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THE SITUATION ROOM

Are Blackwater Employees Being Sent to Iraq Without Armor or Weapons?; Libby's Testimony

Aired February 7, 2007 - 16:00   ET

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


WOLF BLITZER, HOST: We're going to continue to follow all of these developing stories.
Also happening now, other news we're following.

They're supposed to protect others, but are they the ones in need of protection?

Private security guards being sent straight to Iraq's cauldron of violence.

Are they going there without armor and weapons?

We're following this story.

Also, there are tapes his attorneys did not want you to hear. Today in the CIA leak trial, we hear Lewis "Scooter" Libby's revealing grand jury testimony. We also hear from a very high profile witness from the prosecution.

And what happens in Vegas won't necessarily stay in Vegas. Many people will be watching and listening to a key moment in the presidential race. It will involve CNN. We have some exciting news to share with you this hour.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We're continuing to watch that explosion and that fire that has erupted in Kansas City, Missouri. You've been seeing it live here on CNN. Multiple explosions, in fact, over at Kansas City's East Bottoms area. That's on the Missouri side. A chemical plant with major, major ramifications. We'll stay on top of this story and bring you the latest as it comes into THE SITUATION ROOM.

Other news, why are so many U.S. helicopters coming down or being shot down in Iraq?

Today, seven people were killed in the fifth helicopter crash in less than three weeks. The Marine CH-46 helicopter went down in the Anbar Province. Everyone on board now dead. The U.S. military investigating what happened.

Also, the plan to secure Baghdad is now underway. Officials are setting up security stations across the capital where U.S. Iraq and coalition troops will operate.

Meanwhile, are the private security guards who are right in the middle of Iraq's burning violence getting the protection they need?

No, say some families of four private guards who were burned and dragged through Iraq's streets back in 2004. And those loved ones told disturbing stories to lawmakers just a little while ago.

Let's get more from our Congressional correspondent, Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN CORRESPONDENT: Wolf, there are tens of thousands of them operating in Iraq. But as part of the week's long look of oversight hearings in the House, this was the first time that Congress had delved into the private and murky world of military contractors in Iraq.

(BEGIN VIDEO TAPE)

KOPPEL (voice-over): March 31, 2004, a pivotal moment in the Iraq War. Four American contractors working for a private security firm are ambushed, burned and strung up on a bridge in Fallujah. One of them, 32-year-old Scott Helvenston was, like his comrades, a former Navy SEAL and father of two.

In emotional testimony, his mother told the committee she believes the firm, Blackwater USA, failed to provide the men the security they had been promised.

KATHRYN HELVENSTON-WETTENGEL, MOTHER OF STEVEN HELVENSTON: I was told he was still alive when they tied him to the back of that truck and drug him through the streets of Fallujah. And that was before they decapitated him, dismembered him and torched him.

KOPPEL: Helvenston and other family members told lawmakers they had been forced to sue Blackwater in hopes of finding out what happened.

DONNA ZOVKO, MOTHER OF JERRY ZOVKO: The simple plain truth, Mrs. Zath Kordana (ph), this is what happened.

KOPPEL: Chairman Henry Waxman read aloud an e-mail from Blackwater's operations manager in Baghdad, complaining about poor security. The e-mail was sent just one day before the Fallujah ambush.

REP. HARRY WAXMAN (D), CALIFORNIA: "I need new vehicles. I need new coms" -- which means communications devices. "I need ammo."

When Blackwater sends private forces into a war zone, do you have an obligation to equip them adequately?

And I assume you would have to say yes.

And then my next question is did Blackwater meet this obligation in Fallujah? UNIDENTIFIED MALE: Yes, we did.

UNIDENTIFIED MALE: Yes, sir.

UNIDENTIFIED MALE: Yes, sir.

KOPPEL: Republican Chris Shays noted contractors have an important role in Iraq.

REP. CHRISTOPHER SHAYS (R), CONNECTICUT: The whole purpose is to make sure that our military doesn't have to do the security work so they can be the tip of the spear.

(END VIDEO TAPE)

KOPPEL: But according to Jeremy Scahill, who has just written a book on Blackwater USA, he says that that may sound good on paper, but the problem is when you put private actors into a war zone, there are no laws that govern them, the way that they would U.S. soldiers -- Wolf.

BLITZER: All right, Andrea.

And we have some more information on Blackwater USA. It's one of many privately run paramilitary companies operating in Iraq right now.

Among their goals, to deploy small forces to hot spots in war zones to protect civilians. But they also provide security for corporations and governments. Their employees include many people formerly in the U.S. military or law enforcement and those employees often earn relatively lucrative salaries.

Meanwhile, graft, bribery and money laundering -- are they part of war fraud?

Federal charges are now arising from the chaotic aftermath of the fall of Saddam Hussein.

Let's turn to CNN's Brianna Keilar.

She's watching this story and has details -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Wolf, federal officials announced today they have indicted five people, two civilians and three military officers, caught up in this latest wave of criminal charges stemming from the alleged fraudulent use of U.S. funds in Iraq, money that was supposed to go toward reconstruction.

(BEGIN VIDEO TAPE)

KEILAR (voice-over): Deputy Attorney General Paul McNulty said the five defendants and several other people used Coalition Provisional Authority funds as their own personal ATM machines. He accused them of smuggling bricks of stolen cash out of Iraq and back to the U.S. PAUL MCNULTY, DEPUTY ATTORNEY GENERAL: They allegedly stole millions of dollars from the CPA and rigged valuable reconstruction projects, all while helping themselves to cash, SUVs and luxury cars, jewelry and other valuable items.

KEILAR: There are 25 counts in the indictment. Among the charges, conspiracy, bribery, wire fraud, interstate transport of stolen property, cash smuggling and money laundering.

Three of the defendants are high level officers in the Army Reserve -- Lieutenant Colonel Debra Harrison, Lieutenant Colonel Michael Wheeler, and the man they worked under, Colonel Curtis Whiteford. In 2003, Whiteford was the number two man for the U.S.-led coalition government's South-Central Region, one of the CPA's three regions in Iraq.

MCNULTY: Thousands upon thousands of courageous patriotic soldiers and civilians of the United States have devoted themselves to the mission of creating a free and democratic society in Iraq. We will not allow a handful of greedy individuals to undermine the self- sacrificing labors of these heroes.

(END VIDEO TAPE)

KEILAR: CNN is trying to contact the defendants, but so far, none have been arrested -- Wolf.

BLITZER: Brianna, thank you for that.

And there are also some new potentially significant developments in the CIA leak trial underway right here in Washington.

For the first time, we're now hearing audio tapes of Lewis "Scooter" Libby defending himself against the charges he faces. And jurors also hearing from a very high profile prosecution witnesses.

Our Brian Todd is outside the courthouse and he has the very latest -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Wolf, as you mentioned, a very dramatic day, maybe the most dramatic we've seen so far in this trial. The star prosecution witnesses, Tim Russert of NBC News, is on the stand as we speak. He is being cross-examined by the defense. I'm going to get to him in just a moment.

But as you mentioned, audio tapes of "Scooter" Libby's testimony -- we just finished hearing about eight hours of those tapes. Excerpts we hope to show you a little later in this broadcast.

But the highlight is his claim to the grand jury -- this is -- these are tapes recorded in March of 2004 -- Lewis "Scooter" Libby telling the grand jury that he first learned that the administration's critic, Joe Wilson, his wife worked at the CIA, "Scooter" Libby saying he first learned that from his own boss, Dick Cheney.

Libby then told the grand jury that he forgot about that conversation with Cheney and when he heard, a month later, from Tim Russert of NBC News, that Valerie Plame Wilson worked at the CIA, that he was hearing it for the first time. This is what Lewis "Scooter" Libby told the grand jury and it is on those audio tapes. But we have an excerpt for you right now. He tells the grand jury of his conversation with Tim Russert on July 10th of 2003: "He said, 'You know, did you know that this -- excuse me. Did you know that Ambassador Wilson's wife works at the CIA?' And I was a little taken aback by that. And I said, he may have said a little more but that was -- he said that and I said no, I didn't know that."

This is "Scooter" Libby telling the grand jury of what he says Russert told him.

Now, Tim Russert, just months ago, rebutted that totally. He said that Valerie Plame Wilson never came up, there was no mention that Joe Wilson's wife worked for the CIA, that he never told "Scooter" Libby anything about that, that the entire subject was never broached in that conversation.

Tim Russert now being cross-examined by the defense. They're trying to punch holes in his memory, as they've done with many, many other witnesses in this case, and they are also essentially telling him -- they -- the defense attorney, Ted Wells, set Tim Russert up to saying, you know, you're always known as a careful and very tough journalist. Why, in the course of that conversation, didn't you ask him one question about Joe Wilson's wife?

Russert said essentially he was in listening mode because Libby was calling to complain about coverage of this case on another NBC program, Wolf.

And, again, we want to tell viewers that we hope to air excerpts, audio excerpts of "Scooter" Libby's testimony a little later in our broadcast.

BLITZER: Brian, we'll stay in close touch with you.

Thank you.

Let's get a little closer look now at some of Vice President Cheney's involvement in this controversy.

There's no evidence or even a suggestion that the vice president did anything illegal. But it does appear he was unusually attentive to trying to push back against war critics like Ambassador Joe Wilson, after Wilson publicly accused the Bush administration of twisting information to justify the Iraq invasion.

We learned from the trial that the vice president directed the administration's response to the criticism and that "Scooter" Libby carried out those directions. But there's no evidence the vice president told his chief of staff to leak Valerie Plame's name to the news media.

Amid the brewing controversy, reporters began asking many questions and former vice presidential press officer Cathy Martin has testified Libby told her how to respond based on talking points that she says were dictated to Libby by the vice president himself.

We also know that Cheney personally instructed Libby to deal directly with selected reporters.

Afterward, Libby spoke with Judith Miller of the "New York Times" and Matt Cooper of "Time" magazine.

We want to talk a little bit more about this story.

Howie Kurtz of CNN's "RELIABLE SOURCES" has a little more.

HOWARD KURTZ, CNN "RELIABLE SOURCES": Wolf, Vice President Cheney professes not to care about press criticism, but behind-the- scenes, we're learning at the "Scooter" Libby trial, he takes it very seriously indeed.

It was Cheney who went to President Bush and got the National Intelligence Estimate, the NIE, declassified to use as ammunition in his meeting with Judith Miller.

Ari Fleischer, the former White House spokesman, also told a couple of reporters about Valerie Plame, he has testified.

So it's not very surprising that an administration that could do a major rollout on Social Security reform or a speech in Iraq can also orchestrate this kind of media message.

The difference here is it's done quietly through leaks, on background, off the record, whispered conversations. This from an administration that professes to be very angry about leaks -- unless, of course, they're the authorized kind -- Wolf.

BLITZER: All right, Howie, thanks very much.

Howie Kurtz, Brian Todd, Brianna Keilar, Andrea Koppel -- they are all 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 New York and Jack Cafferty for The Cafferty File -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, now it's the House's turn.

Next week they plan to spend three days debating a resolution disagreeing with the president's plan to escalate the war in Iraq.

Here's hoping they have more luck than the Senate.

A Senate resolution on the same subject was over before it began. Republicans closed ranks around the president and blocked the Senate from even considering the resolution.

A big mistake. The mid-term elections sent a message that the public is fed up with the war in Iraq and with the president's arrogance when it comes to listening to anyone except Dick Cheney or god -- and, no, they're not the same.

The message came in the form of taking control of the House and Senate away from the Republicans and handing it to the Democrats. A lot of these same Republican senators will be up for reelection in two years. Here's hoping the voters remember how their wishes concerning this highly unpopular war were ignored in favor of political loyalty to the grand old party and its basket of failed policies in Iraq.

I will guarantee you if the elections were next week, the outcome on this would have been a whole lot different.

Here's the question -- what does it mean that Senate resolutions blocked debate on a resolution opposing the president's plan to escalate the war in Iraq?

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

BLITZER: Jack, thank you very much.

And I want to get some more information now on that chemical fire that's rocked Kansas City, Missouri, at least a large part of it.

Carol Costello is working this story for us -- what's the latest, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Oh, you see the pictures, Wolf.

A huge explosion at a chemical plant in an industrial area just -- just near the downtown. This is called the East Bottoms area. This thing has been burning for more than an hour.

KNBC, our affiliate there, says some sort of precipitation is falling from those thick plumes of black smoke. The wind is blowing that stuff over certain parts of the city.

The courthouse is nearby and, of course, county workers are just getting off work right now. There are a lot of people outside. And they're worried that that, of course, might present a hazard.

HAZMAT teams are on the scene right now. They're trying to get this thing under control, but as you can see, it's pretty much out of control right now. We're not sure what kind of chemicals inside that plant. I'm still trying to find that out.

We had the fire chief on the phone briefly, but as you might imagine, he's a pretty busy man right now. And, you know, the explosion was so loud, the lights flickered in the courthouse and a legislator, a county legislator leaving for the day, driving with his son along the riverfront, said he thought it was a terrorist blast. He thought his car had dropped an axel. He didn't know what was going on. That was how powerful this explosion was.

I'm going to keep checking on this, Wolf, and I'll get back to you. BLITZER: Thank you, Carol.

We'll continue to watch.

The pictures are very, very dramatic.

And still to come here in THE SITUATION ROOM, he's supporting the president when it comes to the war in Iraq and he's also calling for a new tax to keep America safe from terror. The very independently minded Senator Joe Lieberman. He's standing by to join us live. That's coming up next.

Also, what do the bright lights of Las Vegas have to do with the race for the White House?

We're going to tell you in just a few minutes.

And are some bloggers getting presidential hopeful John Edwards in trouble?

We'll get the situation online.

All that coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: He's an outspoken backer of the war in Iraq, which may anger -- it certainly has -- at least some of his Democratic colleagues in the United States Senate.

Joining us now from Capitol Hill, Senator Joe Lieberman of Connecticut.

He's also proposing a special tax now to fund the global war on terror. We're going to get to that, Senator, in a moment.

But I'll ask you a question a lot of your constituents and others are asking, presumably.

How much longer do you give the president to get it right in Iraq?

How much more time, realistically, do you think he has before even supporters like you start to back away?

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: Well, look, the important thing to say here, Wolf, is that how we end Iraq is going to be very important to our security and our -- our progress in the war against the Islamist terrorists who attacked us on 9/11.

So, I'm supporting this latest plan, the new plan with a new general, a new secretary of defense, because I really do think it has some significant hope of working. And I'm not planning for -- for failure.

General Petraeus told us when he was before the Armed Services Committee that he thought by this summer we'd have the beginning of an idea about how -- whether this was working or not.

I just -- I'm going to do everything I can to support it and I hope it does work and that we won't have to think about what's next.

BLITZER: So you're willing to give it at least another six months, maybe a year, or maybe even longer?

I don't want to put words in your mouth.

LIEBERMAN: Yes. No, I think here's the important point. I want to see progress. I don't think any of us should hold out the hope that we're going to see an end of all violence in Iraq any time soon.

But I want to see progress, which means that our forces and the Iraqi forces will make Baghdad more secure so that people can go back to their normal lives and that the government can stand up and take responsibility.

That's the key. In the end, we all know that it's not we Americans who are going to make Iraq a successful state defending itself, it's the Iraqis. And we're trying to give them some opportunity to do that.

BLITZER: Here's what your Democratic colleague in Connecticut, Chris Dodd, said the other day, basically saying the White House doesn't care what Congress does, they're going to go it their own way no matter what.

Listen to Chris Dodd.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD (D), CONNECTICUT: So despite this resolution that may be -- may pass, the White House has no intention of paying any attention to what we're suggesting here.

(END VIDEO CLIP)

BLITZER: Is he right?

LIEBERMAN: Well, I think in the sense that the president has made a decision, as commander-in-chief, which the constitution authorizes him to do, to do what he thinks is best for the security of our country. That's why I thought it was so important that we stop that non-binding Warner-Levin resolution, because it was just an expression of opinion. It -- nobody took responsibility for what was in it.

And my fear was that it wouldn't have accomplished anything, but it would have discouraged our troops as they go into battle, at the order of their commander, and I would have encouraged our enemy.

To tell you the truth, Chris Dodd has had the nerve to say that he would not just have a meaningless resolution that might discourage our troops. He's prepared to get in there and talk about requiring authorization from Congress for more troops, limiting funding, whatever.

That's what ought to happen. We ought to have a debate here about Iraq. But it ought not to be on the kind of inconsistent, vague and ultimately meaningless resolution that was coming up earlier this week.

BLITZER: You and Chris Dodd used to be so close on so many of these issues.

How does it feel now that you and Chris Dodd, who have worked together literally for decades are, on this issue, the war in Iraq, so far apart?

LIEBERMAN: Well, look, that happens. We've disagreed on things before. We've disagreed on some things that have to do with foreign policy, particularly.

But we continue to work together for the state of Connecticut and that will always be the case.

BLITZER: Do you want to support him for his run for the Democratic presidential nomination?

LIEBERMAN: Well, I made -- I wished him well and we've talked about it, but I've made a decision that I've had enough politics for a while. I had a pretty active year last year. I'm grateful to the people of Connecticut for sending me back here.

I want to concentrate on being the best senator I can for my state and country. And I'm not going to get into this presidential contest probably until next year some time.

BLITZER: Let's talk about this tax that you presumably want to introduce that would increase funding for anti-terrorism funding, homeland security funding.

Explain to our viewers what you specifically have in mind.

LIEBERMAN: Right.

BLITZER: And if you can do it briefly, we'd be grateful.

LIEBERMAN: OK. I can do it briefly, Wolf, because it's an idea, it's not a plan at this point.

But I was at the Armed Services Committee hearing -- here's the fact. Since 9/11, when we were attacked and the war on Islamist terrorism began, we've taken on enormous new responsibilities for homeland security, for the international war against terrorism. It costs money.

At the same time, that increase in that budget has forced the administration -- or at least it was their choice to come in with a budget the other day -- that I think badly cuts and under funds some important domestic programs like education, for instance, and cops on the beat, too. And I think we've got to respond to what people have said. The only people who are sacrificing in the war on terrorism now are the members of the military and some of the civilians who are part of that effort.

Let's call on everybody to give a little more to finance the war on terrorism so we'll have the money to invest in things like the education of our captain.

BLITZER: So this would be an across-the-board tax increase or just for the wealthy?

LIEBERMAN: Well, it's mostly for the wealthy. It would be progressive. I'm fleshing out an idea. I've actually had a few colleagues who have said to me, in the last 24 hours, you know, that's a good idea.

Maybe it would be a surtax on the income tax that would be time limited, would be in effect for a period of years and then we'd see how we're doing after it.

I think we've all got to step up and give something to this national effort to protect our freedom and our security against the terrorists who want to take it away from us.

BLITZER: Senator Lieberman, as usual, thanks for coming in.

LIEBERMAN: Thank you.

Good to be with you.

BLITZER: Thank you.

Senator Joe Lieberman of Connecticut.

Coming up, Joe Lieberman ran as an Independent this past election.

In next year's presidential race, will another Independent take on the big two political parties as a third party candidate?

We have some new information on that front.

Also, it's the story America is still talking about. Carol Costello has some new developments this hour in the case of the astronaut and her arrest.

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

(COMMERCIAL BREAK)

BLITZER: Republicans increasingly worried, apparently, that Senator Hillary Rodham Clinton is unbeatable in '08. The former House majority leader, Tom DeLay, warns that Clinton will be the next president of the United States unless the GOP acts now. I'll ask him what he's thinking, what he's talking about? Tom DeLay, here in THE SITUATION ROOM. That's coming up in the next hour.

Also, NBC News Tim Russert takes the stand in the "Scooter" Libby trial. He directly contradicts the testimony at the heart of Libby's defense. And we're hearing for the first time Libby's testimony to the grand jury in his own words. We're going to have the audio tapes for you.

And the House speaker, Nancy Pelosi, caught up in a growing controversy over her use of military airplanes. Critics charge she has first class ambitions with taxpayer footing -- taxpayers footing the bill.

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

Much more on all of that coming up.

But Carol Costello is keeping an eye on all the stories coming in from around the world, around the country, including that story in Kansas City, Missouri, a chemical plant fire.

The pictures, Carol, have been really, really awful.

COSTELLO: Yes, a huge explosion at a chemical plant. We now know what that chemical plant is. It's called Chem Central. It's a distributor of industrial chemicals including adhesives, caulks, sealants, paint coatings, inks and other cleaning and cosmetics and personal care chemicals. Now, this is a HAZMAT situation. People have been evacuated in a mile radius and there is some stuff falling from the smoke that's billowing from this fire.

The fire is so intense and the heat so intense, firefighters cannot get close to it right now, so they're just sort of waiting, waiting to see if it burns itself out or if they can put some sort of like substance on it to beat down the flames.

We'll keep you posted on that.

Also today, NASA launches a full-scale review of its mental health procedures -- that announcement made today after astronaut Lisa Nowak returned to Houston from Florida, where she faces a series of charges, including attempted murder. Nowak is off flight status, placed on 30-day leave, in the wake of charges stemming from that apparent love triangle.

And peaceful protests permitted today at a hearing of the House Armed Services Committee, where Defense Secretary Robert Gates and Joint Chiefs Chairman Peter Pace testified. At one point, the demonstrators were asked to sit, but were allowed to make their presence known throughout the officials' testimony.

That's a look what's happening now -- Wolf.

BLITZER: We will stay on top of all of these stories with you. Carol, thank you.

November 4, 2007, one year to the day before the 2008 presidential election. But mark it down on your calendar. CNN and the Nevada Democratic Party will host a presidential debate on November 4 of this year. It will come live from Las Vegas. Nevada voters will play a crucial role in selecting the Democratic presidential nominee next January.

For the first time, Nevada will go second in the Democratic calendar, just after the Iowa caucuses and just before the New Hampshire primary. Nevada will bring a different feel to the presidential campaign, and not just because of the bright lights of Las Vegas.

We recently sent our congressional correspondent, Dana Bash, out to Nevada to find out why.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): In the valley beneath Nevada's Mormon Mountains, it's no surprise to find a cowboy.

TOM COLLINS, NEVADA DEMOCRATIC PARTY CHAIRMAN: These are roping cow. These are rodeo cows.

BASH: But this cowboy may surprise you.

COLLINS: I'm the state chairman of the Democratic Party. I'm a lifetime union member. I'm a journeyman lineman by trade. And I'm also a cowboy. I'm a life member of the National Rifle Association. And I raise cattle.

BASH: There are actually a lot of Democrats like Tom Collins in Nevada and across the increasingly competitive Mountain West.

COLLINS: I grow a few cows and some sheep.

BASH: And forcing presidential candidates to appeal to them is one reason Democrats moved up Nevada's 2008 caucus, wedging it between the traditional kickoff states of Iowa and New Hampshire.

COLLINS: If the candidates running for president can come to Nevada and learn the issues in Nevada, they will know the issues of eight or nine of the Western states.

BASH: Things like public land use and water conservation -- most people don't think of this as Nevada. They think of this, Las Vegas. And Democrats from Iowa and New Hampshire, furious at the party for disrupting what they call their sacred tradition, warn, presidential candidates will get sidetracked by local issues, like gaming.

But State Senator Maggie Carlton, who's also a waitress on the strip, says an earlier Nevada caucus will highlight issues vital to organized labor and struggling workers.

MAGGIE CARLTON (D), NEVADA STATE SENATOR: We don't do 9:00 to 5:00 in Las Vegas, but the working-class-type thing, the shift worker, those -- those types of questions, the more basic kitchen-table-type politics.

BASH: And, put simply, Nevada looks different than Iowa and New Hampshire.

BASH: These hotel trainees represent a huge untapped Hispanic population Democrats are wrestling Republicans for nationally. Iowa's Hispanic population is just 3.5 percent, New Hampshire's, 2.1 percent, Nevada's, 22.8 percent.

STEVEN HORSFORD (D), NEVADA STATE SENATOR: We have diversity in Nevada. And working people should have more of a stake in how our presidential nominee is selected.

BASH (on camera): This is a place known for its high stakes and extraordinary shows, but there are some doubts Nevada is up to the challenge of organizing and administering a caucus. In 2004, it had just 17 sites, and now plans 1,000. An Iowa veteran said that's like pulling off 1,000 weddings all at the same time.

(voice-over): And not the Vegas "I do" drive-through kind of wedding either.

Party chairman Collins insists, they have hired experienced caucus hands, and says, in the end, Democratic presidential candidates will benefit from learning more about this long-ignored region, and will even find a familiar symbol, a Donkey...

COLLINS: Let them come pet Jezebelle (ph).

BASH: ... in an unfamiliar place.

COLLINS: She's a sweetheart.

BASH: Dana Bash, CNN, Logandale, Nevada.

(END VIDEOTAPE)

BLITZER: And this note to our viewers: We're going to be heading out to Nevada at the end of next week.

I'll be anchoring THE SITUATION ROOM live from Las Vegas next Friday, February 16, as well as "LATE EDITION" on Sunday the 18th.

Once again, CNN and the Nevada Democratic Party will host a presidential debate on November 4 of this year live from Las Vegas. That's exactly one year to the day before the 2008 presidential election.

And, remember, CNN is also a partner with WMUR Television and "The New Hampshire Union Leader" for the very first presidential debates of the campaign season. They're on April 4 and April 5 of this year. We will bring you those debates from New Hampshire.

Up next: blogging gone awry in John Edwards' campaign.

And is Rudy Giuliani the right fit for the GOP? All that coming up in our "Strategy Session" -- right after this.

(COMMERCIAL BREAK)

BLITZER: A lot of presidential candidates are going to be at the various debates we'll be hosting in Nevada, as well as New Hampshire.

Certainly, one of those candidates is John Edwards. He's taking some heat right now. It involves some Internet bloggers and some very upset Catholics.

Mary Snow is watching this story for us from New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, everyone agrees the bloggers are provocative, as many bloggers are.

But one Catholic group says they go too far. And it's calling on John Edwards to fire them, not for what they said during the campaign, but in their past jobs.

(BEGIN VIDEOTAPE)

SNOW (voice-over): On John Edwards' own Web site, it's called the first big test of the campaign. A conservative Catholic group took aim at two bloggers who work for Edwards, calling them anti- Catholic, vulgar, trash-talking bigots.

The blogs in question were written before the two joined Edwards' campaign. One of the postings that angered Catholic League president William Donahue said the church's opposition to birth control forces women to -- quote -- "bear more tithing Catholics."

WILLIAM DONAHUE, PRESIDENT, CATHOLIC LEAGUE: Don't use insulting language like this. This is incendiary. It's inflammatory. It's scurrilous. It has no place being a part of any kind of someone's resume who's going to work for a -- a potential presidential contender.

SNOW: Donahue points to blogger Melissa McEwan, who makes reference to President Bush's "wing-nut Christofascist base," and blogger Amanda Marcotte's entry on the pope and fascists.

Also gaining notice, Marcotte's writing that sarcastically chides the news media's coverage of the Duke lacrosse players who were accused of sexual assault. Her entry read -- quote -- "Can't a few white boys sexually assault a black woman any more without people getting all wound up about it? So unfair."

DONAHUE: It should be a message to everybody, in -- Republicans and Democrat alike. You had better carefully go through these kinds of things. Otherwise, you are going to get burnt in the end.

SNOW: Now, more than ever, bloggers are playing a big role in presidential campaigns.

K. DANIEL GLOVER, "THE NATIONAL JOURNAL": They're passionate. That's what they're known for. And that's why the campaigns are hiring them. They want people who will defend the candidate and -- and be the voice for them, and to -- and to have a strong message and a strong voice.

SNOW: And blog watchers say, with those strong opinions, expect to see controversy surface in other campaigns in the 2008 race.

(END VIDEOTAPE)

SNOW: Now, this afternoon, a spokeswoman for the Edwards camp said she would have no comment about Donahue's call to fire the bloggers.

We also did try reaching out to both bloggers involved. We have not, so far, gotten a response -- Wolf.

BLITZER: Mary, thanks. We will stay on top of this story.

And we're also seeing more and more '08 presidential campaigns reaching out to prominent bloggers to try to drum up support.

Let's get context from our Internet reporter, Jacki Schechner -- Jacki.

JACKI SCHECHNER, CNN INTERNET REPORTER: Wolf, political campaigns want to hire the most experienced bloggers. But the more content they have online, the more content there is out there to be scrutinized.

Senator Clinton hired Peter Daou to help out with her possible presidential bid. He used to blog at Salon.com under something that used to be called "The Daou Report," now "The Blog Report."

We reached out to the Clinton campaign to get some more information about their hiring and their vetting of Peter Daou, but they declined to comment. Senator John McCain also has an e- consultant. He uses Patrick Hynes, who blogs at anklebitingpundits.com. The McCain campaign wouldn't take about their vetting or hiring process either, but they said that they're happy to have Patrick on board.

Bottom line today is that bloggers on both the right and the left are disappointed in what they say appears to be John Edwards' campaign's failure to vet the bloggers that he's hired. And some of the liberal bloggers are upset, saying that, if Edwards' campaign does go and fire these bloggers, it would look like the campaign is caving in -- Wolf.

BLITZER: Jacki, thank you for that good story happening in Washington.

Coming up: Will a new third party become a serious threat to the Democrats or the Republicans in next year's elections? You're going to find out. Bill Schneider has got new information on that front.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: You're looking over the political menu for an appetizing team to win the White House. What if you could mix and match your menu options, a la carte, sort of?

Let's bring in our senior political analyst, Bill Schneider. He's been looking at that part of the story -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, the nation's first national primary starts today? Yes, it does. And you can participate from your own home in your fuzzy slippers.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): Let the politicking begin.

SAM WATERSTON, SPOKESPERSON, UNITY08: Today is a great opportunity for everybody to register and become a delegate to the virtual convention on -- on the Internet.

SCHNEIDER: Say, isn't that Jack McCoy from NBC's "Law & Order"?

(BEGIN VIDEO CLIP, "LAW & ORDER")

UNIDENTIFIED ACTOR: I didn't.

WATERSTON: Stock fraud, assurance fraud, payoffs, finally murder -- all crimes of opportunity.

(END VIDEO CLIP)

SCHNEIDER: Yes. But, right now, actor Sam Waterston is concerned with political wrongdoing.

WATERSTON: The way we nominate people burdens them with debts to partisans and to moneyed interests.

SCHNEIDER: Waterston is promoting Unity08.com, an online nominating process. It's for people who believe politics is the enemy of problem-solving, like Waterston and many Americans.

WATERSTON: Every day, when you pick up the newspaper, there's an article that makes you think, gee whiz, wouldn't it be great if there was a way to just put this straightforwardly in front of the people?

SCHNEIDER: Like, say, the Iraq war issue, which can't even come up for debate in the Senate because of a partisan impasse. Unity08.com is asking ordinary citizens to help break that impasse.

WATERSTON: We're saying, help us define what the major issues are. And, then, we will bring those issues to the table.

SCHNEIDER: Unity08 intends to get on 50 state ballots and find candidates, draft them, if necessary, someone with bipartisan appeal, maybe New York Mayor Michael Bloomberg, a Democrat-turned-Republican, or anti-war Republican Senator Chuck Hagel. Will it work? We will let Jack McCoy answer that.

(BEGIN VIDEO CLIP, "LAW & ORDER")

WATERSTON: Let's do what we think is appropriate and let the chips fall where they may.

(END VIDEO CLIP)

(END VIDEOTAPE)

SCHNEIDER: Unity08 intends to stay in business only long enough to bring the two parties back to the middle, where problems get solved. They will provide a platform and ballot access for any candidate who wants to step forward and say: I can bring this country together.

Any takers? -- Wolf.

BLITZER: I suspect there will be. Thank you very much, Bill, for that.

Up next: Paul Begala and Bill Bennett. They are standing by live for today's "Strategy Session." Is Rudy Giuliani the answer to what ails the Republican Party, or will he take the party farther away from what won them the White House and the Congress?

Stay with us. We will be right back.

(COMMERCIAL BREAK)

BLITZER: Let's get to our "Strategy Session."

Joining us now, our CNN contributor and the host of "Morning in America," Bill Bennett, and our CNN political analyst Paul Begala.

Guys, thanks very much for coming in.

Let's talk about Rudy Giuliani.

Bill, to you first.

Does he, in your opinion, have a realistic, credible chance of capturing the Republican nomination, despite his views on so many of the social issues, like abortion rights, which he favors, gay rights, which he favors, gun control, which he favors? What do you think? And what are your viewers -- or your listeners...

BILL BENNETT, CNN CONTRIBUTOR: Yes.

BLITZER: ... on your radio show saying to you?

BENNETT: The answer is, yes, he has a realistic chance, and more than I thought 72 hours ago.

Since he stepped -- took another step, and people have been reacting, I have been very struck by the reaction of my listeners. I have a center-right audience, for the most part, some liberals, some Democrats, basically center-right, much more forgiving -- I think forgiving is the right word -- or tolerant, or willing to listen to Rudy Giuliani.

Here's the irony. I had more of my listeners saying favorable things about Giuliani than McCain. John McCain, on paper, supports more of the social issues that conservatives support. But people aren't sure about him. Giuliani supports fewer of those issues where the conservative base is, but people like him. They admire him. They seem to think say he's got the right stuff.

BLITZER: Here's...

BENNETT: It was very interesting.

BLITZER: Here's the new CNN/WMUR-TV poll we did of registered Republicans, primary voters in New Hampshire: McCain with 28 percent, Giuliani 27 percent. Given the sampling error of 5.5 percent, that's a statistical dead heat in New Hampshire right now.

And -- and, as a political analyst, what does it say to you, given the record, of -- of course, of McCain in New Hampshire?

PAUL BEGALA, CNN POLITICAL ANALYST: Well, it says a lot.

McCain beat Governor Bush of Texas by 19 points in 2000 in the New Hampshire primary. And it also says that Governor Romney, from neighboring Massachusetts, where neighbors generally do very well -- I mean, I saw Paul Tsongas beat my guy, Bill Clinton. He was a neighboring senator in 1992 in New Hampshire.

It says that Rudy really is for real. Bill knows his base of social conservatives far better than I do. And I will defer to him. I think he's right. It will be a remarkable thing.

In 1992, my party swallowed hard and accepted, the -- the liberals of my party, a nominee who was for the death penalty, for welfare reform, who was for NAFTA.

BLITZER: He was a new Democrat, as they called him.

BEGALA: He was a new Democrat. Can Rudy do the same thing? Will he have a Sister Souljah moment in his party, where he goes right at, say, Jerry Falwell, the way John McCain tried and failed?

Is his party ready to adapt and change? If they nominate him, and if he doesn't change positions, like, you know, weather vane McCain, who is switching every day, it will be a remarkable thing for American politics.

BLITZER: What do you think?

BENNETT: Well, the list is -- I mean, the list is remarkably long, not Sister Souljah moments, but his, if you will, deviation from kind of conservative orthodoxy, including three marriages. In between, he lived with a gay couple. I mean...

BLITZER: After the divorce of his...

BENNETT: Right.

BLITZER: After he left his second wife.

BENNETT: Dressing up as a -- as a woman two or three times.

(LAUGHTER)

BENNETT: I mean, these -- these -- I know these are not, you know, major league issues. But these things...

(CROSSTALK)

BEGALA: He fits right in to my party. We ought to make him my...

(CROSSTALK)

BENNETT: ... used to -- well, fine.

(LAUGHTER)

BENNETT: Well, that's right.

But -- but it does not -- it does not seem to cut at this point. I think part of it is the overriding transcendence of the war that is so important. And Rudy Giuliani is seen as a leader.

On the -- on the Romney thing, it's interesting. This seems to have -- he seems to have fallen rather quickly. People took a good, close look at him at this conference conservatives had in Washington. He spoke for an hour, and didn't mention the war in Iraq. People felt that was dodging, you know, the major issue.

But what you have in McCain and Giuliani is stature. These are big guys...

BLITZER: You also have...

BENNETT: ... big, important guys.

BLITZER: ... in the both two front-runners on the Republican side, McCain and Giuliani, two guys who support the president's position on the war in Iraq. And I think everyone will agree that, at least right now, the war in Iraq is the overarching, dominant issue that's going to determine this election.

BEGALA: Absolutely.

It's outrageous. I didn't realize that Governor Romney spoke for an hour about our country...

BENNETT: Yes. BEGALA: ... and its future, hoping to be our president, and didn't mention the war.

There are some who believe -- and, again, I will defer to Bill -- that there's room in the Republican Party for a strong anti-war messenger, maybe like a Chuck Hagel, because you're right. Where the big three in -- in the Republican Party right now, McCain, Rudy, and Mitt, they all support the escalation that the president has called for, Senator Hagel opposes it. If he gets in the race, that's one more very different...

(CROSSTALK)

BLITZER: Ten seconds. What do you think?

BENNETT: Well, the more interesting third-person possibility, I think, is Newt Gingrich, because, if the social conservatives decide they can't live with Rudy, and they don't really believe in McCain, then, Newt, I think, is going to be tempted in.

BLITZER: We will leave it there.

Bill Bennett, Paul Begala, as usual, thanks very much, guys.

BENNETT: Thank you.

BLITZER: And we're getting some sad news this hour from the office of Congressman Charlie Norwood. The Georgia Republican has decided not to seek additional hospital treatment for lung cancer. He's checking into a hospice -- Charlie Norwood, the long-term Republican lawmaker from Georgia, leaving Georgetown Hospital, checking into a hospice.

We wish him, of course, only, only the best.

Up next, Jack Cafferty has your e-mail. What does it mean that Senate Republicans blocked debate on a resolution opposing the president's plan to escalate the war in Iraq? That's Jack's question. Jack and your e-mail -- when we come back.

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, the question this hour is: What does it mean that Senate Republicans blocked debate on a resolution opposing the president's plan to escalate the war in Iraq? They will take up a similar resolution in the House next week.

Shirley in Atlanta writes: "Republicans have far more seats up for reelection in the Senate in 2008. And they had better learn what that means. Right now, they would lose in a landslide, because of what they are doing. The sad thing is, our troops are paying the price. You would think they would have learned from the 2006 election that the people are sick of them protecting the White House at all costs."

Matthew writes: "Jack, it makes me wonder why so many people worked so hard to help the Democrats regain a majority in Congress. Two-thirds of the country is against the war, against this president, and against his party. And, yet, the Democrats can't even manage to get the matter debated on the floor of the Senate."

Nick in La Grande, Oregon: "It means the Republican senators are running scared, and rightfully so. It also means they will continue to escalate the war and do everything they can to do all the damage they can, before we kick them out in two years. God, how I hate them. And I'm a Republican."

Eric in Cambridge, Mass.: "It means, first and foremost, the Democrats are ineffective leaders that we feared them to be all along. Even when they're the only choice, they prove us to be fools for trusting them to make even the smallest difference. Now we can watch a similar display of ineptitude unfold in the House next week. Apparently, the last years in the minority have taught the Democrats only how to be docile lapdogs."

Gary in Seguin, Texas, writes: "To me, it looks like the Republicans are cutting and running. They just can't face the truth."

And Jenny in New York: "It means a nonbinding resolution is a lot more important than a lot of people claim it is."

Wolf...

BLITZER: Jack, thank you.

CAFFERTY: ... that's all I got.

(CROSSTALK)

BLITZER: We're going to get back to you shortly.

And, to our viewers, you're in THE SITUATION ROOM.

And happening right now: another U.S. helicopter down in Iraq -- the rising death toll raising new questions. Are American forces suddenly very vulnerable, not only on the ground, but in the air?

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