updated 8/3/2004 9:59:04 AM ET 2004-08-03T13:59:04

Guest: Bob Flamm, Annie Jacobsen, Audrey Hudson, Philip Smucker, Paul Krugman

JOE SCARBOROUGH, HOST:  Tonight‘s top headline: terrorists targeting America.  The “Real Deal”?  The media should trust, but verify.

Hey, welcome to SCARBOROUGH COUNTRY, where no passport is required and only common sense is allowed. 

Terrorists who attack financial institutions in America.  We‘re going to be telling you how the Department of Homeland Security got that new threat information and whether you should trust them. 

Then, what really happened on Flight 327?  Were terrorists on a dry run, prepping for another 9/11?  The government has tried to undercut Annie Jacobsen‘s story.  But now a second passenger is coming forward.  We‘re going to get their inside story.  And we‘re also going to be asking the head of the federal air marshal program if they really know how to keep Americans safe in the sky. 

Plus, I‘m going to be asking “The New York Times”‘ Paul Krugman  whether John Kerry is the real deal or another big-spending politician. 

ANNOUNCER:  From the press room, to the courtroom, to the halls of Congress, Joe Scarborough has seen it all.  Welcome to SCARBOROUGH COUNTRY.

SCARBOROUGH:  Hey, welcome to our show.  I‘m Joe Scarborough.  I hope you a great weekend.  I hope you enjoyed our coverage up in Boston.  What a time we had up in Boston.  And I‘ll tell you what.  It looks like this race is going to be neck-and-neck all the way to November. 

As for now, though, obviously, the big story today has to do with terrorism.  America is on high alert again.  It‘s time for tonight‘s “Real Deal.” 

You know, the Department of Security—of Homeland Security—is warning Americans of impending attacks on U.S. soil.  You may have heard Howard Dean saying that these latest terror warnings may be politically motivated.  Americans are seeming to respond to this latest dire warning with a collective yawn. 

Meanwhile, terror experts are telling me that they have grave concerns about the information that was gained from a terrorist‘s computer that was seized in Pakistan.  So this is a question I think you should be asking yourself.  Should you and your family be scared at the latest terror warnings or is the White House using this new threat as a way to increase the president‘s approval rating? 

Now, I know that sounds like a very cynical question.  But I worked in Washington.  So I want you to take note of four realities that surround the presidential campaign this year.  No. 1, the president and John Kerry are locked in the tightest of all political battles.  No. 2, Americans trust the president more than John Kerry when it comes to winning the war on terror.  No. 3, the threat of future attacks on America‘s homeland will politically aid the president.  And, No. 4, this administration, like all administrations before it, is filled with political operatives whose only mission in life is to reelect their president. 

Now, terror threats like the one issued today may help them do that.  These are the realities that exist today.  Unlike Michael Moore, I don‘t believe that President Bush would wag the dog by playing politics with national security.  But I do believe this:  National news organizations have to remain vigilant in tracking down intelligence sources that form the basis for terror warnings like the one that was issued this weekend. 

And the Department of Homeland Security is going to have to bend over backwards over the next several months to protect Americans while assuring all of us that their mission is free of political influence, because if they can‘t do that, then their warnings are going to carry no credibility.  And if their warnings carry no credibility, then Americans from coast to coast are going to be as ill-prepared for terror attacks in the future as we all were on September 10. 

Now, that‘s a real reason to be afraid.  And that‘s my “Real Deal” for tonight. 

The latest warnings of terror attacks come with alarming details of national security Tom Ridge noted yesterday.  Take a listen to what he said. 

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY:  Compared to previous threat reporting, these intelligence reports have provided a level of detail that is very specific.  The quality of this intelligence, based on multiple reporting streams in multiple locations, is rarely seen.  And it is alarming in both the amount and specificity of the information. 

(END VIDEO CLIP)

SCARBOROUGH:  With us now to dissect the details of this new threat to our way of life is MSNBC‘s terror analyst, Steve Emerson. 

Now, Steve, you saw the director of homeland security at his press conference saying, you know what, this is really scary stuff, very specific.  But before we talk about what was found in Pakistan on this computer, let‘s talk generally about the way this department and Tom Ridge are viewed.  A lot of times, this guy comes on the air—and I‘ve been in restaurants and bars when he‘s come on to talk about new terror threats and a lot of Americans just seem to yawn. 

They look up for a second.  Then they go down.  They eat their hamburger and have a beer and pay no attention to him.  Why is that? 

STEVE EMERSON, NBC TERRORISM ANALYST: Well, first of all, Joe, there is a repetition here.  There have been X-number of warnings issued since 9/11.  The code level has been raised several times.  So there is this sort of cry-wolf syndrome that has set in, too. 

There‘s a certain amount of political debate on which this has erupted.  And the accusations by Howard Dean that somehow this was part of a political agenda sort of makes people cynical.  And I think three is the fact that, in the absence of an actual terrorist attack occurring here, people have a hard time imagining the threat that they are facing. 

The reality is, Joe, that, prior to 9/11, if you look at the two seminal episodes that could have prevented 9/11, it was the Phoenix memorandum written by special Agent Ken Williams that talked about flight students training, working with bin Laden in the United States, and the Moussaoui memo and the arrest.  None of that percolated up to the highest levels of the U.S. government. 

Had that been done and there been a presidential decision at both times, maybe 9/11 could have been stopped.  So I think here is a case where I think the administration had no choice but to make the proclamation that there was a major terrorist threat scenario looming on the horizon. 

SCARBOROUGH:  Now, Steve, how do we sort through all this, because I will tell you what.  It sounds like there‘s some very specific threats here.  The last time, though, Tom Ridge came out and raised the threat a level, we found out that the information that he was going on there wasn‘t as specific, wasn‘t as credible.  Why should we be concerned this time with what was found in Pakistan? 

EMERSON:  Well, Joe, I have not seen the actual evidence.  We‘ve only been told about it and the government is reserving that for its analyst in order to exploit. 

But what they have contended they have found—and I have no reason to doubt them, because—look, the first time that anyone says that this is a political-driven piece of analysis and it‘s proven to be so, I‘ll get a phone call from an FBI or a CIA person.  So I have a feeling that they‘re not going to take that chance.  And I think they found the real stuff there in Pakistan. 

SCARBOROUGH:  Let‘s talk about some specifics that were found on the computer over in Pakistan.  It includes surveillance guides and very specific information, including good places such as coffee shops, to case potential targets, details about entrances to underground parking garages, the flow of traffic, including possible escape routes, even the number of pedestrian on the sidewalks during the day. 

You know, Steve, they even noted on this computer that 28 people a minute walked by one of the targets under surveillance.  This sounds like very thorough reconnaissance.  Is this typical of al Qaeda? 

EMERSON:  Unfortunately, Joe, it is.  And this is just the proverbial tip of the iceberg. 

These guys are good.  It‘s an enemy force.  Their hostility to the United States is implacable.  It‘s not going to be solved by any type of political reconciliation.  They are very good at reconnaissance.  They send in people all the time.  They recruit people in the United States; 9/11 was not a one-day problem.  It was a 365-day problem. 

And the reality is that what we picked up in Pakistan is probably a minuscule amount of the reconnaissance and intelligence that al Qaeda and other radical Islamic groups have accumulated over the past 15 years. 

SCARBOROUGH:  So, what are they trying to do here?  What is the purpose?  And was there this sort of detail, detail before 9/11?  Is this the same thing they did with recon operations pre-9/11? 

EMERSON:  Well, what‘s interesting, Joe, is that some of this, the intelligence they picked up, shows that it was picked up after 9/11.  So, in fact, there were cells operating here after 9/11, about which Khalid Shaikh Mohammed, 9/11‘s mastermind, didn‘t reveal or didn‘t know. 

So there are a lot of other cells that we are simply unaware of.  No.  2, they‘re collecting intelligence all over the United States.  And the fact is, it‘s collected in San Francisco, in Los Angeles, Boston, New York, Washington, Tampa, Florida, and they hide under false veneer and they are here doing minor type of jobs, but they are able to hide under the radar screen, collect the intelligence, even observe the incline of the garage floor, because that probably will be helpful in determining whether they can log up a barrel full of explosives. 

SCARBOROUGH:  Now, this computer that was seized in Pakistan also revealed al Qaeda surveillance of how hard certain targets are.  They observed the routines of day-to-day security.  They noted a decrease in building security over the weekends, including what days elevators aren‘t operating.  They also kept track of details about the security checks that were performed, whether or not security guards were armed, and what kind of uniforms these security guards wear. 

And, Steve, I know obviously you talked to people in New York today.  I talked to a lot of people in New York today.  And they seem to be gearing up for lockdown mode.  I mean, are these threats so specific to New York or to Boston or to Los Angeles or D.C. that the government agencies believe that an attack on those cities are imminent? 

EMERSON:  Well, there is a disconnect here, because the intelligence they found was evidence of reconnaissance and, essentially, you know, observations of the most detailed aspects of our operations in the United States, of where people were, how many people in the building, how many floors, how many security guards. 

There was no evidence picked up in this collection that people were in the United States ready to attack.  On the other hand, this is a predicate of all successful al Qaeda operations.  You know, the 1998 embassy bombings, Joe, in Kenya and Tanzania, the intelligence collection started in 1993.  And for the 1993 World Trade Center bombing, intelligence collection started in 1989.  So these things take a while. 

So now we‘re up two, three years after the intelligence collection. 

There is a certain cycle that is about to mature.  That is the real fear. 

SCARBOROUGH:  And I‘m going to ask you this question.  Are we better off today in stopping these thugs than we were in 1993 with the World Trade Center or as we were in 1998 with the embassy bombings or in 2000 with the USS Cole?  Are we any safer today, Americans any safer today, than they were 10, 12, 15 years ago? 

EMERSON:  Well, you know, history will judge. 

I think we are, but I could be proven wrong in the next minute.  The reality is, Joe—and I‘ve been warning about this, as you know—that this country has been infiltrated by a radical Islamic militant group, and not just a group, but sympathizers who provide bits of intelligence and, unfortunately, as we have seen in recent developments in the last week or so, have been able to insinuate themselves into the heart of the establishment. 

That‘s the real problem we face, which I don‘t think we have really owned up to yet. 

SCARBOROUGH:  Steve, stay with me. 

I want to bring in former “Christian Science Monitor” correspondent Philip Smucker.  He‘s also the author of “Al Qaeda‘s Great Escape: The Military and the Media on Terror‘s Trail.”  And we also have former FBI profiler Clint Van Zandt. 

Let me go to you first, Philip.

What do you make out of findings in Pakistan? 

PHILIP SMUCKER, AUTHOR, “AL QAEDA‘S GREAT ESCAPE”:  Very interesting story in “The Atlantic Monthly” that just came out today about another computer that was found.

Remember, “The Wall Street Journal” found a computer.  And they were talking about the way they were casing buildings in the United States.  This kind of thing has been going on a very long time.  But I would like to stress that this is not a zero-sum game.  We‘re going to be fighting this war for a very long time.  And we have to look at everything in total.  There is a cauldron going on in Iraq.  It‘s breeding more terror cells.  I don‘t think we‘re necessarily safer today than we were yesterday. 

SCARBOROUGH:  Clint Van Zandt, what do you make of the findings in Pakistan, and what should Americans do to prepare for this next possible attack? 

CLINT VAN ZANDT, MSNBC ANALYST:  Well, a couple of things, Joe.  I—

I guess I‘ll disagree with your other guest.  I think we are safer. 

I know, for example, the FBI deals with 50 to 100 credible threats of terrorism every day that they have to identify and do something about.  What Steve Emerson talked about earlier, the lack of the bureau‘s ability to percolate this information up to FBI headquarters, that percolator is really moving now. 

You know, is the FBI a perfect organization?  Absolutely not.  But information is moving up faster and, on a daily basis, they are identifying individuals.  They are surveilling potential cell members.  They are breaking up operations.  There are FBI agents in 45 different countries.  At any one moment, Joe, there‘s upwards of 1,000 FBI agents operating outside of this country trying to keep terrorism at bay before we let them in. 

Are we safer than 9/11?  I think we‘re safer because we know more. 

But are we still vulnerable?  Absolutely. 

SCARBOROUGH:  All right, gentlemen, stay with us. 

We‘ll be back in just a minute talking about the new terror threat that we learned about this weekend. 

Stick around.  SCARBOROUGH COUNTRY will be right back.

(COMMERCIAL BREAK)

SCARBOROUGH:  The government says that your family is in danger.  The Democrats say, just politics.  We‘ve got three experts here to tell you who to believe. 

We‘ll talk about that when SCARBOROUGH COUNTRY returns in a second.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, “THE TODAY SHOW”) 

MATT LAUER, CO-HOST:  When we‘re Talking about quality of intelligence, scale of one to 10, 10 being pure quickly, where does this fall? 

RIDGE:  Ten. 

LAUER:  That good?

RIDGE:  That good.

LAUER:  You have no doubts about the reliability of this information?

RIDGE:  That‘s correct. 

(END VIDEO CLIP)

SCARBOROUGH:  Sounds sure of himself.

We‘re talking about New York City, Washington, D.C., Newark, New Jersey.  All three of these cities are now on heightened alert for terror attacks because of what Homeland Security Director Tom Ridge is calling the highest quality of intelligence. 

We‘re back with MSNBC terror analyst Steve Emerson.  We also have former “Christian Science Monitor” correspondent Philip Smucker.  And we also have former FBI profiler Clint Van Zandt. 

Now, Steve, “The Washington Post” is writing about al Qaeda‘s attack cycle and outlines their strategy like this.  The first phase is surveillance of possible targets, which we have been talking about.  The second phase is planning.  And that‘s followed by an operations phase, when attacks are executed. 

Steve, based on what we have been reading and who you‘ve been talking to in the intelligence community, where is al Qaeda going to be planning its next attack?  And can any of us tell what part of the cycle they‘re in right now? 

EMERSON:  No, Joe, it‘s impossible to tell.  I wish I could come up with an answer.  It‘s sort of a doctor who opens up the body and sees the metastasis, and the more they inspect, the more they see the spreading of the cancer.  We‘re still in that stage right now of trying to detect how far the metastasis has spread of this terror threat and the militant Islamic groups that have insinuated themselves here.

So it‘s impossible to say.  But, clearly, the fact that they picked up this intelligence with very specific targets and the intelligence was two to three years old, that‘s just one snippet of stuff that‘s being collected, unfortunately, in other parts of the world by al Qaeda and other groups.  And we are simply unaware of the magnitude to which we are subjected to in terms of a daily threat. 

I don‘t think we have any idea to the extent that perhaps terrorist attacks have been called off, Joe, and we simply are unaware of it, because we got lucky.  And the reality is, we may not know this for a couple of years, at least a few years, not maybe for another five years, for that matter, until we really get the intelligence moving upwards.

And I think the example of, as what Clint said, percolating up of what they did in Pakistan was excellent work and moved up through the system within 72 hours.  That‘s the way the system should work. 

SCARBOROUGH:  Now, let‘s talk about—you say that the body is opened up and you‘re trying to give it a diagnosis.  What about the 9/11 report?  Both of the presidential candidates are running around waving the book, saying they want to implement a lot of the policies that have been suggested by the 9/11 Commission. 

How does that report stack up?  Does that help us get a better understanding or were there omissions from that report that may be dangerous omissions? 

EMERSON:  Well, I think the report made a substantial contribution to understanding of how bad the security problem here—but I think there were omissions.

As I look back on that report now, having had the time to digest it,

it did not deal at all with the whole issue of how these radical groups

have hidden under false veneer, under charitable conduits, under—quote -

·         “civil rights groups.”  It didn‘t deal with the political agenda here of radical groups that have met with Congress or that have been embraced by political officials, but that have a jihadist agenda

               

(CROSSTALK)  

SCARBOROUGH:  Name some of those groups and what political officials are embracing them. 

EMERSON:  Well, for example, two weeks ago, the senior Democratic leader, Nancy Pelosi, had a meeting with several radical Islamic groups.  And, of course, they contend that they were—quote—“civil rights groups,” but they were jihadist groups. 

SCARBOROUGH:  Which groups?

EMERSON:  The Council on American-Islamic Relations was the primary group that met with her.  And it‘s a group that has had its seed money, some of it come from Saudi Arabia, as well as the Holy Land Foundation, which was indicted last week. 

The fact that the American Muslim Council‘s chief, Alamoudi, Mr.  Abdurahman Alamoudi, pled guilty last week to a conspiracy to assassinate the head of Saudi Arabia, working with other terrorists, and here is a guy that throughout the entire 1990s had insinuated himself to the upper tiers of U.S. government.  There‘s a real security problem at the upper...

(CROSSTALK)

SCARBOROUGH:  Steve, I didn‘t mean to cut you off.  I just want to nail this down.  Did he meet with Nancy Pelosi or his group met with Nancy Pelosi or other groups on Capitol Hill? 

EMERSON:  No.

The American Muslim Council, of which Mr. Alamoudi had been head of, had not met with Mrs. Pelosi in the last two weeks.  That was the Council on American-Islamic Relations, which, unfortunately, has been treated uncritically to its status as a—quote—“civil rights group.”

I will guarantee you, after my appearance tonight, you‘re going to be subjected to 10,000 e-mails, minimally, protesting that I‘m smearing all Muslims.  And I‘m not, because they do not represent the vast majority of Muslims.  They have a particular agenda.  And it‘s found in the fact that they were created by a Hamas front group in Texas called the Islamic Association for Palestine.

This is not something that‘s new.  It‘s something that‘s out there, and yet politicians are responding to votes and the prospect for contributions.  This is the real problem here that 9/11 did not address. 

SCARBOROUGH:  Now, back in July, “The New York Post” reported on al Qaeda—of al Qaeda‘s intentions to attack Wall Street and the tapes—a tape supposedly of Osama bin Laden saying this, quote—“After the strike of the New York blessed days, thanks to God, their losses exceed $1 trillion, their budgets have been in deficits for the third year in a row.”

Philip, let me bring you in here. 

Do you think that this makes it clear—does it make it clear to you that Osama bin Laden, al Qaeda‘s primary goal, more than even killing Americans, is to cripple the United States economy? 

SMUCKER:  Joe, I think that‘s relatively clear to most Americans. 

I think, though—well, let‘s not overlook the politics of the day.  The Kerry campaign launched a huge accusation today at the Bush administration.  They said that the Bush administration‘s policies abroad are helping Osama bin Laden recruit members, new members, in fact, increasing his power and his strength.  I‘m not sure if that‘s true. 

But I would like to argue two things, one, that bin Laden‘s escape from Tora Bora, when we had a shot at him and he got away and the Bush administration had known where he was, combined with the situation in Iraq today—now, I‘m not talking about whether it was a good idea or a bad idea.  That‘s beside the point.  But, right now, that is a cauldron breeding terrorist cells. 

And I think, just as the first Afghan war showed us, about five or 10 years down the road, we‘re going to be seeing these young men with post-traumatic stress syndrome coming at us right and left.  And I think the real question is, how do all the pieces of the puzzle fit together?  What‘s going on overseas?  What‘s going on here domestically? 

SCARBOROUGH:  Clint, what do you say to that? 

VAN ZANDT:  Well, I think it depends, Joe, as to whether we‘re perceived as being weak on terrorism or hard on terrorism. 

I don‘t care whether these guys have PTSD or PMS or whatever they may have when they are coming at us.  I think they‘re going to keep coming at us.  And guys like Michael Moore wouldn‘t know if a terrorist ran up and bit him in the arm, and then they would probably say it was a pro-lifer. 

So, you know, somebody like that does a disservice to America, I

think.  The American public want to know, you know, what‘s real and what‘s Memorex?  How do we separate the two?  Here we have Tom Ridge saying this is a 10.  If we‘re talking about a girl walking down the beach, everybody‘s going to say, boy, it doesn‘t get any better than that.  Well, Tom Ridge has given us his best assessment.  This information is a 10. 

The only thing we‘re losing right now—we‘ve got the specificity on where it might happen.  But al Qaeda‘s got A-list and B-list and C-list, and we don‘t have a time schedule.  The only thing that worries me, Joe, is how long can we lean forward in the saddle?  How long can we have these Hercules teams in New York City with flak jackets and automatic weapons up and down the streets 24 hours a day? 

Eventually, we run out of money or those guys get heat prostration.  And al Qaeda, all they have to do is sit back and wait.  And then the bigger question is, would al Qaeda want to strike us now before the election and might that be perceived as then, as you suggest, maybe strengthening President Bush‘s position as a president fighting terrorism, or might they want to wait until after the election and then go for the throat of someone they might perceive to be weak?

(CROSSTALK)

SMUCKER:  But how wise is it to be telegraphing this information to al Qaeda right now?  We‘re telling them we know their plans. 

Now, if I was al Qaeda—it‘s interesting the methods that are being used here.  If I was al Qaeda, I would choose another target.  I‘d go to San Francisco.  I‘d go to Chicago. 

VAN ZANDT:  They have other targets.  We know that.

(CROSSTALK)

SCARBOROUGH:  Gentlemen, let‘s look at specific targets.

I want to read you specific targets that we‘ve had reports from what al Qaeda‘s produced before.  They‘ve talked about going after nuclear plants.  They‘ve talked about bridges and tunnels around New York City, oil refineries, shopping malls, apartment buildings, trans-Pacific flights, the Sears Tower, cruise ships, ferries, crop-dusters, and hazardous material that‘s being hauled around by trucks. 

What in the world can we do?  We don‘t have enough people to protect all these targets. 

VAN ZANDT:  No, we don‘t. 

SCARBOROUGH:  Do we, Clint? 

(CROSSTALK)

VAN ZANDT:  No.  And that‘s the challenge. 

And that‘s why we hear this term vigilance.  When I hear that said on TV, you see people go, oh, don‘t tell me vigilance again.  Well, you know, the reality is, we don‘t have enough police officers.  We don‘t have enough FBI agents on the street to do it. 

Since 9/11, the American public has got to be the eyes and ears of law enforcement.  You know, Joe, it‘s like in the military.  One man with a rifle and then you take one man with a machine gun.  Well, the guy with the machine gun is worth five guys with a rifle.  Well, we need the American public to say, hey, that guy is wearing a bulky coat in the summertime walking into that building.  That doesn‘t look right. 

Everybody has got a cell phone on their belt.  Pick up the cell phone, call and say, I saw this.  We‘ve got all these police out there.  They want to do something.  They want to stop something like this.  It‘s got to be a team effort.  It‘s got to be the American public being the eyes and ears and it‘s got to be law enforcement going after, doing the investigation, and dealing with the situation. 

One can‘t make it without the other.  And we‘re so big and we are such a target-rich environment, as you just pointed out.  You know, it is Mr.  and Mrs. America and all the ships at sea.  And we‘re all vulnerable.  So we‘ve all got to stand together. 

SCARBOROUGH:  All right, Clint Van Zandt, thanks so much.  Philip Smucker, thank you. 

And, also, Steve, also, I‘m going to ask you to stick around, because, coming up next, we‘re going to be talking about the strange events on Flight 327.  Was this just an isolated case or are terrorists probing our system in the air for weaknesses? 

That‘s coming up next.  You‘re not going to want to miss it.

(COMMERCIAL BREAK)

SCARBOROUGH:  Were the suspicious Syrians on Flight 327 just restless musicians or terrorists planning the next attack?  We‘re going to be asking somebody who was actually there in a minute. 

But, first, let‘s get the latest headlines from the MSNBC News Desk. 

(NEWS BREAK)

ANNOUNCER:  From the press room, to the courtroom, to the halls of Congress, Joe Scarborough has seen it all.  Welcome back to SCARBOROUGH COUNTRY.

SCARBOROUGH:  Hey, welcome back. 

You know, when it comes to the security of America, sometimes it‘s the little things that are caught or missed that can make all the difference in keeping us safe. 

We have been bringing you the story of Northwest Flight 327.  It‘s a flight that some say could have been a dry run for terrorists.  Now a second passenger has stepped forward and is talking about also an account of suspicious behavior by 14 Syrian men who were aboard that flight from Detroit to Los Angeles. 

Now, earlier today, I had a chance to speak with Audrey Hudson—she‘s at “The Washington Times”—who interviewed the second passenger. 

(BEGIN VIDEOTAPE)

AUDREY HUDSON, “THE WASHINGTON TIMES”:  Well, the second passenger came forward last week and gave an interview to “The Washington Times” and corroborated what Annie said and went into further detail because she was in the first-class section of the plane and Annie was in coach. 

And so Annie‘s story, what she reported was that people were running to the forth and the back lavatories.  So what the second witness was able to say was what was happening in first class.  And she did say that there was foot traffic constantly throughout the entire flight, that one of the passengers had actually barged and pushed other passengers out of the way in order to get into the front lavatory, where she said he spent at least 15 minutes, she said almost the entire time that her meal was in front of her. 

Now, the second witness is very credible.  She did not want her name used because she does work for a very large business and this was her personal story and had nothing to do with the business.  However, I did ask her to fax me her itinerary, which she did do, which does confirm that she was on that plane on that same flight number. 

I asked her what her reaction was.  Was she concerned about the activity?  Was she scared, frightened?  And she said, Audrey, I thought I was going to die. 

(END VIDEOTAPE)

SCARBOROUGH:  You know, Annie Jacobsen wrote about her experience on Flight 327 and has been researching the 14 Syrian men who were on the flight.  Also, we have Bob Flamm.  He‘s the executive director of the Federal Air Marshal Association.  And still with us is MSNBC terror analyst Steve Emerson. 

Annie, let me bring you in here. 

It‘s amazing to me how this story has really touched a lot of Americans, scared a lot of Americans.  I was at the Democratic Convention this past week.  I can‘t tell you how many people came up and said, I saw that Annie Jacobsen story.  And I had an experience that was somewhat similar. 

I want to ask you, are you still convinced that the group of men that were on your flight weren‘t musicians from Syria, but possibly something more sinister? 

ANNIE JACOBSEN, ABOARD NORTHWEST AIRLINES FLIGHT:  Well, Joe, I understand that they are Syrians from—who are musicians. 

But what they were actually doing on that flight, I‘m not sure.  But what‘s interesting is that we have a couple other passengers who have contacted me today and I‘ve interviewed who were on that flight and who were seriously concerned. 

SCARBOROUGH:  What are they telling you? 

JACOBSEN:  Well, I‘m hoping they‘re going to come on and tell you. 

But you can read about it in my next article.

They were sitting behind where I was sitting in the plane.  You know, same sentiments as the two of us who have come forward already. 

SCARBOROUGH:  Now, did they believe, also, that these Syrians that were on the plane that were moving around, that wouldn‘t sit down, kept going to the restrooms, wouldn‘t be seated as the plane was landing, did they also believe that these Syrians were building bombs inside the lavatory? 

JACOBSEN:  Well, I don‘t know what they thought they were doing inside the lavatory, but I know that they were really concerned.  One of the passengers had his 14-year-old daughter with him.  And she was terrified.

And he was working with her to try to make her comfortable.  So there‘s just no doubt in my mind that what these guys were doing on that flight was just unacceptable behavior at 30,000 feet, musicians or not. 

SCARBOROUGH:  And you talked to the Syrian ambassador about the Syrian band.  What did he tell you? 

JACOBSEN:  He didn‘t have very nice things to say to me or about me. 

SCARBOROUGH:  Not really pleased with the publicity that you have brought to this situation? 

JACOBSEN:  Well, Joe, I was really, you know, disconcerted because he misrepresented a lot of the facts in an editorial he wrote about me for “The Washington Times.”  He suggested that Nour Mehana and his band had in fact played at the Lincoln Center and the Kennedy Centers, when they had not.  And I called him up just to discuss that with him. 

SCARBOROUGH:  And, Annie, what about—have you contacted law enforcement officers and tried to get an answer to the question that we want an answer to, which is how they could have these 14 Syrians in custody?  The FBI is there.  The immigration officials are there.  They‘re suspects, because the pilot called it in.  And yet they let them in and out of their custody when they‘re in America illegally because they don‘t have valid visas. 

JACOBSEN:  Well, that is a terrific question.  And I did ask all of those questions right off the bat before I my wrote my articles, but I stayed clear of trying to get any other additional information from law enforcement.  They don‘t really seem to want to talk to me.  And I think at this juncture they‘re spending a lot of their time trying to discredit me, instead of focusing on the real problem here. 

SCARBOROUGH:  It‘s a real CYA operation.

I remember, right after this happened, they said, hey, don‘t worry, told Pete Williams, everything is under control.  Everything happened as it was supposed to happen.  Everything checked out.  Of course, everything didn‘t check out.  They had them in their custody.  It ended they were in America illegally, but somehow they didn‘t even look to see that their visas had expired. 

Bob, let me bring you in here. 

Obviously, you‘re a federal air marshal, the head of the association.  Does this surprise you?  Does this story surprise you, or do things like this happen at 40,000 feet more often than Americans are aware of? 

BOB FLAMM, EXECUTIVE DIRECTOR, FEDERAL AIR MARSHALS ASSOCIATION: 

Well, Joe, I‘m afraid that we have far too much evidence to discount the fact this is happening far too often and that the public has a right and should be informed, so that they can make a proper decision on whether or not they want to fly, just like they made the alerts today in New York and in Washington and in northern New Jersey, so people can make up their own minds how they‘re going to react. 

SCARBOROUGH:  Steve Emerson, respond to this. 

EMERSON:  Look, Joe, the fact of the matter is that this is a major embarrassment.  These are Syrian nationals, who are on a country, one of the seven countries that officially supports terrorism.  They were out of status.

And then when they landed at the airport in Los Angeles, nobody interrogated them.  They were allowed to leave as if they were just American citizens or they were foreigners coming from Europe.  The reality is, this is a scandal that really needs to be investigated.  And I can tell you, having to spoke to FBI agents in the field, they are telling me, go get them, because, Joe, this needs to be exposed because headquarters is trying to basically pretend it wasn‘t a scandal. 

And the same thing has happened with FBI whistle-blowers who come forward and headquarters tries to discredit them.  The FBI field understands the problem.  They want to get the job done.  They‘re being hamstrung.  Here, headquarters need to stand up and say, let‘s investigate how we screwed up here. 

SCARBOROUGH:  Bob, what how about air marshals that step forward and tell the truth, are they in danger of losing their jobs? 

FLAMM:  Absolutely. 

They are federal law enforcement officials and are bound by agreements to not go public or to show their faces for obvious reasons in carrying out their jobs. 

SCARBOROUGH:  All right, thanks so much, Bob.  I appreciate you being with us. 

Also, of course, Annie, as always, thanks for being here.

And, Steve Emerson, we greatly appreciate it. 

Now, coming up, some people are saying that John Kerry gave a great speech last Thursday.  I‘m not one of those people.  But we‘re going to find out what “The New York Times”‘ Paul Krugman thought of John Kerry‘s big night and about out-of-control spending on Capitol Hill and why that is a capital offense.

That‘s coming up next.

(COMMERCIAL BREAK)

SCARBOROUGH:  “New York Times” columnist Paul Krugman writes the following—quote—“The Bush administration poses a challenge to America as we know it.  Bush represents a revolutionary power that aims at a transformation of American politics.  And the radicalism of this movement, I argue, extends across both domestic and foreign policy.”

The book is called “The Great Unraveling: Losing Our Way in the New Century.”  It‘s now available in paperback from Mr. Krugman. 

I spoke with him earlier today and I asked him if he was worried about the out-of-control spending in Washington. 

(BEGIN VIDEOTAPE)

PAUL KRUGMAN, AUTHOR, “THE GREAT UNRAVELING”:  Big spending increases domestically are all either military related or national security related.

Once you look at the rest, it really isn‘t happening.  There‘s just a lot of deceptive statistics being put out by the usual suspects, at places like the Heritage Foundation.  But if you take that aside, it really—all that‘s been happening is the growth of cost of Medicare and, of course, the Medicare prescription drug bill. 

But this is—no, Bush as big spender is actually mostly a myth.  The other thing to bear in mind is, they have an election to win.  Spend money before the election.  But if you look at the underlying plans, it‘s actually to dismantle a lot of the programs they say now they‘ll defend to the death. 

SCARBOROUGH:  And I want to talk about John Kerry for a second.  Again, I have been very critical of the Republicans, the Bush administration, because, again, the numbers that I see, the increases in the departments, the increases in domestic spending also, as well as foreign, it seems they want to cut taxes.  The want to increase spending.  They don‘t want to balance the budget. 

In John Kerry‘s speech on Thursday night, this is what John Kerry talked about.  He actually tax cuts for the middle class.  He talked about tax cuts for businesses.  He talked about universal health care when he talked about health care being a right.  And he didn‘t propose cutting any existing programs. 

Anything in that speech concern you, or do you think that people like me might be playing Chicken Little by talking about these deficits and the debt and what it may do to interest rates? 

KRUGMAN:  I would probably want to be—if it was up to me and if I didn‘t have an election to win, I would be more aggressive about tackling the deficit than Kerry is. 

But there‘s nothing in Kerry‘s program that is any less responsible

than what is in Bush‘s program.  If anything, it‘s a bit

(CROSSTALK)

(LAUGHTER)

SCARBOROUGH:  That‘s actually damning with faint praise, when Bush got $150 billion surplus and now we‘re sitting at a $450 billion deficit. 

KRUGMAN:  Let me put it this way.  Bush has a plan, he claims, to cut the deficit in half.  It makes no sense at all.  Kerry says he‘s going to cut the deficit in half and there‘s more to it than there is to Bush. 

Now, I say, OK, gimlet-eyed accountant, I would like to see more.  But the things that Kerry is proposing, he has also proposed ways to pay for.  The fact is that the Kerry health care and education stuff is paid for by rolling back tax cuts for the top 2 percent of families.  And if you do the math, it works. 

(CROSSTALK)

SCARBOROUGH:  The numbers actually add up on just the top 1 percent?

KRUGMAN:  The numbers actually add up.  Yes, the numbers actually add up.

And let me say something else.  You know, who was carefully placed sitting next to Teresa Heinz Kerry during the speech?  It was Robert Rubin.

SCARBOROUGH:  Yes. 

KRUGMAN:  Now, if that isn‘t a signal that we‘re going to have fiscal responsibility, what is? 

SCARBOROUGH:  And how sad is it for Republicans like me that came into Congress in 1994 to balance the budget that actually it‘s Robert Rubin that I see up there going, we may get a balanced budget after all.  And It‘s sad, I think. 

(CROSSTALK)

KRUGMAN:  But that‘s telling you something, right?  We went through, you know—people who think that Republicans are the party of fiscal responsibility are living in the Eisenhower years.  It just hasn‘t been true for a long, long time. 

SCARBOROUGH:  Well, unfortunately, I think we did some things right for a couple of years in the mid-‘90s. 

And, unfortunately, again, it seems everybody is driven by, again, cooking the—getting the economy burning through tax cuts, through bigger spending. 

I want to ask you this, though, because Republicans and Democrats alike in the 1990s seemed to understand that higher deficits, higher national debt eventually would lead to higher interest rates.  Why isn‘t that happening now and why don‘t you hear people on either side of the aisle, you know what, we better curb spending and we better curb these deficits and we better not allow these tax cuts or else we‘re going to have interest rates shooting up 2, 3 percent?  That will cripple the economy, less revenue, higher deficits for us in the future. 

KRUGMAN:  Well, I think, actually, you will find people saying it.  And, in fact, Robert Rubin, again, has a pretty—he had a pretty blood-curdling piece on this back that was presented at the American Economics Association back in January. 

Now, the fact is there has been a race to the bottom here, which has been led by Bush.  Bush has kept on telling people, don‘t worry.  Deficits are no problem.  Let me tell you about the good things I‘m going to do for free.  And, realistically, the focus of anyone who is going to run against that, since the public isn‘t sitting there saying, well, let me take a look at those—oh, the administration has gone over the five-year budget projections, but that‘s missing the real stuff because it‘s all in the out years.  Ordinary people sitting at their kitchen table trying to pay their own bills are not thinking that through. 

So a candidate who is going to run against him has got to talk about the good things he can do.  I‘m sorry, but this is—it might be good if we had Ross Perot and his charts in this election, but we don‘t.  And so what you have to do is, you have to look at the candidates we‘ve actually got and ask which one do you think is more fiscally responsible. 

(END VIDEOTAPE)

(LAUGHTER)

SCARBOROUGH:  Longing for the days of Ross Perot, who would have thunk it? 

Now, straight ahead, more of my interview with “New York Times”‘ Paul Krugman. 

Don‘t go away.  We‘ll be right back.

(COMMERCIAL BREAK)

SCARBOROUGH:  Tomorrow night, SCARBOROUGH COUNTRY is live from Liberty Island for the grand reopening of Lady Liberty after almost three years. 

But stick around with us tonight, because there‘s much more SCARBOROUGH COUNTRY from the Redneck Riviera straight ahead.

(COMMERCIAL BREAK)

SCARBOROUGH:  Welcome back. 

You know, I asked “The New York Times”‘ Paul Krugman what he thought about John Kerry‘s convention speech and whether or not the presidential candidate rushed his remarks. 

(BEGIN VIDEOTAPE)

KRUGMAN:  The network coverage was disgraceful, one hour a night for a national convention in an election that‘s going to decide a lot about America‘s future. 

And they should have done—now they‘re going to have to do the same thing with the Republicans, unless they‘re going to—unless they open themselves to charges of gross bias.  But I‘m not sure that‘s what Kerry was doing. 

I think part of it was, he was trying to give a serious speech, not just a set of applause lines.  And so he sort of waited a couple of seconds, then talked over each applause line.  And I actually thought it worked pretty well.  I watched—I watched the convention on C-SPAN, which was the way to do it, not—unfiltered. 

And I actually thought that the thing—that it was a pretty effective, maybe not the best for an emotional connect.  But what he needed to do was convince people that he really was serious, he really was presidential.  And I thought he did a pretty good job of that. 

(END VIDEOTAPE)

SCARBOROUGH:  All right, we thank Paul Krugman for coming on

SCARBOROUGH COUNTRY. 

And, again, the book is called “The Great Unraveling.”  And it is now available in paperback.  I don‘t agree with a lot of the content, but I like—I‘ll tell you what.  I liked reading this book because it certainly challenges a lot of my beliefs.  And I think, in the end, if you‘re a conservative, read the book.  I think it will make your views stronger.  If you‘re liberal, read the book.  It will help you going into the fall election and give you some talking points when you eat dinner across the table from somebody like me. 

Hey, we‘ll see you tomorrow night.  You know, it‘s been three years.  The symbol of America‘s freedom reopens tomorrow.  And we‘re going to be there.  We‘re going to take you live to Liberty Island.  That‘s tomorrow night at 10:00 Eastern.  We‘ll see you there.

Have a great night.

END   

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