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AMERICAN MORNING

BP Prepares Attempt to Kill Wellbore in the Gulf of Mexico; Stressing Over Oil Well Seepage; U.S.-U.K. Summit: Obama and Cameron to Meet at White House; Food Stamp Fraud Revealed; WTC Islamic Center Fight; National Security, Inc.; News Ways to Diagnose Alzheimer's

Aired July 20, 2010 - 07:00   ET

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


KIRAN CHETRY, CNN ANCHOR: Hello and welcome to AMERICAN MORNING. It's Tuesday, July 20th. Thanks for being with us this morning. I'm Kiran Chetry.

JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts. Thanks so much for being with us. A lot to talk about this today, so let's get right to it.

In the Gulf of Mexico, BP is doing more tests right now searching for answers about possible leaks and low pressure readings. At the same time, BP is now considering what's called a static kill pumping mud into the ruptured well to plug it completely. We're live from the Gulf of Mexico with the very latest this morning.

CHETRY: Also, a new report showing more than a quarter million private contractors are oftentimes doing the sensitive and top-secret work around the world that many say should be left up to our government. The question is, is this the conflict of interest and is the U.S. government too dependent on outsiders to do that work?

Dana Priest of "The Washington Post" will join us later this hour about her two-year-long investigation.

ROBERTS: A CNN exclusive -- correspondent Deborah Feyerick talks with the developer of a controversial Islamic center that some want to build just two blocks from the World Trade Center site.

(BEGIN VIDEO CLIP)

DEBORAH FEYERICK, CNN CORRESPONDENT: Why here? Why so close? Why?

(END VIDEO CLIP)

ROBERTS: His answer ahead this hour.

CHETRY: BP officials think that mud may deliver us a miracle in the Gulf of Mexico. It is a new operation they're calling static kill.

ROBERTS: We've reached day 92 of this disaster. Take a look, one mile down beneath the water. Since Thursday a containment cap on the oil giant's ruptured well is holding. CHETRY: While BP continues testing the integrity of that well this morning, it is also considering a dramatic new option to seal it once and for all -- static kill. Similar to top kill, it would work by pouring heavy mud into the cap forcing all of the oil and gas back down into the reservoir.

ROBERTS: Our Rob Marciano is live for us in Orange Beach, Alabama this morning.

And how quickly might they decide whether or not this is the way to go? And does it pose any risk, Rob, because there are concerns about the integrity of the well and if they start pumping down that heavy mud while the top of the well is capped, could they increase the pressure such that they might actually damage it more?

ROB MARCIANO, AMS METEOROLOGIST: Well, that would be the commonsense line of thinking, John. I think you are right about that, and that's probably why they haven't pulled the trigger right away.

So it's a 24-hour test, then another 24-hour test until they get -- basically gain more confidence that that well has kept its integrity, without going to leak now for the past five days.

The pressure readings, as you remember, when they first capped this thing, they anticipated pressure readings to go to 8,000, maybe 9,000 pounds per square inch. Right now we're at about 6,800 pounds per square inch, climbing slightly. So that's a little lower than they expected.

So they wonder, well, are there leaks anywhere? They did find some anomalies, some seepage in spots, and they also found some methane bubbles, but they don't think those are a concern or particularly from the leak in the well either.

So they think the reservoir has been depleted somewhat with oil the oil that's been leak into the Gulf. That's certainly an option. They're continuing these tests. When or if they're going to pull the trigger, they haven't said that.

They just said in the coming days a static kill procedure is possible. As you mentioned, it's basically the same as a top kill with the one exception -- the one advantage is that they don't have that oil spewing out of the well. You just have static pressure which is where they get the name static kill.

They'll decide later in the week whether or not they are going to attempt that, but there are risks. Will those valves hold, will the well hold when you add additional mud and add additional pressure down there?

And they have the relief wells very close to where they need to be. They're still on target, they're still saying mid-August before those relief wells will kill the well, or do a bottom-kill. But they are on track and very, very close, at least to relief well number one, they're very close. So status quo here on day five, but there is very little, if any, oil seeping into the Gulf for the fifth day in a row. That's certainly good news. We're in Orange Beach, an area that's seen oil come and go. Over my left shoulder -- we've got a beautiful heron there.

And some of these barriers have been installed in the past month to protect this inlet. Just beyond that there is a vessel out there already, hundreds of skimmers trying to clean up this mess. One advantage we've had over the past few days, John and Kiran, is that there is no more oil coming out of the bottom of the Gulf. We certainly hope that continues to be the case over the coming weeks.

CHETRY: Absolutely. All right, Rob Marciano for us, thanks.

Also coming up in less than ten minutes, we will be joined by a Art Berman, a geological consultant. We'll ask him what he thinks of the new static-kill option.

Also in our next hour, CNN's Amber Lyon has exclusive access inside of a Navy blimp that's about to take flight over the Gulf searching for oil slicks.

Also developing this morning, Shirley Sherrod, the U.S. Department of Agriculture development director for the state of Georgia who resigned yesterday responding to a video that surfaced in recent days. The video appears to show Sherrod telling an NAACP audience that race played a factor in her decision to withhold help from a white farmer.

But when we talk to Sherrod just a few minutes ago, she told us that video does not tell the whole story.

(BEGIN VIDEO CLIP)

SHIRLEY SHERROD, FORMER USDA WORKER: I tell them about a time when I thought the issue was race and race only, and I tell them the story of how I worked with a white farmer back in 1986. I was not working for the Department of Agriculture. I was working with a non- profit organization assisting farmers throughout south Georgia and the southeast.

And this farmer came to me for help. I was telling the story about how working with him helped me to see that the issue is not about race. It's about those who have versus those who do not have.

(END VIDEO CLIP)

ROBERTS: Sherrod also told us that she would have fought this since the story was 24 years old and not while she was an official at the Department of Agriculture, but she did not have the support of the Department of Agriculture. She also says it's unfortunate that the NAACP would release a statement without knowing all the facts.

CHETRY: Also new this morning, a Los Angeles district attorney looking into the business practices of Goldline International, a popular company that sells gold items on TV and online. Reports now of complaints by customers saying they were lied to or misled or pressured into buying gold coins not worth what they originally thought.

Among the company's top pitchmen conservative commentator Glenn Beck, as well as former presidential candidates Mike Huckabee and Fred Thompson. Congress is also looking into the case.

Countdown to lockdown for actress Lindsay Lohan. She is expected to begin serving a 90-day jail sentence today for violating probation after two DUI incidents. After jail she is going to spend another 90 days in rehab.

Coming up next, the static-kill operation -- is it a good idea with that relief well so close to being finished? And what about the so-called seeps coming from the floor of the Gulf of Mexico? Are they really something to be worried about? We'll talk with Arthur Berman, who is well-versed in all things petro-chemical right after the break.

It's seven minutes after the hour.

(COMMERCIAL BREAK)

ROBERTS: Ten minutes after the hour.

There appears to be some good news on the bottom of the Gulf of Mexico. So far that capping operation on that runaway well is holding, though officials had discovered some seepage of oil, potentially natural gas coming from the seafloor.

But they believe this time it is not be associated with the well. BP now believes even as they get very close with those relief wells trying something called a "static-kill."

Let's talk about all of that this morning. Art Berman is a geological consultant with 31 years of experience in petroleum exploration and production. He's also the president of Labyrinth Consulting Services and a contributor to oildrum.com.

Art, thanks for being with us this morning. First, let's ask you about this static kill operation, very similar to what we saw with the top kill more than a month ago, except now the top of that well is capped and we wouldn't see mud spewing out from it.

But the question many people have is, with this relief well so close to being completed, why undergo this static kill operation, or at least even think about it?

ARTHUR BERMAN, PRESIDENT, LABYRINTH CONSULTING SERVICES, INC.: Well, I think the reason that they're considering it is because they've yet to intercept the wellbore. They're very close, a few feet away with the relief well, as everyone knows.

But to actually intersect the seven-inch pipe does involve a bit of technology and accuracy, whereas if they do the static-kill through the existing well bore at the top, there's less uncertainty about their ability to actually get the mud into the pipe.

ROBERTS: So basically they know where it is and it is very easy to get mud into a place where you know it is located.

But here's a question that I had. There had been some questions about the integrity of the casing in the wellbore. You've already got thousands of pounds of pressure coming up from below. Now that you've got the top of it sealed off, if you introduce more pressure with mud in the top, do you risk the possibility of, if there are any weaknesses in that well casing, blowing it out with a static kill operation?

BERMAN: Well, John, that's obviously a certain concern. But personally, I don't really see it as a big issue. The standard operation when you begin to lose control of a well is to pump heavy mud into the well.

The idea there is not to -- you're not really introducing pressure, you're putting additional fluid which is heavier than the oil that's in the pipe that is going to sink to the bottom. And because of the weight of the fluid, it is going to counterbalance the pressure in the formation and kill the well. So I don't see the introduction of mud as being a big risk.

ROBERTS: Talk to us about the issue of seeps that we're seeing in the floor of the Gulf of Mexico. Apparently one was found about two miles away from the wellbore itself. Originally thought that maybe it was methane gas potentially oil coming up through the rock formations and the subsea floor, finding their way up through faults to the bottom of the ocean there.

But now the thought is that these might be natural. So what are you thinking about these seeps? Could they be associated with this well or are they part of a natural process?

BERMAN: Obviously there's a huge amount of speculation about what these seeps are and the question I would ask is, do we really even know that they are seeps? How can we know whether it's methane, whether it's oil or just some natural process?

But in answer to your question, yes, natural oil and gas seeps are normal in the Gulf of Mexico. They're normal in any ocean basin that has an active petroleum system, which is to say that petroleum is being generated at some depth. So having seeps on the sea floor is not anything out of the ordinary, certainly not in this area of the Gulf of Mexico.

But the evidence perceived is unclear to me. There are a lot of people that are watching the live feeds from the ROVs and they think they see things that they are sure are seeps. But I've had correspondent with experts on these ROVs and apparently the ROVs themselves have thrusters that can very easily stir up the bottom sediment and create some sort of illusion that there is seepage.

ROBERTS: There was a study done back in 2000 by the Earth Satellite Corporation that determined that two Exxon Valdez's worth of oil naturally seep into the Gulf of Mexico every year. Do you know if that's true?

BERMAN: I think it's probably true. I can't speak to exactly what the volumes are, but it is really quite a bit of oil. Now the difference between the natural seepage and what's happened in the BP well is that it's spread out over a large number of seeps and over a vast area of the Gulf Mexico. This is all coming out in one place. That's the difference.

The ocean has the capability of absorbing and equilibrating to that kind of seepage. It doesn't have the ability obviously when you're having tens of thousands of barrels a day come out of a wellbore.

ROBERTS: One other issue you've been thinking about is this drilling moratorium. People talk about the immediate economic impact because of jobs, people not being out on the rigs, supply ships can't work. But you are looking further ahead to a year from now because of this moratorium. What do you think the potential long-term economic impact is?

BERMAN: Well, obviously there are a lot of people who are not working right now who would be. I've seen information that suggests that just the wage impact alone of a six-month moratorium is more than $2 trillion. There is an issue that says that a lot of the drilling rigs are already leaving the Gulf of Mexico. They're going to other countries. They won't come back until contracts are over there.

So, this is really quite a serious issue for all of the people that are involved in the oil industry and the various service industries that provide them with the things that they need. There's also been estimates by the Department of Energy that suggest that we're going to see something like 80,000 barrels a day less oil in the future, or more, because of this moratorium. So we're going to be importing more oil as a result of the moratorium as well.

ROBERTS: And inevitably potentially prices could go up as well. Arthur Berman from Labyrinth Consulting, thanks for being with us this morning. Appreciate you spending time with us.

BERMAN: Thanks very much, Kiran.

ROBERTS: Kiran?

CHETRY: All right. Well, still ahead, it's a CNN exclusive. Correspondent Deb Feyerick asks the developer of an Islamic center and mosque just two blocks from the World Trade Center why that spot and why now.

(BEGIN VIDEO CLIP)

SHARIF EL-GAMAL, SOHO PROPERTIES: There are Jewish community centers all over the country.

DEBORAH FEYERICK, CNN CORRESPONDENT: But the Jews didn't take down two towers.

EL-GAMAL: There are -- there are YMCAs all over the country.

FEYERICK: But the Christians didn't take down the towers.

EL-GAMAL: And this is a model center --

(END VIDEO CLIP)

CHETRY: Will it help heal wounds or make matters worse? We're going to take a look at the other side of the issue ahead on AMERICAN MORNING.

(COMMERCIAL BREAK)

CHETRY: Twenty minutes past the hour. Later today, British Prime Minister David Cameron is meeting with President Obama. It's his first official trip to Washington. And their agenda is expected to include Afghanistan, concerns about BP and also the release of the Lockerbie bomber.

Ed Henry is live at the White House. It doesn't sound like much of a honeymoon at all for these two leaders. I mean, they have a lot of big and controversial issues to tackle.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: They do, Kiran. And what aides to both men are sort of hoping here though is that they're developing some personal chemistry. You know, one of the president's top campaign advisers from 2008, Anita Dunn, also helped advise David Cameron on his winning campaign for prime minister. One of the many links they have that aides say is putting this so-called special relationship back on the right track.

(BEGIN VIDEOTAPE)

HENRY (voice-over): When heavy fog prevented British Prime Minister David Cameron from being able to fly in to Toronto last month for the G-20 summit, President Obama offered his new friend a lift. And the two men joked about their teams tying in a World Cup match as they exchanged beer from both nations to pay off a friendly wager.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I advised him that in America, we drink our beer cold so he has to put this in the refrigerator before he drinks it. But I think he will find it outstanding. And I'm happy to give that a shot, although I will not drink it warm.

DAVID CAMERON, BRITISH PRIME MINISTER: It's 5.2 percent. You can have it cold. It's all right.

OBAMA: All right.

CAMERON: But --

OBAMA: Cheers.

HENRY: Cold is the perfect word to describe the president's relationship with former Prime Minister Gordon Brown. But aides insist these two leaders are developing a strong personal bond.

CAMERON: A conservative vote is a vote for change.

HENRY: Even though they come from different ideological backgrounds, they're of the same generation and shared campaign messages of hope and change.

NILE GARDINER, HERITAGE FOUNDATION: We're all going to see a significant improvement in the personal chemistry between the British prime minister and the U.S. president post-Gordon Brown. But having said that, there are some significant tensions in the background which could certainly, I think, play havoc with the best laid plans.

HENRY: Chief among those potential bumps is Afghanistan with both leaders under heavy pressure to bring their country's troops home, amid questions about whether the war is worth fighting.

(on camera): Do you believe we are now winning in Afghanistan?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think he would tell you that we are in a better -- in better shape than we were, that we have -- and we are constantly evaluating the resources that we've added.

HENRY (voice-over): Cameron, meanwhile, has bristled at the Obama administration's grilling of BP over the gulf oil spill.

GARDINER: Eighteen million British people have pension funds linked to BP, so Britain has a huge economic state. But I think that David Cameron is going to send a very clear message that he believes that BP is responsible for this crisis and should pay for it.

(END VIDEOTAPE)

HENRY: So you see, Cameron trying to find some common ground on BP by saying he realizes the company is responsible for the gulf oil crisis, of course, but also wants to find some common ground on the controversial release of the Lockerbie bomber. President Obama expected to press him on that in private. We're told the prime minister is going to meet with some senators on Capitol Hill today who are concerned about that case, and on this trip may even announce a British inquiry of the whole affair. That would be another sign that he is really trying to please the Obama administration and really smooth over some of these tensions, Kiran.

CHETRY: All right. We'll see how it goes. They certainly have a lot of issues to work on. Ed Henry this morning for us this morning, thanks.

HENRY: No doubt.

ROBERTS: Well, still ahead on the Most News in the Morning, food stamps. They're supposed to be used to buy food, right? But our undercover investigation finds some people bucking the system, buying things like cigarettes, even condoms instead. And it's costing you, the taxpayer, billions. That story coming up next on AMERICAN MORNING.

(COMMERCIAL BREAK)

ROBERTS: Twenty-six minutes now after the hour. For nearly 50 years, the government has helped feed struggling families across the nation. You know it as the food stamps program.

CHETRY: Yes. And these days instead of stamps, the government sends out debit cards and they're funded by your tax dollars. The problem is though that some people are illegally using those cards to get cash, beer, cigarettes, and worse. John Zarrella is live from Miami with the second part of our special series "Scammed."

Hey, John.

JOHN ZARRELLA, CNN CORRESPONDENT: Hi, Kiran, John. You know, at this point, no one knows exactly how much money taxpayers are losing. Law enforcement officials tell us it's a lot. But if you use, or know someone who uses these food stamp cards for anything other than what they are intended, pay close attention to this story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The female's getting out, walking towards the front door.

ZARRELLA (voice-over): An undercover agent walks into a small convenience store in Tampa. Wearing a recording device, she approaches the cashier with a debit card.

UNIDENTIFIED FEMALE: Can I get $100 back off of this?

ZARRELLA: While they're negotiating, she picks up some chips, soda and cigarettes. She presses the clerk.

CLERK: What you want?

AGENT: I wanted one hundred back.

ZARRELLA: The clerk turns over the 100 bucks, and the agent leaves with the cash and the goods.

UNIDENTIFIED MALE: UC (ph) is out, small bag in her hand.

ZARRELLA: What the store clerk just did, Florida Department of Law Enforcement officials say, is illegal. And they say you should be outraged.

UNIDENTIFIED MALE: It's directly stealing from the taxpayers of the United States.

ZARRELLA: The debit card the undercover agent used is called an electronic benefit transfer card, or EBT, which can only be used to purchase food. It's more commonly known by its old name -- food stamps. VOICE OF BOB URA, SPECIAL AGENT, FLA. DEPT. OF LAW ENFORCEMENT: You see what they do is they charge the U.S. government $212.02. EBT food benefit, food balance, all that, and they give us $100 in cash. Cigarettes and chips for $212.

ZARRELLA: Bottom line, there's no requirement to itemize the receipt, so the convenience store made $100 of your taxpayer money. The recipient, the undercover agent, got cash back. Also illegal.

(on camera): Authorities targeted 30 stores in the state of Florida. At 16, they were allowed to use the EBT cards. At multiple stores, the cash from those EBT cards were used to purchase lottery tickets. And at one store, agents used the EBT card to buy the prescription drug Oxycodone.

UNIDENTIFIED MALE: Pointed cell device.

ZARRELLA (voice-over): If you think that's outrageous, listen to this transaction at a drive-through store called Big Daddy's.

URA: It looks like Wayne's the clerk. It looks like he may have shaved his beard.

ZARRELLA: It was one of the stores targeted, because in just the month of December, it did $34,000 in EBT transactions, compared to $1,000 at comparable stores that same month.

Here, the agents didn't get money back, but they got beer, cigarettes and this --

UNIDENTIFIED MALE: Do you have any Trojans in there?

UNIDENTIFIED MALE: Who?

UNIDENTIFIED MALE: Trojans?

UNIDENTIFIED MALE: Yes. I've got 1,200 (ph). I've got these.

UNIDENTIFIED MALE: Yes. Do you have a three-pack or -- yes, just give me two of those.

UNIDENTIFIED MALE: Two?

ZARRELLA: Wednesday, following a three-month investigation, state agents hit the 16 targeted stores across Florida. At Big Daddy's, three people were taken into custody -- the owner and two employees. None of them would comment for CNN at the scene. Authorities believe during the past year, the 16 stores alone defrauded taxpayers of $3.5 million.

UNIDENTIFIED MALE: If you multiply it nationwide, you know, I can't give you an accurate number, but it has to be in the billions of dollars.

ZARRELLA: The USDA which administers the program says nationwide, 38 million people benefit from the supplemental nutrition program. It estimates one percent of the $50 billion in EBT funds were lost to fraud in 2009.

Authorities in Florida say the next phase of their operation will target people using the cards illegally rather than for what they were intended -- food to put on the table.

(END VIDEOTAPE)

ZARRELLA: Now the Florida Department of Law Enforcement tells us they have now entered that second phase of the operation, so they are in fact now going after the recipients, the people who are using their EBT cards to get cash rather than food. Kiran. John.

ROBERTS: John Zarrella this morning with that eye-opener. John, thanks so much.

Crossing the half-hour, means it is time for this morning's top stories.

BP now weighing a dramatic new option to kill its ruptured oil well in the gulf for good. It's called a static kill. It involves pumping heavy mud into the containment cap to force the oil and gas back down into the reservoir from whence it came. The oil giant could decide to try the procedure sometime this week.

CHETRY: The Senate is expected to break a log jam today and approve legislation that would extend unemployment benefits to millions of Americans. That vote is scheduled just after the swearing in of West Virginia's new senator gives Democrats the last vote needed to cut off a Republican filibuster on the issue.

ROBERTS: And Elena Kagan could take a giant step towards becoming the next Supreme Court justice. The Senate judiciary committee is expected to approve Kagan's nomination today and send it to the full Senate for confirmation.

CHETRY: A plan to build an Islamic community center near ground zero, sacred ground for many Americans, has led to a very emotional and at times an angry debate, both in New York City, but also across the country.

ROBERTS: At a hearing in New York City, one woman called it a monument to terrorism. But some Muslim community leaders say it could be an opportunity to heal and improve relations. Deb Feyerick spoke to the developer of the building and she's here now with us this morning. Good morning, Deb.

DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, John. Good morning, Kiran. Well, you know, the developer says that this is on the community center with its prayer space it is being built, period. It is a done deal regardless of whether or not the existing structure gets landmark status. It sounds pretty defiant but to the driving force behind all of this it is really a labor of love.

(BEGIN VIDEOTAPE)

FEYERICK (on camera): This is where you sort of conceived of the idea?

SHARIF EL-GAMAL, SOHO PROPERTIES: Yes, it is.

FEYERICK (voice-over): Meet New York real estate developer Sharif El-Gamal, the man at the center of the controversial plan, a stone's throw from the World Trade Center site.

EL-GAMAL: This is a Muslim-led project. This is an Islamic community center that will cater to all of New York with fitness gym and basketball courts.

FEYERICK: Plans include a performing arts center, swimming pool, child care facilities, and, yes, a Muslim prayer space two blocks from the worst terror attack in U.S. history.

(on camera): Why not have a prayer space for Buddhists or Jews or Christians or why must it be Muslim? It can't be just a business decision.

EL-GAMAL: There are Jewish community centers all over the country.

FEYERICK: But the Jews didn't take down two towers.

EL-GAMAL: There are YMCAs all over the country.

FEYERICK: But the Christians didn't take down the towers.

EL-GAMAL: And this is a need that exists.

FEYERICK: For those still sensitive and so raw to this, their question -- their overriding question is, why here? Why so close? It's two blocks but it was close enough that landing gear ended up on the roof. Why?

EL-GAMAL: There is a need. It's supply and demand. The community wants it. The politicians are supporting it.

FEYERICK (voice-over): Maybe. But many who attended a town hall meeting recently were dead-set against it.

UNIDENTIFIED MALE: Have we forgotten what happened at 9/11?

EL-GAMAL: What happened that day is not Islam. What happened that day is terrorism.

FEYERICK (on camera): Coming out of that hearing, somebody said the Japanese would never have dared to build on Pearl Harbor. What makes this different?

EL-GAMAL: If you were at that hearing the way that I was at that hearing, you come out understanding that there is a great need for dialogue now.

FEYERICK (voice-over): El-Gamal says many people don't understand Islam, but does that make it Islamophobia? EL-GAMAL: 100 percent.

FEYERICK (on camera): Why?

EL-GAMAL: Because the moderate voice of Islam is not coming out.

FEYERICK: Can you guarantee that this center will root out extremism or completely reject any extremists that try to get into it?

EL-GAMAL: 100 percent. We will not tolerate extremism. We will not tolerate extremism.

FEYERICK (voice-over): And yet critics say the religious leader Imam Faisal Abdul (INAUDIBLE) has links to groups that support terror.

EL-GAMAL: Imam Faisal is one of the most moderate Muslims that exists in this country today.

FEYERICK (on camera): Will you reject any money that comes either directly or indirectly from any person, any country, any organization, any corporation that has any links to terrorism? Will you be doing due diligence?

EL-GAMAL: We are going to be doing extreme due diligence and we are going to hire the best security experts in the country to help us walk through the process. And we plan on being very transparent throughout the whole process.

FEYERICK: For those who would say this is not an olive branch to greater understanding, this is more an act of defiance, how would you answer those people?

EL-GAMAL: This is an olive branch.

(END VIDEOTAPE)

FEYERICK: El-Gamal points out that there are more than one million Muslims in the tri-state area and that the American-Muslim consumer spends nearly $200 billion a year. So when he talks about this center as a business, it really is a business. But he says he's also doing this for his two daughters to give them a place where they can feel a sense of pride and belonging, both religiously and culturally, a place where others can learn and share with them.

John and Kiran.

CHETRY: You said something interesting in the introduction to that as well, which is that regardless of whether or not this historic landmark status, which is something that's been debated back and forth, would actually stop the construction of this. You say no.

FEYERICK: Well, that's exactly right. There was a big hearing to see whether in fact the building would get landmark status. I think a lot of people really thought that if it does, you're not going to be able to tear it down. That's right, you can't tear it down but you can still build within the existing structure.

So that means the Islamic center will happen. It just depends on what it's going to look like. Will it be a lower, flatter, shorter building with an Italian facade or is it going to be something larger, 13 stories as opposed to five or six.

CHETRY: Well, very interesting. Thanks, Deb.

FEYERICK: Of course.

ROBERTS: Certainly haven't heard the last of this, that's for sure.

FEYERICK: Oh, yes.

CHETRY: Well, still ahead, a new report shows that the U.S. government employs more than a quarter million contractors with top- secret clearance. And the question is could there be a conflict of interest and is this the road we're going down now when it comes to our national apparatus for intelligence and security?

We're going to talk with Dana Priest of the "Washington Post" about her two-year-long investigation. Next.

(COMMERCIAL BREAK)

CHETRY: Well, it is a story that's reportedly has D.C.'s spy community in panic mode a bit. A two-year investigation by "The Washington Post" taking a look at the security universe that was created quickly after 9/11. One that suggests it may be too bloated to be effective and we may rely too much on outside contractors.

Today the paper is taking a look at just how much the government is farming out its intelligence work to those private contractors. National security, Inc., as they call it. And Dana Priest reported this story with William Arkin. She's an investigative reporter at "The Washington Post" and she joins us from the "Post" newsroom this morning. Dana, good to talk to you.

DANA PRIEST, INVESTIGATIVE REPORTER, "THE WASHINGTON POST": Good morning, Kiran.

CHETRY: So today the highlight of the piece really digs into the explosion of contractors in the intelligence community post-9/11. It is interesting though because the federal rules actually prohibit contractors from performing inherently government functions, yet your investigation finds that's exactly what's happening. Tell us how big of an extent and why.

PRIEST: Well out of the 850,000 Americans who have top-secret clearances, about 260,000 of them are actually contractors. What happened after 9/11, because they wanted to increase their capabilities so quickly, the Bush administration and Congress allowed funding to go to contractors but not to increase the federal workforce. And so really, tens of billions of dollars poured into the intelligence world and contractors were hired left and right. And actually so quickly, that they weren't saying sign in at the door. Right now they're having a hard time getting a head count.

In fact, one of the most revealing quotes in the story comes from an interview I had with the Defense secretary Robert Gates who says --

(CROSSTALK)

CHETRY: Let me get to it because I was going to ask you about that. He talked about wanting to reduce the head count, wanting to reduce the number of contractors, realizing that this rush after 9/11 and the hiring and trying to pare it back, he said by 13 percent. But then it was interesting because he also said to you "this is a terrible confession but I can't get a number on how many contractors work for the Office of the Secretary of Defense."

And when we read that, I mean, I thought to myself, how is it possible the man running things can't even get his hands on something as basic as an accurate head count?

PRIEST: Well, that's because so many people were employed so quickly, they really weren't interested at that time in trying to figure out who they were. It just proliferated after that. They've got huge, giant umbrella contracts in which the contractors themselves are managing the contracts. And of course, hiring many, many subcontractors.

The other issue that we bring up is how dependent the government has become on these contractors. In fact, a lot of important functions could not be done without them, which worries the government because they really have found that these are -- the contractors themselves are much more costly than they had hoped they would be.

In fact, Gates gave a percentage he says federal workers are about 25 percent less expensive than contractors. And one of the reasons for that is that in order to hire away the best federal workers, corporations started giving them twice as much salary as they could get in the private sector, plus benefits. And that drove up the cost.

The other thing it did, which worries them, too, is that it drove out a middle tier of managers with a lot of expertise and very particular sensitive subjects so they had to hire new people and many intel managers say right now they have the youngest and least experienced intelligence staff, ever.

CHETRY: Where? In government or in the private industry?

PRIEST: In government. And government has the least experienced staff, the contractors are senior people coming back in contractor roles. So you have them actually fulfilling a role sort of as mentors to the younger staff.

CHETRY: Right.

But is that more of a problem in, you know, just our entire government system? I mean, if you're working for the federal government, there is a certain amount of money that you can make. I mean --

PRIEST: Right.

CHETRY: And if you're in private industry, that doesn't exist. And so I mean we're talking, I mean, this is a debate that goes on within, you know, private industry versus the FDA and I mean, in a lot of regulatory organizations. I mean, the so-called revolving door around Washington. I mean, the bottom line is you can certainly make more money in private service.

PRIEST: Well, that's true. And this is an exaggerated form of that because of the requirement to get a security clearance and that takes a long time. And it takes a long time and there are fewer people that actually can qualify for it. So what contractors were doing because they realized that security clearance was like a gold card, they were offering employees in the government not only double salaries but bonuses like BMWs and $50,000 signing bonuses and this sort of thing.

CHETRY: Right.

PRIEST: But on the flip side, the government agencies really are worried that they've become so dependent on them that, you know, they can't -- it's a force they can't afford anymore. On the other hand, they can't let -- let it go because -- because so much of the sensitive activity is actually done by them.

CHETRY: But, on the other side, is the private sector in some cases nimble, more able to get things done, bringing new technology to the table.

PRIEST: Absolutely.

CHETRY: And, if that's the case, is it necessarily as -- as big of a problem as we may --

PRIEST: Right.

CHETRY: -- think by traditional wisdom?

PRIEST: Well -- right. And the most -- the big base of contractors do IT work, information technology and administrative support. That's an area that is probably less problematic. But there are many more, probably a quarter of the whole force, that do very core mission things.

CHETRY: Right.

PRIEST: I use the example in the story about the Memorial Wall at the CIA for people who've died in the line of duty, and, since 9/11, 22 people have been killed and eight of them have been contractors. Those people were really doing fundamental, sensitive jobs that usually you think of government employees doing.

CHETRY: Right. CIA work, right? Spy work. I mean, all of this --

PRIEST: Exactly.

CHETRY: -- super sensitive. And, you know, that brings me to my next question, which is you've gotten a lot of criticism, actually, for -- for the entire piece and -- and all of the investigation. Many have said that perhaps our national security is compromised, especially with the -- with the companion Web site where people can check all of this and people can sort of have quick access to all of these contractors and agencies.

Do you agree that -- that perhaps some of this reporting is actually bad for American security?

PRIEST: No, and if you look at the Web site and you look at what information we put out there, it's more general than -- than that. It's not locations, not specific locations, except for in the headquarters locations which are out there. You can find those on Web sites.

We don't let our map go down to where these either government agencies or contractors work. We fuzz up what kind of government organizations they are all across the country. So, really what you are left with is general details on who the contractors are and what the government agencies are. Very general. And then more specific information about the conclusions that we reached.

In other words, how many agencies are doing the same thing? You can look on -- on our wheel and play around with that, things like that.

So, no, we weighed that very carefully. This was a long-term investigation. We've been thinking about these issues for months and months. And -- and, of course, we came to a conclusion that -- that we were OK. This was not specific enough.

We don't give away what they're doing or -- or we don't give away sites that are actually top-secret themselves. In other words, are supposed to be totally hidden. We're just -- these are sites and companies that do top-secret work. We don't say what kind, specifically, but we say in a very general way what sort.

CHETRY: Well, you've certainly given the agencies a lot of food for thought and it comes as this confirmation hearing for James Clapper to be the new DNI, Director of National Intelligence, happens today. So I'm sure some of this will come up.

But, great job, Dana, and thanks for joining us to talk about it.

PRIEST: Thank you. Thanks, Kiran.

CHETRY: Forty-eight minutes past the hour. We'll be right back.

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ROBERTS: There could be major changes to the way that Alzheimer's disease is diagnosed. The current criteria has been virtually unchanged since the early 1980s. But if the new guidelines proposed last week are adopted, experts say it would not only mean better care but a significant jump in the number of people who were diagnosed with the disease.

Joining me now to talk about this is Dr. Maria Carrillo. She is the senior director of Medical and Scientific Relations for the Alzheimer's Association. Dr. Carrillo, thanks so much for being with us.

You -- you will, if these are adopted, add biomarkers to your arsenal of diagnostic tools, Positron Emission Tomography scans, as well as spinal taps looking for certain proteins. What sort of help do you think that these procedures would be in diagnosing people with Alzheimer's?

DR. MARIA CARRILLO, SENIOR DIRECTOR OF MEDICAL AND SCIENTIFIC RELATIONS FOR ALZHEIMER'S ASSOCIATION: I think as you and the public understand, the Alzheimer's -- Alzheimer's disease is a looming epidemic. And with over five million Americans living with this disease today, we really can't afford to allow this disease to continue in its current course.

People are diagnosed today unfortunately too late. They've already lost many memories. I think the main goal of this criteria is to identify people with those biomarkers that you mentioned, John, earlier before they actually lose their memories, and that's the exciting part about the proposed criteria.

ROBERTS: What -- what help would it be, Dr. Carrillo, to know who is in the earlier stages of developing Alzheimer's? Is there -- is there any evidence to suggest if you catch it early, you could either stem the progression of the disease or maybe even turn it back altogether?

CARRILLO: I think one of the biggest factors involved is that we have had a few failures in terms of drug trials lately. And the general feeling in the scientific community actually has been that Alzheimer's disease occurs on a continuum. By the time we're able to diagnose this disease, it's really in the middle stages or maybe even in the later stages. And that we have actually a huge window of opportunity, maybe 10 years prior to that diagnosis in order to interrupt the disease.

And so the exciting thing is that we are hopeful that if we have even a slight signal in the upcoming three to five years in the drug trials that are currently under experimentation, we might be able to even move those -- those investigational treatments into this younger population. But we can't do that unless we have a framework for how to define and identify that population.

ROBERTS: Now, not everyone is a -- is a real fan of these new, potential diagnostic tools. Sanjay Pimplikar from the Cleveland Clinic wrote an OpEd in "The New York Times" yesterday.

He recommends against adopting these because he says the Positron Emission Tomography scans are not accurately predictive, particularly since one-third of elderly adults have those amyloid plaques in their brains yet they function normally. And its spinal tap tests are not only uncomfortable and expensive, but the predictive potential while quite promising remains uncertain.

What do you say to all of that?

CARRILLO: Certainly, at the Alzheimer's Association and the National Institute on Aging, we understand that these biomarkers are not quite ready for primetime and actually that's why they are embedded in a proposed criteria that hopefully will be studied over the next three to five years, maybe longer, whatever they require.

One of the main thrusts of that criteria is to try to find out what numbers we should be looking for. Whether it's on a PET scan, amyloid imaging, whether it's on cerebrospinal fluid through a lumbar puncture, we don't have those numbers quite yet that give us an indication.

We're looking for something like 200 for cholesterol, right, because we know now that if we have a 200 for cholesterol you might be able to make changes and stave off disease. That's what we're looking for.

But until we actually do those studies, we're not going to find out.

ROBERTS: Dr. Maria Carrillo from the Alzheimer's Association, good to talk to you this morning. Certainly, you know, with so many people developing Alzheimer's disease in this country, anything that might be positive is good news.

Really appreciate you coming in.

CARRILLO: Thank you for having me.

ROBERTS: Fifty-five minutes after the hour. We'll be right back.

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CHETRY: Welcome back. This morning's top stories are just minutes away, so you want to stay tuned. We're following the latest on the oil spill.

Also, the fight over plans to build an Islamic community center near ground zero. Now, it's getting uglier. Images of 9/11 in a new ad that says it would celebrate the worst attack on U.S. soil. We'll talk to the man behind those ads.

ROBERTS: The oil like you have never seen it before from a blimp. The Navy's air assault (ph) and the biggest spill in history, and we are the only ones with the bird's eye view this morning. CHETRY: Also, viral video gold at the end of a rainbow. The YouTube clip of a guy totally losing it over nature's beauty.

These stories and more coming up in just two minutes.

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