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THE SITUATION ROOM

Update on Boston Security Breach; Iraq Prime Minister Speaks Out; Nancy Pelosi Response to Iraq Trip; Joe Biden Kicks Off Presidential Campaign

Aired January 31, 2007 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: Thanks very much, guys.
And it is happening now. We're going to have more on this security scare that was happening in Boston. We're expecting to hear from the mayor of Boston. Coming up, we're going to be bringing you his remarks and letting you know what he has to say.

Also this hour, a CNN exclusive -- Iraq's prime minister tells the United States and Iran -- keep your fight with one another out of my country.

Is Nouri Al-Maliki thumbing his nose at President Bush right now?

You're going to want to hear what he told our Michael Ware in Baghdad just a little while ago.

Plus, Mr. Bush is getting an earful from Speaker Nancy Pelosi about her trip to Iraq. She calls the war catastrophic.

Could the same be said about the Democrats' relationship with the White House?

And Senator Joe Biden kicks off his presidential campaign with what his critics are saying is foot and mouth disease.

Did he insult fellow Democrat Barack Obama with a back-handed complement that some are actually seeing as racist?

Stay right here to find out what Biden said and what Senator Obama's response is.

I'm Wolf Blitzer and you're in THE SITUATION ROOM.

We're going to update you on that bomb scare that has been happening over the past few hours in Boston. Several suspicious packages triggered fear, a traffic nightmare.

We're standing by for a news conference. Top city officials, including the mayor of Boston, will detail what's going on. We're going to have that coming up.

Right now, authorities have determined it looks like the whole thing may have been a hoax. All of the devices that were found, for all practical purposes, turned out not, not to be explosives.

Let's -- we'll update you on that as we get more information. But let's turn now to our CNN exclusive.

The Iraqi prime minister's stern message to the United States and Iran to simply keep their would-be war out of his backyard. Nouri Al- Maliki's very, very strong comments today are driving home fears of a wider war in the region.

CNN's Michael Ware is joining us from Baghdad with more on his xvii -- Michael.

MICHAEL WARE, CNN CORRESPONDENT: Wolf, in an xvii today with Prime Minister Nouri Al-Maliki, the Iraqi leader said that Iranian forces had been targeting American troops. And he now worries that his country is becoming a proxy battleground between Tehran and Washington.

(BEGIN VIDEO TAPE)

WARE: Is American intelligence wrong when it says Iran is working to kill American soldiers in your country?

NOURI AL-MALIKI, IRAQI PRIME MINISTER (THROUGH TRANSLATOR): I didn't say it does not exist and the Americans, when they say that their intelligence is saying that Iranians are killing their soldiers, it means their intelligence is based on information that they got. And this is not an obscure thing.

There is a struggle between Iran and America and we have told the Iranians and the Americans, we know that you have a problem with each other, but we're asking you, please, solve your problems outside of Iraq.

We do not want the American forces to take Iraq as a field to attack Iran or Syria. And we will not accept Iran to use Iraq to attack the American forces.

But does this not exist?

It exists and I assure you it exists. But it's based on the struggle between the two countries. And from our side, we're trying to stop the effort to have a struggle in Iraq. We are always encouraging the two sides to negotiate and to try to find an agreement away from Iraq.

Iran and America -- we are ready to pay efforts to solve the problems between them, if it is possible. But not on the account of Iraq. Iraq has nothing to do with the American-Iranian struggle. And we will not let Iran play a role against the American Army and we will not allow America to play a role against the Iranian Army and everyone should respect the sovereignty of Iraq.

(END VIDEO TAPE)

WARE: Wolf, indeed, the prime minister said that all of Iraq's neighbors -- from Turkey to Syria to Jordan to Saudi Arabia -- want to interfere in Iraq's internal affairs. BLITZER: Michael, were you surprised that the prime minister, Nouri Al-Maliki, was effectively equating the Iranian president, Ahmadinejad, with the U.S. president, George W. Bush?

WARE: Well, the prime minister is certainly a man caught in the middle between these two powers, represented by Washington and Tehran; by two presidents.

He's struggling a very difficult divide. His government exists only through the intervention of the United States. He is propped up by U.S. forces and Washington's support, yet he shares a very important border with Iran.

Iran has enormous strategic interest in this country. And in the past, during Saddam's regime, when the prime minister was in opposition, Iran supported his party and many other Shia opposition parties.

BLITZER: Because, you know, so much of this new U.S. strategy depends on Nouri Al-Maliki cooperating with the U.S. And when so many people here in Washington, including the president's own Republican supporters, hear Nouri Al-Maliki basically say to the United States and to Iran, keep your proxy war out of Iraq. They're going to say why is the United States supporting this guy if, effectively, he's aligning himself, at least in part, with Iran?

WARE: Well, to some degree. I mean this is real politick -- what choice does Prime Minister Maliki have?

And certainly U.S. officials and American commanders here on the ground have been saying since the beginning, since the invasion in 2003, that they recognize that, yes, Iran does have interests in Iraq, given its shared border and the cross-pollination of the Shia people over that border, and that also they would like to foster a healthy relationship between Baghdad and Tehran.

However, what we've seen is this fierce competition for influence being waged between Washington and Tehran. And we're actually seeing it being fought out militarily. So this relationship is veering into very dangerous waters -- Wolf.

BLITZER: Michael Ware reporting for us from Baghdad.

Michael, thanks very much.

And over at the White House right now, President Bush is meeting face-to-face with some of his toughest Democratic critics on Iraq. They include the House speaker, Nancy Pelosi, and Congressman John Murtha.

They're just back from a visit to Baghdad.

At the same time on Capitol Hill, Republicans are fighting among themselves over various resolutions opposing a troop build-up in Iraq.

Our Congressional correspondent, Dana Bash, is standing by. But let's go to Ed Henry at the White House with the latest from there -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Wolf, today the president was on Wall Street talking up the economy. He got a rock star reception when he walked on the floor of the New York Stock Exchange. It's sort of a novelty for traders to see him there. It's a rare appearance.

But no such luxury for the president back here at the White House. A much more hostile reception from Democrats and Republicans alike. A lot of pressure, obviously, still on Iraq, even as the president tries to talk about the domestic agenda.

As you noted, right now, the president huddled here at the White House behind closed doors with Speaker Nancy Pelosi, Democrat John Murtha, other lawmakers who were just on this bipartisan delegation fact finding mission to both Iraq and Afghanistan.

Speaker Pelosi has already called the situation and what she saw on the ground catastrophic. Senior Democratic aides saying that Speaker Pelosi planning to be "blunt but polite to the president" about exactly what she saw.

So he's clearly going to get an earful -- Wolf.

BLITZER: Do we expect the president to be reaching out to Democrats a little bit more assertively in the coming days and weeks?

HENRY: Yes. As we first reported last night, the president finally agreed last night, after a lot of back and forth with Democratic leaders, that he's going to create this sort of bipartisan, informal panel that's going to do more consultation. That had come after the president said he wanted to do more of that but after Democrats said look, there have been meetings here at the White House, but they don't really feel like they're being listened to.

They feel like the president already had his policy to send more troops to Iraq and he wasn't really hearing criticism.

I think given the fact that he's on the defensive now, Democrats are expecting a lot more consultation -- Wolf.

BLITZER: Ed, stand by.

I want to go to Dana Bash up on Capitol Hill.

Republicans seem to be fighting amongst themselves emotionally -- Dana.

DANA BASH, CNN CORRESPONDENT: Very much so.

You know, before November's election, the story line here on Capitol Hill was about Democrats divided over Iraq. Now it is Republicans divided. And the intensity of that disagreement has been pretty much behind closed doors. But, Wolf, today it spilled out into the open.

(BEGIN VIDEO TAPE)

BASH (voice-over): President Bush's allies are so worried that resolutions opposing his Iraq plan could pass, they are not waiting for next week's formal debate to start slamming them.

SEN. DAVID VITTER (R), LOUISIANA: Do you not throw mere words out that have no concrete effect except undermining our troops and emboldening the enemy?

SEN. JIM DEMINT (R), SOUTH CAROLINA: Our responsibility is to sell it to the American people, not just to criticize, not to come up with resolutions that don't mean anything, intended to embarrass the president.

BASH: Preemptive strikes not just aimed at Democrats, but at fellow Republicans, meant to pressure GOP senators not to vote against the president.

SEN. SUSAN COLLINS (R ), MAINE: Comments like that are really inappropriate.

BASH: Instead, it is intensifying the deepening discord within the Republican Party.

Susan Collins is one of four GOP senators co-sponsoring a resolution that opposes sending more troops to Iraq.

COLLINS: The vast majority of those of us serving and in leadership roles on this debate feel very strongly, are not motivated by political purposes.

BASH: But when GOP Senator Jim Demint was asked if he thinks fellow Republicans, including former Armed Services Chairman John Warner, are really trying to embarrass the president, he said: "It's clearly not an act of leadership."

Bush allies admit there is less pressure on GOP lawmakers to stand with the president.

SEN. JOHN CORNYN (R), TEXAS: The president has the bully pulpit of the office of president of the United States. But I think in many ways, the American people have sort of chosen up sides on this issue and are not listening.

BASH: Texas Senator John Cornyn has proposed one of several measures supporting a troop increase, as long as Iraqis meet their commitments. John McCain is authoring another intended to lure skeptical Republicans away from condemning the president, a resolution establishing a series of benchmarks for the Iraqis.

(END VIDEO TAPE)

BASH: And while Senator McCain's resolution will lay out benchmarks, it will not provide any introduction of what would happen if the Iraqis don't comply or consequences if they don't, as well.

Now, many Republicans say that they're very, very skeptical of the Iraqi government, therefore they don't think that resolution will have that kind of impact.

But, Wolf, Senator McCain told us today that he is reluctant to put any consequences in his resolution, saying it's too complicated. But he says he's confident he'll be able to assess whether Iraqis would comply with the benchmarks that he intends to lay out -- Wolf.

BLITZER: Dana, thank you for that.

We're going to check back with you, as well.

Lots of commotion up on Capitol Hill right now.

And Dana, by the way, and Ed Henry, as you know, are part of the best political team on television.

And remember, for the latest political news at any time, check out our Political Ticker at cnn.com/ticker.

Let's go to Jack Cafferty.

He's part of the best political team on television, as well -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Why, thank you, Wolf.

This probably doesn't come as news to you, but it's been confirmed now that the United States has wasted tens of millions of dollars in Iraq reconstruction aid. There's been an audit by a special inspector general.

Get this -- the United States paid $44 million for a police training academy. He's never been used and the building stands empty. It has been for months.

The price included $4 million for 20 VIP trailers and an Olympic- sized swimming pool. These items were ordered by the Iraqi government, never authorized by the United States.

Put an Olympic-sized pool in there while you're doing that.

We have spent $36 million on weapons that we can't account for -- vague invoices and things like that. Body armor, armored vehicles, communications equipment -- we don't know what happened to this stuff, $36 million worth.

You remember the Baghdad police college?

$73 million of your money, my money, down the toilet for that debacle. The construction was so bad that at one point there was raw sewage dripping from the ceiling in the living quarters. This was when the building was brand new.

Four years after the war started and the State Department says it's now working to improve controls.

We're finding out about all of this just as President Bush is ready to ask Congress for another $1.2 billion in reconstruction aid to Iraq. We -- you and I -- have already spent more than $20 billion on reconstruction.

So the question is this -- how can the U.S. avoid wasting millions of dollars in Iraq on things like an unused police academy, an Olympic-sized pool, and unaccounted for weapons?

E-mail your thoughts to caffertyfile@cnn.com or go to cnn.com/caffertyfile -- Wolf.

BLITZER: All right, we'll be anxious for that -- those e-mails.

Jack, thank you very much.

I just want to remind our viewers, we're standing by for a news conference in Boston. We expect to hear from the mayor and some other authorities on what they thought was a bomb scare. It's caused some traffic and security problems in Boston.

We'll give you that news when it's available. It looks like the whole thing may simply be a hoax.

Meanwhile, a presidential launch gone wrong -- Senator Joe Biden finds himself at the center of some controversy over what he said about fellow Democratic Senator Barack Obama.

And also coming up, who's a better speaker, Senator Obama or presidential rival Hillary Clinton?

Democrats take a stand in a brand new poll.

And a new glimpse inside the Bush White House and its relationship with the news media. A reporter who went to jail goes under oath. We're going to share what she's saying.

Stay with us. You're in THE SITUATION ROOM

(COMMERCIAL BREAK)

BLITZER: Welcome back.

A journalist who went to jail to protect a source inside the Bush White House is testifying against that person once again today, and her credibility is coming under fire.

Let's go to Brian Todd.

He's at the courthouse.

He's joining us now with more of the CIA leak trial that's unfolding -- everyday, Brian, there is more and more drama.

BRIAN TODD, CNN CORRESPONDENT: Absolutely, Wolf. And as you just mentioned, today was all about "Scooter" Libby's team trying to attack the credibility of that key prosecution witness. That witness, former "New York Times" reporter Judith Miller, who today finished her testimony. And the defense spent just about all morning trying to punch holes in Judith Miller's memory, specifically, her memory of the first meeting she had with Louis "Scooter" Libby in which Miller says Libby told her that Ambassador Joe Wilson's wife worked at the CIA.

Now, at that meeting on June 23, 2003, Miller told the court that Libby was agitated, that the CIA was, in his view, back-pedaling on pre-war intelligence.

But the defense came right back at Judith Miller this morning, essentially asking how could she remember those details when she had forgotten to tell the grand jury the first time she testified before the grand jury that she had even had that meeting with "Scooter" Libby.

The defense also asked Judith Miller several times whether she had learned about Wilson's wife from other sources, other than "Scooter" Libby, before that meeting. And Judith Miller's response: "I can't be absolutely, absolutely certain, but I have no recollection of it with anyone else."

Now, that June 23, 2003 meeting is key, Wolf, because that was weeks before Libby claims he heard of Joe Wilson's wife's status for the first time.

Judith Miller, of course, spent 85 days in jail for refusing to cooperate with investigators about her source, revealing her source, which turned out to be "Scooter" Libby -- Wolf.

BLITZER: How many of those reporters, Brian, are being forced to testify about their relationship with "Scooter" Libby?

TODD: Well, Matt Cooper, the former "Time" magazine reporter, is on the stand just as we speak. He came on the stand shortly after noon today. He testified that he first learned of Wilson's wife from White House political adviser Karl Rove and that he later asked "Scooter" Libby if he had heard the same thing and Libby replied to him, "yes, I've heard that, too."

But the defense trying to punch holes in Matt Cooper's credibility, too, talking about what he reported on the record and off, even kind of dissecting his typographical errors in notes. So they're really trying to go after Matt Cooper's credibility.

Also, Wolf, Tim Russert of NBC News scheduled to take the stand very soon, probably this week, and that's very, very key testimony.

BLITZER: It's understandable to punch holes in one or two or even three witnesses. But when you have seven, eight, nine, 10 people, journalists as well as Bush administration officials, basically saying the same thing, that's -- that's a pretty high hurdle. TODD: It is a high hurdle, Wolf. They are trying to erode the credibility of each and every one of those people who essentially said that Libby shared information with them about Joe Wilson's wife, Valerie Plame Wilson.

But remember that they are going to -- the central defense for "Scooter" Libby is his memory, saying I simply don't remember what I told different people and when.

And so when "Scooter" Libby testifies, that's a big chance for them to kind of rebut that once again.

BLITZER: All right, Brian is going to stay on top of this trial for us.

Thank you, Brian.

And we're also getting more details from Matt Cooper's testimony today online.

Let's go to our Internet reporter, Abbi Tatton -- Abbi.

ABBI TATTON, CNN CORRESPONDENT: Wolf, there are a handful of bloggers at this trial who are reporting in real time about what is going on. And their sites give you a real look inside what is happening right now.

I've just updated from liberal Firedoglake, which is reporting on Cooper's demeanor. He's been there since about noon, looking a little bored at this point.

But, of course, they're also following details of his testimony. Cooper describing how on July 12, 2003, he was running in and out of a country club, taking a phone call from "Scooter" Libby on his cell phone in the parking lot.

And we also have details online of the very basis for that conversation. This is the Web site of the office of the special prosecutor. This is where we're getting all the trial exhibits. And there you see one of the latest documents to be uploaded is an e-mail from Matt Cooper to the office of the vice president about some questions he had on Niger.

Many more documents being uploaded here now mounting at this Web site, including a handwritten note here from the vice president. Another one here, a formerly classified document. And we're expecting another batch to be unloaded in the next couple of hours when the courtroom wraps up for the day -- Wolf.

BLITZER: Thanks very much for that.

We'll stay on top of this story, Abbi.

And this just coming into THE SITUATION ROOM.

We're just getting word that Senator and presidential hopeful Hillary Rodham Clinton will postpone a trip to New Hampshire this weekend because of the illness of her stepfather-in-law, Dick Kelley.

We're going to continue to watch this and see her schedule.

We, of course, wish him a speedy recovery.

Just ahead, does Senator Barack Obama think he was insulted by his White House rival, Senator Joe Biden?

New details on this dustup that's muddying Biden's campaign kick- off.

And is Iraq a winning issue for Democrats and a loser for Republicans?

It's trench warfare that could decide the 2008 election.

Much more coming up.

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

(COMMERCIAL BREAK)

BLITZER: Carol Costello is off for the day.

Fredericka Whitfield is monitoring the wires. She's keeping an eye on the video feeds coming in from around the world.

She's joining us now with a closer look at some other important stories making news -- hi, Fred.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello to you, Wolf.

Well, it could be as early as today that the leaders of the Senate Judiciary Committee get their hands on key documents surrounding the government's so-called warrantless surveillance program. Attorney General Alberto Gonzales today announced plans to turn the information over to Senators Patrick Leahy and Arlen Specter. Leahy and Specter have been demanding for months to see the secret court documents that led to the reversal of the controversial intelligence program.

And this today -- a leading London-based security think tank says Iran is only two or three years away from being able to build a nuclear bomb. The International Institute for Strategic Studies says Iran is on track for producing 3,000 centrifuges to create weapons grade uranium by the end of March. In its annual publication, "The Military Balance," it does say domestic opposition to nuclear development efforts may help to slow the process.

And new movement today in the global war on terror. British police staged a series of early morning raids they say thwarted what they call an Iraq-style abduction. The raids in Birmingham, England netted the arrests of nine men. A source tells CNN the plot centered around the torture and beheading of a British Muslim soldier who recently returned home from Afghanistan. The soldier was not identified. And then this message today from the travel industry to the U.S. government -- tourists are not terrorists and should not be treated as such. Industry leaders, meeting in Washington, called on the Feds to take steps to reverse the steep post-9/11 decline in overseas travel. They say travel to the U.S. has fallen 17 percent in the past five years and U.S. travel abroad is off 9 percent -- Wolf.

BLITZER: All right, thanks very much.

I want to go to Boston right now.

The police chief there is meeting with reporters, explaining what was going on -- a traffic nightmare, as a result of some sort of scare.

Let's listen in.

EDWARD DAVIS, BOSTON POLICE COMMISSIONER: ... as a result of the investigation, I'd like to remind citizens to treat any suspicious devices with care and to call 911 if any such device is found.

I'd like to introduce Governor Patrick.

Governor?

GOV. DEVAL PATRICK (D), MASSACHUSETTS: Commissioner, thank you.

I think we are all relieved that the devices found so far have proven to be hoax devices. We are very gratified by the prompt and professional response of all of law enforcement -- the commissioner and the mayor and his team, the transit police from the T, the state police, working cooperatively with the ATF. And we're very, very gratified that the response has been as prompt, as professional and as cooperative as it has been.

The investigation continues. There is more information to be developed. But I think we feel at this point that there is not a reason for anyone to panic, but there are reasons for us to be vigilant.

And, as I say, we are relieved and pleased that none of the devices have so far been found to pose a threat to public safety.

And I want to commend all of the leaders and members of law enforcement represented here with me and the lieutenant governor and Secretary Burke for the cooperation shown in pursuing today's events.

Mr. Mayor?

MAYOR THOMAS MENINO (D), BOSTON: Thank you.

Thank you, Governor.

Early this morning, I received a call from Commissioner Davis of a suspicious bomb in Sullivan Square in Cambridge. And from that point until right now, the Boston Police, the state police, the ATF and the BRIC, which is the Boston Regional Investigative Service, have been working together investigating all calls that they've got about suspicious bombs being in Boston and in Somerville.

I just want to say that every one of those so far has been investigated, either the Boston police and the federal and state folks are working on those investigations.

I just want to say to the public, you know, public safety officials, both the federal, state and city side, are all working together. Like the governor says, at no time anyone should panic. We believe we have the situation in hand and that to go about your business.

And Commissioner Davis said, we will have additional officers at different locations during the transit time this evening, as people make their way home, just to give the sense that we are out there and doing our jobs.

And it's just about all of us. And the individuals who might have placed these bombs, or these packages, I should say, should be warned that this is a heavy penalty. It's imprisonment, two to five years for each one of them. So, it's not -- we're not playing around. This is about keeping the city on edge.

It's about public safety. When it comes to public safety, we're throwing everything at it.

(CROSSTALK)

QUESTION: Mr. Mayor, we're hearing that Turner Broadcasting is saying...

(CROSSTALK)

MENINO: Well, Joe (ph), I'm not finished yet.

QUESTION: (OFF-MIKE) apologize. We thought you were finished, Mr. Mayor.

MENINO: You're last in questions now.

(LAUGHTER)

MENINO: I just want to say that we're staying -- we will stay focused.

The unified command center will stay open as long as we deem necessary.

And I just want to finish up and say thanks for everyone working together. This is when public safety really rises to the occasion, because public safety, both in the federal, state, and seaside, have been doing their jobs since early in the morning, this morning, and they will continue the rest of the day.

Thank you. QUESTION: Mayor, do you have any idea about who might be behind this?

MENINO: I will ask the commissioner to answer those questions.

DAVIS: This is a very active investigation. We are following numerous leads right now. And we're confident that those leads will bring us to an individual who was behind this.

(CROSSTALK)

QUESTION: ... connection on some of these devices?

DAVIS: Well, this is part of the ongoing investigation. And I wouldn't make any specific comments at this point in time. This is a very active investigation.

We hope to have additional information for you specifically about individuals or parts of the investigation later this evening.

QUESTION: Did you search...

(CROSSTALK)

DAVIS: We did not.

QUESTION: Commissioner, can you speak to the toll that this has taken on the city, both in police resources and the time and the money in operating the command center, if this is a fact a hoax or some sort of advertising campaign?

DAVIS: This has taken a significant toll on our resources. Emergency deployment teams were sent into the center of the city immediately upon these reports. Bomb squad units from the transit police, the state police and the Boston police were fully deployed.

There were significant shutdowns of not only highways, but rail traffic with the MBTA. And this has created an enormous inconvenience to people in the city. So, we're going to fully investigate this and get to the bottom of it. And, thankfully, none of these devices have proven to be lethal.

(CROSSTALK)

QUESTION: Commissioner, do any of these devices have any common characteristics, or is there any indication at this point that any of the devices are connected in any way?

DAVIS: Yes, several of the devices do have common characteristics. But it's too early to say specifically how many are connected and how many are not.

(CROSSTALK)

QUESTION: ... ease public fears and say either this is definitely not terrorism, this is some whack job, or this is a prank? Can you go in one direction there for us?

DAVIS: There are no indications in the investigation at this point in time that will indicate that this is a terrorist act. But, as to exactly who was behind it, the reasons, the motivations, I can't comment on that right now.

QUESTION: One person though, right, one person?

DAVIS: I can't comment right now.

(CROSSTALK)

QUESTION: ... that someone thought this was funny, that this was a prank?

DAVIS: I would not comment on any of the ongoing investigation.

(CROSSTALK)

UNIDENTIFIED MALE: Last question. Last question, please.

(CROSSTALK)

QUESTION: Commissioner, apparently, Turner Broadcasting has issued a statement saying that this is some sort of marketing campaign for some cartoon. Have you heard this? Are you aware of this?

DAVIS: We're investigating numerous leads, numerous comments that were made that were phoned into us. We're looking at that as a possibility. But we're looking at all sorts of possibilities at this point in time. It really is premature for us to talk about where this investigation is going to go.

I want to make clear that people should not be afraid to come into or leave the city of Boston right now. There is nothing that we have found that indicates any danger to the people who are coming into and out of the city. We have additional police resources out there to make people feel safe. We're working very closely with the other police agencies represented here.

The governor and the mayor have joined us here at the police department. And we're doing everything we can to assure people that they should be safe right.

(CROSSTALK)

QUESTION: ... commercial interests involved?

(CROSSTALK)

QUESTION: ... any commercial interests who are involved in this in any way...

BLITZER: All right, the police chief up in Boston, Ed Davis, speaking to reporters.

We heard from the mayor. We heard from the governor -- this investigation continuing.

But we're getting some new and significant information coming into THE SITUATION ROOM right now.

Dan Lothian is joining us from Boston.

What are you picking up, Dan?

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: Well, you heard at the press conference where someone kept asking law enforcement officials if this was part of some kind of advertising campaign. And law enforcement officials said that they did have some leads; they were talking with some people, and that they would have more information later on.

We can report this, a statement from Turner: "The packages in question are magnetic lights that pose no danger. They are part of an outdoor marketing campaign in 10 cities in support of Adult Swim's animated television show "Aqua Teen Hunger Force." They have been in place for two to three weeks in Boston, New York, Los Angeles, Chicago, Atlanta, Seattle, Portland, Austin, San Francisco, and Philadelphia. Parent company, Turner Broadcasting, is in contact with local and federal law enforcement officials on the exact location of the billboards."

And, then, from Turner Broadcasting, "We regret that they were mistakenly thought to pose any danger."

So, that's the very latest information. Obviously, this is something law enforcement is looking into. And this began this morning, the first incident that occurred this morning just north of downtown Boston, where there was some kind of package device found on I-93. They had to shut down the northbound lanes.

They brought in bomb teams, exploded that device safely -- officials saying at that time that it was not an explosive device. And, then throughout the day, we saw these other devices, at least five of them, if not more, showing up across the city -- Wolf.

BLITZER: So, it looks like this may just be a huge misunderstanding, some advertising devices put out at these billboards in these cities, part of a promotional campaign for the Cartoon Network's Adult Swim animated television programs.

That's what it looks like, based on the statement from our parent company, Turner Broadcasting.

Deb Feyerick is getting some more information as well.

Deb, what are you picking up?

DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Wolf, we can you tell that apparently this was done by a third-party marketing campaign, interference marketing, is what we are being told.

According to intelligence sources, the device itself was a circuit board about 15-by-12 inches long, with a character put together by LED light bulbs, almost like the lite-brites that you may remember. It was powered by four Duracell batteries.

We actually were able to call up an image of that device on a blog, makezine.com. It tells exactly how to make these things. So, whether that was something that was put out by the marketing campaign, but that is the image that was appearing. And when we went on the blog, we even found somebody that said: I saw the same thing up in Seattle.

So, this has been out there for a little while -- that posted about a week ago -- Wolf.

BLITZER: And our parent company, Turner Broadcasting, is in contact right now with federal and local law enforcement to try to work this out -- clearly -- apparently, at least, a major misunderstanding. These packages, as they were described, magnetic lights that pose absolutely no danger, but law enforcement authorities clearly taking no chances whatsoever.

We're going to continue to follow this. But it looks -- looks like a major misunderstanding caused this scenario to unfold in Boston.

Still to come: Senator Biden's underdog race for the White House stumbles out of the gate. Is the chairman of the Foreign Relations Committee suffering from what his critics are calling foot-in-mouth disease? Mary Snow will have a live report.

And will the war in Iraq be the cloud hanging over the GOP's head for generations to come, or will Democrats overplay their hand? Bill Schneider's analysis straight ahead.

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

(COMMERCIAL BREAK)

BLITZER: You can bet this is not the way Senator Joe Biden wanted to get his presidential campaign off the ground. Were his comments about fellow White House hopeful Barack Obama a case of loose lips or worse?

Let's go to CNN's Mary Snow. She's watching the story for us -- Mary.

MARY SNOW, CNN CORRESPONDENT: Biden was eager to talk about foreign policy, but he found himself having to explain comments he made about Senator Barack Obama Obama.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), SENATE FOREIGN RELATIONS COMMITTEE CHAIRMAN: I'm running for president because...

SNOW: On the very day Senator Joseph Biden launched his 2008 presidential campaign, controversy kicked in. In an interview with "The New York Observer," questions were raised when he use the word clean to describe fellow Democratic presidential contender Senator Barack Obama.

Here's what he said.

BIDEN: I mean, you have got the first sort of mainstream African-American, who is articulate and bright and clean and a nice- looking guy. I mean, it's -- that's a storybook, man.

UNIDENTIFIED MALE: Yes.

SNOW: And what does Senator Barack Obama think of that?

SEN. BARACK OBAMA (D), ILLINOIS: I mean, you would have to ask Senator -- Senator Biden what -- what he was thinking. I don't spend too much time worrying about what folks are talking about during the campaign season.

SNOW: But the Reverend Jesse Jackson, who ran against Biden for president in 1988, said Biden's comments called for an explanation.

REVEREND JESSE JACKSON, FOUNDER, RAINBOW/PUSH COALITION: I do not think he meant to say anything intentional that was off-color, but it certainly is highly suggestive.

SNOW: In a conference call, Senator Biden said his comments were taken out of context.

BIDEN: My mother has an expression: clean as a whistle, sharp as a tack. That's the context. He's crisp and clear.

LARRY SABATO, DIRECTOR, UNIVERSITY OF VIRGINIA CENTER FOR POLITICS: It's classic Joe Biden. It's really history repeating itself.

SNOW: Biden dropped out of the 1988 presidential race following charges he plagiarized a speech of a British Labor Party leader. And, just last year, he caused controversy with comments that some had to hear for themselves to believe. The comments are still posted on the Internet.

BIDEN: You cannot go to a 7/Eleven or a Dunkin' Donuts unless you have a slight Indian accent.

SNOW: Biden later explained the comment, saying he was referring to a vibrant Indian-American community in the state of Delaware.

(END VIDEOTAPE)

SNOW: Now, this afternoon, Senator Obama told CNN that Senator Biden called him. He said it unnecessary, that he didn't think Senator Biden intended to offend anyone -- Wolf.

BLITZER: And, in that same interview in "The New York Observer," he was pretty critical of Senator Clinton and former Senator Edwards as well, two rivals for that Democratic presidential nomination. Mary, thanks for that.

Coming up in our "Strategy Session": The speaker, Nancy Pelosi, she is meeting over at the White House with President Bush right now. Is there some tough talk going on, on Iraq in the Oval Office?

Bay Buchanan and Donna Brazile, they are standing by to join us right here. Stay with us.

(COMMERCIAL BREAK)

BLITZER: Let's get some analysis now on Joe Biden announcing formally his run for the White House today in our "Strategy Session" -- Democratic strategist Donna Brazile and her Republican counterpart, Bay Buchanan, the president of American Cause.

What do you make of this? What a way for Joe Biden to formally start his run for the White House.

DONNA BRAZILE, CNN POLITICAL ANALYST: You know, Wolf, I was shocked to read those comments.

Look, I know Joe Biden. I believe his intentions are good. He has a strong civil rights record. But it came across pretty damaging. His first, you know, major event, his announcement, and he stepped on his own story by criticizing Mrs. Clinton, Mr. Edwards, even making some weird remarks about, you know, Al Gore and John Kerry...

(CROSSTALK)

BLITZER: In the interview that appeared today in "The New York Observer."

But it's the comments about Barack Obama, Bay, where he says he's articulate and bright and clean and nice-looking guy, which I'm sure he meant in a good context.

BAY BUCHANAN, CNN POLITICAL ANALYST: I'm sure.

BLITZER: But, to some people, that might be condescending, if you will.

BUCHANAN: There's no question.

If you read it as he said it, there is real question as to what it really means. Now, I agree with Donna. I think what he meant is clean-cut, just like he said he meant. Everything around it was positive.

But it's a major mistake as to, what is he thinking? What is he comparing this to? Was it -- is he different from -- in this way from Al Sharpton and Jesse Jackson, who have run before as black Americans? He really has a lot of the explaining to do.

I think it's enormously damaging to him and it's unfortunate. But, in fairness, he took on every single candidate. (LAUGHTER)

BUCHANAN: He took them all out. His opening interview, he knocks every present and former major Democratic nominee -- candidate.

(CROSSTALK)

BLITZER: How severe of a setback would this be, you think, for Senator Biden?

BRAZILE: I think it's going to continue to play across the board.

Look, I -- when he took on Barack Obama, that's one thing. But, to take on Jesse Jackson, Al Sharpton, to take on those who have also run for the presidency, that's -- they have a lot of support out there.

(CROSSTALK)

BRAZILE: So, I think Senator Biden will clean up his comments.

(CROSSTALK)

BRAZILE: And I believe he's already talked to Barack Obama. And Senator Obama said he's not going to make a lot out of it.

BUCHANAN: But, in fairness, America is looking for nice, candid, honest candidates. We have got one here, who likes to publicly assess his fellow Democrats. I say more credit to him. I'm memorizing all his lines as we go.

BLITZER: How worried are Republicans right now with these various resolutions that are moving forward, because we're hearing that there's really an emotionally driven divide among those Republicans?

BUCHANAN: On both sides. It's extremely emotional, Wolf.

And there's no question those who do not want to see these resolutions go forward make an excellent point, in the sense that they feel that this will indeed hamper, undermine the efforts of General Petraeus over there in Iraq. We -- obviously, no one in this country wants to see that happen.

And if indeed they are correct, I think every single senator should reconsider that vote, because nobody wants to see that happen.

BLITZER: We have got to leave it there, guys.

Thanks very much...

BRAZILE: Thank you.

BLITZER: ... Donna and Bay. And, coming up in our next hour, former Secretary of State Madeleine Albright, she says the president's Iraq plan is more a prayer than a policy statement.

Also coming up: How can the U.S. avoid wasting millions of dollars in Iraq on things like an unused police academy and unaccounted-for weapons? Jack Cafferty with your e-mail right after this.

(COMMERCIAL BREAK)

BLITZER: Jack's back with "The Cafferty File" -- Jack.

CAFFERTY: So, before we get to the question, Wolf, I have a question.

BLITZER: Yes.

CAFFERTY: How long do you think it's going to be before Joe Biden announces he's decided not to run for president?

BLITZER: He's got a little explaining to do. And I'm sure he's working on that overtime right now.

CAFFERTY: You know, last night, here on THE SITUATION ROOM, we could have helped him. We were talking about these guys who train politicians not to stay stupid stuff. I guess Senator Biden wasn't watching last night.

The question, the other question, is: How can the United States avoid wasting millions of dollars in Iraq on things like unused police academy and unaccounted-for weapons?

Jonathan writes, "Well, maybe the first step is stopping the no- bid contracts to Halliburton and other friends of the vice president."

James in Florida: "Congress can do something other than passing nonbinding resolutions and symbolic statements, such as creating a committee that oversees reconstruction in Iraq that Congress actually oversees, you know, do their job."

Dan in Quebec: "Jack, the best way I could suggest managing the funds being grossly misspent in Iraq would be to have your trusted IRS agents do the dirty work. They come after hardworking Americans for a lot less than millions."

Joseph in Miami -- this is poignant -- "Listen, it's this waste that is the business of the war machine. And the only reason the war machine wants war, someone's profiting from all of this waste. The money doesn't really go into a toilet. It goes into someone's pocket. I wouldn't be surprised if that doesn't leak to the administration and its extended cronies, including its Iraq cronies. It's all a business deal. And young kids think their dying is about freedom. Bunk."

Tony in Ohio: "I will answer your question by asking one of my own. What has happened to the premise put forth by the Bush administration at the beginning of the war, that we will use the Iraqi oil to pay for the reconstruction of that country? Where's the oil? And who's making the money from it?"

And Bob in Oklahoma: "Let's send a real decision-maker, Donald Trump, to make some decisions about our construction money" -- Wolf.

BLITZER: A Trump Towers in Baghdad, I can only imagine what that would be like.

(LAUGHTER)

BLITZER: Jack, stand by. We're going to get back to you soon.

Still to come: The war in Iraq, will it hang over the GOP for years to come, or will the Democrats overplay their hand? Bill Schneider's take is coming up.

And Senator Lindsey Graham, he is looking for a way to keep his Republican Party united on the war in Iraq. Senator Graham joins us in the next hour, right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: In Iraq right now, lives are on the line, including those of American troops. The political stakes pale by comparison. But they will be a critical part of the legacy of this war and of President Bush.

Our senior political analyst, Bill Schneider, is standing by with more -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, could the Iraq issue change the long-term political landscape? It is a possibility.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Disillusionment with the war in Iraq has produced a dramatic shift in the polls.

"The Washington Post"/ABC News poll asks: Who do you trust to do a better job handling the campaign against terrorism, President Bush or the Democrats? In 2003, President Bush had a 51-point advantage. In 2004, Bush was ahead by 29 points. And now? People say they trust the Democrats more than President Bush on terrorism.

Republicans won the 2002 and 2004 elections as the daddy party, the party that would do a better job protecting the country. But it didn't work in 2006.

In 2002, Republicans had a 35-point lead over Democrats on handling terrorism. Now the parties are virtually tied. That gives Democrats an opening. But they can't make the same mistakes they made in the 1970s. Then, anti-war sentiment made the Democrats look weak on national security. The loss of Vietnam, followed a few years later by the Iran hostage crisis, made Americans feel vulnerable. Enter Ronald Reagan and a new era of Republican dominance.

Now Democrats are trying to make it clear that opposition to the war in Iraq does not mean weakness in the war on terror. The public no longer believes the war in Iraq is part of the war on terrorism. The best way to fight the war on terror, Democrats argue, is to get out of Iraq.

SEN. RUSS FEINGOLD (D), WISCONSIN: Our Iraq-centric policies are hurting our ability to defeat the enemy that attacked us on 9/11.

(END VIDEOTAPE)

SCHNEIDER: The daddy party may be in trouble.

Political analyst James Pinkerton of the New America Foundation put it this way in an interview with "The San Francisco Chronicle" -- quote -- "In times of war, the instinct is to trust dad more than mom. And the Republicans have benefited from that. But, if dad keeps wrecking the car, there may be reason to change" -- Wolf.

BLITZER: Bill Schneider, reporting, thank you.

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