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THE SITUATION ROOM

Are Iraqi Insurgents Moving Beyond Bombings?; Debunking Rumors About Senator Obama

Aired January 22, 2007 - 19:00   ET

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


WOLF BLITZER, CNN ANCHOR: Lou, thanks very much. And to our viewers, you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Standing by CNN reporters across the United States and around the world to bring you tonight's top stories.
Happening now, attackers in Iraq go to bloody new extremes. Tonight, the investigation into how Iraqi military forces were duped and U.S. troops paid with their lives. Are insurgents moving beyond bombings and finding creative new ways to kill Americans?

Also this hour, the anatomy of a smear -- we'll have a CNN exclusive debunking rumors about Senator and presidential hopeful Barack Obama. Who is behind this clearly false claim about the Democrat? And Senator Hillary Rodham Clinton says she's in to win, but can this new presidential explorer leave her baggage behind? Tonight, the Clinton factor -- is her gender an issue or is she the issue?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The shock waves are spreading from a bold attack in which insurgents dressed like American military men went about their ways and decided they were going to kill Americans. Today, the targets were civilians slaughtered as they shopped in open air markets. At least 100 are dead, 200 wounded.

Most of the casualties came in a twin bombing in Baghdad. The rest when a bomber struck in Baquba. This follows an exceptionally deadly weekend for United States troops. And we have new information on a daring raid in which insurgents used disguise and deception to breach a heavily guarded compound and carried out their deadly attack.

CNN's Arwa Damon is in Baghdad.

ARWA DAMON, CNN CORRESPONDENT: Wolf, an attack in the southern Shia city of Karbala is raising many questions and concerns about new tactics the insurgents are using.

(BEGIN VIDEOTAPE)

DAMON (voice-over): The insurgency relentless, their attacks evolving. New details of a brazen and unprecedented attack on U.S. forces in Karbala. According to the police spokesman there, gunmen wearing uniforms very similar to those worn by U.S. forces got through three checkpoints flashing fake I.D.s, some even spoke English.

They stormed a supposedly secure coordination center where a meeting was under way to discuss security for the upcoming Shia pilgrimage known as Ashura. Police said the attackers targeted only U.S. soldiers.

(END VIDEOTAPE)

DAMON: The scene of the attack is currently under lockdown. The vehicles, which are very similar to those used in official convoys, were found in a nearby province. The Iraqis are calling this unprecedented. The Americans are saying that the incident is still under investigation. They're trying to figure out what went wrong and why -- Wolf.

BLITZER: Arwa Damon in Baghdad. In all, 25 Americans troops were killed in Iraq on Saturday alone. Twelve of them in the crash of a Blackhawk helicopter northeast of Baghdad. A radical Islamic group today claimed it downed the helicopter, and a U.S. military official says there are indications the Blackhawk may have been brought down by a shoulder-fired missile.

Let's go to our senior Pentagon correspondent Jamie McIntyre. It looks like there's a new threat, an alarming threat to all of these helicopters flying over Iraq. Is that what you're hearing, Jamie?

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well you know the U.S. military has been aware for quite some time that shoulder- fired surface-to-air missiles are in Iraq. These are missiles that can be bought on the black market and smuggled into the country and some of them Russian-made versions are around. And you know helicopters are used by the U.S. military partly because travel by road is so dangerous with roadside explosives, but they know there's a threat from the ground as well.

And Blackhawk helicopters are particularly susceptible to this kind of heat-seeking missile. The good news is it's hard to get a direct hit on a helicopter because the U.S. military varies the routes and tactics so much, but if it does happen, it can be deadly. And the evidence in this case is a shell tube found on the ground that would indicate that there may have been a shoulder-fired missile used to take down this Blackhawk helicopter. It's still under investigation.

BLITZER: A very worrisome development indeed. Jamie at the Pentagon. Al Qaeda's allies in Iraq, by the way, have taken a very heavy toll among U.S. troops and have always looked at ways to strike inside the United States as well.

Let's go to our justice correspondent Kelli Arena. She's looking into this part of the story. There is some new information emerging today, Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, U.S. forces found documents in Iraq indicating that al Qaeda there was planning to attack on U.S. soil. Intelligence officials say that those documents suggested using student visas as a way to get terrorists into the United States. This is an avenue, Wolf that officials say remains pretty vulnerable.

Officials who have seen those documents describe the plot as more aspirational than operational, basically one in its very early stages. They say there was no target mentioned, no specifics on what kind of attack would be staged, and they say that it involved a small handful of people. But still, officials say that these documents prove that al Qaeda still wants to attack on U.S. soil even as insurgents and al Qaeda operatives are still busy focusing on Iraq, they're dreaming up ways to hit the U.S., Wolf.

BLITZER: So, what is the FBI saying about all of this?

ARENA: Well the FBI says for the record that it has no indication of a specific threat at this time. But these documents were first found about six months ago, Wolf. The FBI did send an advisory then to its state and local partners about student visas, the fact that terrorists have talked about using them. They're underscoring look, we have no Intel that anybody got into the country, that there's a plot under way. But obviously, something we need to be concerned and aware of.

BLITZER: And I'm sure they're looking closely at all of this -- Kelli Arena reporting for us.

On Capitol Hill tonight, Republicans going to new lengths to try to send a message to President Bush that they're either worried about his Iraq policy or they're downright in disagreement with it. The American people are also sending Mr. Bush a powerful message. Look at this.

Our brand new CNN Opinion Research Corporation poll shows 63 percent of Americans are against the president's plan to increase troop levels. Let's get some more on all of the latest developments from our congressional correspondent, Dana Bash.

Dana, what's the latest?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, there were two significant events here on Capitol Hill today, the eve of the president's State of the Union address to show how shaky his political standing is here and how far Republicans are trying to go to distance themselves from him on Iraq.

(BEGIN VIDEOTAPE)

BASH (voice-over): First, in the Senate, one of the most influential members of the president's own party introduced a new resolution, saying he's wrong to send more troops to Iraq.

SEN. JOHN WARNER (R), VIRGINIA: The purpose of this resolution is not to cut our forces current level, or to set any timetables for withdrawal. But rather to express the genuine, I repeat, the genuine concerns of a number of senators from both parties about the president's plan.

BASH: Republican John Warner is the former Senate Armed Services chairman and had been a staunch supporter of the president's Iraq policy. Now Warner has drafted a resolution with two other Republicans and a Democrat. They hope to get enough votes to force the president to consider alternative ideas.

UNIDENTIFIED MALE: I feel ever so strongly that the American G.I. was not trained, not sent over there, certainly not by resolution of this institution to be placed in the middle of a fight between the Sunni and the Shia and the wanton and just incomprehensible killing that is going on at this time.

BASH: At the very same time, House Republican leaders mindful of polls that show public support for the war still plummeting issued an unprecedented challenge to the White House saying the administration and Iraqi government should meet a series of benchmarks and issue monthly progress reports to Congress.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: There are a lot of members of our party who are skeptical that the plan will work because of its dependence on the Iraqi -- the new Iraqi government stepping up its activity.

(END VIDEOTAPE)

BASH: Now, the decision by the House Republican leadership to hold the president more accountable was sort of a compromise position, Wolf. On the one hand, they're trying to stay loyal to the president. But on the other hand, they're trying to pay heed to the rank and file who are getting complaints from constituents who are not happy about sending more troops into an unpopular war -- Wolf.

BLITZER: It's going to be a busy day on the Hill tomorrow, Dana. Dana is on the Hill for us. And remember to stay with CNN for complete coverage of the president's State of the Union address and the Democratic response. Paula Zahn will be here with me in THE SITUATION ROOM. Our special coverage begins tomorrow night, 7:00 p.m. Eastern.

And this additional programming note, on Wednesday, my special exclusive interview with the vice president of the United States, Dick Cheney. That comes up on Wednesday.

What's coming up right now is Jack Cafferty. He's got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, here's a little piece of wisdom. Quote, "If we're putting all this money into Iraq and ignoring New Orleans, then we're doing something wrong", unquote. That was Democratic Senator Jim Webb of Virginia. He's the one who delivered the party's rebuttal to President Bush's State of the Union address tomorrow night.

Webb says getting New Orleans back on its feet is a point of national priority and the government hasn't done nearly enough about it. However, Webb stopped short of calling for money that is supposed to go to Iraq to be sent to New Orleans instead. But you know what; maybe that's not such a bad idea. It's been 17 months now since Hurricane Katrina ravaged the Gulf Coast and ripped apart the city of New Orleans and those areas are still devastated. Street lights don't work everywhere in New Orleans. The criminal justice system overwhelmed. Crime is rising.

The lower Ninth Ward, no phone service. It hasn't been touched. It looks like it did the week after the storm hit. And now some New Orleans -- residents of New Orleans may end up the city with about half of its pre-storm population. So the question we pose is this.

Should the United States cut off funding for Iraq reconstruction and instead pay for Hurricane Katrina recovery? E-mail your thoughts to CaffertyFile@CNN.com or go to CNN.com/CaffertyFile.

Kind of sad, Wolf. We poured what $400 billion into that quagmire in Iraq and New Orleans the people are still suffering. I saw an interview with a woman over the weekend, her house is unlivable. She has a couple of kids. The water was up eight feet. All that was left inside were the two-by-fours, the frame of the house. She's still paying the mortgage 17 months after Katrina.

BLITZER: It's heartbreaking to see what is going on not only there, but a lot of other parts of the country as well. And a lot of people, Jack, are wondering $2 billion a week...

CAFFERTY: Yes.

BLITZER: ... that the United States is spending in Iraq. You can imagine what we could be doing with those kinds of funds right here in the United States.

CAFFERTY: Build a lot of houses with that kind of money, can't you?

BLITZER: All right. We'll get back to you very soon -- Jack, with "The Cafferty File".

And still to come, a very important story we have been working on. CNN's John Vause actually went to Jakarta, Indonesia to uncover a smear. This is a CNN exclusive investigation. Debunking rumors about Senator and presidential hopeful Barack Obama.

And also coming up, it's the question lots of people are asking now that Senator Hillary Clinton is a step closer to a White House bid. Can she -- can any woman win?

And the Venezuelan President Hugo Chavez finding a new target for his anti-American anger. Wait until you hear what he's saying now about Secretary of State Condoleezza Rice.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The roster of White House hopefuls is growing significantly right now with Senator Hillary Rodham Clinton among the latest to announce she's forming a presidential exploratory committee. And that has many people wondering if the United States is ready for a woman president.

Let's turn to CNN's Mary Snow. She's been looking for some answers -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, with Senator Clinton leading in the polls some say it's a sign America is ready. But they also say women candidates still face more scrutiny than their male counterparts.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Senator Hillary Clinton hopes to make history, but is America ready for a female commander in chief.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: I was asked the question do we think a woman could be elected president? The answer is yes.

SNOW: Sixty percent of people surveyed in the CNN Opinion Research Corporation poll said America is ready for a woman president. This New York Democratic leader supporting Hillary Clinton isn't sure.

UNIDENTIFIED MALE: Her biggest challenge, of course, is to get past the issue of being a woman.

SNOW: Political analysts say Senator Clinton also faces an image challenge.

DEBBIE WALSH, CTR. FOR AMERICAN WOMEN & POLITICS: She doesn't connect to me. She's not warm. She's, you know, she's not like me. And I think she's trying to you know sit down, reach out, and talk directly to the American public.

SNOW: Past attempts to do that have hurt her. Flash back to her husband's 1992 presidential campaign. Hillary Clinton defending her career.

HILLARY RODHAM CLINTON (D), NEW YORK: I suppose I could have stayed home and baked cookies and had teas, but what I decided to do was to fulfill my profession, which I entered before my husband was in public life.

SNOW: And these famous words on "60 Minutes" dealing with her marriage.

H. CLINTON: You know I'm not sitting here as some little woman standing by my man like Tammy Wynette. I'm sitting here because I love him.

SNOW: As first lady after the Monica Lewinsky scandal broke, she did stay with President Clinton. How much will that factor in? Experts say it depends on whether voters connect with candidate Clinton at events like this one, emphasizing her personal side.

(END VIDEOTAPE) SNOW: And tonight's video Web chat that Senator Clinton is holding is another effort to connect with voters -- Wolf.

BLITZER: Mary Snow looking at this story, she's going to be busy in New York covering this campaign as well. It's happening right now. There's a live Web cast that Mary was just talking about involving Senator Clinton.

Let's bring in our Internet reporter Abbi Tatton. Abbi, what are you seeing?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, the first of three interactive Web casts going on right now as we speak at the site HillaryClinton.com. Hillary Clinton sitting on a sofa there, looking relaxed, answering questions through a moderator. These are questions that have been coming in through the site since 5:00 today and they're also coming in as we speak.

It's been going on for about 10 or 15 minutes now. The first couple of questions one dealt with Iraq. This is a big concern to the liberal anti-war bloggers online. And the other question that came in right off the bat, are we ready for a woman president. The answer there from Senator Clinton, we don't know unless we try, and that she believes she's the best candidate for the job. At the newly revamped HillaryClinton.com, more and more opportunities for the public to interact. They're invited to send in their blog posts. We're seeing more and more interaction on these Web sites for presidential hopefuls even at this early stage -- Wolf.

BLITZER: She clearly likes that setting that couch there. That's where she made her announcement Saturday on the Web as well. Abbi monitoring that for us.

We also have some fresh evidence tonight that Senator Clinton is far and away the Democratic frontrunner, at least now. Our new CNN Opinion Research poll shows she has the support of 34 percent of registered Democrats nationwide. Her nearest rival, Senator Barack Obama gets just 18 percent. Former Senator John Edwards, former Vice President Al Gore, are the only other Democrats in double digits.

And take a look at this. Our new poll of registered Republicans nationwide puts Rudy Giuliani on top of the GOP field with 32 percent support. Senator John McCain is second with 26 percent. The only other Republican in double digits. Those numbers presumably will change in the weeks and months to come.

Up ahead, tonight right here in THE SITUATION ROOM CNN goes on an exclusive fact-finding mission, looking into explosive claims about Senator Barack Obama's past. We're chasing this story all the way to Indonesia. We have a reporter on the scene. We're going to tell you what is true and what's a lie.

And in Iraq, more blood in the streets. Attackers appear to be getting even bolder, dressing like American troops to copy American troops. I'll speak live with Pulitzer Prize winning reporter John Burns of "The New York Times" about all of the bloodshed. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check in with CNN's Carol Costello. She's monitoring developments around the world, checking feeds coming in, speaking to our reporters, our producers. What's the latest, Carol?

CAROL COSTELLO, CNN ANCHOR: Hi, Wolf. Hello to all of you.

A new terror tape out tonight from the al Qaeda's number two leader, Ayman al-Zawahiri mocks President Bush's plan to send 21,000 more U.S. troops to Iraq. He says quote, "why not send 50,000 or 100,000". He also urges Americans to quote, "reject the fantasies with which Bush tries to deceive you."

A grounded British cargo ship is creating a treasure-trove for scavengers on England's Devon coast. At least 200 containers have fallen overboard and washed up on nearby beaches and people are swooping in, picking up the loot, including shoes, wine barrels, and 15 BMW motorcycles. The ship's 26 crewmembers have already been rescued.

Jury selection now complete in the trial of "Scooter" Libby and opening statements are expected tomorrow. The former top aide to Vice President Cheney is accused of perjury and obstruction of justice in the investigation into the Valerie Plame scandal. She's the former undercover CIA officer whose name was leaked to the news media.

Headlines for now, Wolf.

BLITZER: All right. Thanks very much, Carol. We'll get back to you.

And still to come tonight right here in THE SITUATION ROOM we have a report that you're going to see only here on CNN. It concerns Senator Barack Obama, his past, and claims so explosive that CNN did what any serious news organization should do, we went and investigated. We sent our John Vause all the way to Jakarta in Indonesia and we're going to show you what he found.

And in Iraq, blood flows through the streets. I'll speak live with Pulitzer Prize winning reporter John Burns of "The New York Times" about the violence, including a very, very creative and bold new method of an attack that left a lot of U.S. troops dead.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: To our viewers you're in THE SITUATION ROOM where new pictures and information are arriving all the time. Happening now, more bipartisan opposition to the president's Iraq plan. Senator John Warner joined fellow Republican Senator Susan Collins and Democratic Senator Ben Nelson to co-sponsor a non-binding resolution opposing sending more U.S. troops to Iraq. Also, remember the man Senator Patrick Leahy grilled the attorney general about last week? He's Syrian born Canadian citizen Maher Arar. Today, U.S. officials said he should, should stay on a U.S. security watch list. This despite the Canadian government saying he's not a threat. Arar was arrested by the U.S. back in 2002, deported to Syria where he says he was tortured and later cleared by a Canadian investigation.

And many people scrambled to get their passports today. Starting tomorrow, Americans flying to Mexico, Canada, and the Caribbean will need to show their passports to get back into the United States.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Now to a CNN exclusive. There's been a smear circulating on the Internet and at some conservative news media aimed at Democratic Senator Barack Obama, claims that as a young boy in Indonesia, he was educated in a Muslim religious school of the type that often educates extremists. CNN did what any serious news organization should do in a case like this. We conducted a first-hand investigation and we went right to Indonesia to check out the school that Obama attended as a little boy.

We sent in our correspondent John Vause -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, I came here to Barack Obama's elementary school in Jakarta looking for what some have been calling an Islamic madrassa, like those that teach violence and hate in Pakistan and Afghanistan. Well, Wolf, I've been to madrassas in Pakistan and this school is nothing like that.

(BEGIN VIDEOTAPE)

VAUSE (voice-over): In the quadrangle of this elementary school, boys and girls age from 6 to 12 neatly dressed in uniform playing together, just as a young Barack Obama would have done almost 40 years ago.

(CROSSTALK)

VAUSE: Here they're taught science and math and practice traditional Indonesian dance. Besuki Elementary follows a national curriculum, just like it did in the '60s and '70s. Take a look at Obama's teachers, women and men, all in Western style dress. There are religion classes once a week. Most of the 450 students are Muslim and are taught about Islam. The handful of Christians learn that Jesus is the son of God. The deputy headmaster tells me he's unaware that his school has been labeled an Islamic madrassas by some in the United States and bristles at the thought.

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

VAUSE: This is a public school. We don't focus on religion, he told me. In our daily lives we try to respect religion, but we don't give preference to one or the other." Bandung Winadijanto attended Besuki with Obama. Back then was known as Barry. They were in Boy Scouts together. And he says in all these years, not a lot has changed at his old elementary.

BANDUNG WINADIJANTO, BESUKI ALUMNI: No, it's not an Islamic school. It is common -- I mean, it's general, because there's also a lot of Christian students, Buddhist -- Buddhism students, also Confucian students.

(END VIDEOTAPE)

VAUSE: In fact, Besuki Elementary is typical of almost every school here in Indonesia, except it's in probably one of the wealthiest neighborhoods in Jakarta, not far from the U.S. and ambassadors residence -- Wolf?

BLITZER: John, you say you have been to madrassas, these Islamic religious schools in Pakistan. You've clearly visited this school in Jakarta. Give us a little sense of the difference.

VAUSE: Well, Wolf, this school is just like an elementary school anywhere in the western world in many ways. Right now, moms and dads are dropping their sons and daughters off for another day at school. They'll return and pick them up in the afternoon.

This school was established in 1934 by the Dutch. It has a very broad education. It doesn't folks on religion. It has a very famous alumni. For example, the grandchildren of Indonesia's second president attended this school. The current CEO of Garuda Airlines in Indonesia's national carrier, was also a former student at Besuki Elementary. So this is just a normal elementary school, and there's a good deal of confusion here how it could be confused as being an Islamic madrassa, Wolf.

BLITZER: And I've been to some of those madrassas in Pakistan myself, and when you go in, you oftentimes just see these little boys studying, memorizing the Koran in Arabic even though a lot of them have no clue what they're reading.

VAUSE: Yes, there's no learning of the Koran, no ongoing religious lessons every hour of every day. These kids get a very well-round education. They only go to religion classes once a week. So the religion is taught, as it is in every school run here in Indonesia run by the government. Indonesia, is, after all, a Muslim country, so the government says that Islamic studies are required as part of that curriculum. But also Christian studies as well, as there are Christian kids at this school. Also studies on Buddhism and other religions as well. So there's no one focus on Islam like you would find at a madrassa in Pakistan or Afghanistan.

BLITZER: John Vause doing excellent some reporting for us from the scene. John, thanks very much. It's already Tuesday morning in Jakarta.

And let's get now some background on the anatomy of the smear against Barack Obama. Howard Kurtz of CNN's "RELIABLE SOURCES" takes a closer look at the rumor and the repercussions -- Howie?

HOWARD KURTZ, HOST, "RELIABLE SOURCES": Wolf, the first media controversy of the 2008 presidential campaign has erupted and is raising questions about journalistic behavior.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D), ILLINOIS: As many of you know...

KURTZ (voice over): From the moment Barack Obama began talking about running for president, he's drawn an increasingly loud drumbeat of positive coverage.

UNIDENTIFIED FEMALE: Barack Obama, the rising rock star.

BILL PRESS, RADIO TALK SHOW HOST: It's about Barack Obama, the rock star.

TONY HARRIS, CNN ANCHOR: His rock star popularity...

SEAN HANNITY, FOX NEWS: Barack Obama treated like a rock star.

UNIDENTIFIED MALE: Huge crowds, literally. They would make a rock star envious.

KURTZ: But in recent days the Illinois senator has had to cope with a rumor pushed by a little-known conservative magazine and amplified by an echo chamber on the right. And the unsubstantiated article tries to blame the whole thing on Hillary Clinton.

"Insight" magazine, which is owned by the conservative "Washington Times," says Obama went to a madrassa, the type of Muslim religious school often associated with teaching the most fundamentalist form of Islam. The article also accused him of supposedly hiding that he was raised as Muslim.

An Obama spokesman calls the story, based entirely on unnamed sources, trash and completely false.

Obama has already revealed in his two autobiographies that he spent two years at a predominantly Muslim school. This, by the way, when he was just 6 years old. The senator today is a Christian who belongs to a Chicago church.

"Insight" also claims the madrassa allegation has been spread by researchers "connected to Senator Clinton." Again, without a single named source or document. A Clinton spokesman calls the piece an obvious right-wing hit job.

The allegations got a big boost from Rupert Murdoch's media empire, with "The New York Post" running this headline: "'Osama' Mud Flies at Obama." And Murdoch's FOX News Channel touted the claims on two programs.

JOHN GIBSON, FOX NEWS: The gloves are off. Hillary Clinton reported to be already digging up the dirt on Barack Obama. The New York senator has reportedly outed Obama's madrassa past.

KURTZ: But as we now know, there is no madrassa past. Obama spokesman Robert Gibbs, who called FOX's broadcasting of the madrassa tale "appallingly irresponsible," says she didn't think much of a clarification carried this morning on the program "FOX and Friends."

FOX News executive Bill Shein says some of the network's hosts were simply expressing their opinions and repeatedly cited "Insight" as the source of the allegations. Some conservatives say Obama should expect his personal life to come under journalistic scrutiny.

JONAH GOLDBERG, EDITOR, "NATIONAL REVIEW ONLINE": I think the background on Obama, when all he's running on is his background, is fair game. If this thing is a lie or a smear, then it needs to be denounced and pelted from the public sphere for being an unfair and untrue allegation.

(END VIDEOTAPE)

KURTZ: This, unfortunately, is how the media food chain works. A bogus charge appears in some magazine or on some Web site and works its way up to bigger news outlets, all based on little or no evidence.

What makes the madrassa story unusual is that the false allegations are about a candidate's elementary school nearly 40 years ago, and the attempt to blame this rumor mongering on the rival campaign of Hillary Clinton -- Wolf.

BLITZER: All right Howard, thanks very much -- Howard Kurtz reporting.

And by the way, "Insight" magazine which initially published this rumor, says the story was not thinly sourced. On their Web site, they also say their reporters sources were close to the Clinton opposition, research war room and they confirmed the truth of the story. They're standing by this story right now.

Still ahead tonight right here in THE SITUATION ROOM, the Venezuelan President Hugo Chavez telling the United States to quote, "go to hell." He's also taunting directly the secretary of state Condoleezza Rice. We're going to have details of his latest rant.

Plus, a documentary filmmaker focusing in on religion and politics, the politics of America's Evangelical Christians. She also happens to be the daughter of the speaker of the House. My interview with Alexandra Pelosi, that's coming up. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: A new skirmish in the war of words between Venezuela and the United States and a power play by President Hugo Chavez. Let's turn to our State Department correspondent Zain Verjee. She's got details -- Zain?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, Venezuela's president is at it again. This time he's going off to Condoleezza Rice.

(BEGIN VIDEOTAPE)

VERJEE (voice over): Hurling insults. The target this time, the U.S. secretary of state. In his weekly radio address, Hugo Chavez belittles Condoleezza Rice...

HUGO CHAVEZ, VENEZUELAN PRESIDENT: Condoleezza, how are you?

VERJEE: ... saying, "Hi, Condoleezza. How are you? You've forgotten me, missy."

Last year, Chavez called President Bush "the devil" in his speech at the United Nations. Now he's just been re-elected and wants special authority that will let him rule by decree. The State Department said decrees are a bit odd to have in a democratic system. Chavez is blasting back.

"Go to hell, gringos, go home, go home! We're free here." Adding that Venezuela has a right to do what it wants.

(END VIDEOTAPE)

VERJEE: Regional experts say Chavez's consolidation of power is disturbing. He seems bolder after his election victory and poses a challenge for anyone who really cares about democracy -- Wolf.

BLITZER: What are experts you're talking to, Zain, saying what, if anything, the United States can or should be doing as far as Hugo Chavez is concerned?

VERJEE: Experts say when he makes comments like this, really what he wants is some attention. He's just riding a wave of anti-U.S. sentiment. And so, don't give him the attention, don't take the bait, they say.

Also, another really important point, Wolf, is that the U.S.'s dependent on Venezuelan oil. About 12 to 15 percent of oil in this country comes from Venezuela. So it's difficult to pressure that country and economically isolate Venezuela in a way that would hurt Chavez, because the U.S. needs them. The State Department today, Wolf, said that by making comments like this, Chavez just hurts himself and hurts Venezuela.

BLITZER: So basically, what you're hearing from State Department and other sources is to just ignore Hugo Chavez? Is that what they would like?

VERJEE: Exactly. They said, just ignore Chavez. He only does this -- when he says things like this, he does himself no favors, and they've also said they're not going to directly respond to comments like this.

BLITZER: Zain Verjee reporting for us.

President Bush, meanwhile, is expected to talk extensively about energy and energy security in tomorrow night's State of the Union address. But presidents have been talking for decades about ending the country's oil addiction. And so far, it's proven far easier said than done. CNN's Frank Sesno takes a closer look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The president of the United States.

FRANK SESNO, CNN CORRESPONDENT (voice-over): Make it less ritual and more real. Starting with a genuine call to arms on an issue we can actually do something about, to reduce America's addiction to oil and reduce the cloud of unsavory suppliers.

They could do it if they wanted to. They know the drill. This is just one recent blueprint from a group of business leaders and retired military men.

What's needed? Everything. Tough love. Higher fuel efficiency standards for cars and light trucks. Tax laws that really encourage new technologies, like this one. Did you know that under current law, tax credits for hybrids disappear once a company sells 60,000 of them? A real push on conservation and alternative fuels though incentives and mandates.

And more exploration. Yes, new drilling in oil-rich offshore waters and in Alaska.

Is there a chance they have the courage and imagination to connect these dots? Maybe, but probably not. Congress is divided. Mr. Bush is politically weakened.

But what if, starting with tomorrow's State of the Union, they called for sacrifice and compromise? What if America connected energy to national security and climate change, and actually took the lead?

(END VIDEOTAPE)

BLITZER: That was our special correspondent, Frank Sesno, reporting.

From oil to Iraq, we'll be listening very closely to the president's State of the Union address. Please be sure to join Paula Zahn and me right here in THE SITUATION ROOM tomorrow. Our coverage begins at 7:00 p.m. Eastern.

And Wednesday in THE SITUATION ROOM, I'll have an exclusive interview with Vice President Dick Cheney. You'll want to see that as well.

Still to come, Jack Cafferty wants to know, should the United States cut off funding for Iraq reconstruction and instead pay for Hurricane Katrina reconstruction? Jack standing by with "The Cafferty File."

And it's getting congested on the road to the White House. Very congested. CNN's Jeanne Moos shows us the president glut. Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: She comes from a well-known family, but she's also an award-winning film maker blazing her own path. Already well-known for one political documentary, she's now out with another.

Alexandra Pelosi is joining us from New York. She also happens to be the youngest daughter of the House Speaker Nancy Pelosi. We'll get to that, Alexandra, shortly.

Congratulations on this new film that airs Thursday night on our sister network, HBO.

But I want to play a little clip to start off the conversation.

Listen to this.

(BEGIN VIDEO CLIP, "FRIENDS OF GOD")

ALEXANDRA PELOSI, FILMMAKER: Ever since they started showing their influence at the ballot box, they have become a formidable force in our culture and our democracy.

But the evangelical movement is a big tent. So, we are going to hit the road to meet some evangelicals, to find out what they believe and what it means for the future of America.

(MUSIC)

(END VIDEO CLIP)

BLITZER: They're singing a song: "I am a Friend of God. I am a friend of God."

Well, what did you -- what is the bottom line? In a nutshell, what did you discover, Alexandra?

PELOSI: Well, I think we spent a lot of time on cable news channels talking about who these evangelicals are and what their influence may be in the next presidential election. So, I hit the road to go try and meet some, to talk to them about what they believe, and whether or not there is a cultural divide in this country.

BLITZER: It seems like there is a growing trend, at least among many evangelicals, to get beyond some of the traditional issues, worry about the environment, for example.

Did you discover that?

PELOSI: Well, I focused mostly on the 50 to 80 million evangelicals that are more conservative, that had more influence in helping reelect George Bush in 2004.

The two main issues that they care about -- obviously, today, with the anniversary of Roe vs. Wade -- they care about abortion, and they care about gay marriage. After that, the issues start to get confused. And there are certain sections of the population, obviously, that care about the environment and that care about the war. But that really didn't come up. I focused mostly on the fundamentalists.

BLITZER: And -- and did you -- did you get a sense of how they're going to play in this upcoming election, presidential election?

PELOSI: Well, I think they are a formidable force in our democracy, and that we have to listen to them, especially the Republican candidate, obviously, has to listen to them.

And they go to church every Sunday. And they're organized. And they're mobilized. And they're getting together to talk about what is important to them. And they will be a force. So, we do have to listen to them in every election.

BLITZER: Tell us something about your mom, the speaker of the House of Representatives, that our viewers may not necessarily know.

PELOSI: Gosh, how much time do you have?

BLITZER: Got 30 seconds.

PELOSI: Well, you know, for me, my mother was a stay-at-home mom. She was -- you know, she drove car pools, and baked cookies, and threw birthday parties, and made Halloween costumes.

And this is her second act. You know, this is really, for -- for us, it's like her empty-nest syndrome. You know, she went off to Congress when I went to college. So, for us, this is all new, too. There's plenty that we're just learning about her now.

BLITZER: And you must be so proud. Your mother is the speaker of the House. And -- and you have a new baby. So, congratulations to you on that as well. Congratulations on the film. It's entitled "Friends of God: A Road Trip With Alexandra Pelosi."

Good work. Thanks very much for coming in.

PELOSI: Thank you for having me.

BLITZER: And we have Jack Cafferty standing by. He's in "The Cafferty File." He's in THE SITUATION ROOM with "The Cafferty File." I want to be precise.

CAFFERTY: I can't follow that. How do you follow that?

BLITZER: I don't know.

CAFFERTY: She's a very delightful young lady.

BLITZER: She was delightful, and it is obviously a very good film.

CAFFERTY: I enjoyed it. Well, I don't know about the film, but she seemed pleasant.

The question is, should the United States cut off funding for Iraq reconstruction and instead pay for Hurricane Katrina recovery, as was suggested by one of our U.S. senators?

Pat writes from Naperville, Illinois: "What an interesting idea, America taking care of its own, and letting those countries in the Middle East, especially those oil-rich countries, pay for their own reconstruction and modernization."

Sean in Simi Valley, California: "I'm disgusted that this administration has created a country where we would have to contemplate a question like this."

Paul in Pewaukee, Wisconsin: "Sounds like a damn good idea to me. Why are we investing money in a country that really doesn't want us there, while our country is falling apart?"

Jenny in New York: "Yes, the reconstruction funding is a waste, since as soon as something is built in Iraq, it's destroyed. Not to mention the billions of dollars that were lost over there. We should pay for Hurricane Katrina recovery right away. How long has it been since Bush promised to spend whatever it takes to rebuild down there? Just another broken promise."

Christine: "One problem is that wherever money is sent by this administration, it has been less than successfully managed. Fraud, waste, mismanagement, et cetera siphon off dollars from the causes the money is supposed to support. New Orleans, HIV in Africa, and Iraq, to name there. What we need is an administration that can successfully manage projects, people and money in order to accomplish goals."

Len in Arizona: "Jack, Cheney and Halliburton don't make any money building houses in New Orleans."

John in Kingsport, Tennessee: "My hard earned tax dollars should not go to pay to rebuild homes for those who choose to live in harm's way. If my home is destroyed by a tornado, I would not receive federal dollars to rebuild. So why should anyone else receive tax dollars?"

And Margaret in Craig, Texas: "The money should be going to homes destroyed on the Gulf Coast and in Iraq, and the war spending should stop. There would still be a lot left over."

If you didn't see your e-mail here, you can go to cnn.com/caffertyfile and read more of these online. Wolf, we expect you to do that right after you get off here.

BLITZER: Not only me, a lot of people do actually go to CNN/caffertyfile. They love to read your email.

CAFFERTY: Well, good.

BLITZER: Thanks very much for that. Paula Zahn standing by in New York. A little preview of what is coming up right at the top of the hour -- Paula.

PAULA ZAHN, CNN ANCHOR: Thanks, Wolf. Coming up, we're going to shine a light on America's hidden secrets, bringing intolerance out in the open. Tonight, one of the meanest streaks in the country. It is a dividing line between L.A.'s black and Latino neighborhoods. And the gang violence is so bad there, the mayor is now getting federal help.

Also, allegations that the hit show "24" is reinforcing stereotypes and promoting intolerance because the bad guys are predominantly Muslims. I'll have more coming up at the top of the hour with a couple of pretty heated debates on whether this country is ready to accept a female presidential candidate, Wolf.

BLITZER: All right, I'll look forward to it. And I'm looking forward to seeing you here in THE SITUATION ROOM, Paula, tomorrow. We'll be leading our coverage at 7:00 p.m., looking forward to the president's State of the Union address.

Welcome back to Washington tomorrow. Paula will be with us tomorrow.

ZAHN: Thanks.

BLITZER: And still ahead tonight, a traffic jam on the road to the White House in the 2008 presidential race. Our Jeanne Moos takes a closer look at everyone who wants in.

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the hot shots coming in from the Associated Press.

In Israel, soldiers take part in an exercise during a training demonstration for journalists.

In India, a man displays a cycle boat that's part of an exhibition.

In Brazil, a 12-story illegally constructed building is demolished.

And here in Washington, the panda cub Tai Shan plays in the snow with his mother.

Some of today's hot shots, pictures often worth a thousand words.

They're on a one-of-a-kind journey already and want you to come along for the ride. Right now, the road to the White House is getting more and more jampacked. Here is CNN's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): If this is your idea of exploration, explore this.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I announce today...

GOV. BILL RICHARDSON (D), NEW MEXICO: Today, I'm announcing...

CLINTON: That I'm forming...

UNIDENTIFIED MALE: I'm filing papers today...

SEN. BARACK OBAMA (D), ILLINOIS: To create a presidential exploratory committee.

RICHARDSON: A presidential campaign exploratory committee.

CLINTON: A presidential exploratory committee.

GOV. TOM VILSACK (D), IOWA: I intend to be that president.

MOOS: Even if Jon Stewart is dunking the question about your name.

JON STEWART, HOST, DAILY SHOW: What's his name?

UNIDENTIFIED MALE: Vilsack.

STEWART: Vilsack. Tom Vilsack.

They have all formed exploratory committees. Just today, Kansas senator. What the hell is his name?

UNIDENTIFIED MALE: Brownback.

STEWART: All right, Sam Brownback.

MOOS: Not to be confused with "Brokeback." Brownback is considered by gay activists to be anti-gay.

The election is two years away, and already, we're blessed with a glut of presidential candidates.

SEN. SAM BROWNBACK (R), KANSAS: God bless you. And God bless America.

VILSACK: God bless our work and God bless the United States.

MOOS: And God bless whoever arranged the look of each announcement. From Hillary Clinton propped up on a pillow on her homey coach, to John Edwards, clad in jeans in New Orleans.

But what is an exploratory committee? We consulted Ken Gross, a Washington lawyer who helps create them.

(on camera): Jeanne Moos for President...

KEN GROSS, ATTORNEY: Exploratory committee.

MOOS (voice-over): All you have to do is basically fill out two forms and send them to the FEC, the Federal Election Commission.

(on camera): Boy, it doesn't even cost anything, does it?

GROSS: 39-cent stamps.

MOOS (voice-over): Here is one of the forms filled out by Barack Obama's campaign.

OBAMA: I would like to announce that I'm ready...

MOOS: Wait a minute, that's Obama's pre-exploratory fake announcement.

OBAMA: ... for the Bears to go all the way, baby!

MOOS: Candidates aren't required to launch exploratory committees. Most do it for the double shot of publicity.

(on camera): You get to say you're exploring, and then you get to say...

GROSS: Say I'm doing it ...

MOOS: ... I'm running.

GROSS: Right, and then you get to say I'm doing it for real.

MOOS (voice-over): Every year, Gross says around 200 goof balls, in his words, file with the FEC.

GROSS: So they can tell their friends and neighbors that they're running for president, I suppose.

MOOS (on camera): Do not try this at home, folks. Do not try this at home. Even though the form looks like this.

(voice-over): With so many candidates exploring, it's almost easier to...

SOLEDAD O'BRIEN, CNN ANCHOR: Raise your hand if you're not running for president. You and you...

MOOS: And what do those would-be presidents seem most intent on exploring? Us.

CLINTON: I'm beginning a conversation with you.

JOHN EDWARDS, FORMER U.S. SENATOR: Including you.

OBAMA: Because I believe in you.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

BLITZER: And before we leave you tonight, we had hoped to bring you an interview this hour with "The New York Times" Baghdad bureau chief John Burns. Unfortunately, we could not make that happen. We'll catch up with John Burns later in the week.

Until then, thanks very much for joining us. I'm Wolf Blitzer in THE SITUATION ROOM. Let's go to Paula in New York -- Paula.

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