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Interview With Adel Al-Jubeir; Interview With Seymour Hersh; Interview With John Snow

Aired June 20, 2004 - 12:00   ET


WOLF BLITZER, CNN ANCHOR: It's noon in Washington, 9:00 a.m. in Los Angeles, 7:00 p.m. in Riyadh, Saudi Arabia, 8:00 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "LATE EDITION."
In just a few minutes, I'll speak live with Saudi Arabia's foreign policy adviser, Adel al-Jubeir, about his country's efforts in the war on terror.

Also, this hour, Seymour Hersh has a new article about to be released in the New Yorker magazine with new information about Israel's alleged role in Iraq.

We'll get to all of that. First of all, let's go to CNN headquarters in Atlanta for a quick check of the hour's top stories.


BLITZER: Let's begin first in Iraq, where it's 10 days and counting until the handover of power, but there appears to be absolutely no let-up in violence.

Our chief international correspondent, Christiane Amanpour, is in Baghdad. She's following all these developments. She's joining us now live -- Christiane.

CHRISTIANE AMANPOUR, CNN CORRESPONDENT: Well, Wolf, it is 10 days, and there is a litany of violence to report yet again today. And it seems that about 100 civilians so far have been killed this month.

Up in Tikrit, north of here, the old stronghold of Saddam Hussein, a council member was killed today. And then, here in Baghdad, the health minister narrowly escaped an assassination attempt on his car, and it's about the second time that has happened.

Also, in Baghdad, near the airport road, two Iraqi soldiers were killed in what they call an IED, an improvised explosive device, on the road. Eleven of those soldiers were wounded, four of them critically.

Early this morning in Baghdad, about 7:30 our time, we heard a massive explosion. That was downtown, and left five people wounded. It was very early. And, fortunately, people weren't killed.

Also, we heard from the prime minister today, Iyad Allawi, the interim prime minister, who spoke about the need to upgrade and make the new security forces more visible on the street. He said they were changing the name of the ICDC, the Iraq Civil Defense Corps, to the Iraqi National Guard, and that they would be inserting into Iraq as soon as possible a special intervention force they call, which is apparently meant to be specialized in urban warfare -- Wolf.

BLITZER: No change in status in Iraq; still obviously very, very volatile. CNN's Christiane Amanpour will be in Baghdad for us throughout this week up until the transfer of power on June 30th.

Christiane, thanks very much.

The Bush administration is expressing confidence in Saudi Arabia's efforts to combat terror, but some U.S. lawmakers are seriously questioning that country's commitment after the beheading of the American hostage Paul Johnson.

Joining us now, Saudi Arabia's foreign policy adviser, Adel al- Jubeir.

Mr. al-Jubeir, welcome back to "LATE EDITION." Thanks very much for joining us.

First of all, any progress in finding the body of Paul Johnson?

ADEL AL-JUBEIR, SAUDI FOREIGN POLICY ADVISER: We are still searching. We are still combing through neighborhoods. And we hope that eventually we'll find the body and restore it to his family.

BLITZER: But right now you have not found it?

AL-JUBEIR: As of now, we have not found it.

BLITZER: What do you say, what do you want to say on behalf of the Saudi government to the family of Paul Johnson? They're obviously grieving in New Jersey right now.

AL-JUBEIR: We want to express our sincerest condolences to the family. Our prayers and thoughts are with them as they go through this difficult time. May God grant them patience and strength as they deal with the situation.

We feel a sense of sorrow that we were not able to rescue him before he was murdered, and we wish them the best as they deal with this very difficult and tragic situation.

BLITZER: Now, you do have the body of this al Qaeda leader, Abdul Aziz al-Muqrin. Is that right?

AL-JUBEIR: That is correct, yes.

BLITZER: And what does that mean, the fact that you got this guy, that you killed him, but that other al Qaeda operatives clearly still at large in Saudi Arabia?

AL-JUBEIR: We will pursue them. We will go after every one of them, and with the help of God, we will catch every one of them. We have no doubt. This is a struggle that we intend to continue until the bitter end.

BLITZER: Did you capture any of these al Qaeda operatives alive?

AL-JUBEIR: We have 12 suspects that were captured alive.

BLITZER: Are they giving information on the whereabouts presumably or the plots, the plans of other al Qaeda cells out there?

AL-JUBEIR: They are being questioned as we speak, and it is would not be appropriate for us to talk about what it is they're telling us or not telling us at this time.

BLITZER: What is the U.S. government's role, involvement in any of this?

AL-JUBEIR: The U.S. government is working closely with our government in the counterterrorism effort. We have joint task forces that deal with counterterrorism as well as counterterror financing. The U.S. government has provided us with a lot of technical assistance. We share a lot of information, as we do with a number of other governments.

BLITZER: The Associated Press has an article that's moving now on the wire quoting an Islamist al Qaeda-related Web site as saying that your statement on CNN here earlier this week on my program, "Wolf Blitzer Reports," indirectly resulted in the murder of Paul Johnson.

"The stupid Saudi government took the initiative and announced, by the Americanized tongue, Adel Al-Jubeir, that it will not submit to the conditions of the mujahedeen, claiming that it doesn't negotiate with terrorists." That's the statement.

You said on my program that Saudi Arabia, like the United States, does not negotiate with terrorists.

AL-JUBEIR: That has been our history from the very founding of the Saudi state. We have never negotiated with terrorists. We don't intend to do so. I believe what the al Qaeda people were trying to do is trying to justify a murder that is unjustifiable under any faith or under any principle of humanity.

BLITZER: And you will not be deterred by this kind of warning?

AL-JUBEIR: Absolutely not. They have murdered our people. They have murdered our guests. They have taken people hostages. They have set off explosions.

We have not been deterred. If anything, it reinforces our resolve to go after them and to rid the country with the evil. And with the help of God, we shall.

BLITZER: In making the announcement that they had beheaded Paul Johnson, they also issued a chilling warning of other Americans working in Saudi Arabia, 30,000 or 35,000 -- it's unclear exactly how many.

Among other things, they said this. They said, "As for the Americans and most importantly the unbelievers and the criminals who are fighting Islam, this is a lesson for them to learn. For whoever comes to our country, this will be their punishment."

Clearly, a lot of Americans are getting nervous about working in Saudi Arabia -- a lot of other Westerners, as well. The U.S. Department of State, as you well know, has issued since June -- in fact, earlier, they've been saying the Department of State continues to warn U.S. citizens to defer travel to Saudi Arabia. Private American citizens currently in Saudi Arabia are strongly urged to depart.

If they do depart, is that a win for the terrorists?

AL-JUBEIR: Absolutely. Their objective is to scare foreigners into leaving Saudi Arabia. They believe that if foreigners leave Saudi Arabia, and in particular Americans and other westerners, that our economy will be crippled and our government will be weakened.

But that logic doesn't hold. We are determined to ensure the safety of our citizens and our residents. We will do everything in our power to ensure they are safe. We will also do everything in our power to go after this deviant group and to eliminate it from our midst.

There can be no doubt about the outcome of this battle. We will win it.

BLITZER: How safe, though, are those Americans, the other Westerners, the other non-Saudis who live in Saudi Arabia right now, supposedly having been targeted and seeing what happened to Paul Johnson?

AL-JUBEIR: It is a difficult time, but it is a manageable time. We believe that we still have control over safety in Saudi Arabia. We don't believe it has reached a panic situation yet. Nor do we believe -- and we hope it won't.

We will be very vigilante in trying to ensure the safety of everybody in the kingdom. And we will be merciless when we go after the terrorists who try to wreak havoc on our society.

BLITZER: Can Saudi Arabia continue the export of oil, its primary export, without these Westerners, without these Americans?

AL-JUBEIR: Yes. Over 90 percent of the employees of Saudi Aramco are Saudi citizens. The oil facilities are very, very secure. We continue to produce oil. There has been no reduction in our oil production. And quite the contrary, we have increased oil production.

BLITZER: There is an article in today's front page of The Los Angeles Times, which makes a very serious allegation against Saudi Arabia, and Pakistan for that matter, two U.S. allies in the war on terror. Let me read a little snippet from the article. It says, "By not cracking down on bin Laden, Pakistan and Saudi Arabia significantly undermined efforts to combat terrorism worldwide, giving the Saudi exile the haven he needed to train tens of thousands of soldiers."

It goes on to say, "Saudi Arabia provided funds and equipment to the Taliban, and probably directly to bin Laden, and didn't interfere with al Qaeda's efforts to raise money, recruit and train operatives, and establish cells throughout the kingdom, commission and U.S. officials said."

That was today's article in the Los Angeles Times, and I'd like you to respond.

AL-JUBEIR: Absolute nonsense. We've been through this many times. Saudi Arabia stripped bin Laden of his citizenship in the early '90s. We froze his assets. We declared him an outlaw. When he went to Afghanistan, we tried to negotiate with the Taliban for his extradition. When that failed, we reduced our ties with the Taliban, as well as our assistance to the Taliban.

Remember, Wolf, a lot of countries gave money to help Afghanistan rebuild after the ravages of the Soviet occupation, including the United States and Europe. America alone, I believe, gave almost $200 million in 1999 and the year 2000 to help Afghanistan. Does that mean that the U.S. was supporting bin Laden in any way, shape or form?

We see these charges or these myths being perpetrated about Saudi Arabia in order to malign our country, and then we see them later on shattered: the myth of whisking the bin Laden family out of the U.S. when airspace was closed; the myth of the Saudi government giving money to al Qaeda; the myth of Princess Haifa giving money to two of the hijackers. All of these were dispelled by the 9/11 Commission, and I believe this myth will also be dispelled when the report comes out.

BLITZER: All right. We're going to be speaking later on "LATE EDITION" with two commissioners, two of those 9/11 commissioners, and we'll ask them about this as well.

Two statements in recent weeks made by leaders of Saudi Arabia, suggesting that Israel or Zionists or Jews were responsible for these terror attacks in Saudi Arabia.

As you well know, Crown Prince Abdullah said on Saudi television, "Zionism is behind it. It has become clear now, it has become clear to us. It is not 100 percent, but 95 percent that the Zionists' hands are behind what happened."

And on May 1st, Prince Nayef, the interior minister of Saudi Arabia, suggested that there was a link between Israel and al Qaeda. "al Qaeda," he said, "is backed by Israel and Zionism."

Now, people hear that, they have to wonder what's going on.

AL-JUBEIR: I believe you and I spoke about the crown prince's statement and the reason for him doing it, a couple of weeks ago on your show.

There are a number of people in the U.S. who call for change in the government of Saudi Arabia, the dismemberment of Saudi Arabia, taking Saudi out of Saudi Arabia. And that objective is the same objective as we hear coming from Osama bin Laden and al Qaeda. So that was the intention.

With regards to Prince Nayef's statement, I haven't seen it, so I can't comment on it.

BLITZER: He was quoted in the Arab News, which is a Saudi newspaper, as saying -- and I'll read directly from what it says. Speaking to top military and civilian officials in Jeddah last Saturday, when four terrorists went on a shooting spree in Yombu (ph), killing five Westerners and a National Guard officer, the crown prince said he believes Zionists were behind most of the terror attacks in the kingdom.

But in a press statement after the attack, Prince Nayef blamed al Qaeda, and this is what Prince Nayef said: "I don't see any contradiction in the two statements, because al Qaeda is backed by Israel and Zionism."

The suggestion has been made by a lot of Saudi observers that, yes, Crown Prince Abdullah, the defense ministry, the security services are working closely with the U.S., cooperating in the war on terror, but the interior ministry, which oversees the religious police -- that there are a lot of sympathizers there within the religious police to al Qaeda. They're giving uniforms, police uniforms, they're giving warnings, they're giving information to these al Qaeda operatives, and Prince Nayef might be behind this.

AL-JUBEIR: I think that's in the realm of fiction. It's very easy to obtain police uniforms and military uniforms in Saudi Arabia, just as it is here. You go to an Army surplus store in the U.S., and you can get any uniform that you want.

With regards to vehicles, what we found in the Al Muhaya compound is they took cars to a farm, painted them to look like police cars, and then used them in the attack against the compound.

The interior ministry is on the forefront of the war against terrorism. It is our Mabahath (ph) that is pursuing the terrorists, and they have been very successful at it, and they're getting better at it.

The notion that our security services are infiltrated by the terrorists really doesn't hold. If that were the case, they would not be going after soft targets, they would be going after government installations. We haven't seen that.

BLITZER: We're almost out of time, but do you believe there's a connection, a link between al Qaeda and Zionists?

AL-JUBEIR: No, I personally don't think so. I believe that al Qaeda is run by bin Laden. It's spread over 50 or 60 countries. Their objective is evil. Their objective is to overthrow the government in Saudi Arabia and do damage to America and other countries.

BLITZER: Adel al-Jubeir, thanks for joining us. Good luck to you...

AL-JUBEIR: Thank you.

BLITZER: ... and to everyone in Saudi Arabia as well.

AL-JUBEIR: Appreciate it. Thank you.

BLITZER: Coming up, with insurgent attacks still plaguing Iraq just 10 days before the handover of power, are Iraqis ready to take charge? We'll talk with two key United States senators.

And later, the unveiling of former President Bill Clinton's official White House portrait, and this week the unveiling of his memoirs. Two former White House advisers size up the Clinton presidency.

"LATE EDITION" will continue right after this.


BLITZER: "LATE EDITION's" Web question of the week is this: Do you think al Qaeda and Saddam Hussein work together? You can cast your vote, go to, one word. We'll tell you the results later in this program.

Up next, though, terrorist strikes again: the beheading of another American. We'll talk with U.S. Senate Foreign Relations Committee Chairman Richard Lugar and Senate Armed Services Committee Ranking Member Carl Levin.

You're watching "LATE EDITION," the last word in Sunday talk.



RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: Terrorist attacks are not caused by the use of strength. They are invited by the perception of weakness.

So this nation has made a decision. We will go on the offense.


BLITZER: Vice President Dick Cheney saying the United States will take the fight to the terrorists around the world.

Welcome back to "LATE EDITION."

Joining us now to talk about where the war on terror stands right now and other issues, two leading members if the United States Senate. Here in Washington, Republican Senator Richard Lugar of Indiana; he's the chairman of the Senate Foreign Relations Committee. And in Detroit, the top Democrat on the Senate Armed Services Committee, Carl Levin; he's also a key member of the Intelligence Committee.

Senators, thanks very much for joining us.

And, Senator Lugar, I'll begin with you. Are the Saudis doing everything you believe they should do right now to fight terror?

SEN. RICHARD LUGAR (R), INDIANA: Well, they're very vigorous. They understand the problem. The question is how comprehensive they can be. Clearly the statements that were attributed to to some of the Saudi officials are disquieting, but on the ground it appears to me they understand there's a threat to the Saudi regime.

And furthermore, if they do not provide more safety for Americans and for other foreign guests of Saudi Arabia, they're in deep trouble with regard to the oil business. When you have a consideration of 5 million people in Saudi Arabia that keep the business going, it's not that all are going to flee, but there are tens of thousands of Americans who are absolutely critical to this.

BLITZER: And the State Department wants them to leave already.

LUGAR: Well, that's right. It's advising everybody that does not have a compound around them or a very specific mission to leave. And a good many are doing that. So that dislocation's going to be felt. The Saudis feel it. So they have become very serious in intent.

BLITZER: But, Senator Levin, do you think the Saudis are doing everything they should be doing right now?

SEN. CARL LEVIN (D), MICHIGAN: No, I think the two biggest exports of Saudi Arabia have been oil and terrorism, and that one of the ways in which they supported terrorism was by their support for the schools in which hatred was taught of the West, the so-called madrassas.

And according to the Council of Foreign Relations report, which just came out -- and this is a very nonpartisan, highly respected group -- they are still, in Saudi Arabia, very ambivalent in terms of the funding issues, the support of the terrorists through their charities.

Now, I think they finally have been hit at home, so they realize that what they have helped to unleash in the world is coming back to bite them as well. And so I'm hopeful that they'll take stronger action now.

But until now, I don't see that they have taken strong actions in many areas. And that's part of the problem that we've had.

BLITZER: Senator Lugar, if all the Americans were to leave, 30,000 or 35,000, who work and live in Saudi Arabia, won't the terrorists have won?

LUGAR: Yes. And we have to understand that the terrorists may not be in favor of pumping oil. We always take for granted that whoever happens to succeed will see the value in all of that, but there could be very severe disruptions in the petroleum supplies of the world, not to say it'll (ph) impact upon us.

But I think that Carl Levin's point is worth reiterating again. These madrassa schools, in the long run, are absolutely deadly. They're producing, even as we speak, or as the Saudis chase down murderers, new people that are going to populate al Qaeda cells.

And the fact that Saudi officials are still saying that al Qaeda is somehow tied to Zionism really has to be rebutted completely. It is ludicrous and dangerous.

BLITZER: Dangerous in what sense?

LUGAR: Dangerous in the sense that other Arab states believe it. That there is at least still a feeling on the part of the Saudis or the Saudi leadership that they have more at stake in solidarity with some type of Arab myths than they do with the fight against terrorism.

BLITZER: There's a story, Senator Levin, in the L.A. Times today, referred to it earlier with Adel al-Jubeir, saying that there's evidence that the 9/11 commissioners have come up with that, before 9/11, Saudi Arabia and Pakistan, two close allies of the United States right now, were intimately involved in cutting deals with not only the Taliban but also with al Qaeda and Osama bin Laden.

Have you investigated that? Do you believe that to be the case?

LEVIN: Well, that evidence did not come into my possession, but that doesn't mean that it's not good evidence or that it doesn't exist.

And it's part of a major review and investigation that ought to take place relative to all of these relationships between allied countries who thought they could buy peace for themselves by supporting terrorists or terrorist groups elsewhere. It was kind of a devil's bargain which took place between Saudi Arabia, I believe, and the terrorist groups, and that may be true with other countries, as well.

BLITZER: Have you seen any such evidence, Senator Lugar?

LUGAR: No, I haven't. But I think Senator Levin's analysis is correct. There are others who have tried to buy their peace with rather cynical (ph) deals. Now they'll have to get over that, because we are in danger, all of us, including the Saudis.

BLITZER: Senator Lugar, Vladimir Putin, the president of Russia, this week dropped a bombshell, suggesting that, after 9/11 but before the war in Iraq, his intelligence services provided information to the U.S. that Saddam Hussein was planning terrorist strikes against the U.S. in the U.S.

Were you surprised to hear that?

LUGAR: Well, I was surprised to hear it. On the other hand, other people gave us that evidence before the time without being specific.

That's the dilemma: no time and place in particular.

But it was important that Vladimir Putin felt it useful to make that point, and that at least he was attempting to manifest some cooperation with the United States.

BLITZER: But you haven't been briefed on that specific intelligence?

LUGAR: No, I have not.

BLITZER: You're a member of the Intelligence Committee, Senator Levin. Have you been briefed on that, what Vladimir Putin says his intelligence services provided to the U.S.?

LEVIN: No. And apparently nothing much came of that report, as well. But we have not been briefed on that. That was the first that we learned of it, when we read and heard about that last week.

BLITZER: All right. I want to move on and get to this issue of Saddam Hussein and al Qaeda.

The 9/11 Commission, Senator Levin, concluded -- and I'll read the quote specifically what they said -- "We have no credible evidence that Iraq and al Qaeda cooperated on attacks against the United States."

I assume that is consistent with everything you've learned in the course of your own investigations as a member of the Intelligence Committee and the Armed Services Committee.

LEVIN: That is consistent. And I find it, frankly, shocking that the exaggerations of the administration before the war relative to that connection continue to this day.

We still have Vice President Cheney, as recently as three days ago on NBC, saying that we don't know whether there was any such relationship. And he even denied that the staff of the 9/11 Commission found just in the last few weeks that there was no relationship, saying, "No, no. All they said is that there's no evidence." That's not accurate. They found that there was no relationship.

And also, he even denied that he said what he did say prior to the war. When he said, prior to the war, that a meeting, a key meeting which alleged to have taken place but apparently never took place in Prague between the Iraq intelligence and the lead hijacker, Mr. Atta, he said was pretty well confirmed. He said that, and it's on tape, before the war. And now he denies that he ever said that that meeting was pretty well confirmed.

I find that amazing, frankly.

BLITZER: All right. What about you, Senator Lugar?

LUGAR: Well, unfortunately, this particular passage has become very politicized in our own campaign already.

President Bush has simply said that there were al Qaeda people in Iraq; that it is reasonable to assume that, in fact, they visited; that we're not talking about the fact they collaborated on the details of the attack.

But between that explanation and the 9/11 Commission, there's a lot of grist for the mill, and people will be debating this.

BLITZER: And we're going to continue this discussion because there's a lot more to talk about, but we have to take a very short break.

Just ahead, we'll also check the hour's top stories. Then we'll continue our conversation with Senators Lugar and Levin. They'll also be taking your phone calls.

Then, with concerns about its own security, is Israel -- yes, Israel -- playing some sort of undercover role on the ground in Iraq? A conversation with the veteran investigative journalist, Seymour Hersh. He has new information coming out in the new issue of The New Yorker magazine. He'll be joining me live.

More "LATE EDITION" straight ahead.


BLITZER: The White House here in Washington, D.C., on a beautiful but very hot day.

Welcome back to "LATE EDITION."

We're continuing our conversation with the Senate Foreign Relations Committee chairman, Richard Lugar, and the Senate Armed Services Committee ranking member, Carl Levin.

Let's take a caller from California.

California, go ahead with your question.

CALLER: Good morning, Wolf. I was just wondering if, now that we're providing security hand in hand with the Saudis, if we can expect to see fuel prices rise, lower or stay the same?

BLITZER: All right, Senator Lugar, any connection, the price of a gallon of gasoline, and what the U.S. is doing with Saudi Arabia right now?

LUGAR: Yes. Chances are that the price will go lower, because there will be more pumped, more security for that supply. The Saudis have been cooperative, at least to a point, with OPEC.

BLITZER: What about in Michigan, how do you see it, Senator Levin?

LEVIN: Well, the gas prices out here are just truly outrageous, and the Saudis have kind of blown hot and cold on this. We hope that now they're going to be more supportive and stop this real danger, not just to our economy, but to the world economy, which is represented by these high gas prices.

BLITZER: All right. Let's move on and talk about some other issues.

Senator Levin, you're a member of the Intelligence Committee. Last week on this program, Senator Roberts, Pat Roberts, the chairman of your committee, was on. He was frustrated that the CIA is still not letting you release your report on intelligence leading up to the war in Iraq, WMD, weapons of mass destruction.

On Thursday, he said this: "If the agency" -- referring to the CIA -- "were classifying an elementary book and the book said, 'See Spot run,' they would try to redact 'Spot.'"

How frustrated are you that your report is being held up by the CIA?

LEVIN: Very frustrated. There's no excuse for what they're doing. They've redacted a significant portion of it, and Chairman Roberts and Senator Rockefeller are doing everything they can to try to force the CIA to a much more reasonable position.

Obviously, you want to protect sources and methods, but they're protecting themselves, their own embarrassment, and that's got to end.

This is only phase one of the investigation. Phase two gets into the issue of the use of intelligence by the policymakers, because, as bad as the intelligence was, the policymakers made it worse by their own exaggerations.

But phase one should be released. It's not partisan. It's hard- hitting. And it really goes after the CIA failures.

BLITZER: Senator Lugar, let's talk about Iraq for a second. Ten days and counting, June 30th, the handover of sovereignty to Iraqis. Do you think it's going to work?

LUGAR: Well, it has to work, for the Iraqis, for us, for the rest of the world.

Now, it'll work, because security finally will be provided. That's still the critical point. The number of Iraqis who are prepared to do this, trained police or army, are still very few. We have 130,000 troops. Now probably altogether we ultimately need 300,000 or 400,000 people, and most will be Iraqis.

But this will take time. So, the critical point now is between the training and getting on with that and whatever is going to be hidden (ph) by the insurgents.

BLITZER: That could take, Senator Lugar, a long time to train the Iraqis to do the job. LUGAR: It's got to be accelerated very fast, and so will the shipment of arms. In some cases, about half of the policemen don't have arms. So obviously they're not going to be very effective under those circumstances. There are some hitches in our supply lines. We're sure they're getting better.

But we all have a lot of work to do, and the coordination of this with the new leadership of Iraq and our army, General Casey, Negroponte, our ambassador, this will be critical, the behind-the- scenes talks to get everybody on the same page.

BLITZER: Senator Levin, even as we speak, 10 days and counting, assassination attempts, roadside bombings, car bombings, more violence continuing. It doesn't look very upbeat by any means, does it?

LEVIN: No, it looks like a downward spiral of terrorism and violence.

Hopefully that new government, after June 30th, will be able to reconstitute their army, which is what I hope they will do. One of the real mistakes which was made after the war was when we disbanded the Iraqi army, did not seek to reconstitute it.

We were told it was a mistake by the new prime minister, Mr. Allawi. As a matter of fact, at that time many of us urged the Defense Department not to disband that army, but to reconstitute it. As a result of that disbanding, we saw hundreds of thousands of young men on the streets with nothing to do, and that created a real security problem too.

So I hope that this new government will be able to succeed in getting their police force and their army back on their feet a lot faster than we have done. And the fact that it's been so long delayed, I think will make it harder. The fact that we didn't do it will make it a much greater challenge. But nonetheless hopefully they'll succeed.

BLITZER: Senator Lugar, do you have confidence in this new interim Iraqi government led by the prime minister, Iyad Allawi?

LUGAR: I think both the president and the prime minister have been very impressive in their opening statements, not only to Iraqis, but to the U.N., to us.

The new president visited with eight senators in Senator Frist's office for lunch the other day. I had a chance to ask questions of him. I thought he was very sophisticated about our politics, about theirs, and understands the United States has to help provide security for that country until they can do so for themselves, but that they're going to be independent, they're going to have an Iraqi government.

And that man that is the president, and the prime minister were not our choices necessarily, nor those of the U.N. They came out of the Iraqi hurly-burly of politics. So they may have some credibility. I hope they'll have it, because they will need it.

BLITZER: The president is a Sunni, the prime minister is a Shiite.

Senator Levin, does that bode well for the future?

LEVIN: Well, if they can work together and keep it together, it bodes well. They've got to keep that country together.

And add the Kurds there, with their very strong feelings about autonomy, and you've got a real challenge on our hands. But hopefully they're going to be able to put it together.

They're going to need a lot more security, much more than we have provided. We've done some things wrong, which hopefully they're going to be able to correct, particularly on the security side of things. And I think there's going to be, or perhaps already have been, some announcements today in that area.

But you have, in the prime minister, somebody who's going to make a very strong effort to put that Iraqi army back together again. And that should have, again, happened many, months ago, but it hopefully is not too late. They're going to have to do it. We can't do it for them.

BLITZER: Senator Carl Levin, Senator Richard Lugar, thanks to both of you for joining us. Always good to have you on this program.

LUGAR: Wolf, great being with you.

BLITZER: Thank you very much. And to both of you, before I forget, happy Father's Day.

LUGAR: And grandfather's day.


BLITZER: And grandfather's day to you, as well.

Just ahead, he was the first to outline the extent of the Iraqi prisoner abuse scandal. Now the Pulitzer Prize-winning journalist Seymour Hersh has uncovered new information about the role of Israel in Iraq. We'll get the inside story.

"LATE EDITION" will be right back.


BLITZER: Welcome back to "LATE EDITION."

On the heels of his expose about the Iraqi prisoner abuse scandal, the Pulitzer Prize-winning journalist Seymour Hersh has new uncovered new information, this time about Israeli military and intelligence operatives supposedly working on the ground in Iraq. He lays it all out in the new issue of The New Yorker magazine that's just about to come out.

Seymour Hersh joins us here on "LATE EDITION."

Thanks, Sy, very much for joining us.

What are the Israelis doing in Iraq?

SEYMOUR HERSH, "THE NEW YORKER" MAGAZINE: They're in Kurdistan in northern Iraq. They're not in Iraq central. They're in northern Iraq, and they're working with the Kurds. Their long-time friends.

And what the Israelis did, as I write about, they decided six months ago, this was a no-win for us. We were in real trouble without a major change in policy.

And one of the Israeli issues all along had been that the United States was very slow to recognize the fact that Iran was playing a peaceful but very aggressive role in helping the insurgency against us. And they tried, they batted heads against us, and we would not listen. This is the White House and the Defense Department.

So they took the option of going in there with their old allies, the Kurds, and they're beginning run operations against the people they really are frightened of, the Iranians, nuclear issue, and the Syrians. They like to pose trouble for the Syrians.

The only problem with their operation is that it puts them face to face with the Turks.

BLITZER: Well, we're going to get to that in the moment because the Israelis have a long-standing, very good relationship with Turkey, as well.

But what you're saying is that there are Israeli operatives in northern Iraq, in Kurdistan, the Kurdish part of northern Iraq, that are, what, engaged in actions against Iran?

HERSH: Intelligence-gathering. There's no gun play here. We're talking about Israeli operatives, and many of them are going in -- some Masad people go in without passports. They're not wearing uniforms. They're undercover.

How many? A few hundred probably is the best guess, maybe more even. But what they're doing -- and don't forget, there's always been, as I say, a long ties, a lot of economic ties, a lot of Kurdish Jews are very friendly with -- emigrated to Israel. There's a lot of ties.

What they're doing is they're -- Kurdistan puts them very close to some very central potential nuclear sites in Iran, and they're running operations with the Kurds into Iran setting up, you know, the kind of devices, you have the sniffers, the kind of activity you get to see what kind of nuclear goings on might be going on.

BLITZER: So it's basically an intelligence-gathering operation for the Israelis in cooperation with the Kurds, the Iraqi Kurds.

HERSH: And more. I mean, there's been a lot of trouble in Syria recently. There's been a lot of disturbances among the Kurdish populations of Syria. Syrians have about 2 million Kurds among the 17 million population, and there's been a lot of trouble. There was riots at a soccer match.

BLITZER: So what are you suggesting, the Israelis are involved in this?

HERSH: Well, the Israelis certainly, to a degree, not on the ground there, but certainly supporting the idea that the Syrians have a lot of trouble with their own population.

This is all keeping people off balance. This you have to understand in the context for Israel of a major strategic defeat for the United States in Iraq.

BLITZER: You know the Israeli Embassy spokesman, Mark Regev, has issued a statement flatly denying what you're reporting.

HERSH: Categorically I know that. I like Mark. He's a good guy. And there's no question that he's categorically denying it.

BLITZER: Let's talk about another quote you have in the new issue of The New Yorker. A former Israeli intelligence officer quoted as saying this about what you call Plan B: "It's over, not militarily -- the United States cannot be defeated militarily in Iraq -- but politically."

The Israelis very pessimistic about what's happening in Iraq right now.

HERSH: They've been pessimistic for six months. I write about the fact that, beginning last summer, late last summer, they started worrying about, as I say, the Iranian infusion.

But more than that, even people like Ehud Barak, the former prime minister, who's very straightforward, I write about a meeting he had with our vice president, Mr. Cheney, in which he, said according to a witness, he told Cheney, "Your only issue now is how much humiliation will you collect."

BLITZER: Let me read you exactly what you wrote. You said, "Israel had learned that there's no way to win an occupation. The only issue, Barak told Cheney, was choosing the size of your humiliation."

What Barak saying to Cheney, what, get out, or stop, or move on? What was his bottom line?

HERSH: Get real. Change your policy. Understand that you have a problem with the insurgency that you can't wish away.

This is an administration that doesn't want to hear bad news and doesn't absorb bad news. So they just go along hoping it'll change. He was saying you have to do a lot of things to change the policy.

I should also say Cheney's office would not respond to comment. And I'm sure Mr. Barak isn't happy that I'm quoting him in that way.

BLITZER: All right. Let's talk a little about another fascinating aspect in the article. Iyad Allawi, the new prime minister of this interim government, about to take charge in Iraq. Allawi, you write, was involved with a Mukhabarat hit team that sought out and killed Baath Party dissenters throughout Europe.

You're talking about the days when he was an ally of Saddam Hussein.

HERSH: Yes. He was one of Saddam's closest allies, I'd say from '68 to the middle '70s. He was a big supporter of Saddam.

Saddam was, you know, killing his the way through the Baath Party to get control. The vice president then -- all during the '70s he was seizing control, but he finally got it officially in '79.

And for five or six or seven years, Allawi was his guy, one of his people in Europe. And what they would do is they would basically, the only other word for it is murder the opposition anywhere in Europe. And he was certainly involved with those people. He was a thug. I've talked to people who have read his internal CIA file. On the other hand, he also became later a very big asset.

BLITZER: Well, they tried to kill him. They axed him almost to death. He spent a year in a hospital because Saddam Hussein tried to kill him?

HERSH: His people did, yes. The head of the Mukhabarat did in '76 -- '78 is when he got axed. I think before that they had gone after him. Something happened in between '75, '76 in which they turned against him.

BLITZER: What happened?

HERSH: I can give you 10 different theories. Nobody really knows.

BLITZER: The bottom line, I guess, for U.S. policy today, Iyad Allawi, he's going to be the interim prime minister. He's a Shiite leader in Iraq right now. Is this a guy the United States can trust, can rely on to get the job done?

HERSH: People in our CIA who work with him say he's really quite competent. He's a good guy now. The past is passed. I urged by somebody, "It isn't worth it. Don't go after him."

But the truth is that he had a very, very bad past. I even quote somebody in this article, one of the persons with whom he went to med school, a fellow Iraqi, as saying that his med degree came basically from the Baath Party. Nobody's quite sure, you know, what kind of doctor is he. He says he's a doctor.

What's important is that it's totally, completely clear that he was involved with what the Russians call wet-ops, blood. And he was involved in a lot of very bloody things. And I quote a former CIA official using that word.

BLITZER: Let me talk briefly about the prison abuse scandal, since you were so directly involved in breaking this news in The New Yorker over so many weeks.

Is there anything new that you have uncovered in recent weeks you'd like to share with our viewers in the United States and around the world right now?

HERSH: I'm glad you asked the last part. Yes and no. I mean, yes, there's more stuff. I work for The New Yorker magazine, and I really have an obligation to report there.

And also, we talked about this the other day. I learn a lot of things, but getting them into the position where they can be facts, where they can be fact-checked as The New Yorker as so carefully do, where I can get enough sources that make me sure.

In general, what we're seeing in the last month -- and this story is trickling its way upward. And it was there. It was there. It was there high up in this administration. There was a lot of concern very early by a lot of people.

Wolf, American soldiers, military, senior officers want their boys when they're captured to be treated well. And the military, the senior officers of this government have a lot of integrity. We have a lot of great officers. They don't approve of doing the kind of stuff that was being done to some of the prisoners, because it offends their own sense of military justice and also in terms of their own boys.

So it went higher than everybody wants to say it did.

BLITZER: And we'll stand by for the next installments of The New Yorker. You'll be back on this program to share it with our viewers.

HERSH: If I can prove it.

BLITZER: If you can prove it, obviously. You don't want to come out and provide false information.

Thanks very much. Happy Father's Day.

HERSH: Hey, same to you, Wolf.

BLITZER: Still ahead, the September 11th investigation, is there consensus about why the terrorist attacks weren't prevented? We'll talk with two members of the 9/11 Commission.

And don't forget our Web question of the week. It's this one: Do you think al Qaeda and Saddam Hussein worked together? You can vote right now at

And "LATE EDITION" will be right back.


BLITZER: Welcome back to "LATE EDITION."

We'll talk with two members of the 9/11 Commission about the panel's upcoming final report in just a few minutes. First, though, let's go to CNN headquarters in Atlanta for a quick check of the hour's top stories.


BLITZER: Now to Saudi Arabia, where authorities are still searching for the body of the beheaded American contractor Paul Johnson, and a group claiming responsibility for his killing now has apparently a new leader.

Our senior international correspondent is in the Saudi capital of Riyadh. He's joining us now on the phone. Nic Robertson, that is.

Nic, give us an update. What's the latest?

NIC ROBERTSON, CNN CORRESPONDENT: Well, the latest, Wolf, the operation to try and find out where Paul Johnson's body is is an ongoing operation. There are no details that Saudi officials are being able to tell us about it. They say that is because it's an ongoing operation. We do understand, however, the search is taking place to the north of Riyadh.

Also, as you say, Saleh al-Oufi has now been named by the al Qaeda group here as their new leader in Saudi Arabia, that after Saudi authorities killed Abdul Aziz al-Muqrin, the man behind Paul Johnson's kidnapping and murder.

In the Saudi papers today, the headlines read, "Big Blow to al Qaeda," "Qaida Cell Wiped Out." Pictures of al-Muqrin's body and the bodies of his three associates killed with him on Friday night on the front of the papers.

But Saudis I'm talking to here, Wolf, say they are still concerned, concerned about other elements of al Qaeda in the country, concerned as well that they may be regrouping.

Saleh al-Oufi, the new head, was put on Saudi Arabia's most- wanted list in December last year, a list of 26 people. He was, at that time, number five. Saudi authorities since then have killed 10 on that list.


BLITZER: CNN's Nic Robertson in Riyadh. We'll be checking back with you, clearly, here on CNN throughout the day, and in the days to come. Thanks very much.

Moving on now, startling revelations here in Washington this past week, as the 9/11 Commission released new audiotapes, new time lines, and new information of mistakes made on the day of the terrorist attacks.

Also, the commission fired up a simmering political dispute with the administration, at least potentially, over the question of links between al Qaeda and Saddam Hussein's Iraq.

Joining us now, two of the commissioners: former Illinois Governor James Thompson; he's joining us today from South Bend, Indiana. Here in Washington, former U.S. Congressman Tim Roemer of Indiana.

Thanks to both of you for joining us.

And, Governor Thompson, I'll begin with you and play for you one of the most chilling moments during this hearing, when we heard, supposedly, the first time, the voice of Mohammed Atta, the ringleader of the 9/11 attacks. Listen to this, Governor.


MOHAMMED ATTA: Nobody move. Everything will be OK. If you try to make any moves, you'll injure yourself and the airplane. Just stay quiet.


BLITZER: Governor Thompson, can you assure the American people right now that what happened on 9/11 could never happen again?

JAMES THOMPSON, 9/11 COMMISSION MEMBER: No, I can't, and the commission can't, and nobody can, because it depends on the action of human beings.

I can tell you that, to the best of our knowledge, NORAD and the FAA, the authorities of this country, from the president of the United States on down, have taken steps to try and lessen the possibilities of another attack like that and try to lessen the possibility that things would go wrong in responding to an attack like this.

But nobody can make the assurance that this couldn't happen again.

BLITZER: Well, let me rephrase the question and ask you more specifically: Do you assure the American people right now that another hijacker like Mohammed Atta could never again get into the cockpit of a commercial airliner?

THOMPSON: Well, I think that's unlikely, because the cockpits have been hardened, and everybody's under orders not to let anybody into the cockpit, no matter what happens back in the plane. We have greatly heightened security at the checkpoint, for passengers to go on the plane, greatly heightened security for the search of luggage.

So I think it's unlikely that four airliners could be taken over again in the fashion that they were taken over.

But occasionally things slip through the security. And if somebody makes a mistake and leaves the cockpit door open, theoretically it could happen again.

But you're talking about 4,000 to 5,000 flights a day in the United States, and the hijackers would have to get awfully lucky.

BLITZER: Tim Roemer, let me let you weigh in on those questions that I asked. What do you think? TIM ROEMER, 9/11 COMMISSION MEMBER: Well, first of all, hi to Jim Thompson in my hometown of South Bend. That's a good place to spend Father's Day.

I agree basically with what Jim has said. I think we've done some marginal things on the edges to increase our airport safety, put marshals on some of the planes, increase our response and our cooperation between some FAA and NORAD people.

However, what we've found, in chilling fashion in our last couple days of hearings, is that al Qaeda is evolving. They probably will not do the same kind of attack again.

We heard Khalid Sheikh Mohammed and bin Laden talking about how they can change a target and discuss whether they're going to hit the White House or whether they're going to hit the United States Capitol and what's a higher priority. How to slip in a new pilot and do it within weeks and not really delay significantly the timing of their operation.

We've seen them go from a war room in Afghanistan as a sanctuary in coordinating things there, to a devolution, a decentralized dynamic-acting group that pulled off what they did in Saudi Arabia the other day.

BLITZER: Let me play for both of you a comment made by Philip Zelikow, the executive director of the 9/11 Commission, because what he says is very, very chilling. Listen to this.


PHILIP ZELIKOW, EXECUTIVE DIRECTOR, 9/11 COMMISSION: The existing protocol was unsuited in every respect for what was about to happen. What ensued was the hurried attempt to create an improvised defense by officials who had never encountered or trained against the situation they faced.


BLITZER: Tim Roemer, it's shocking to me when I heard that, that the U.S. military, the FAA, had never trained for the possibility that terrorists would hijack a commercial airliner and then use it in a suicide attempt as a missile.

ROEMER: These staff statements, Wolf, are incredibly rich in the detail on these kinds of points. If we had valuable propositions put forward by our founding fathers in the Federalist Papers these may not be the same kind of elevation, but they are certainly a penetrating look into how government did work and did not work.

We had brave people at the Boston Center telling headquarters on that day to try to harden the cockpits and try to prevent maybe Flight 93 from being taken over. And then when these things got to headquarters, we had people leaving the room. We had people saying, "Oh, God, I don't know what we're going to do next." And so headquarters, I think, performed miserably on that day, but we had a lot of bravery and a lot of courage in some of the regional offices of the FAA.

BLITZER: Governor Thompson, as you well know and as your commission has discovered over its investigation, there were numerous intelligence reports in the decade before 9/11 that terrorists might want to hijack a plane and use it as a missile, whether against a tall building in Tel Aviv or the Eiffel Tower or in the Far East.

What happened? Who dropped the ball? And the U.S. military, the FAA never trained for this contingency.

THOMPSON: Well, Wolf, I think the predicate for your question is a little broad. We didn't have numerous reports of hijackers wanting to use planes as missiles. There were occasional references to that. But most of the references in the past were to hijackers as traditional hijackers, to take control of the plane in order to force a demand of theirs and to fly it someplace else, land it and hold the passengers hostage until somebody gave in.

The problem was on 9/11 that all of our training had been pointed towards Cold War days, bombers coming over from the Soviet Union, intercepted over the Atlantic Ocean, and nobody was thinking about the possibility of using these as missiles.

BLITZER: But I, even as a reporter, Governor Thompson, knew that there had been numerous reports of terrorists wanting to hijack a plane and go into the Shalom Towers, the tallest building in Tel Aviv, because that was just something they wanted to do. It wasn't a secret that that was a possibility, that they could use a plane as a missile.

THOMPSON: No, absolutely not a secret, that possibility. But the sad fact is that our training, either at FAA or at NORAD, never took that into account, and so they continued in their Cold War posture.

Now, on that day, as it became apparent what was happening, as Tim said, the controllers at Boston Center, Cleveland Center, New York had made valiant efforts to follow these planes, because the hijackers turned the transponders off and the controllers could only rely on radar. And the planes went in and out of radar. And so they eventually lost them, and they were able to complete their tragic and deadly mission.

But those days are gone now, I hope, because NORAD and the FAA now understand that there is a new terrorist threat out there.

But I agree with Tim Roemer. I think it highly unlikely that al Qaeda will, in their next attempt against us -- and there will be a next attempt. Both the FBI, the CIA and the president of the United States have said it could come within months.

But I think it highly unlikely that they're going to try and hijack planes and use them as missiles. It's much more likely that they're going to use chemicals or poisons or anthrax or truck bombs or blowing up pipelines, something that we haven't seen before.

BLITZER: All right. We're going to continue on that line. We're going to take a quick break, though. We have much more to talk about.

More of my conversation with two 9/11 commissioners. They'll also be taking your phone calls.

And later, his side of the story on the bookshelves Tuesday. We'll get opposing views on the Clinton presidency from former White House counsels Lanny Davis and C. Boydon Gray.

This is "LATE EDITION," the last word in Sunday talk.



BLITZER: ... that cooperated on attacks against the United States.

But the vice president, Dick Cheney, was asked about that on CNBC earlier this week. And listen to this exchange he had with Gloria Borger.


GLORIA BORGER, CNBC: Do you know things that the commission does not know?


BORGER: And do you think the commission needs to know them?

CHENEY: I don't -- I don't have any way -- I don't know what they know.


BLITZER: All right. Well, that's a very serious suggestion, that you don't know everything that he knows. What do you make of it?

ROEMER: Well, first of all, I'd just say that if the vice president knows something that's valuable to us with respect to al Qaeda and Iraq, I hope he would share it with us, or I hope we would agree to talk with him again.

He was generous to spend three hours and 40 minutes with us and the president in the Oval Office. If we need to get to the bottom of this more, maybe we should spend some more time together.

Listen, Wolf, two or three important points on this. And it's important to be very precise with the language. One, our report concludes that there is no credible evidence that Iraq and al Qaeda cooperated on attacks against the United States, in the general terminology here, attacks.

Two, we saw no specific evidence of cooperation on 9/11.

Three, we looked specifically at the 1994 Sudan meeting, and we found that there was a meeting eventually but it did not result in any more than a tie but no cooperation. Nothing, no attack resulted as a consequence of that.

And lastly, we looked at a meeting between Atta and an intelligence officer from the Iraqi government that reportedly took place in Prague in 2001, April 9th. We could not find evidence that that meeting took place.

BLITZER: And we'll get to that in a moment.

But, Governor Thompson, John Lehman, one of your colleagues from the 9/11 Commission, said on "Meet the Press" today that new information has come to him and to the commission since you completed your staff report, suggesting that a very prominent member of al Qaeda served as an officer in Saddam Hussein's army, a lieutenant colonel specifically.

Do you know anything about this?

THOMPSON: Well, I don't think it's appropriate for us to talk about things that have come before the commission that haven't been publicly released yet or that we haven't had a chance to fully investigate or question.

But I will agree with Tim Roemer. Look, both the White House, Bush, and Cheney, and the commission have said no evidence that al Qaeda and Hussein got together to attack the United States. We have no evidence, and we said so, that there was cooperation between them.

We do have evidence, and the White House has said this as well, that there were contacts between Saddam Hussein and al Qaeda.

And it may well be true that the president and the vice president know things from intelligence reports that we don't know. We don't know everything that goes on in government.

If they relate to our mission to find out what happened on 9/11, they should send that evidence to us. If they don't, I suspect they won't. Our mandate is not as broad as the president and vice president's mandate to run the United States.

BLITZER: Let's get back, Congressman Roemer, to the alleged meeting in Prague that may or may not have happened. The commission says this:

"We have examined the allegation that Atta met with an Iraqi intelligence officer in Prague on April 9, 2001. Based on the evidence available, including investigation by checking U.S. authorities plus detainee reporting, we do not believe such a meeting occurred."

The vice president on CNBC responded with this. Listen to this.


CHENEY: We have never been able to prove that there was a connection there on 9/11. One thing we had is the Czech intelligence service report saying that Mohammed Atta had met with a senior Iraqi intelligence official at the embassy on April 9th of 2001.

That's never been proven. That's never been refuted.


BLITZER: Now, the way I read the staff report, in part, at least it sounds like you were basing your conclusion that the meeting never happened on the cell phone that Mohammed Atta had and was being used in Florida. There were a few phone calls during that period.

But it's possible, as some have suggested, he gave that cell phone to someone else while he was in Prague.

ROEMER: There's the fact, Wolf, that we looked at this issue as closely as we could in minute detail. And while maybe, in our staff statement, we didn't refute that it could never have happened, we did say based upon cell phone evidence and that Atta was on the East Coast, that we had cell phone conversations from Atta for a probably seven- or eight-day time period including the date in question, that it was not likely at all that he could have been in that meeting.

Now, listen, we're getting into the weeds here on these particular issues. And I would say that Jim Thompson and I would agree that we could spend a lot of time talking about what our mandate is on the 9/11 Commission. It's not on the Iraq war; it is on 9/11. And it's working in a bipartisan way to move this country forward to make us safer in the future. And I think we're going to be successful on that front.

BLITZER: All right. Well, let's hope for the best.

THOMPSON: Tim is exactly right.

BLITZER: We, unfortunately, Governor, have to leave it right there.

Governor James Thompson has been kind to join us here on Father's Day from South Bend, Indiana.

Governor, happy Father's Day to you. Thanks very much.

THOMPSON: Thank you.

BLITZER: Same to you, Tim Roemer. Happy Father's Day to you, as well.

ROEMER: Thank you. Thanks, Wolf.

Take care, Jim.

BLITZER: And coming up, a check on what's making news at this hour, including the latest developments around the world.

Plus, my special conversation with U.S. Treasury Secretary John Snow about what the Bush administration calls the fastest growing economy in the industrialized world.

More "LATE EDITION" straight ahead.



BLITZER: Up next, what should we expect from the U.S. economy in the coming months? We'll talk jobs, economic recovery and more with U.S. Treasury Secretary John Snow. That's an exclusive "LATE EDITION" Sunday interview.

And will the Clinton book steal the spotlight from fellow Democrat John Kerry? We'll talk to former presidential advisers Lanny Davis and C. Boyden Gray.

Stay with "LATE EDITION."



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: People are going back to work. There's a sense of optimism around this table.


BLITZER: President Bush this week cheerleading for the United States economy. And how the U.S. economy does has enormous ramifications around the world.

Welcome back to "LATE EDITION."

Leading the Bush economic team, the Treasury secretary, John Snow. I spoke with him earlier today.


BLITZER: Mr. Secretary, thanks very much for joining us. Welcome back to "LATE EDITION."

Let's get to the U.S. economy right now. What do you project it will look like between now and the end of this year, in terms of job creation and economic growth?

JOHN SNOW, TREASURY SECRETARY: Wolf, I think we're going to see a lot more of the same, which is strong GDP growth. We've just come off the strongest three- quarter GDP growth in 20 years, and the last three months we've created nearly a million jobs. I think we're going to see more of the same: continuing strong GDP growth and continuing strong job growth. BLITZER: Do you want to give us an assessment, how many new jobs you anticipate might be created in the coming months, based on what's happened over the past few months?

SNOW: Well, I leave the estimates of those job-creation numbers to the private forecasters. But I can cite their numbers. They're looking at 200,000 to 300,000 jobs a month. And that looks reasonable.

BLITZER: What about in terms of GDP, economic growth? What kind of percentage are you forecasting?

SNOW: Well, again, I rely on the private forecasts that are in line with our own internal assumptions, and that's between 4 and 5 percent. It looks like we'll have growth for the coming quarters of over 4 percent, which of course, is terrific. It's well over the long-term average of the economy, and it's a growth rate that assures us that we'll see lots of good jobs created.

BLITZER: Those are very impressive numbers. But look at these numbers, which you won't be happy with, in terms of how the president is handling the economy.

The most recent Gallup poll showed that 41 percent approve of the way he's doing it, 58 percent disapprove. And in a separate Time magazine poll that came out earlier this month, "Who would better improve the economy," 50 percent said John Kerry, 38 percent said George W. Bush.

Those numbers are not encouraging politically, I assume, for you.

SNOW: Well, I'm not on the political side of the House, of course. All I can do is talk about the numbers and the economy and what's really going on.

I think there's some lags in these things. And also, there's been so much attention to other things, particularly the war in Iraq, that it's deflected attention from the economy.

But the news on the economy, Wolf, is so good and so pervasive, so far-reaching, that I think people will change their views here.

As I travel the country, I'm really impressed by, as I meet with small business and medium-sized businesses and larger businesses, by the fact that the business community is so optimistic. They're expanding, they're putting capital into their businesses, they're growing, and they're hiring. And that's really all over the country.

BLITZER: We saw in The New York Times the other day a chart, and I'll put it up on the screen, in terms of presidents and job creation, going back over five presidents.

Ten million new jobs created during Jimmy Carter's administration. Sixteen million new jobs under Ronald Reagan. Two- and-a-half million under the first President Bush. Twenty-two million new jobs under the eight years of Bill Clinton's administration. To date, right now, 1.2 million jobs have been lost under this president.

I guess a lot of Americans see that and wonder could they be next, could they be out of work, especially as they hear all of this talk of so-called outsourcing, jobs going from the United States overseas.

SNOW: Wolf, let me put those numbers in perspective. You're using the so-called Payroll Survey, and the numbers you cite are the numbers from the Payroll Survey, but there's another survey called the Household Survey, also put out by the BLS, the Bureau of Labor Statistics, and it shows a significant job improvement. There's a disparity in those two surveys.

But even using the Payroll Survey, the less favorable survey, I'd point out that most of the jobs that were lost were lost in 2001, when the president inherited a weak economy, an economy in a pretty steep decline that now we know was a recession, and 9/11. And the combination of the weak economy in decline and the recession, plus 9/11, took out over 2 million jobs.

Since then, the economy has been improving. And in the last year, since the president's tax cuts were put into effect, it's been improving at a rapid rate, a rate which will see lots and lots of good jobs created in the months ahead.

BLITZER: How worried should Americans be about outsourcing, jobs going abroad? There have been conflicting statements I've heard from various Bush administration officials whether this is good or bad in the long term for the American people. What's your opinion of these jobs going to India or China or Mexico or wherever?

SNOW: Wolf, there real issue there, of course, is, can we generate good jobs in the United States?

Will we be able to make sure that people who are looking for work can find work? And the answer to that is absolutely yes.

America's the most innovative country in the world. The spirit of enterprise is stronger here than anywhere. We have more entrepreneurs. As long as the spirit of enterprise and entrepreneurship is strong and our education system is strong -- and we need to work on that -- we don't need to fear. We'll create lots and lots of good jobs.

The important thing is to keep at the cutting edge of innovation. That's where we need to focus the energies of the country.

BLITZER: Are you not overly worried about this outsourcing issue? Is that what you're saying?

SNOW: That's what -- well, what I'm saying is is, as long as we tend to our knitting, do the things here that we historically done so well -- keep the spirit of enterprise alive, entrepreneurship alive, give people opportunities for good education so they can be productive -- America has a history of creating lots and lots of good jobs. And every generation of American has done better than the preceding. The standard of living of the United States has continued to rise decade after decade.

And remember, we're 5 percent of the world's population, which means that 95 percent of our customers lie outside the United States. So the last thing we can do is turn our back on the rest of the world. The last thing we should think about is anything that smacks of economic isolationism.

BLITZER: Let me switch gears for a second. Saudi Arabia, the Treasury Department overseeing where the Saudi money is going.

Are you convinced that the government of Saudi Arabia is right now doing everything it should be doing, everything it should be doing, to prevent any money from going to terrorist organizations like al Qaeda?

SNOW: Wolf, we're working very closely now with -- Treasury, we, the United States government -- to make sure that Saudi Arabia is not a source of terrorist money, that Saudi Arabia takes all the steps they can to close off those flows.

And I must say, over the course of the last year, Saudi Arabia has taken a number of really important steps. I am convinced they're deeply committed and sincere about this effort. They've gone so far as to change the whole way their charities operate, so that cash transactions through charities can't flow to terrorist groups.

No, I'd say they're very serious and committed to trying to wipe out the flow of terrorist monies and monies going to al Qaeda.

BLITZER: Anything else they should be doing that they're not doing right now?

SNOW: Well, they need to continue the vigilance. They need to continue to strengthen their local law enforcement efforts, their efforts to investigate terrorist flows and interdict them.

We have a team over in Riyadh of enforcement people, working with their enforcement people, to try and penetrate any networks that are over there that could be the source of these flows.

BLITZER: Mr. Secretary, thanks very much for joining us on this Sunday. Happy Father's Day to you.

SNOW: Hey, same to you. Thanks, Wolf.

BLITZER: And just ahead, he's tanned, rested, rich and now published. Bill Clinton is back in the headlines. We'll talk to two former White House lawyers, Lanny Davis, C. Boyden Gray, about the new Clinton book.

Stay with "LATE EDITION," the last word in Sunday talk.


BUSH: It was clear that Bill Clinton loved the job of the presidency. He filled this house with energy and joy.


BLITZER: Hold on a minute. Is this really the campaign of 2004? Such gracious praise from President Bush to the former president, Bill Clinton? The president went on to remind everyone that Bill Clinton's book is coming out, and I'm quoting now, "in fine bookstores all over America." I'll go on to say, indeed, all over the world.

Welcome back to "LATE EDITION."

We have a fine panel to talk about the Clinton book, how it will be received, its political impact and more. Two guests: Lanny Davis is a former White House special counsel. He worked in the Clinton White House. C. Boyden Gray was the White House counsel in the administration of the first President Bush.

Gentlemen, thanks very much for joining us.

And, Lanny, I'll begin with you and read to you a quote from the president in the new issue of Time magazine. He gives an interview to Time magazine, which has an excerpt of the book.

"I was involved in two great struggles at the same time: a great public struggle over the future of America with the Republican Congress and a private struggle with my old demons. I won the public one and lost the private one. I don't think it's much more complicated than that."

You were in the White House in those days. A lot of people don't know how he could manage to deal with that struggle, that demon, the sexual relationship he had with Monica Lewinsky, on the one hand, and dealing with national security and other issues at the same time.

LANNY DAVIS, FORMER WHITE HOUSE COUNSEL: Well, that comment really shows a lot about Bill Clinton, and the book, showing candor, and his willingness to deal with both of those struggles.

I think he had the ability, as long as I've known him, which is about three decades, to compartmentalize. And he was a great president. Presidents do have to compartmentalize their multi- decisionmaking, both private and personal. And he had maybe the best ability of anyone I've ever met to do that.

BLITZER: Does that ring serious, that someone who's going through impeachment, who's been accused of infidelity, someone who's going through all of this could, at the same time, devote all the energy he needed to the affairs of the presidency?

C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL: Well, I think he couldn't. I think he didn't. I think there were some failures toward the end in dealing with al Qaeda, which he could have perhaps been more aggressive, if he hadn't been so torn up by this.

He does say -- and I find this hard to believe, but apparently he says in the book that he was under great stress because of Starr's investigation before the Monica part. And then later, that he blames Monica in part on the stress caused by Ken Starr.

And that, of course, the Whitewater investigation, really grew out of the larger S&L crisis. It was a $300 billion to $500 billion mess, and it's not trivial. It was not trivial, this Whitewater investigation.

BLITZER: What about that?

DAVIS: Well, first of all, with all due respect to my friend Boyden, the facts are that, in the last two years of his administration, with all that was going on with Ken Starr, he did try to kill Osama bin Laden twice, he was responsible for preventing 9/11s. The millennium attack that was widely reported was a serious danger. There are other non-9/11 events that his White House addressed al Qaeda.

His parting words to President Bush as he left the White House was to warn Bush about al Qaeda on the morning of the inauguration.

He was of course distracted, Boyden, I agree with you; we all were. But I go back to his ability to focus on performance in the presidency versus the private and legal distractions.

His ability to compartmentalize, as I believe President Bush I was able to do and deal with the distractions of the Iran-Contra crisis -- both men showed the ability to put some things in a compartment and deal with the presidential decision-making necessary.

BLITZER: Boyden, here's an excerpt from what the president told Dan Rather in the "60 Minutes" interview that airs tonight. Listen to this.


WILLIAM CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I think I did something for the worst possible reason, just because I could. I think that that's just about the most morally indefensible reason that anybody could have for doing anything, when you do something just because you could.

And I've thought about it a lot. And there lots of more sophisticated explanations, more complicated psychological explanations, but none of them are an excuse. Only a fool does not look to explain his mistakes.


BLITZER: That's a pretty candid statement.

GRAY: It's very candid, but I'm not sure it's completely honest, because elsewhere in the book, apparently, he talks about these demons, and this is just one more chapter in a whole book about demons. He did it because he could, but he did it because he couldn't help but do it also. That was an element of his that he simply could not correct, and Monica was yet another chapter in these...

BLITZER: Lanny, you say you've known Bill Clinton for 30 years. Did you know about these demons that he had, that he talks about, that he writes about now in his book?

DAVIS: What I knew -- and I hope you don't accuse me of making a speech here -- is the first time I met him, he was one of the smartest, most public-service-committed people that I've ever met. And the excerpts of the book that I've read talk about the early years of his commitment to public service, starting in the '60s, when I first met him...

BLITZER: You met him when you were both law students at Yale?

DAVIS: I had just graduated. I knew Mrs. Clinton when she was Hillary Rodham in law school. But we were there in the '60s. That's when his public service commitment really began.

And, Boyden, I would say that this is a complicated man who is confessing to having demons maybe more candidly than most people in public life, but this is a man whose commitment to public service proved, I think, in eight years in the presidency that he was able to perform very well, leaving office with the highest popularity of any second-term president in this century, at least in the 20th century. And that shows to me that his commitment to public service is a lot more important and his legacy as president than this Monica incident.

BLITZER: Do you want to respond to that?

GRAY: Well, I think he definitely had a commitment to public service. He's the greatest public-policy wonk as a president that we've ever had.

But he had this dark side, this weak side that he couldn't discipline. And I think it's a fatal flaw, and I think it affected his public performance.

BLITZER: There's another excerpt -- I want to read this -- from the "60 Minutes" interview, in which he says this: "I didn't quit. I never thought of resigning, and I stood up to it and beat it back. The whole battle was a badge of honor. I don't see it as a stain, because it was illegitimate."

And then he goes on to lash out at Ken Starr, the independent counsel who went after him on the whole impeachment process.

How bitter is this president, Bill Clinton, the former president of the United States, at Ken Starr?

DAVIS: Well, I don't know about personalizing it in Ken Starr. I think Starr was sincerely committed to what he was doing, and I'm not questioning his motives. But I do know that all of us, President Clinton and all of us, fought the battle for impeachment and won the battle. Remember, the Senate did not convict, and the House vote was a party-line vote.

BLITZER: He was still impeached, and that will always go down.

And when you say you're not impugning, you're not raising questions about Ken Starr's motive, Bill Clinton certainly is, Hillary certainly is. They're talking about a right-wing conspiracy that was out there from day one to get him.

DAVIS: It's easier for me to say that, because I wasn't in the cross-hairs of what Mr. Starr did. But the facts are that there was a network connecting the Paula Jones case to Mr. Starr's prosecution. That's a fact.

And a second fact is that the party-line vote in the House of Representatives to impeach is less significant than an indictment. And the fact is, he was acquitted, and a majority of the Senate did not find -- or a majority of the Republicans could not vote for the conviction of Bill Clinton...

BLITZER: I'm going to let Boydon respond, but how many presidents of the United States have been impeached?

DAVIS: The last time -- and that's exactly the analogy I was pointing to. We will look at history as the Republicans of 1868 are held and repudiated for partisan motives and misusing that process, the way I believe, and a lot of them are my friends today, those House managers, will be compared to those Republicans in 1868. It was a politicized impeachment.

And the acquittal in the Senate, where a majority of the Republican Senate did not agree with those House managers, is what we have to remember.

BLITZER: Two presidents impeached in the entire history of this country.

Go ahead.

GRAY: Well, I think he had to have been punished publicly.

Look, I think this did affect public life. His behavior cannot be totally separated. He did it in the White House, what he did. And I think that it has affected teenagers all around the world, certainly in this country.

I don't doubt that the history books will show that some of the dot-com excesses, some of the CEOs lying and stuff, took a cue from this public performance that became public.

So I think he had to be impeached. I think it was proper for him not to have been convicted. I think that was the right result. But to say he shouldn't have been impeached is to excuse behavior that simply is intolerable. DAVIS: Could I just jump in very quickly?

President Clinton, and those of us involved in that battle when the House was about to vote, would have supported a strong censure. The fact that the Republican leadership in those days refused to allow a vote for censure -- they barred a vote, Boydon -- will go down in history as the reason why that impeachment vote was illegitimate.

BLITZER: Will this book help or hurt John Kerry's campaign?

DAVIS: It's got to help because it reminds Democrats and independents and moderate Republicans about eight years of prosperity, about balanced budgets, about deficits turning into surpluses. If we focus on the issues of the Clinton administration, it's got to help John Kerry.

BLITZER: Last word.

GRAY: I think it does not help Kerry, because it sucks a lot of the oxygen out and takes attention away from Kerry, which he needs at the moment for himself.

BLITZER: Boydon Gray, thanks very much for joining us.

Lanny Davis.

Happy Father's Day to both of you.

DAVIS: You too, Wolf.

BLITZER: Thanks very much for continuing this conversation.

And this program note. You can see the former president of the United States, Bill Clinton, his first live primetime interview this Thursday night right here on CNN's "Larry King Live." That airs 9:00 p.m. Eastern, 6:00 p.m. Pacific. That's Thursday.

And up next, the results of our Web question of the week, whether you think al Qaeda and Saddam Hussein worked together. We'll have the results.

Stay with us.


BLITZER: Our "LATE EDITION" Web question of the week asked this question: Do you think al Qaeda and Saddam Hussein worked together?

Look at this. Twelve percent of you say yes; 88 percent of you say no. Remember, though, this is not a scientific poll.

Turning now to what's on the cover of this week's major U.S. news magazines. Time magazine features former President Bill Clinton explaining himself. They run an excerpt.

U.S. News and World Report has a special issue, "Defining America: Why the United States is Unique."

And Newsweek delves into the secrets of the movie, Spiderman II.

That's your "LATE EDITION" for Sunday, June 20th. Please be sure to join me next Sunday and every Sunday at noon Eastern for the last word in Sunday talk.

I'm here Monday through Friday, twice a day, noon and 5 p.m. Eastern.

Until then, thanks very much for joining us. Happy Father's Day to all the fathers watching right now. I'm Wolf Blitzer in Washington.


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