are waterways. Homes are ruined. Lives are now changed. And it all happened in a matter of a few hours.

(END VIDEOTAPE)

BROWN: So, Gary, what happened to the home of that woman you were speaking with?

TUCHMAN: Rochelle's home is two blocks away from where I'm standing. Rochelle told me she stayed there another 15 minutes. The water started coming in. It was over a foot, she then...

BROWN: Yes, we lost him. Lots of bad weather there, you can see; having some technical issues because of the rain.

The floods, the tornadoes, the brutal weather all year long, you might be wondering, is it all connected and is the worst yet to come?

Well, with some answers on that, here's CNN's Susan Roesgen.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: There's structures there. I don't know if that's a house or whatever. It looks like it's going to be right in the path here very shortly.

SUSAN ROESGEN, CNN GULF COAST CORRESPONDENT (voice-over): Oklahoma, a tornado rips apart an industrial farm, incredibly, the workers inside survive.

Wisconsin...

UNIDENTIFIED MALE: There it goes.

ROESGEN: ... homes are cut in half, swallowed in floodwaters that swamp a town. In the West, wildfires; the South, record drought; while the East bakes in a deadly heat wave.

CODY VAN ZUIDEN, BOY SCOUT: He told us just to get under the tables.

ROESGEN: And now four Boy Scouts killed in the tragedy in Iowa.

From January to June, extreme weather has pounded the country with relentless force. So, what's causing it?

MYERS: We're talking about a big trough of low pressure in the West. That's made a very cold spring and early summer. And then up here across the parts of the Northeast, it's been a big ridge of high pressure that's been very warm. But, in the middle, kind of this stalled front is where the rain has been and where the tornadoes have been. You got hot, you got the rain, and you got cool and dry. Yes, they are all connected.

UNIDENTIFIED MALE: Oh, my goodness.

ROESGEN: In the last three years, there have been an average of more than 1,100 tornadoes annually.

But, so far this year, there have already been more than 1,500 reports of tornadoes or tornado damage.

UNIDENTIFIED FEMALE: I have never seen anything like this. I don't -- I don't know where to go.

ROESGEN: The heavy rain, the floods, the worst in years could have a lasting impact on America's farms.

(on camera): These are a couple of the soybeans that have died underwater here. And the worst of it is, even if the rain were to stop, even if all this water were to dry up, it's just about too late to try to plant the fields again.

(voice-over): And many Americans are wondering if global warming is a factor.

CNN severe weather expert Chad Myers doubts it.

MYERS: This has just been a very -- it's been a stormy year, and it's all going to change and it's all going to kind of get back to normal. But things do look like they're breaking right now. And this storm after storm day after day will come to an end quite soon.

ROESGEN: Not soon enough for those in harm's way.

Susan Roesgen, CNN, Madison, Wisconsin.

(END VIDEOTAPE)

BROWN: Our live blog is up and running tonight. To join the conversation, just go to cnn.com/360.

Up next: facing down a tornado.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Like a pounding sensation on your back. It wasn't like blowing around. It was just going straight on, not stopping.

(END VIDEO CLIP)

BROWN: The Boy Scouts who trained -- who are trained to save lives, and they did, even as other scouts lost theirs. We're going to have those stories from the storm.

Then later, making Michelle Obama an issue in the campaign against her husband. Is she fair game? Are spouses ever fair game? And do the tactics work? We have got the "Raw Politics."

Also, a CNN exclusive: tapes and documents from inside al Qaeda in Iraq, documenting its rise and, thankfully, its fall. Michael Ware has them. And we will check in with him shortly in Baghdad.

We have got that and more tonight on AC 360.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We are in the tornado. It just went over us. The tornado just went over us. We're in the tornado. We are in the tornado.

(END VIDEO CLIP)

BROWN: It is dramatic video taken by storm-chasers caught in the middle of the deadly tornado in Iowa. Tonight, they spoke to Larry King.

(BEGIN VIDEO CLIP, "LARRY KING LIVE") UNIDENTIFIED MALE: This is the worst. You can't get any closer than being in the tornado. It was not something we planned on. We had old radar data that we were using. The storm -- the tornado was completely wrapped in rain. So, it was almost impossible to see where the storm was, and we ended up turning and driving right into the tornado.

(END VIDEO CLIP)

BROWN: Also tonight, new details are emerging about the tornado that killed four Boy Scouts. The stories are heartbreaking and heroic. They are being told by survivors. And we want to share them with you.

CNN's Dan Simon reports.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): The tornado that tore apart this Boy Scout camp came so fast, it didn't seem real.

JOHN PORTER, BOY SCOUT: I just kept waiting for myself to wake up from a dream. I still couldn't believe that I was that I was -- that I had actually been there and gone through that.

SIMON: But John Porter, Jack Pape, and Phillip Brunetti did. They're among the survivors. But they were also rescuers, helping the injured and holding each other together.

PHILLIP BRUNETTI, BOY SCOUT: Some of our leadership skills were used in that tornado, because I think that's what saved a lot of people.

SIMON: They took cover, shelters one moment, rubble the next.

(on camera): Describe what the scene looks like.

JACK PAPE, BOY SCOUT: It was just chaos. I mean, there was rubble. There was guys laying around, a lot of guys -- a lot of blood loss. You could tell. And the whole pavement, the whole foundation was covered in like a light red, because blood was mixing with rainwater. It was just chaos. It was gruesome. We tried to find who was hurt the worst and help him.

SIMON: But some scouts were beyond help and were killed in the storm, Ben Petrzilka and Aaron Eilerts, each 14 years old. Josh Fennen and Sam Thomsen, they were just 13. Others were badly injured. One had a fractured skull.

PAPE: The kid, he kept trying to get back up. And he said: I'm not hurt. I'm fine. And I said: Yes, you are. You need to stay down. And I said, don't move, because I was afraid there might be nerve damage or something.

PORTER: I was talking to people that were hurt. There was one who had a broken leg who was in extreme pain. And we just had to keep asking him questions, like what was his name, what is his favorite color, what does he like to do, and it was really -- it was just really sad.

SIMON: But true to the motto, they were prepared -- emergency training just a day before the tornado struck.

LLOYD ROITSTEIN, PRESIDENT, MID-AMERICA COUNCIL OF THE BOY SCOUTS OF AMERICA: They rough it. And we teach the scouts when they're in the wilderness what to do, where to go in case there's a storm. But there was no -- there's no building that could stand the force of that tornado that hit.

PORTER: I'm just going to remember that, since I was one of the people that wasn't hurt, there's a reason for that. God put me here for a reason. And I'm going to try to do whatever I can to remember that.

(END VIDEOTAPE)

BROWN: And Dan Simon joins us from Little Sioux, Iowa.

Dan, I'm just amazed, listening to these kids. And they seem so brave and they were so young, facing such a horrible situation. These were real heroes, weren't they?

SIMON: No question about it.

And this was a leadership training camp, of course, cut short by a few days because of the storm. But they got to put to use some other practical skills, their first aid skills, things like that. And they really succeeded in doing so. No question, they saved countless lives.

And a lot of them say they want to go back to Boy Scout camp this summer. There's another camp coming up in a few weeks, still no word. Well, their parents really have to weigh in and decide whether or not they will let them do that.

But also tonight, their thoughts of course are with the victims and their families. There were some vigils tonight in Omaha -- no word yet on memorial services -- Campbell.

BROWN: All right, Dan Simon for us tonight -- Dan, thanks.

And you can read and hear more Boy Scout survivor stories on the 360 blog. Just go to cnn.com/360.

Straight ahead: a sign of the times, Barack Obama's new Web site dedicated to knocking down smears and false rumors from other Web sites. We have got the lowdown on that.

And then later, is attacking Michelle Obama any way to win an election against her husband? Meet the people who think it is, and see why that strategy could backfire.

Also, what the Supreme Court says about the Guantanamo detainees and their rights under the Constitution -- that's ahead on 360.

(COMMERCIAL BREAK)

BROWN: Much more tonight including a chilling Wall Street mystery that starts with the theft of nearly half-a-billion dollars and ends with a disappearance. Or was it a death?

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

ERICA HILL, CNN CORRESPONDENT: Campbell, while President Bush disagrees with this, he will respect the Supreme Court's 5-4 decision giving Guantanamo detainees the right to challenge their detention in federal court. The ruling is seen as a defeat for the president. There are 270 prisoners currently in Gitmo. Some have been held there for more than six years without charges.

Tough to see how this murky video will shed much light on the dispute between the U.S. and Pakistan over American air strikes that killed 11 Pakistani troops. But the Pentagon is hoping the footage shot from a drone may help to make its case that the air strikes were in response to provocation.

And turns out you're not the only one feeling the pinch of high gas prices. Exxon Mobil is also hurting. Yes, this is the same Exxon that posted a record $46 billion in profits last year, now, though, planning to sell off 2,000 gas stations, because, Campbell, they're just not profitable.

BROWN: Really?

HILL: Yes.

BROWN: OK. I will try to figure that one out.

HILL: I know. My head's still spinning.

BROWN: Erica, here is tonight's "Beat 360" photo: Italian Premier Silvio Berlusconi jokes with President Bush during a meeting in Rome today.

And here's the caption from Sean, our staff winner: "President Bush strong-arms our European allies during his tour of the continent."

(BELL RINGING)

HILL: Sean got the bell tonight.

BROWN: Wow.

HILL: Wow. New sound effects.

BROWN: Yes.

Think you can do better? Go to cnn.com/360 and send us your entry. And we will announce the winner at the end of the program.

Coming up next: Michelle Obama under attack, taking punches from the right, being called unpatriotic, and that's not all. Is it dirty politics, or is she fair game? The "Raw Politics" and how Senator Obama is fighting back against what he calls the smears -- next.

(COMMERCIAL BREAK)

BROWN: Politics isn't beanbag; that much you probably know. But how much is too much when it comes to the rough stuff, and how far is too far when spouses are involved? We're looking at that tonight, right after the latest from out on the trail.

John McCain today with a pair of town hall meetings, without Barack Obama alongside him. You will remember, Senator McCain is pushing for joint appearances this summer. His campaign today also pushing for a second Obama running mate vetter to step down a day after Jim Johnson did.

The Obama forces, meantime, unveiled a new Web site, fightthesmears.com, to answer rumors and attacks on the senator and his wife before they take hold. And, today, FOX News backed away from one such shot. Take a look: a banner describing Michelle Obama as the senator's "baby mama," not his wife.

Well, FOX executive Bill Shine telling Politico.com that the producers -- or, rather, the program's producer exercised poor judgment in using it, which brings us back to the question of targeting a candidate's wife.

The "Raw Politics" now from CNN's David Mattingly.

(BEGIN VIDEOTAPE)

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): The Obama campaign is bracing for a fight. But the candidate isn't the only one on the defensive. Critics look at Michelle Obama and see a real opportunity.

RICK WILSON, REPUBLICAN MEDIA CONSULTANT: I think there's an edge to some of her remarks in the course of this year that speaks to the larger point of the mind-set that she and her husband share.

MICHELLE OBAMA, BARACK OBAMA'S WIFE: For the first time in my adult lifetime, I'm really proud of my country.

MATTINGLY: That comment four months ago caught fire, rocketing around the conservative blogosphere. The campaign was quick to say it reflected her excitement about grassroots support, but it still plays every day on the Web stirring the pot over issues of patriotism.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm Bob Hope and I'm proud to be an American.

(END VIDEO CLIP)

MATTINGLY: That video from the Tennessee Republican Party was criticized by the state's Republican senators, but it touched a theme that also popped up at a John McCain campaign event.

CINDY MCCAIN, JOHN MCCAIN'S WIFE: I'm proud of my country. I don't know about you, if you heard those words earlier. I'm very proud of my country.

MATTINGLY: Strategists say there's a reason of the wife of the Democrat who would be president is fair game.

WILSON: This is the game where the lowest common denominator unfortunately ends up being that everybody gets thrown into the shark pool.

MATTINGLY: The issue of Michelle Obama as a potential liability hit newsstands simultaneously on both coasts. Newspapers pointed to relentless online rumor mills, conservative blogs, and articles like this one from "The National Review" critical of Michelle Obama.

Columnist Maureen Dowd called it a preview of future attacks that suggests she does not share American values, mining a subtext of race. It's something the Obamas seemed to be bracing for back in May with this appearance on "Good Morning America."

(BEGIN VIDEO CLIP, FROM ABC'S GOOD MORNING AMERICA )

MICHELLE OBAMA, BARACK OBAMA'S WIFE: We're trusting that the American voters are ready to talk about the issues and not talking about the things that have nothing to do with making people's lives better.

SEN. BARACK OBAMA (D) PRESUMPTIVE PRESIDENTIAL NOMINEE: But I also think these folks should lay off my wife.

(END VIDEO CLIP)

MATTINGLY (on camera): "Lay off my wife," it was a line drawn on so many levels for this campaign and left no doubt how the Obamas were going to react. And if conventional wisdom holds true into November, opponents of the presumptive Democratic nominee will listen, because attacking a candidate's wife rarely pays off.

STEPHEN MARKS, REPUBLICAN POLITICAL CONSULTANT: Mr. Obama is going to come to his wife's defense. It's going to humanize both of them.

MATTINGLY (voice-over): Former political hit man Stephen Marks says you only have to look back to 1992, when Bill Clinton stood up to critics of his wife. And we all know how that race turned out.

David Mattingly, CNN, New York.

(END VIDEOTAPE) BROWN: Digging deeper tonight: CNN's John King, CNN political analyst Roland Martin, and "TIME" magazine senior political writer Karen Tumulty.

Welcome to everybody.

Roland, let me start with you.

Republicans have made it clear pretty much that Michelle is fair game here. Are you surprised by the intensity of the attacks?

ROLAND MARTIN, CNN CONTRIBUTOR: I'm not surprised by it, but I think, also, we can't blame Republicans for everything.

It's these idiot Democrats that started some of this stuff.

BROWN: What do you mean?

MARTIN: Well, you had Larry Johnson, a Clinton supporter, who put this whole rumor out of this so-called tape where she used "whitey." It doesn't even exist.

Then you had Bob Beckel, a Democratic strategist, who goes on FOX, and he floats the rumor as well. Democrats are shooting themselves in the foot. They can't put this one on conservatives. They started that particular One.

But there's no doubt they're going to go after Michelle Obama, because they need to go after her husband as well.

BROWN: John, the campaign has nicknamed Michelle "the closer" for her ability to win over voters.

But, if these attacks continue against her, I mean, are they going to need to change her role in some way?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Campbell, we need in our business, especially in what we consider to be mainstream, well-sourced media to draw a very clear line.

There's a difference between rumor, innuendo, and smears...

MARTIN: That's right.

KING: ... by saying there's a tape. When someone says there is such a tape, we should say, where is it? Prove it.

And if we can't prove it, I'm not even sure why we're talking about it on television. In the old days, we wouldn't do that. In the age of the Internet, we have decided, well, it's out there; I guess we can talk about that.

I don't think that's a wise approach. But that's a very different thing that her saying, "For the first time in my life, I'm proud of my country." That is fair game. She wants to be First Lady of the United States. Her husband acknowledges that she has significant influence over him. And, yes, Democrats are going to have to face attacks in which the Republicans say that the Obamas are left of center, both on policy and culturally in America.

If she says something in the public arena, that is fair game. What she says is very different from an unsubstantiated rumor.

BROWN: All right, Karen, I'm coming to you after a quick break.

We have got a lot more with our panel coming up. I want to get their take on the whole "baby mama" controversy.

Also ahead: a 360 exclusive, documents and videos from inside al Qaeda in Iraq. Michael Ware reports live from Baghdad.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, WIFE OF BARACK OBAMA: For the first time in my adult lifetime, I'm really proud of my country. And not just because Barack has done well, but because I think people are hungry for change.

(END VIDEO CLIP)

BROWN: Michelle Obama earlier this year. Her words, whatever they say to you, for better or worse, now part of the case against Barack Obama.

"Digging Deeper" tonight, we're joined again by John King, Roland Martin and Karen Tumulty, senior political writer for our corporate cousins, "TIME" magazine.

And Karen, Michelle did -- Michelle Obama did respond to the criticism regarding her "really proud" comment. Let's listen to what she had to say.

(BEGIN VIDEO CLIP)

M. OBAMA: And I think that every candidate, whether you agree with their policies or not, I think their families and their spouses care deeply about this country. I know I do. I wouldn't put myself and my family in this position if I didn't have a level of pride.

(END VIDEO CLIP)

BROWN: The campaign is also now providing Michelle with her own response team, and we just heard how her husband was defending her. How well have they handled the criticism aimed at her so far, do you think?

KAREN TUMULTY, SENIOR POLITICAL WRITER, "TIME" MAGAZINE: You know, Michelle Obama is really a relative newcomer to the national scene. I thought it was interesting this week that she got some defense from -- and some support from an unexpected corner, Laura Bush.

She said, "I know exactly what she meant. She meant to say that she's prouder of her country because of what her husband has achieved."

But you know, as Laura Bush said, you know, this is something that we all learn, which is that every single thing that you say is under a great deal of scrutiny.

And I've got to tell you, Campbell, I have been around Michelle Obama since then, and she has become much more cautious in what she says. And much more conservative, I think, in the way she presents herself.

And again, I think this is a learning curve that we're seeing for somebody who just hasn't been in the national spotlight all that long.

BROWN: Roland, as we mentioned earlier tonight, FOX News had a segment about Michelle Obama with a banner on it, a Chiron saying that she is Barack Obama's "baby mama." They later apologized for it.

According to an article in "The New York Times," "baby mama" is defined, and this is according to the dictionary, as chiefly African- American usage. It refers to the mother of a man's child who is not his wife, nor in most cases his current or exclusive partner.

What do you think happened here?

ROLAND MARTIN, CNN CONTRIBUTOR: I think they probably had somebody who was an idiot who was writing that. This follows the whole notion of this (INAUDIBLE). I mean, what you -- you don't have standards and practices going on over there just to get through the actual system. That is actually ridiculous.

You need to have more proper respect for somebody who's running for president of the United States. Folks want to be cute and flippant, but in this business you can't do that.

I doubt very seriously you're going to see them throw something up, talking -- alluding to Cindy McCain's issue of drugs or even that kind of stuff. You're not going to see that. It was wrong, and they should penalize somebody for doing it.

BROWN: John, let me turn to you, and let's talk about the new Obama Web site set up to debunk smears and rumors. You know, initially, he was hoping not to discuss these rumors, hoping they would fade away. You yourself said, you know, in the old media world you wish you didn't have to talk about it.

But address their change in tactics. Why?

KING: Well, it's a smart change in tactic to one degree, and they also hope they're going to benefit from it to a different degree. And let me explain what I mean. The rumors say that he was a Muslim. That was spread by Democrats. Roland's right. Democrats started a lot of this early in the campaign. Democrats who did not support Obama were spreading that email like wildfire.

We investigated at CNN. It is not true, but it keeps coming up.

So Obama starts this new Web site that includes a link to that report that CNN did, saying that this is simply not true. There are things like that that are reprehensible, rumors about Barack Obama and his family that continue to be spread in the age of email and the blogosphere.

They are hard to stop, no matter how responsible we in the, quote unquote, mainstream media are. So that is the goal of the Web site.

But they're also hoping, Campbell, to get all this attention about this Web site. Other candidates have had these in the past. In this campaign, John McCain had one in South Carolina during the primary.

They hope to get all this attention about it to create the impression that Barack Obama is being grossly aggrieved so that, when other things come up, like Jeremiah Wright, like things Michelle Obama has said in the public domain, that people think, "Well, that's a smear, too."

Which is why I'm being sort of psychotic about the idea that there's a difference between a smear and fair game. And in this day and age, because of the blogosphere and the Internet and everything else, those lines often get blurred. And to some degree, the Obama campaign is hoping to blur them, saying that there's a whole lot of smears about us out there.

MARTIN: And Campbell, also, the Obama campaign should have taken the path with John McCain. Remember "The New York Times" article where they sort of kind of alleged he was having an affair? The McCain campaign struck back hard. They attacked the "New York Times."

Early on the Obama campaign sort of allowed this thing to float on and then realized, "Whoa, we've got a problem." They have to attack, attack, attack. You don't have time to sit back these days and allow things to sort of just fall out naturally. No, you have to shut it down immediately.

BROWN: Karen, do you agree with that?

TUMULTY: I think, though, that what the Obama campaign has as a tool here that no other campaign has had is an enormous grassroots network that itself is based on the Internet. So what they want to do is take advantage of that and essentially fight fire with fire.

If this is coming at them over the Internet, they want to give this information to their supporters so that they can send it out themselves to their own email contacts. And I think that that, in some ways, is a smart strategy, and I think that is the way that campaigns are going to have to function in the Internet era.

BROWN: All right. Guys, we've got to end it there. But to John King, to Karen Tumulty and to Roland Martin, thanks everybody. Appreciate it.

KING: Thank you.

TUMULTY: Thanks, Campbell.

BROWN: Coming up next, al Qaeda's secrets revealed. Michael Ware takes an exclusive look at video and documents the terrorists don't want you to see.

Plus, a Wall Street mystery. A former hedge fund executive disappears. Did he fake his own suicide to avoid prison? "Crime & Punishment" ahead.

(COMMERCIAL BREAK)

BROWN: Now a CNN exclusive. It is the product of a lot of hard work by 360's Michael Ware and his Baghdad bureau colleagues. For the last two weeks they've been digging through a mother lode of documents and video from hard drives seized by U.S.-allied Iraqi militias.

The material opens a remarkable window on the inner workings of al Qaeda in Iraq. It also tells the story of its undoing.

A warning, though: as welcome as that story may be, it is also terribly hard to watch.

Here's Michael's report.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT (voice-over): Al Qaeda gunmen brought this man here to die. Staged for maximum impact, he's to be executed on this busy market street. We don't know why. The al Qaeda members who recorded this tape offer no explanation. But the anticipation is agonizing, leading to a moment we cannot show you.

A punishment for betraying al Qaeda? Or for breaking their strict version of Islamic law? Either way, it was public executions like this that would help lead to the unraveling of al Qaeda in Iraq, and al Qaeda knew it. Its leaders recognized their greatest threat was not the U.S. military, but the men in the crowds who witnessed the slaughters and who would eventually turn against them.

In fact, in this secret memo three years ago, a senior al Qaeda leader warned against the backlash for the public executions. They were being carried out, he wrote, "in the wrong way, in a semi-public way. So a lot of families are threatening revenge, and this is now a dangerous intelligence situation."

But U.S. intelligence did not pick up on this weakness for more than a year. Most of these men were once insurgents; some even members of al Qaeda. But now they're on the U.S. government payroll, paid to assassinate al Qaeda.

All of these secrets come from here, the town of Ramadi. Al Qaeda computer hard drives were discovered here when one of these U.S.-backed militias overran an al Qaeda headquarters. As for the al Qaeda members, they showed them no mercy.

Eventually, the secret hard drives were passed along to both the U.S. military and to CNN.

Until recently, this man, Abu Zayyf (ph), was a senior al Qaeda commander. He's now changed sides and confirms these are genuine al Qaeda in Iraq documents. Documents that reveal a network that's sophisticated, well organized, meticulously bureaucratic and thorough.

Rear Admiral Patrick Driscoll is the U.S. military spokesman in Iraq.

REAR ADMIRAL PATRICK DRISCOLL, SPOKESMAN, MULTINATIONAL FORCE: Well, it's kind of unique what you have, because you have a comprehensive snapshot of al Qaeda at a time where it was a network or a unit.

WARE: In one local headquarters alone, more than 80 execution videos were cataloged. Not for propaganda. They were never made public but as proof of killings for al Qaeda's superiors.

DRISCOLL: I was kind of surprised when I saw the degree of documentation for everything. Pay records, those kind of things.

WARE: In addition to pay sheets, hit lists and membership application forms, there are detailed lists of prisoners held, tried and executed. And then this: architectural schematics for storage bunkers on a U.S. base, proof al Qaeda has infiltrators inside America's compounds.

And despite the administration's insistence al Qaeda in Iraq is dominated by outsiders, in the secret correspondence obtained by CNN, the orders are given by Iraqis. Non-Iraqi fighters are used mostly in frontline roles, such as suicide bombings.

And these pages contain a complex strategy for planning and executing a three-month wave of simultaneous al Qaeda attacks.

DRISCOLL: When you're talking about an organization that's a network of networks, it's pretty resilient. And there are still determined elements in the al Qaeda hierarchy that want to win in Iraq.

WARE: Win to restore their own harsh justice. Here, al Qaeda gunmen punishing thieves, dangling them from an overpass and shooting them from below. While al Qaeda today no longer wields this power, the U.S. military is wary of its return.

DRISCOLL: A threat of al Qaeda, if not watched carefully, and not pursued aggressively, will come back and be the largest threat. WARE: Though al Qaeda in Iraq is now under pressure as never before, these documents and videos warn its threat is more organized and more menacing than many ever imagined. After all, al Qaeda remembers when not so long ago it was welcomed by waving children.

(END VIDEOTAPE)

BROWN: And Michael Ware joining us now live.

And Michael, how relevant do you think al Qaeda is in Iraq today? Are they still a threat on any level?

WARE: Yes, they certainly are, Campbell.

Now, this war may really be a war of contests between Washington and Tehran to influence here in Iraq and in the region. But al Qaeda in Iraq is still very much a player in that.

Al Qaeda only comprises a small part of the insurgency. But we've seen over, say, the past ten days, just for example, al Qaeda in Iraq was still able to pull off six suicide bombings and three truck bombings, in which, one of these attacks, American soldiers were killed -- two American soldiers were killed and 18 were wounded.

So very much, al Qaeda is still out there. They're operating much more as a covert, underground network, unlike before, where they actually controlled large parts of this country. But nonetheless, they still remain resilient, and the U.S. military well knows its capacity to come back from the brink -- Campbell.

BROWN: All right. Michael Ware for us tonight from Baghdad. Michael, as always, thank you.

And then up next, a Marine thrown out of the Corps for what he did on tape to a helpless puppy. That's coming up.

Also ahead, a Wall Street tycoon swindles hundreds of millions of dollars and sentenced to prison, then vanishes. He left behind a suicide note. But is he dead or simply gone? Randi Kaye investigates when 360 continues.

(COMMERCIAL BREAK)

BROWN: Some new information on our extreme weather coming in right now. Chad Myers is working on some new data, and we're going to go to him very shortly.

But first, a Wall Street mystery and perhaps a fatal one. It involves a possible suicide. A hedge fund manager, convicted of trying to steal nearly half a billion dollars, disappears on the day he was supposed to report to prison. So what happened?

Here's CNN's Randi Kaye in "Crime & Punishment."

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): He's a wanted man, but is Samuel Israel alive or dead? Authorities wish they knew.

Israel, the co-founder of Bayou hedge fund, pleaded guilty in 2005 to stealing more than $450 million from his clients in a fraud scheme. He's been out on bail, cooperating with prosecutors.

(on camera) On Monday, Israel was supposed to report to prison in Massachusetts by 2:00 p.m. That morning, around 9 a.m., police say he left his home here in Armonk, New York, about an hour outside Manhattan, telling his live-in girlfriend, "I'm driving to prison."

(voice-over) Israel never showed up. Instead, hours later, his GMC Envoy was found on the Bear Mountain Bridge, perched 150 feet above New York's Hudson River, keys still in the ignition, Israel nowhere in sight.

A bizarre message etched in dust on the car's hood. It reads "Suicide is painless," the name of the theme song from the "M*A*S*H" television show and the same song that played during a fake suicide in the original "M*A*S*H" movie. It's enough to make investigators wonder, did Israel jump or did he run?

They are trolling the river for his body.

SGT. DENNIS STOLL, ROCKLAND COUNTY SHERIFF'S DEPARTMENT: We'll continue to search if it takes a week, a month or the rest of the summer.

KAYE: A skeptical U.S. attorney has issued a warrant for Israel's arrest. The FBI and U.S. marshals aren't ruling out any possibilities.

The marshals reportedly are questioning a possible getaway driver seen on the bridge. Israel's attorney did not return our calls.

Forty-eight-year-old Israel grew up in New Orleans. His father was a trader, too. He comes from a wealthy family. He's divorced and often described as charming. He had a pacemaker and had been through nine back surgeries and considered 20 years in prison a death sentence.

(on camera) Do you think he took his life?

ROSS INTELISANO, ATTORNEY: I think it's unlikely that he jumped off the bridge.

KAYE (voice-over): Attorney Ross Intelisano says his clients collectively lost $25 million in the fraud scheme.

INTELISANO: I don't think it's that much of a stretch for him to, you know, potentially put on this ruse, if that's what it is, and just try to escape.

KAYE (on camera): A spokesman for the bridge authority tells us there are four security cameras on the bridge. They're not monitored, and they're not very sophisticated. In fact, we're told they may not even be good enough to tell the difference between a car and a truck, let alone pick up someone jumping.

(voice-over) Oddly, this is not the first possible suicide in the Bayou hedge fund case. After the fraud was exposed, Israel's partner, Dan Marino, left this note at the office. It says, "This is my combined confession and suicide letter." Marino didn't attempt suicide and today is in prison, where his former partner, Samuel Israel, was supposed to be.

Randi Kaye, CNN, New York.

(END VIDEOTAPE)

BROWN: As we said earlier, some new information coming in to the weather center right now. Let's go back to Chad Myers for the latest -- Chad.

MYERS: Campbell, three tornado warnings and one really of interest near the quad cities, near Rock Island, really, moving northeast at 50 miles per hour.

Here's the one up into Michigan, actually way up near Cadillac, Michigan; still a couple things spinning around up there. Nothing confirmed on the ground.

Some hail moving into parts of Milwaukee right now. And there's the storm we're most concerned about. You see the spin there near Bluegrass, but it's very close to Rock Island and eventually moving right on through the quad cities area. This is the one we're worried about for the next few hours, probably, as it continues to move on up into Northern Illinois -- Campbell.

BROWN: All right. Chad Myers for us tonight. Chad, thanks.

A quick check on some of the other headlines now. Erica Hill joins us again with a "360 News and Business Bulletin" -- Erica.

HILL: Campbell, a U.S. Marine kicked out of the Corps after he was caught on camera throwing a puppy over a cliff while on patrol in Iraq, a story that's disturbed so many people. The video made it to YouTube. The outrage was almost instantaneous.

Lance Corporal David Motari was also punished for his actions, as was a second Marine. Details of those punishments, however, were not released.

By the time the Iraq war ends, it could cost taxpayers $2.7 trillion. That is according to analysts at the Heritage Foundation's Center for Data Analysis. They testified before Congress today. At the beginning of the war, the Bush administration estimated it would cost them more than $100 billion.

Both U.S. Airways and United Airlines passing along the rising cost of jet fuel now, to you, by charging domestic passengers $15 each way for checking one bag. American Airlines announced similar charges last month. U.S. Airways, by the way, also going to start charging for drinks later this summer.

And finally, check this out. It's a pregnant sea dragon at the Georgia Aquarium. If you can see the tail here -- it's coming through -- you'll see a bunch of little red dots. Those are the fertilized eggs. And it's good news here, because the sea dragon is endangered.

But, Campbell, this is not the mommy-to-be. No, no, in sea dragon land, it's daddy who gets pregnant. Happy Father's Day, Mr. Sea Dragon.

BROWN: Interesting.

HILL: Yes.

BROWN: I never knew that.

HILL: Me either.

BROWN: You know, you learn something every night on this show.

HILL: Indeed, you do.

BROWN: Erica, here are tonight's "Beat 360" winners. Tonight's photo, to remind everyone, Italian Premier Silvio Berlusconi joking with President Bush during a meeting today in Rome.

Our staff winner is Sean, who wrote, "President Bush strong arms our European allies during his tour of the continent."

BROWN: And our viewer winner is Lorie Ann. She wrote, "OK, OK, George, I cry uncle. I'll wear your flag pin."

HILL: Ah, the flag pin. Never away for very long, is it, Campbell?

BROWN: Right.

See the other captions that didn't make the cut at cnn.com/360. And logon tomorrow afternoon and play along.

"The Shot" is next. Can radio waves from your cell phone pop popcorn? Are these folks right or just blowing hot air? Stick around and find out.

(COMMERCIAL BREAK)

HILL: OK, time now for tonight's "Shot." And it may look familiar to you; people in 30 countries using cell phones to pop popcorn. The YouTube videos have actually been watched more than 4 million times since being uploaded two weeks ago.

Popcorn kernels shown on the table here, surrounded by a few cell phones. The implication is that the radiation from the phones create enough heat and energy to pop the kernels and rather quickly and that, in turn, the phones could cook your brain.

The only catch here, it's a hoax, commissioned by -- get this -- a company that makes Bluetooth head sets. Yes, definitely made the rounds here at CNN, sent by one of our directors.

We're still waiting, though, to find out exactly how they made the popcorn pop. I wonder what was under the table.

BROWN: First time I've ever seen that.

HILL: It's kind of crazy.

BROWN: I would have bought it hook, line and sinker.

HILL: Several people did, but today we're sharing the truth.

BROWN: All right, Erica, thanks.

I'm Campbell Brown in for Anderson Cooper.

For our international viewers, "CNN TODAY" is next. Here in the states, "LARRY KING" is coming up.