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CNN LATE EDITION WITH WOLF BLITZER

Interview With Spencer Abraham; Interview With Bill Richardson; Interview With Wesley Clark

Aired August 17, 2003 - 12:00   ET

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

WOLF BLITZER, CNN ANCHOR: It's noon in Washington, 9:00 a.m. in Los Angeles, 5:00 p.m. in London and 8:00 p.m. in Baghdad. Wherever you are watching from around the world, thanks for joining us for LATE EDITION.
We'll get to my interview with the U.S. energy secretary, Spencer Abraham, about the North American blackout in just a few minutes.

But first, with power largely restored, attention is shifting to the cause of the massive power outage, the worst ever in North America. CNN's Kathleen Koch is in New York's Times Square. She's joining us with the latest -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Wolf, it's like trying to piece together the anatomy of a train wreck. This was a big one.

They have zeroed in on the epicenter, and they say it is the Cleveland, Ohio, area, northern Ohio, where three transmission lines went down, one after another, starting at 3:06 p.m. on Thursday.

There were alarms in the control center of First Energy, the utility that runs those lines. The alarm should have gone off to tell them something was wrong, but the alarm system was broken. First Energy knew it; they hadn't repaired that system.

There was then a back-up system. This was at the headquarters of a regional nonprofit power pool that oversees the regional grid. However, it gets thousands of alarms every minute. And so, since these outages in Ohio were not in a normally trouble-prone area, the spokesman there says they don't know if any of their workers noticed the Ohio outages.

So, then, it was in the 4 o'clock hour, after those Ohio lines went down, that there were these radical surges and then drops in the regional grid. And suddenly, from -- throughout eight states, starting in Ohio and cascading up and around the Erie -- Lake Erie and Lake Ontario, all these power plants went out, some 100 of them in eight states and up into Canada.

The question is again, was it a human error that caused this, or was this a technical problem? The North American Electric Reliability Council meets today with officials from the Department of Homeland Security to try to get to the bottom of this.

Officials are saying we could still have some scattered blackouts starting tomorrow when everyone heads back to work. But, Wolf, they say they will only do that as a last resort if the fragile energy grid is overtaxed.

Back to you.

BLITZER: Thanks, very much, Kathleen Koch at Times Square in New York.

And within the past hour, I spoke with the U.S. energy secretary, Spencer Abraham, about the impact of this blackout and what can be done to prevent future outages.

(BEGIN VIDEOTAPE)

BLITZER: Secretary Abraham, welcome back to LATE EDITION. Thanks for joining us. A critical few days here, obviously, for you and everyone else.

You just met yesterday with the governor of New York, George Pataki. He seems frustrated. He seems angry. Listen to what he said.

(BEGIN VIDEO CLIP)

GEORGE PATAKI, GOVERNOR OF NEW YORK (R): I think the people of western New York and the people of New York state also have a right to know what went wrong, where did this happen, why did this happen, and why did the safeguards that were supposed to have been put in place after the '65 blackout and after the '75 blackouts not work?

(END VIDEO CLIP)

BLITZER: Fair questions from the governor.

SPENCER ABRAHAM, ENERGY SECRETARY: Very much so. And we want the same answers. We're launching -- in fact, today we've sent investigative teams out from our department and other agencies to begin tracing the source of the problem. We want to decide what happened, why it cascaded, and what we need to do to make sure it doesn't happen again.

BLITZER: So what happened?

ABRAHAM: Well, that's what we need to find out.

BLITZER: But you must have some inkling already.

ABRAHAM: There's a lot of speculation going on. As you know, within the first day or so, fingers were being pointed at a variety of communities and locations, and it's just too hard. I mean, there's hundreds of thousands of miles of transmission grid, there's countless substations where the electricity gets rerouted. It's impossible at this point to definitively say.

We hope that this is an issue we can deal with fairly quickly, and we're going to put every resource we need to get to get the answers quickly so we can reassure people that need to use subways or trains or any other energy that's resulted here from this or any other problems that they don't have to worry in the future.

BLITZER: But to our viewers in the United States, indeed around the world, can you categorically rule out terrorism?

ABRAHAM: There is absolutely no evidence that there has been any intentional action that triggered this. We're dealing with an enormous system in the U.S. and Canada that has not only huge power production but huge amounts of transmission.

Something went wrong. We'll find it out, and when we do, we'll make sure it doesn't happen again.

BLITZER: Any evidence of cyber terrorism?

ABRAHAM: None. Obviously, the Department of Homeland Security and other law enforcement agencies have been looking into that. There has been no evidence.

And we've talked to people on the front lines. Nobody in the system, none of the companies or the folks who work with the independent service providers have evidenced any inclination toward that, and so that's the good news. The bad news is, until we've definitively decided what the source of the problem is, we can't answer the question today. But we're going to put the resources we need into play to make sure we do answer it soon.

BLITZER: What about the issue of human error, either inadvertent or deliberate?

ABRAHAM: Well, again, if it's deliberate, that's a whole different question, but it's not inconceivable, I suppose, that there's a human factor here. You have a lot of people in these systems that have roles and responsibilities.

But again, I think it's unwise for me to speculate at this point. The reason we're doing a binational, a U.S.-Canadian task force investigation, is to get the right answers so that people have the comfort of mind that this isn't going to happen again.

BLITZER: The suggestion coming out today that there were these problems, separate problems originating in Ohio, that cascaded and went around this so-called Erie Loop, including into Canada, back through New York. Is that fair speculation?

ABRAHAM: I can only say this. What we need is an independent investigation to be conducted on both sides of the border jointly by the U.S. and the Canadian energy ministries.

Until then, I am not going to comment on the suggestions that are out there. We'll certainly take into account that investigation that's gone on. But I think the people want a final, decisive answer, and we'll give it to them.

BLITZER: President Bush said this was an important wake-up call for the country right now, but in 2002, only five months after he took office, he already saw there was a serious problem out there. Listen to what he said in May of 2001.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: But if we fail to act, this great country could face a darker future, a future that is unfortunately being previewed in rising prices at the gas pump and rolling blackouts in the great state of California.

(END VIDEO CLIP)

BLITZER: He knew there was a problem then, so what has been done over the past two years, two and a half years, to deal with this issue?

ABRAHAM: When President Bush made the announcement you just saw, it was part of the announcement of our 105 recommended changes for the nation's security, our energy plan.

Ninety-five of the 105 recommendations are ones the executive branch can implement, and we've been implementing them. They are in place. We've done a national grid study. We've enhanced our investment in research into how to run the grid more effectively, and how to use more energy-efficient transmission.

We've done the things we can do. Congress has yet to pass an energy bill. And the final 10 or 12 recommendations of the energy plan that we put forth require congressional action. We need Congress to empower the Federal Energy Regulatory Commission to be able to put mandatory reliability standards in place. Today, they can't. We need to give them that authority. We need to put in place incentives for new transmission.

We've done the things we can do as an executive branch. Now we have to finish the job with Congress.

BLITZER: Well, Democrats and others say the administration has not taken the leadership with Congress to get this kind of legislation passed, the legislation you want, in part because you're holding up some of the critical infrastructure creation demands hostage to the ANWR, the Alaskan (sic) National Wildlife Refuge, which so many Democrats, and a few Republicans of course, strongly oppose as well.

ABRAHAM: Look, that's a ridiculous charge. I mean, we have been trying to pass energy legislation. We've never issued a veto threat related to ANWR or any other part of the comprehensive energy package.

BLITZER: But since ANWR is so controversial, why not take that out of the legislation...

ABRAHAM: Well, it isn't in the Senate bill that passed.

BLITZER: ... deal with everything else, and then move on separately on ANWR? ABRAHAM: Well, I would ask the critics, first of all, if you believe that we need to address our energy security, why is ANWR holding this up? The same question can be asked of them.

But let me make this point. The president -- we've never issued a veto threat on an energy bill. All we said is, we need to pass energy legislation to give Americans energy security.

We identified these problems, as you'll recall, in 2001, we said we need more production, more transmission. We were criticized then by the very same Democrats and others who have held up the legislation for wanting too much new energy build-up in this country.

Well, now we've learned that if you don't move ahead, if we don't increase the transmission and generation capabilities in this country, you'll have problems.

BLITZER: This current blackout, the worst in U.S. history, we'll put some statistics up on our screen, the largest in U.S. history, 21 power plants went down in three minutes, covering an area of 9,300 square miles. Fifty million people were affected in the United States and Canada.

A few years ago, not only the president was warning of this, there was a recommendation, David Cook, the general counsel of the North American Electric Reliability Council, said this: "The question is not whether but when the next major failure of the grid will occur." Well, we now know when it occurred, only this past week.

What is the most important thing that the government, the federal government, has to do right now to make sure this doesn't happen again?

ABRAHAM: Well, first of all, as we investigate the source of the problem, and there may be specific things that come out of that investigation, we need to pass an energy bill that gives the Federal Energy Regulatory Commission the authority to impose mandatory reliability standards that says the people who use the system have to adhere to high standards of conduct, or be punished if they fail to do so. Right now, that does not exist.

BLITZER: So, in other words, you have to increase the regulation, in effect.

ABRAHAM: We have to give -- we have to set -- we have to put in place a set of standards that require good behavior and have the ability for the federal government to enforce those standards. Failing to do that leaves the system open to potential behavior that falls short of the mark.

BLITZER: One of the criticisms is -- you need a lot more of these transmission systems around the country. Everybody says you need them, but nobody wants them in their own backyard.

ABRAHAM: And no one wants to pay for them. BLITZER: Does the federal government have the authority to force these states, these local communities to accept the construction of these transmission systems?

ABRAHAM: No.

BLITZER: Why not?

ABRAHAM: A common misunderstanding here is this: The federal government neither has the power to site transmission lines, nor do we build them. That's done, as people know, in their own communities. The siting decisions and the permitting is done at the local level, or by state governments if it's interstate in nature. And federal government -- this is one area we have no authority.

BLITZER: But should the federal government take that authority, get that kind of eminent domain that you have in other areas, for example?

ABRAHAM: We have it for pipelines, we have it for other interstate -- obviously, for roads.

We believe we should. In fact, one of the recommendations in our energy plan was that the federal government have siting authority. It has been strenuously resisted both in Congress and by the states, because they want to hold on to that power at the state and local level. I understand their position, but the fact is that the problems will be greater in the future. The demand for electricity is going to necessitate more transmission. And if people hold up the siting of the transmission, it can cause problems.

We saw it -- in fact, we had to issue an emergency order on Thursday night to open up a current between Long Island and Connecticut that had been held up because of disagreements over authority, to allow for some electricity to move back and forth. It actually helped alleviate the problem, but we had to do it in an emergency order.

BLITZER: There's a story you saw in The Washington Post today, the Federal Energy Regulatory Commission recommending these regional transmission organizations to control the flow of power. Says the Bush administration thinks that's a bad idea.

ABRAHAM: Well, that's a mischaracterization of our position. We don't think it's as important as putting mandatory reliability standards in place and making them enforceable. We don't think it's as important as putting in place more incentives to build transmission lines.

What you're talking about has to do with the market structure, the deregulation of the marketplace and the regionalization of it. We don't feel that forcing that down the throats of individual communities and regions is as important as the other priorities which we have in terms of an energy policy.

BLITZER: Looking back, was all this deregulation of the energy grid, the power system in the United States, was it a mistake?

ABRAHAM: No, I don't think so. In fact, the major blackouts of 1965 and 1977 happened in a highly regulated system. There have been fewer outages since we moved in the direction of deregulation in some parts of the country.

But until we know everything that happened here, it's just going to be the case, I think, that people who have interests in one or another side of these issues are going to speculate that their position was the one that would have avoided this problem.

We don't know all the answers, but we will soon.

BLITZER: Well, your predecessor, Bill Richardson, the former energy secretary, was on Larry King Live earlier in the week. He's going to be on this program, coming up shortly.

I want you to listen to what he said, because this soundbite that he had on Larry King Live has caused a lot of excitement, concern out there. Listen to this.

(BEGIN VIDEO CLIP)

GOV. BILL RICHARDSON (D-NM), FORMER ENERGY SECRETARY: We're a superpower, but we have a third-world grid that needs to be modernized.

(END VIDEO CLIP)

BLITZER: Does the United States have a third-world grid?

ABRAHAM: Well, we have a grid that is old. We have a grid that was, in large part, built at a time when a single power plant serviced a small community. Now we have long-distance electricity supply being traded back and forth. It's not up to that 21st-century challenge.

And so, we do need to pass energy legislation to try to bring more investment into the process and more safeguards into the process.

BLITZER: When you were in upstate New York yesterday, you spoke of the need to conserve energy, at least right now. Some suggested that was in contrast to what the vice president, Dick Cheney, said upon release of his energy recommendations in 2001. Listen to what the vice president said then.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Conservation may be a sign of personal virtue, but it is not a sufficient basis, all by itself, for sound, comprehensive energy policy. We also have to produce more.

(END VIDEO CLIP)

BLITZER: When he spoke of a sign of personal virtue, he seemed to be belittling the importance of conservation. ABRAHAM: What he said was it's not, all by itself, sufficient. And it isn't, all by itself, sufficient. The demand for electricity to have a strong, growing economy is too great to be simply offset by more conservation. You need both. Our energy plan recommended a variety of conservation and energy efficiency proposals, as well as new production proposals.

And it's interesting, as I said earlier, that now that we've run into this problem, people are saying, "Why didn't you do more?" Well, the very people saying that were the ones who strenuously opposed our calls for greater production and expansion of our transmission capability.

BLITZER: We only have a few seconds left, but very quickly, what happened in the Northeast and the Midwest and Canada this past week, could it happen again in other parts of the country in the days, weeks, months to come?

ABRAHAM: We intend to do everything we can to make sure it doesn't. We obviously are going to investigate this thoroughly and make corrections as needed. It has happened at this magnitude only twice in the last 25 years, and so I am confident, talking to the people on the front lines, that we can address these problems.

But there is peril ahead if we don't modernize the system, invest in energy the way we need to, because there will be other evidences of problems coming up. And we've seen crisis in California a couple of years ago. Now this one. That's what we need, a comprehensive energy plan, and we need to pass the legislation.

BLITZER: I think it's been a wake-up call, not only for the government but for the news media as well.

Good luck to you, Secretary Abraham.

ABRAHAM: Thank you.

BLITZER: You've got a daunting challenge ahead of you.

ABRAHAM: Thank you.

(END VIDEOTAPE)

BLITZER: Up next, the blackout's impact is being felt from gas pumps to water faucets. We'll talk with the Michigan governor, Jennifer Granholm, and the former energy secretary, Bill Richardson.

Plus, he led the world's largest military alliance. Is the retired U.S. Army general, Wesley Clark, is he ready for a new mission, this one, that might take him to the White House? We'll ask him about a potential run for the U.S. presidency.

And our LATE EDITION Web question of the week: How vulnerable is the United States' electrical power system? You can cast your vote by going to our website, cnn.com/lateedition. We'll have the results later in this program. Meanwhile, those affected by the blackout are speaking out about their experiences.

(BEGIN VIDEO CLIPS)

UNIDENTIFIED FEMALE: We're here just relaxing because, you know, there's nothing else to do this evening.

UNIDENTIFIED FEMALE: Actually, I'm very excited, because we get to see some stars tonight.

(END VIDEO CLIPS)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We were told to go home, and had to walk down 28 floors, and then it took about three and a half hours to get home.

(END VIDEO CLIP)

BLITZER: Just one of the thousands, the millions of personal stories, indeed, about this week's blackout.

Welcome back to LATE EDITION.

Joining us now from his home state of New Mexico, the governor, Bill Richardson. He served, of course, as the energy secretary during the Clinton administration.

Governor, welcome back to LATE EDITION. Thanks very much for joining us.

I know that you're an expert on this subject. What do you believe went wrong?

RICHARDSON: What I believe happened was an overload of some transmission lines. It looks like it was in Ohio.

But regardless, it was not a computer error, because we had the Y2K effort that showed that the utilities had decent computers. I don't think it's a terrorist act. Therefore, what happened was a jamming of some very outdated transmission lines.

And regrettably, Wolf, this could happen again tomorrow, because utilities don't have mandatory reliability standards that prevent them from overloading on power on their transmission lines.

BLITZER: And the computers apparently didn't catch it, didn't catch it in time to alert other power systems around the Northeast and in Canada and the Midwest what to do.

RICHARDSON: Well, this also shows, Wolf, that we need to modernize our grid. We need to establish rules of the road so utilities invest in the grid. This is what's happened in the last 10 years. America has increased demand of electricity by 35 percent, yet we've all only built 18 percent new capacity.

At the same time in those 10 years, the transfer of electrons for profit has increased 400,000 percent. Utilities in the last 10 years in the East, for instance, their profit margin has increased 7 percent each year, yet they have not invested in new technologies, renewable energy, distributed generation as much as they should, that allows some of this transmission lines to be more efficient, to be more environmentally sensitive. We're relying too much on coal, on nuclear. We're not modernizing.

And the utilities, I think, have to step up to the plate, along with the Congress, which has failed to pass mandatory reliability legislation, the Congress has failed to give authority for the Federal Energy Regulatory Commission to promote regional transmission efforts so that there's a single operator and utilities have less control. And the Congress has not given incentives for utilities to invest in these new technologies and new transmission lines.

BLITZER: You were the energy secretary, and you pointed out then, you continue to point out now, that this problem has been around for a long time. Why wasn't much done, if anything was done, under your watch, when you were the energy secretary? Where was the problem then?

RICHARDSON: The problem is in a few utilities, like the Southern Company, that have a monopoly control in the South. For instance, they have just gone to the Congress and gotten the Congress to postpone until 2007 the ability for FERC, the Federal Energy Regulatory Commission, to create regional transmission lines, to modernize.

There are a lot of lobbies in the utility that like to keep the status quo so that they can keep making profits. And as a result, our systems, our electricity grid, is overloaded with power.

So the first step has to be the president should take out those provisions in the energy bill that are controversial, that on both sides have problems -- nuclear subsidies, coal subsidies, drilling of Alaska, the ANWR issue -- concentrate on conservation initiatives and, also, Wolf, on mandatory reliability standards where utilities would be fined.

There would be penalties -- today it is voluntary -- where there would be penalties for failing to comply when they overstock the transmission lines with excessive electricity. This is what probably happened that caused this trip-wire cascading effect that brought generators and transmission lines down.

BLITZER: You wrote an article in yesterday New York Times making some specific recommendations, what need to be done.

Let me put them up on the screen, just to show our viewers some of the highlights: Establish mandatory reliability rules -- you've been speaking about that today -- outline basic rules for utilities, create regional transmission organizations, and you want the federal and state governments to work together.

That last point easier said than done. What's the biggest problem in getting the federal government and the state governments working together?

RICHARDSON: The biggest problem is turf -- who regulates some of these transmission lines. What needs to happen is, the Congress, in passing reliability legislation, can establish the rules of the road, so basically in certain instances the feds have control, the FERC commission, which I think has jurisdiction, and in other cases the states have control. Right now there are no rules of the road, there's fighting, there's lawsuits.

What also could happen, Wolf, that the Bush administration respectfully should do is, we're still having a hot summer. The last few days in office as energy secretary, I put a very tough air- conditioning standard, what is called the "SEER-13" (ph), increasing energy efficiency by 33 percent. The Bush people rolled it back a week after we came into office. This is a time to bring the standard to be tough. The air-conditioning manufacturers rolled it back. That's not right. The Bush administration should increase funds for energy efficiency.

And this new distributed generation, which is a way for the transmission lines to be modernized with superconductivity transmission lines, with distributed generation that relies on renewable energy, on fuel cells, let's make these transmission lines a lot more modern, more energy-efficient and more technologically sound.

BLITZER: You heard -- I hope you heard the interview I just did with the secretary of energy, Spencer Abraham. Do you believe he's up to the job?

RICHARDSON: Yes, he's doing a good job. He's a good man.

You know, the problem, Wolf, is that in the Clinton administration we pushed very hard with these reliability summits, legislation. He's pushing too. Where I would differ with him is, the president says he wants comprehensive energy legislation, but they're tying too much of that energy legislation on drilling in Alaska, the production site. There has to be conservation, energy efficiency, the promotion of more efficient use of air conditioners, of washing machines. I think the public has to do its bit too.

Also, renewable energy -- solar, wind, biomass. Research in that area.

But they're too hung up on the coal subsidies, nuclear subsidies, the ANWR issue. They should just strip this out, and pass a stand- alone electricity-reliability bill. This can be done. There's consensus on that one.

And then also wipe out that initiative that the Southern Company and other utilities have passed that delays FERC authority to establish regional transmission lines. I think that has to happen. That's special interest. That would be delayed till 2007.

BLITZER: One final question, Governor, before I let you go. By all accounts, this was not an act of terrorism or cyberterrorism. But it does show terrorists out there how vulnerable the U.S. energy system is right now.

How concerned are you about, God forbid, an act of terrorism doing this kind of damage, a blackout?

RICHARDSON: I am enormously concerned. We should have our homeland security efforts participate with our nation's electricity grid, the utilities, our nuclear power plants. The industry is not good at security. Computer security, physical security. The Homeland Security Department, I'm not saying they take over the security, but there should be a threat assessment, a plan to require the industry to do more about enhancing security.

We are very vulnerable. If I'm a terrorist sitting there, and I saw how just a malfunction, a systems overload of the transmission line that's caused this problem, just think what that terrorist could do if they promote a terrorist act, knowing that the entire Northeast grid and the American grid is interconnected and so vulnerable.

So I would immediately dispatch a threat assessment headed by Homeland Security Secretary Tom Ridge to say to the industry, we have got to upgrade the security at our electricity grids, our nuclear power plants, our power plants, and we've got to do it right away.

BLITZER: Governor Richardson, thanks for joining us.

RICHARDSON: Thank you.

BLITZER: Up next, we'll get a firsthand perspective on the blackout from the governor of Michigan.

And later, the suspected mastermind of last week's Marriott Hotel bombing in Indonesia is captured. We'll discuss the war on terror with U.S. Senate Intelligence Committee Chairman Pat Roberts.

LATE EDITION will continue right after a quick check of the headlines.

(COMMERCIAL BREAK)

BLITZER: And welcome back to LATE EDITION. We are continuing our coverage of the worst power blackout ever in North America.

Michigan was one of the states crippled by the blackout. Today I spoke with the Michigan governor, Jennifer Granholm.

(BEGIN VIDEOTAPE)

BLITZER: Governor Granholm, welcome to LATE EDITION. Thanks very much for joining us.

I know you're joining us from Indianapolis today. I assume that means that things are all quiet, back to normal in Michigan.

GOV. JENNIFER GRANHOLM (D), MICHIGAN: They are back to normal. We are at 100 percent service, I'm very glad to say. Everybody is able to switch and have the light come. Yesterday, we were concerned because we did not quite have the capacity that we needed for a very hot summer day. But all of the appeals to conserve were successful, so we made it by, and today's a much cooler day, so all is well.

BLITZER: Are you getting answers from either state or federal authorities, what happened, what went wrong?

GRANHOLM: I think everybody is launching an investigation. And I think that it's a very good thing, only because we need to get to the bottom of it, really.

You know, my Aunt Linda in Warren, when she rose to turn on the tap water, she wants the water to appear. She doesn't care who's responsible, whether we have vertical integration of our electric system. She doesn't care who owns the grid and who doesn't. She wants to know, is it going to work, and am I going to have electricity? If I go to the hospital, am I going to be able to have my surgery completed? If I get into an elevator, am I going to be able to go to the top floor?

Those are the things that real citizens are caring about, so we've got to get answers. An investigation will do that.

And then the question is, how do we provide incentives for reinvestment in the transmission grid?

BLITZER: The suggestion has been made by the former energy secretary, Bill Richardson, the United States may be the world's only superpower but it has a third-world electrical grid power system out there. Is that true in Michigan?

GRANHOLM: I think what's true is that he is right on the money in this regard, that we absolutely need to invest in the grid. And in many places, we need to invest in capacity increasing, too.

He is, you know -- he does a great job, and he is one of my mentors in the governors' association, and I'm looking forward to seeing him today. Heard what he said, and I think he's right on the money.

He's calling for more investment, and he's calling for us to increase reliability, to make sure that there are standards, that there are penalties, that there are people held accountable. Right now it's difficult to know who is responsible and who is responsible for enforcement. And that's a very important question.

BLITZER: Do you have confidence in the Bush administration, specifically in the secretary of energy, Spencer Abraham?

GRANHOLM: Well, Spencer Abraham, of course, is from Michigan, and I spoke with him yesterday. He knows very well how important this is. He knows that in Michigan, 60 percent of our population lost power. Those are people that are his friends and family. He knows how important this is.

He's going to be coming to Michigan on Wednesday. I'm hopeful that the administration will hear the cries of citizens. Not just the utility companies and not just the energy companies. We want to make sure that citizens are heard and that they are assured that this kind of blackout does not occur again.

BLITZER: So what's the most important thing that has to be done in the short term to make sure it doesn't happen again?

GRANHOLM: There is -- one, an investigation must occur, and we have to pinpoint what happened so we know exactly where the fix must be directed.

Two, we have to increase the ability to enforce how to make sure these systems are reliable. As you know, Wolf, we've -- we're in an era of disintegration of the electric delivery system. A few years ago, when everything was, you know, owned by the utility companies, the generation, the transmission and the distribution, you could point your finger at who was responsible.

Today, because of restructuring, the utility company owns, maybe, the generation in Michigan. They don't own the transmission. The distribution lines may be owned by the utility company, but the energy that goes across them owned by somebody else. It's all a hodgepodge.

So the question is, who is responsible? Who is going to hold them accountable? How can we assure reliability? And what are the penalties for failure to make sure that it is reliable?

BLITZER: And you're searching for answers. You don't have those answers yet.

But one of the things that was very impressive to me. I was in New York City during the power blackout. There was virtually no looting. I assume that was also the case in Michigan and Ohio, elsewhere hard hit. There was some looting up in Ottawa in Canada.

But why do you think the American public acted so responsibly this time around, as compared to the blackout of a couple of decades ago?

GRANHOLM: Well, I can tell you, in Michigan, there were calls for citizens to act as citizen patriots, to work together, and people heeded that.

I am so proud of the way citizens responded in this crisis. People were having, deciding, you know, that they were going to sit around and talk about the good old days and how people used to live.

It was a great lesson for children. It was a great lesson for everybody that perhaps it's time to take a pause, and respect and encourage and support your neighbor instead of taking advantage of him or her.

BLITZER: Governor Granholm, thanks very much for joining us. Good luck to you and everyone in Michigan.

GRANHOLM: Thank you so much.

(END VIDEOTAPE)

BLITZER: And just ahead, the question being asked about retired U.S. Army General Wesley Clark these days: Will he or won't he? We'll talk with the former NATO supreme allied commander about a possible, a possible presidential run.

Also, the terrorist threat inside Saudi Arabia. Is the government doing enough to crack down? We'll interview that country's foreign policy adviser, Adel al-Jubeir.

And don't forget to weigh in on our Web question of the week: How vulnerable is the United States' electric power system? You can cast you vote right now. Go to cnn.com/lateedition.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION. I'm Wolf Blitzer in Washington.

The last U.S. general to be elected president of the United States was Dwight Eisenhower, and that 50 years ago. In 2004, voters may have another retired general as a candidate. The former NATO supreme commander, Wesley Clark, is considering, considering a White House run.

He joins us now live from Little Rock, Arkansas.

General Clark, welcome back to LATE EDITION. Thanks very much for joining us.

Are you running for president?

GEN. WESLEY CLARK (RET.), FORMER ALLIED SUPREME NATO COMMANDER: I have not made a decision yet, but I am coming to closure on the matter, Wolf.

BLITZER: When will you make that final decision?

CLARK: Sometime in the next two or three weeks, I'll continue to move toward closure.

BLITZER: What are the factors?

CLARK: I really haven't speculated on that. This is a very tough call for someone who hasn't been climbing the political ladder. I've been in public service my whole life, but it's been in the military. And this is -- you're dealing with new language, new groups, new issues, new ways of thinking about how to do this.

It's not so much the problems of government, but it's the problems of the organization and the mindset it takes to move ahead in a political elective process.

BLITZER: The Wall Street Journal quotes Senator Hillary Clinton from New York State as having told one of the Draft Wesley Clark volunteers that perhaps your wife of many years is a reluctant political warrior, reluctant to see you step into that political fray. Is that true?

CLARK: Well, what wife isn't reluctant to see her husband and her family exposed to that. I think that's a universal condition, as I've talked to so many people in political life now since I got out of the military. The wives all say that, whatever they may say publicly.

But we've been in public service our entire marriage, and I'm confident my family will support whatever the ultimate decision is, and they'll do it very, very well.

BLITZER: Some of your fans out there, and there are plenty of them apparently, are not waiting for you to make that formal announcement. They have a Draft Wesley Clark movement under way. They're already starting to run some ads. Let's show our viewers some of them.

(BEGIN VIDEO CLIP)

ANNOUNCER: Unafraid to speak his mind. Unwilling to put politics ahead of duty. He has never failed to answer our country's call. Now we call on him one more time to preserve, protect and defend our nation and all for which it stands. Draft Wesley Clark for president.

(END VIDEO CLIP)

BLITZER: You're not telling them to stop running those ads, are you?

CLARK: I haven't, Wolf. I've thought about that. I thought about it a lot when this movement got started, but I -- because I had not made a decision and I have nothing to do with this movement.

But I do say this about it. This is an authentic expression of political feeling, and I think people should do that. They should be encouraged, they certainly shouldn't be discouraged from doing that in a democracy. I mean, that's what democracy is all about.

So regardless of whatever decision I come to, I applaud their effort. I think they've really caught fire and really have done something very, very important.

BLITZER: Let's show our viewers some of what they've done. We'll put it up on the screen. They've raised apparently $600,000 so far. They have eight full-time staff members. They're running these television commercials in New Hampshire, Iowa and Arkansas. That's your home state. They've got members. They've got committees all over the place.

And you, yourself, are certainly sounding and acting a little bit like a candidate. You recently went up to New Hampshire. Have you been to Iowa lately?

CLARK: I haven't been to Iowa since I got an honorary degree there in 2002, Wolf.

But I'm concerned about the issues, more concerned about the issues than the process. And I think this country right now is -- we're at a turning point in where we are. We're at a turning point both in our foreign policy and in our policies at home. And to me, that's the real motivation, and it's why I've been speaking out.

BLITZER: Some of the political pundits out there are suggesting that it's a little late to start running for president right now, with Iowa, New Hampshire, South Carolina, they're coming up early in the new year.

Look at all the money that has been raised so far. You've raised obviously very little yourself, if any, money. Look at this. George W. Bush, without any challenger, he's already raised $34 million only in the second quarter. John Kerry, Dick Gephardt, Howard Dean, Joe Lieberman, John Edwards, they've raised millions and millions of dollars.

Is it too late to start raising money to be competitive in those early states?

CLARK: Wolf, I don't know if it's too late or not, but I do know this, that when people get up and speak the truth and they speak their mind and they talk about the issues that are of concern to ordinary Americans, that I can't believe that, should I do this, that the money is the issue.

That's not the issue. The issue really is the issues. It's what the -- what does America stand for? How do we want to behave in the world? What does it take to fulfill America's dreams at home?

BLITZER: In our CNN-USA Today-Gallup poll that was released early this month, we'll show you what registered Democrats are saying right now. Right now, Joe Lieberman with 18 percent; Howard Dean, 15 percent; Gephardt, 15 percent; John Kerry, 12 percent; everybody else down into single -- way low single digits.

What do these nine candidates not bring to the table that you might bring? What are they -- where are the Democrats missing that would require you to run?

CLARK: Wolf, I think the American people are looking for, first of all, hands-on leadership experience. They are looking for a proven track record in leadership.

And I think, secondly, they are looking for, and especially people in the Democratic Party, are looking for the articulation of what the Democratic Party means, what it can represent for America.

And as I've gone around the country, again and again, I find just an enormous hunger for leadership. And I think the draft movement is evidence that, to some extent, there is still that hunger out there, despite the number of candidates in the race and despite the president's polling.

I'm getting a lot of letters from Republicans and people who say that they wish they hadn't voted the way they had in 2000. They want an opportunity to do it a different way in 2004.

BLITZER: And those Democrats, those nine other Democrats, don't have the leadership that you would bring to the table?

CLARK: I think the other people in this race are great people. Every person is different. I think that's really a question for the American people to answer, not for me.

BLITZER: What about George W. Bush? How vulnerable is he to defeat next year?

CLARK: Well, I guess the conventional answer is, people would look at polls. But what I look at are the realities. And I think the American people will begin to see the reality.

Number one, Iraq is not -- if it is the centerpiece of the war on terror, it shouldn't be. We went into Iraq under false pretenses. There was, you call it deceptive advertising, you'd be taking him to the Better Business Bureau if you bought a washing machine the way we went into the war in Iraq.

We're there now. We're totally committed to this. We have got more than half the deployable strength of the U.S. Army there. We're taking casualties.

We haven't made America safer by this. We've made America more engaged, more vulnerable, more committed, less able to respond. We've loss a tremendous amount of goodwill around the world by our actions and our continuing refusal to bring in international institutions.

At home, we've got a jobless recovery. We've lost 2.6 million jobs since this administration took office. Just to maintain the same level of employment in America, we have to create about 1.3 million jobs a year, and instead we've lost 2.3 million.

So, the statistical unemployment rate, it doesn't really address what the problem is that Americans are feeling out there. There are millions of people who aren't in the labor force. There are other people who are employed, but they're underemployed in terms of their skills. We've got problems.

BLITZER: General, I want you to listen, during the war, when you were still working for CNN -- and just want to alert our viewers, you're no longer working for CNN as our military analyst.

CLARK: Right.

BLITZER: But during the war, early in April, Tom DeLay, the majority leader in the House, really hammered you directly. I want you to listen to what he told our Judy Woodruff then.

(BEGIN VIDEO CLIP) REP. TOM DELAY (R-TX), MAJORITY LEADER: Frankly, what irritates me the most are these blow-dried Napoleons that come on television and, in some cases, have their own agendas.

General Clark is one of them that is running for president, yet he's paid to be an expert on your network. And he's questioning the plan and raising doubts as he becomes this expert.

I think they would serve the nation better if they would just comment on what they see and what they know, rather than putting their own agenda forward as an expert.

(END VIDEO CLIP)

BLITZER: Well, pretty strong words from Tom DeLay going after you. What do you say to that criticism?

CLARK: Well, first of all, I'd be happy to compare my hair with Tom DeLay's. We'll see who's got the blow-dried hair.

But beyond that, Wolf, he's got it exactly backward. It's upside down. I am saying what I believe. And I'm being drawn into the political process because of what I believe and what I've said about it.

So it's precisely the opposite of a man like Tom DeLay, who is only motivated by politics and says whatever he needs to say to get the political purpose. And so, you know, it couldn't be more diametrically opposed, and I couldn't be more opposed than I am to Tom DeLay.

You know, Wolf, when our airmen were flying over Kosovo, Tom DeLay led the House Republicans to vote not to support their activities, when American troops were in combat. To me, that's a real indicator of a man who is motivated not by patriotism or support for the troops, but for partisan political purposes.

BLITZER: Well, he was hammering you, and you're hammering right back.

General Clark, good luck to you. Thanks very much for joining us.

CLARK: Thanks, Wolf.

BLITZER: We'll be standing by for your announcement in the next two or three weeks.

Still ahead, was the North American blackout an invitation for terrorists? We'll get an assessment from a panel of energy and security experts.

Then, a missile-smuggling operation and plans for attacks on a U.S. commercial passenger jet. Those plans are foiled. We'll talk about the state of the war on terror with the U.S. Senate Intelligence Committee chairman, Pat Roberts. LATE EDITION will continue at the top of the hour, right after a quick check of the headlines.

(COMMERCIAL BREAK)

BLITZER: Welcome back to the second hour of LATE EDITION.

In the aftermath of the worst power blackout ever in North America, President Bush is promising to take steps to modernize the U.S. power grid, but politics already are coming into play in all of this.

Our White House correspondent, Suzanne Malveaux, is near the presidential ranch in Crawford, Texas. She's joining us now live -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, really to get a good indication of how this debate is going to play out in Congress over the nation's energy policy, all you had to do was just take a look at the political shows this morning. Truly it's playing out.

And really the debate here, the center of the debate, is the controversial plan by the Federal Energy Regulatory Commission, essentially to set up regional groups that would control the flow of power across state lines, would also oversee the overhaul of the transmission system.

Now, this essentially would take away, shift power away from those states. There are a lot in Congress who are against this idea. As a matter of fact, they are threatening not to pass the National Energy Policy unless this particular regulation plan is frozen.

Well, earlier today we found out from Energy Secretary Spencer Abraham that that is in fact what the administration plans on doing, that they support delaying this regulation plan to get that legislation through.

(BEGIN VIDEO CLIP)

ABRAHAM: We need to pass an energy bill that gives the Federal Energy Regulatory Commission the authority to impose mandatory reliability standards, that says the people who use the system have to adhere to high standards of conduct, or be punished if they fail to do so.

(END VIDEO CLIP)

MALVEAUX: Now, Wolf, there have been some critics who say that this is really counterproductive, to actually changing, overhauling the power grid system. But the secretary says that he believes there are other provisions within the bill, within the legislation that would allow for that.

But, as you know, Wolf, this is just one of many issues that they're going to be debating when Congress comes back from recess -- Wolf.

BLITZER: Suzanne Malveaux, at the western wing, the southwestern wing of the White House, that is, thanks very much for joining us.

The blackout is raising concerns that America's energy supply could be vulnerable to terrorists. Joining us now to talk about that, as well as all other aspects of this power blackout, are three guests:

Here in Washington, the congressman, Ed Markey. He's a Democrat of Massachusetts. He's a member of both the House Energy and Commerce Committee, as well as the Homeland Security Committee.

In Princeton, New Jersey, Michehl Gent. He's president of the North American Electric Reliability Council, which was established after the 1965 New York City blackout, and, of course, is leading the investigation right now, what happened this past week.

And in San Jose, California, Brian Jenkins. He is a terrorism analyst with the RAND Corporation.

Gentlemen, welcome back to LATE EDITION.

And, Mr. Gent, let me begin with you, your investigation. What are you learning right now? What caused this blackout?

MICHEHL GENT, PRESIDENT, NORTH AMERICAN ELECTRIC RELIABILITY COUNCIL: Well, we know the sequence of events, so what we've started focusing on is why didn't the area in trouble separate from the rest of the system and keep the entire grid whole?

We're getting more and more data in. We have tens of thousands of lines and pieces of data. And we're asking for more. We need to sort through all of this and find all of the events that are related and affected.

And we're really hesitant to point to any cause or any person. We're pointing to events. We're certain of the events. And that leads us to what we have to do to make sure this won't happen again.

BLITZER: Well, we're hearing about this domino effect or this cascading effect. There was one particular event that started it all. Where was that?

GENT: It was in a line that relayed out for yet unknown reasons, but we're examining the line closely. A second line relayed. A third line relayed. And then, that should have separated that local system, like Cleveland, and the rest of the grid should have remained intact. And that's what we're focusing on, is, why didn't that separate?

BLITZER: So it started in Ohio. And the question is, why didn't it separate? You've known about this problem for decades, going back to the '60s and '70s. Why wasn't there some sort of fail-safe step that could have prevented this massive blackout?

GENT: There were fail-safe steps in place, and they didn't work. We don't know whether it's a faulty design, or whether it's not following the rules.

BLITZER: What is your suspicion, though?

GENT: It's one or the other. We don't have a conclusion yet.

BLITZER: Mr. Gent, what needs to be done in the days ahead to make sure that this doesn't happen again?

GENT: Well, what we are doing, Wolf, is we are putting extraordinary attention on operating in a conservative mode. It's an all-hands-on-deck-type scenario, so that we can gather all of this data, make sure we know what we're doing, what kind of an operating state we're in. I'm certain that this won't happen in the near future.

BLITZER: But you believe there was an element of human error there, or was it just simply some sort of mechanical glitch?

GENT: There's no evidence that it was human error yet.

BLITZER: "Yet." What does that mean?

GENT: Well, we haven't discarded the possibility. The data has not demonstrated that yet.

BLITZER: All right. Mr. Gent, stand by. I want to bring Congressman Ed Markey into this interview, as well.

Congressman Markey, I want you to listen to what the chairman of the Commerce Committee, Representative Billy Tauzin, said on Friday, the day after the power went out. "Yesterday's massive blackouts," he says, "the worst in American history, highlight the critical need for Congress to enact a comprehensive national energy bill this year. We simply cannot afford to wait any longer. Our economy and our way of life are at stake."

Is he right?

REP. ED MARKEY (D), MASSACHUSETTS: Well, not to solve this problem, no, he's not right. This has nothing to do with whether or not we drill in the pristine Arctic refuge for oil. That has nothing to do with the electricity grid. That has nothing to do with the issue of whether or not, even (ph), we increased the fuel economy standards for SUVs.

This issue has to do with whether or not we have mandatory national standards for ensuring that the transmission system in our country can handle the electricity flow. This is not a question of...

BLITZER: So, if they take out the n-word, the Alaska drilling issue, from this legislation, it will then zip through?

MARKEY: This would zip through. This issue has been held hostage to the Republican agenda of trying to drill in the most pristine wilderness, environmentally sensitive areas of the country. We could have broken this issue off three years ago, five years ago. But they refused to allow it to move as a separate piece of legislation.

This just deals with whether or not the electricity highway is safe and can provide the protection for the electricity system. There is not a shortage of electricity that we've identified on Thursday. In fact, it might have been a surplus of electricity that the system could not hold.

So, we don't need a comprehensive bill. We need a safety and security bill broken off from the comprehensive bill.

BLITZER: Is there a cost estimate, how much it would cost the American taxpayer to build up the power grid, the electrical system in the United States to make sure it's not, in the words of the former energy secretary, Bill Richardson, a third-world electrical grid?

MARKEY: Well, what we saw on Thursday was that regions like New England that had made an investment in the upgrade of this system were strong enough in order to resist, to protect itself against this Northeastern power outage. The same thing was true in Pennsylvania.

So, whatever it is that has been going on in New England, in Pennsylvania, is something that New York and Ohio and other states are going to have to do. But we have to mandate that it be done on a national basis. You can't have some states doing the right thing and other states allowing their system to atrophy, because you wind up with a mess like you saw on Thursday.

BLITZER: How many billions of dollars are you talking about?

MARKEY: Whatever it costs is the price that is going to have to be paid.

The price not to do it is much too high. We saw that we have lost tens of billions of dollars, perhaps, of economic activity because of the disruption that occurred.

That would have been penny-wise and pound-foolish in terms of the lack of investment over the years, and we now see that the pound- foolish aspect of it has come back to haunt the residents of those states.

BLITZER: Brian Jenkins, you know as much about fighting terrorism as anyone in the world. Let me read to you from an editorial in Friday's Wall Street Journal.

"The breadth of the energy disruption suggests that some major rethinking deserves to be done about the vulnerability of America's power grid. If an accident can shut down an entire U.S. region for a half a day, imagine what well-planned sabotage could do."

Let's imagine. What is the concern there? How serious is that concern?

BRIAN JENKINS, TERRORISM EXPERT: Well, we did some research on this at the RAND Corporation, and some of the conclusions we reached was, first of all, those people we label terrorists have fortunately not been interested in these traditional kinds of sabotage. They've been more interested in causing casualties and attacking symbolic targets. It's rare that you see them going after portions of the infrastructure to wage economic warfare, although that is a possibility.

Second conclusion was that these systems are pretty robust, and while they may go down as a consequence of a series of accidents, it is very, very difficult to recreate, in effect to deliberately choreograph, the sequence of events, the chaos that we saw resulting from the sequence of events last Thursday.

However, the broader point is a well-taken one. And the fact is, since 9/11 we have had to devote a lot more attention to security. We have taken essentially a gates-and-guards approach. We now have to get strategic about this and get smarter.

And as we build these new systems, as we replace some of this old infrastructure, we have to design into that the kind of robustness, the resiliency, the rapid recovery powers that will enable us to tolerate, when there is an assault on the system, and not suffer the consequences that took place in the blackout.

BLITZER: On that point, Brian, if a terrorist were to hijack a big plane, a commercial jetliner, for example, and fly it into a nuclear power plant, what would be the damage be?

JENKINS: It's a question mark, given the size of the plane, given the angle of attack, what physical effect it would have on the reactor itself. It is doubtful that it would result in any sort of massive nuclear release.

However, I suspect if that event were to occur, we probably would shut down every reactor across the country as a consequence of the event until we could put in security measures to make sure that it couldn't be repeated. And that would have an impact.

BLITZER: All right. Let's take a caller from North Carolina.

Please go ahead with your question.

CALLER: To all the panelists, with the only partial deregulation in the energy industry, and the myriad of local, state and federal government agencies needed to make change, how does it go from just talking about it to actually getting it fixed?

BLITZER: What about that, Mr. Gent?

GENT: I think if I can separate it into two issues, the near- term and long-term, and speak to the near-term, nearly everybody supports the reliability language that's in one or another bill in the energy bill. We need that. We need to have mandatory operating procedures and rules and standards, and we need to be able to enforce them. We've had voluntary standards for years, and it's simply not going to carry us into the future. We need that legislation.

As to the future, we need to put in more transmission lines. And I think the senator would agree with me that we can do this on a phased-in basis. Once we've secured the system operationally, then we can start to build and rebuild.

BLITZER: Congressman Markey, everybody says you need more transmission lines, but they don't want them in their state, in their hometown, they don't want them in their backyard, because of the power lines, the concern.

What do you do about that? Should the federal government get the authorization to mandate to local communities, the states, where these transmission lines should go?

MARKEY: I don't think that the federal government has to be able to mandate that a power line has to go down this street, through that farm. I think what they have to have the authority to do is to mandate that the state has to solve the problem, one way or the other.

And there are states in the Union that thus far have not been willing to mandate that their utilities spend the money to solve the problem. You have a fundamental conflict. Many of these utilities are trying to maximize profits for their shareholders, which is in conflict with maximizing the security for the whole system.

Some states -- New England, Pennsylvania -- have forced the upgrade. Other states have not forced their utilities to make the upgrade.

The feds don't have to make the micromanagement decisions of where the lines go. They just have to mandate that in a time certain that the problem gets solved, and that we have an eight- lane super highway across the whole country and not just patch-quilt system that doesn't work.

BLITZER: We only have a little time left, but I want to bring back Brian Jenkins and pick up something that happened this week, the potential threat to U.S. passenger commercial airliners from these surface-to-air missiles, these shoulder-fired missiles. That was in the news.

How vulnerable is the passenger aircraft system in the United States to this kind of potential terrorist action?

JENKINS: Well, the vulnerability of commercial aircraft to surface-to-air missiles has been demonstrated. I mean, civilian aircraft have been brought down, a number of them, over the years by these surface-to-air missiles. There's no question about the physical vulnerability.

The question, however, depends on whether or not they have these weapons or can smuggle these weapons into this country. And there, I think, the answer is, this is not a difficult task. We're talking about objects that are relatively small. We have all sorts of contraband that is regularly being smuggled into the country.

Therefore, the utility in last week's sting operation to, at least, as a partial deterrent, get the message out that these people who traffic in these materials are going to be at constant peril from being involved with somebody who's going to turn out to be an undercover agent, whether it's for the Russian SFB or for the U.S. FBI.

BLITZER: All right. Brian Jenkins, thanks very much.

One final word to you, Ed Markey. You've been studying this homeland security, these shoulder-fired missile systems, the threat to U.S. aviation. What needs to be done right now to make sure that threat goes away?

MARKEY: Well, the FBI was very successful last week. And that's our best protection. Because once they get into the United States, once they're in the hands of terrorists in the United States, right now, these planes are very vulnerable, because the weapon could be deployed a mile, two miles, three miles or even further away from the airport, which makes it a very dangerous situation.

So while we're debating in Congress whether or not we're going to mandate that planes be built in with a defensive system, we have to make sure these weapons don't get into the country, into the hands of terrorists.

Congratulations to the FBI last week, because once they're over here, it's going to be a very perilous condition for the airline industry.

And, might I add, the airline industry has to deal also with the issue of checking, of screening cargo that goes onto passenger planes. Because they don't screen, in the back door, the cargo that comes on passenger planes, and that's another vulnerability.

Again, the industry doesn't want to spend the money. The government doesn't want to spend the money. But if an accident occurs, it will extract a terrible terrorism tax on our economy.

BLITZER: We're going to leave it right there.

MARKEY: Thank you.

BLITZER: Congressman Ed Markey, thanks very much for joining us.

Michael Gent, thanks to you. Good luck in your investigation.

GENT: Thank you, Wolf.

BLITZER: Brian Jenkins, always good to have you on the program, as well.

Still ahead, we're going to pick up the whole issue of terror -- targeting terrorists, specifically, around the world. How much progress is the United States making right now? We'll get some insight from the chairman of the Senate Intelligence Committee, Pat Roberts.

Also, what's the Saudi connection to the terrorist network? We'll interview the foreign policy adviser to Saudi Arabia's royal family, Adel al-Jubeir.

And a reminder, you can vote on our LATE EDITION Web question of the week: How vulnerable is the United States' electric power system? Go to our website at cnn.com/lateedition. We'll have the results. That's coming up shortly.

And LATE EDITION will continue after a quick check of the headlines.

(COMMERCIAL BREAK)

BLITZER: Welcome back to LATE EDITION.

The man suspected of masterminding the bombing of the J.W. Marriott Hotel in Indonesia, as well as last year's deadly nightclub explosion in Bali, is now in CIA custody. He's known as Hambali, and he was a senior leader in a group with links to al Qaeda.

Joining us now to talk about where things stand in the war on terror, the chairman of the United States Senate Intelligence Committee, Pat Roberts of Kansas. He also serves on the Armed Services Committee.

Senator, welcome back to LATE EDITION.

SEN. PAT ROBERTS (R), KANSAS: Thanks, Wolf.

BLITZER: Hambali, how big of a catch was this?

ROBERTS: This is a big fish. This is a good-news story, and it's a good-news story from the standpoint of the cooperation we're getting from Indonesia and from Thailand.

This man is the operations chief in that whole part of the area. This is the man who said, "Let's don't attack embassies anymore, and military installations. Let's really try to concentrate on soft targets." That's what he did.

There are probably other plots in the pipeline, but this is a real blow to that particular terrorist organization.

BLITZER: He ran this group called Jemaah Islamiah.

ROBERTS: Yes, he did.

BLITZER: What kind of links specifically does it have to al Qaeda?

ROBERTS: Well, basically, it's one of these associated terrorist organizations that it is run by itself but has a very close link to al Qaeda.

And there will be others that will try to take his place. But when you take the operations chief out of the picture, it does pose a lot of problems. BLITZER: There were reports surfacing over the weekend that this group was planning on a huge terrorist attack at the APEC, the Asian Pacific Economic Conference, that was going to be happening in Bangkok in October. President Bush will be attending that meeting.

What can you tell us about that?

ROBERTS: Well, I can't tell you anything specific about it. We'll probably have another briefing on it. We have threat warnings or threat briefings every week in the Intelligence Committee.

But that part of the world was beset, you know, by these, you know, by these problems. That's why this arrest and this capture is so doggone important.

But that, again, we are seeing the realization of many countries, the value of really cooperating with the United States, whether it's Afghanistan or Pakistan, or whether it's in the Mideast, or whether it's in Southeast Asia.

And so, basically, we're making a lot of progress. I would say probably 60 percent of the al Qaeda leadership has been taken down.

BLITZER: But Osama bin Laden remains at large. Why is he so hard to find?

ROBERTS: Wolf, I think he's somewhere between Pakistan and Afghanistan, in that area where there are mountains 12,000-, 13,000-, 14,000-feet high, a hundred different tribes. It's almost like a medieval world. The last Caucasian in that area was Alexander the Great. And the Pakistanis are not too anxious to go up in that part of the world, where it is almost medieval.

But that noose is tightening as well, as is the noose in regards to Saddam Hussein.

BLITZER: But assuming that he's communicating still with his associates...

ROBERTS: Right.

BLITZER: ... there's got to be some way, presumably, to monitor if there's any kind of cell phone or any kind of communications devices going on whatsoever?

ROBERTS: Well, he learned pretty quick when there were press reports in regards to signal intelligence and what we're able to do, not to do that. And so he establishes his communication by courier and by other means. Perhaps it's a step back in terms of technology, but it's still proven very effective.

BLITZER: And Hambali got caught in part because he didn't learn that lesson?

ROBERTS: That's precisely correct. That, and tips from local people who said, "We don't know who this guy is. This is a different kind of person," and they, you know, tipped off the proper authorities.

And with very good work by our intelligence people -- and let me emphasize that they do some good work, despite all the criticism, why, we were, you know, we were successful. It's the biggest catch since Khalid Shaikh Mohammed.

BLITZER: There was another arrest, the sting operation that happened this week. The FBI, other law enforcement, it involved, and they caught an arms dealer. His name, Hemant Lakhani (ph), who was caught.

Was, though, the end of this operation, the sting operation, was there a premature leak that caused the arrest to go forward, or was it the way it was supposed to work?

ROBERTS: I don't know that. We will, doubtlessly, have a briefing when we come back into session with the Intelligence Committee. I've read the press reports.

But I would agree with Ed Markey, who was just on your show just prior to me, that this is really big news. Tom Ridge came out and said, let this be a lesson to any arms dealer, you've got to stop those missiles from coming into the United States.

Wolf, we have probably, what, 700,000 of that kind of weaponry all around the world. And so we really have to stop that from coming in the United States. That's almost an impossible task. And then you're facing with the infrastructure problem and the airline industry to protect our airlines like we do in terms of the military. So it is a big challenge ahead of us.

BLITZER: And that's the first line of defense, of course, is good intelligence. How confident are you right now that the U.S. intelligence community is getting the intelligence necessary to make sure that a shoulder-fired missile is not launched at a U.S. passenger jet?

ROBERTS: Well, we're doing pretty good with that sting operation, and that sends a message. I'm not sure that it's 100 percent, in terms of capability. You just don't have 100 percent with the intelligence community.

But, you know, the thing about the intelligence community, Wolf, is that you can't really brag about the successes. We don't really announce them that much. And then, in terms of the failures, or the alleged failures, that there's something that the press will allege, they can't really step up and answer it.

But we're doing much better, let me put it that way.

BLITZER: We're going to be speaking to the Saudi foreign policy adviser, Adel al-Jubeir, coming up. But this week, British Airways announced they're suspending, canceling flights to Saudi Arabia, precisely because they were concerned about a threat to a British plane coming into Riyadh or Jeddah.

The question is this: How much cooperation is the U.S. government getting from Saudi Arabia?

ROBERTS: I think it's much better. After the Riyadh attack, which was their own 9/11 attack, we have much better cooperation on the intelligence side. They have arrested over 200 people, had severe loss of life with their security forces. They have, basically, a center in regard, a joint working center on intelligence, also on the finances. There's a lot to be done, but I think that was a big wake- up call for the Saudis.

BLITZER: Is there a split, though, within the Saudi government, some wanting to work more cooperatively with the United States as opposed to others?

ROBERTS: I don't see that at the current time. Every since the Riyadh attacks and ever since they came to realize that their government was actually threatened, I think they've been working much better with us. And we have access to several people we want to have access to in terms of FBI interrogation.

I'm not saying everything is perfect. They have a long road to go. But I think we're doing better.

BLITZER: While I have you, the whole threat out there, weapons of mass destruction, reports surfacing over the weekend, that Libya, not only Iran, North Korea, but Libya now may be working on chemical weapons, maybe even some sort of nuclear capability. What can you tell us about that?

ROBERTS: Well, basically it never stops. Basically, the problem of proliferation of weapons of mass destruction in the so-called rogue countries doesn't stop. And so that's why we have to have, as you've indicated, you know, the best intelligence.

By the way, we will hopefully complete our basic inquiry into the WMD issue in Iraq in September. Senator Rockefeller and I will be meeting over this break and trying to work that out. And we'll probably have some public hearings at the end of September...

BLITZER: The whole question whether the intelligence was faulty going in?

ROBERTS: Exactly.

BLITZER: Because where are the Iraqi weapons of mass destruction?

ROBERTS: Well, I still would have patience and perseverance. It took us six months after the first Gulf War for David Kay to receive a tip in regards to the nuclear capability of Saddam Hussein. And we said, whoops, it isn't five or six years, it's one or two years.

That took six months. This has been eight weeks. And through document exploitation and people exploitation, we are learning a great deal.

But we've also learned, and Dr. Kay says, "I want to have more than one source, I want to have the document in hand and I want to have the physical evidence." That's a pretty tough criterion. I think he'll come up with it.

BLITZER: So you still think they're going to find some evidence that the Iraqis were involved in -- had weapons of mass destruction capabilities?

ROBERTS: Well, I don't think there's any question about that. The question is, where is it now?

BLITZER: One final question before I let you go. Scott Speicher, the U.S. Navy pilot, the first U.S. pilot who went down during the first Gulf War, from Kansas, your home state. Is there anything you've come up lately with to suggest, yes, he may indeed be alive?

ROBERTS: Unfortunately, no. The good news is, we have the best team. When I was in Iraq about three weeks ago, and got to visit with the team. So has Senator Bill Nelson of Florida. We have an outstanding team.

But we haven't had the breakthrough that we had hoped to have. Now, that doesn't mean we're giving up, and we have some very dedicated people working on that. And obviously, our hearts and our heads tell us that it's not only for Scott, but it's, you know, for every service person that we don't leave anybody behind.

There were some very egregious mistakes made early. But we will find out the fate of Scott. But at present, we've had no breakthroughs.

BLITZER: And no Iraqi official, former Iraqi official, member of the Baath regime, has said anything to suggest, yes, he was alive?

ROBERTS: We have some original sources that were very helpful, but nothing on top of that.

But we do have some indication in regards to document exploitation, a mention of Scott Speicher. So that's good if we can follow that up, in regards to who actually prepared the documents, that could be the breakthrough that we need.

BLITZER: Pat Roberts, the chairman of the Intelligence Committee, thanks very much for joining us.

ROBERTS: OK. Thank you, Wolf.

BLITZER: Up next, what role is Saudi Arabia playing in the war on terrorism? We'll have an exclusive interview with the kingdom's foreign policy adviser, Adel Al-Jubeir.

And there's still time to weigh in on our LATE EDITION Web question of the week: How vulnerable is the United States' electric power system? You can still cast your vote. Go to our Web site, cnn.com/lateedition.

LATE EDITION will continue right after this.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

Since suicide bombers killed 26 people in Riyadh, Saudi Arabia, last May, the Saudi government has been cracking down on Islamic militants, but Saudi-based terrorist plots continue.

British Airways this week suspended all flights to Saudi Arabia after a threatened attack on Western interests.

Joining us now to talk about all of this is the foreign policy adviser to the Saudi royal family, Adel Al-Jubeir.

Welcome back to LATE EDITION, Mr. Al-Jubeir.

ADEL AL-JUBEIR, FOREIGN POLICY ADVISER TO SAUDI ROYAL FAMILY: Always a pleasure to be here.

BLITZER: Thanks very much.

Americans are being told right now to stay away from Saudi Arabia. Let me read to you from the latest State Department travel advisory. It says, "The U.S. has received indications of terrorist threats aimed at American and Western interests, including the targeting of transportation and civil aviation. There is credible information that terrorists have targeted Western aviation interests in Saudi Arabia."

Tell us about that.

AL-JUBEIR: Well, we have broken up a couple of al Qaeda cells in Saudi Arabia over the past few weeks, and we glean intelligence from them with regards to what plans may or may not be, and we want to be super careful, in terms of the risks that we allow people to take. When it comes to things like this, we can never underestimate the danger that terrorists can present.

And I believe the British government, British Airways made a decision on that basis to suspend temporarily their flights into Saudi Arabia. We may view this as maybe too drastic an action, but it's really not for us to decide what kind of level of tolerance they would like to have.

BLITZER: So the information basically, you're suggesting, is coming from interrogations of captured al Qaeda or other terrorists?

AL-JUBEIR: One of the cells that was broken up had -- there were materials, there were maps, there were certain things that indicated that there was a high level of interest in British Airways. And I think that's the conclusion that was arrived at by British Airways when we notified the British government of this, was that there may be a threat there, and we don't want to take any chances.

BLITZER: Presumably because Britain has worked with the United States in the war against Iraq?

AL-JUBEIR: I can -- nobody can read the mind of a terrorist. Why would they target, for example -- why would they booby-trap Korans in Mecca? Why would they blow up civilians living in residential communities? Why would they crash airplanes into office towers?

I think it's a deviant mindset, it's a perverted mind. And all we can do is try to protect our citizens from any mischief that they might cause.

BLITZER: Is there a fear, though, that the specific to a British plane coming into Riyadh or Jeddah, that it was going to be shot down with a surface-to-air missile?

AL-JUBEIR: I don't know that it was that specific, because we -- among the weapons that we captured, there were no surface-to-air missiles or...

BLITZER: But were there diagrams? Were there words written about a shoulder-fired missile, for example?

AL-JUBEIR: I'm not sure that that was the case. I believe it was more of British Airways counter. It was the -- where they were in terms of the airport, more of that nature.

BLITZER: But it was enough to scare British Airways into for canceling all of its flights?

AL-JUBEIR: For the time being, yes.

BLITZER: You will remember, I was in Saudi Arabia last December, went to the Prince Sultan Air Base. There was an incident there where terrorists attempted to shoot down a U.S. plane at the Prince Sultan Air Base with a shoulder-fired missile.

AL-JUBEIR: Correct.

BLITZER: And what happened then?

AL-JUBEIR: We discovered the cell. We discovered that the cell leader was a Sudanese national who had escaped to the Sudan. We tracked down members of the cell. We arrested them. And we cooperated with the Sudanese government to get the individuals extradited to Saudi Arabia, where they will be facing justice.

BLITZER: What is the biggest problem that you have right now? You say that the Riyadh bombings, the terrorist acts in May, were a wake-up call for Saudi Arabia. But why wasn't 9/11 a wake-up call, since 15 of the 19 hijackers were in fact Saudis?

AL-JUBEIR: I wouldn't describe it as a wake-up call as much as I would describe it as a massive jolt to Saudi Arabia. When normal people leading normal lives get murdered in our midst, we are shocked into action.

BLITZER: But that wasn't the first time in Saudi Arabia. There was the Khobar Towers, for example. A lot of normal people were killed then, too.

AL-JUBEIR: Correct, correct. But in the Khobar Towers the target was, I guess, perceived as a military target. The United States was attacked in East Africa, three of your embassies were attacked, and it didn't provoke the same reaction that 9/11 did, because what happened 9/11 was normal people were murdered while they were leading normal lives. And that is very shocking to people. And so, the U.S. jumped into action. We went through a similar experience, granted on a much smaller scale, in Riyadh on May 12th.

BLITZER: So what you're saying now is the Saudi government is now on-board, cooperating. We heard Senator Roberts say that there has been significant improvement. But as you know, there are a lot of critics of Saudi Arabia here in the United States. The National Review, a conservative publication, in their issue, the new issue that's coming out, they write this:

"Old friends do not stay friends forever. The Saudi regime exports dissidents while fomenting a Nazi-like hatred of the other at home and throughout the Muslim world. They see the process of Iraqi rebirth as a threat to their own unreformed status quo, as well they should."

That's pretty strong words coming from a very conservative publication like the National Review.

AL-JUBEIR: I'm not surprised it was the National Review.

BLITZER: Why aren't you surprised?

AL-JUBEIR: Ever since September 11th, the National Review has made it a mission to be disparaging toward Saudi Arabia, to try to malign Saudi Arabia, to try to twist the facts to make certain cases. I can't read their mind and what motivates them, but what I do know is they are totally wrong.

Saudi Arabia, when it comes to Iraq, is very concerned about the unity of Iraq and the territorial integrity of Iraq. We want what's best for the Iraqi people. We believe that the Iraqi government should be a representative government that represents everybody. If the Iraqis have democracy, we would welcome it, because democracies do not attack you. So this notion that Saudi Arabia doesn't want to see democracy in Iraq is nonsense.

With regard to incitement and exporting dissidents, and so forth, what do they base this on? We have tracked evildoers. We have worked in terms of our mosques to remove or reduce incitement. We have made great progress in terms of what is being said in our media. I think if there is any incitement, it's coming out of the National Review itself.

BLITZER: All right, we're going to have to unfortunately leave it right there. Adel Al-Jubeir, thanks very much for joining us.

AL-JUBEIR: You're very welcome.

BLITZER: Appreciate it.

The results are in on our Web question of the week. We'll tell you how you, our viewers, voted, right after this.

(COMMERCIAL BREAK)

BLITZER: Our LATE EDITION Web question of the week: How vulnerable is the United States' electric power system? Look at this: 79 percent of you are saying it's very vulnerable. Seventeen percent say somewhat vulnerable. Four percent of you said not vulnerable. Remember -- remember this -- this is not a scientific poll.

Let's get to some of your letters that you've been e-mailing us to LATE EDITION about this week's blackout in North America.

Morell (ph) writes this from Virginia: "We've given the terrorists a great deal of information in the past 24 hours, the know- how of an important power loop that can be tampered with. This was too much information at one time to be televised for the viewing public."

Thayer (ph) writes from Washington: "While having the largest and longest power outage in American history, once again the people are hearing, `The answer is, we don't know,' while at the same time hearing, `We know within an hour that it was not a terrorist attack.' If no one knows the reason for the outage, how can they state that they know it was not an attack?"

We always welcome your comments. You can e-mail us at lateedition@cnn.com. And if you would like to receive our weekly e- mail previewing this program, go to cnn.com/lateedition, and you can sign up for it right there.

Up next, Bruce Morton's last word.

(BEGIN VIDEO CLIP)

BRUCE MORTON, CNN CORRESPONDENT: Other Americans -- Muslims, Buddhists, agnostics, atheists -- must wonder, too, is there a place for them in such a Christian country?

(END VIDEO CLIP)

BLITZER: Modern politics and the separation of church and state.

Stay with us.

(COMMERCIAL BREAK)

BLITZER: And now Bruce Morton has the last word on the often explosive mixture of religion and politics.

(BEGIN VIDEOTAPE)

MORTON (voice-over): August is tough in the news business. The president's on vacation. Congress, too. So we're grateful for Arnold and his all-star California recall and circus.

But there's a much nastier story simmering here too. The Knights of Columbus, a Roman Catholic organization, recently passed a resolution condemning opposition to federal judicial nominees because of, quote, "deeply held beliefs," unquote, stemming from their Catholic faith.

Pennsylvania Republican Senator Rick Santorum, a Catholic, accused colleagues of wanting to bar any judicial nominee, quote, "with a deep faith in Catholicism, having to subscribe to the Church's teaching on abortion," unquote.

The judicial nominee at the center of this is Alabama Attorney General William Pryor, who said Roe v. Wade, the decision legalizing abortion, was, quote, "an abominable decision, the worst abomination in the history of constitutional law. It has led to the slaughter of millions of innocent unborn children," unquote.

Abortion rights groups oppose Pryor, of course, but because he is Catholic?

First, he's also opposed by women's rights groups -- he has questioned parts of the Voting Rights Act -- by gay rights groups, handicapped groups and so on. He has said he is not aware of any innocent person being executed in America since the Supreme Court restored the death penalty in 1976.

So, his opponents oppose him for a variety of reasons, but because he's a Catholic? Surely he has the right to worship in any church, or none. The question is, would he try as a judge by his rulings to make the rest of us follow his church's teaching as to what is right and wrong?

Pryor says his record is separate from his beliefs, but his passion on issues like abortion, his exclamation, "Please, God, no more Souters" -- a reference to Justice David Souter, a moderate -- make you wonder.

He sounds like a man who, as a judge, would want us to obey his faith. He has said that the Declaration of Independence and the Constitution are rooted in a Christian perspective. Senator Dianne Feinstein, who is Jewish, wondered what are we to make of that.

And other Americans -- Muslims, Buddhists, agnostics, atheists -- must wonder, too, is there a place for them in such a Christian country? What about separation of church and state?

And when Pryor calls Roe versus Wade a constitutional abomination, we can be pretty sure how he'd vote on it.

There are no easy answers to these questions. Nominees always say they'd follow the Constitution. Critics always wonder.

One certainty: With charges of religious prejudice creeping in, this ugly argument is likely to get even uglier in the months ahead.

I'm Bruce Morton.

(END VIDEOTAPE)

BLITZER: Thanks very much, Bruce.

Let's take a look now at what's on the cover of this week's major news magazines in the United States.

Time magazine features the blackout and asks this question, can it happen again?

The blackout is also on the cover of Newsweek.

U.S. News and World Report had a double issue last week.

And that's your LATE EDITION for Sunday, August 17th.

For our international viewers, World News is next.

For our North American audience, People in the News, followed by In the Money and CNN Live Sunday.

Please be sure to join me next Sunday and every Sunday at noon Eastern for the last word in Sunday talk.

Until then, thanks very much for watching. I'm Wolf Blitzer in Washington.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com



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