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THE SITUATION ROOM

CIA Indictment: Former Top Official Charged; U.S. Choppers at Risk in Iraq; An Interview With Senator Chris Dodd; North Korea Returns to Nuclear Talks

Aired February 13, 2007 - 17:00   ET

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


WOLF BLITZER, CNN ANCHOR: And to our viewers, you're in THE SITUATION ROOM.
Happening now, is Tehran behind deadly attacks on U.S. troops?

America's top general casting some doubt on claims by his own military and his bosses in the Bush administration.

What would a war with Iran actually look like? Would Israel fire the first shot?

We're going to show you a scary scenario.

And until recently, he ran the daily operations of the CIA. Now he faces corruption charges in the same probe that sent a powerful congressman to prison.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Weapons from Iran killing American troops in Iraq -- the Bush administration says there's no doubt about that.

But does the trail lead to the top leadership in Tehran?

America's top general is voicing some doubts about that claim.

Let's go live to our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf, well, some Pentagon officials are privately complaining that this briefing held in Baghdad on Sunday was mishandled and that the use of anonymous U.S. officials undercut America's credibility.

(BEGIN VIDEO TAPE)

MCINTYRE (voice-over): The briefing in Baghdad was supposed to make a convincing case that these weapons with Iranian markings were sent to Iraq. In the words of anonymous military briefers, on orders from the highest levels of the Iranian government.

But the problem is none of the senior leadership of the Pentagon was kept in the loop. One by one, over the past few days, they all professed ignorance of the evidence to back up the charge that so- called explosively formed penetrators were directly linked to the Iranian government.

Defense Secretary Robert Gates Friday in Spain.

ROBERT GATES, SECRETARY OF DEFENSE: I'm just frankly not specifically certain myself of the -- of the details.

MCINTYRE: Joint Chiefs Chairman General Peter Pace Monday in Australia.

GENERAL PETER PACE, JOINT CHIEFS CHAIRMAN: And it's clear that materials from Iran are involved, but I would not say, based on what I know, that the Iranian government clearly knows who is complicit.

MCINTYRE: And Tuesday, the brand new top commander for the Persian Gulf region, Admiral William Fallon, told CNN's Kyra Phillips in an exclusive interview he hadn't seen the evidence either.

ADM. WILLIAM FALLON, COMMANDER, U.S. CENTRAL COMMAND: Kyra, I have no idea who may be actually with hands on in this stuff.

MCINTYRE: At the White House, Spokesman Tony Snow was pushed to explain why, if the case was so clear, the joint chiefs chairman was waffling.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: I just asked that three or four times. You haven't answered that. You were saying the Iranian government is behind it.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: OK. Let me put it this way. I'll say it one more time. The Quds force is part of the Iranian government. The Quds force is behind it -- is associated with it.

HENRY: OK.

SNOW: All right?

Thank you.

HENRY: Let me...

(END VIDEO TAPE)

MCINTYRE: In an effort at damage control, the U.S. military says it will put its chief spokesman in Baghdad, Major General Bill Caldwell, out to talk about all of this on the record, to try to dispel any doubts -- Wolf.

BLITZER: He's going to be joining us here in THE SITUATION ROOM tomorrow, General Caldwell on that.

The original explanation we heard from our Michael Ware, who was at that briefing, was that there was a high ranking intelligence official who was part of the briefing team to the reporters and there was no way that official could go public and release his identity.

What are they saying about that, Jamie?

MCINTYRE: Well, they're saying that that is the case. But in retrospect, they're thinking that this -- the way they handled this may have -- may have undercut the U.S. case, especially the prohibition against reporters being able to record for note taking purposes the comments.

So we don't have, in some cases, a direct quote of exactly what they said.

BLITZER: Jamie is watching that for us, as he always does, at the Pentagon.

Thank you, Jamie, for that.

North Korea shocked the world with a nuclear test last -- only four months ago. Now it's agreed to shut down its weapons program in exchange for economic help.

Is this one the real deal or not?

CNN's John Vause is in Beijing -- John.

JOHN VAUSE, CNN CORRESPONDENT: Wolf, under this agreement, the North Koreans have 60 days to shot down their main plutonium producing facility in return for 50,000 tons of heavy fuel oil. Another 950,000 tons of heavy fuel oil will be delivered when that reactor is completely disabled.

The North Koreans have also agreed to allow the return of international inspectors.

Separately, there is an agreement between Washington and Pyongyang to start working toward normalizing their relations and also to start working toward removing North Korea from that U.S. list of state sponsors of terrorism.

And while this agreement will stop the North Koreans from producing new plutonium, there is still no specific time frame on how to deal with the existing nuclear weapons.

According to some reports, there could be as many as 12 nuclear weapons in Kim Jung Il's arsenal.

The six party talks have been down this road before. Almost a year-and-a-half ago, another breakthrough deal. But that fell apart in just days -- warning.

BLITZER: All right, John.

John Vause in Beijing for us.

Those nuclear talks, by the way, took place in a secluded guest house near Beijing's Tiananmen Square. The luxurious setting might make any negotiator more inclined to actually go ahead and make a deal.

The former imperial mansion was a favorite fishing spot for China's emperor 1,000 years ago. And while it usually houses visiting VIPs, you -- that would be you -- you can stay in the presidential suite for about $4,000 a night.

The six party talks were held around a hexagon-shaped table. The United States, China, Russia, Japan and the two Koreas sat in alphabetical order. Just a little nugget for you.

Let's get to the race for the White House right now.

The Republican, Mitt Romney, officially jumped into that race today, after serving just one term as Massachusetts governor. Romney is playing up his relatively short tenure in office as evidence he's a political outsider. But in Massachusetts, Romney does have a record and plenty of critics.

Let's go to our Mary Snow.

She's joining us now live from Boston with more -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, people in Massachusetts say while Mitt Romney may not have made his big announcement here, his record in four years as governor in this state will certainly follow him on the campaign trail.

(BEGIN VIDEO TAPE)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Thank you, Michigan.

SNOW (voice-over): A warm reception in Michigan.

But in Massachusetts, you could feel the chill. Critics say it's here, when Mitt Romney was governor, that he made his conversion from moderate Republican to conservative and he made enemies.

REV. ANNE FOWLER, RELIGIOUS COALITION FOR FREEDOM TO MARRY: Well, I think the people of America will discover Mitt Romney's essential hypocrisy as he -- as he tries to explain himself.

SNOW: Gay rights advocates are furious that Romney supported a constitutional amendment to ban gay marriage after Massachusetts became the first state to allow it.

ROMNEY: We did not want Massachusetts to become the Las Vegas of same-sex marriage.

SNOW: A far cry from 1994, when Romney said he had a better record on gay rights than Ted Kennedy.

ROMNEY: But I'll tell you one thing...

SNOW: And listen to Romney on abortion in 2002 during his campaign for governor.

ROMNEY: While I am personally not in favor of abortion, as governor, I will protect the right of a woman to choose.

SNOW: A promise you won't be hearing on the 2008 campaign trail.

ROMNEY: I had to take sides. And call myself firmly pro-life.

GLEN JOHNSON, A.P. STATE HOUSE BUREAU CHIEF: There are going to be people who accuse him of being a flip-flopper and also emphasize or focus on what he said in Massachusetts, not what he's saying in South Carolina and other Southern states today.

SNOW: Massachusetts Republican lawmaker Bradley Jones, Jr. is supporting Romney's presidential bid, even though he does not agree with him on abortion and gay rights.

BRADLEY JONES, JR. (R), MASSACHUSETTS HOUSE MINORITY LEADER: I've had the opportunity to work with him over four years as governor and back to 1994 when he ran. And, you know, whenever he has given me his word and I've looked him in the eye, you know, he says what he means and he means what he says.

(END VIDEO TAPE)

SNOW: Now, supporters say Romney can use his days as governor to his advantage by making the point that he was a Republican who won in a liberal state and argue that he can work across party lines -- Wolf.

BLITZER: One of those same supporters, though, saying about when he ran for governor of Massachusetts, he was going to the left. Now that he's running for the Republican presidential nomination, he's moving solidly to the right.

SNOW: Absolutely. And they say the situation that he faced when he was running for governor is now flip-flopped. And one of the big challenges that he's going to face is convincing social conservatives that he is sincere about these changes. And because of the fact that he only held office here in Massachusetts, his days as governor is the only record that people have to compare to.

BLITZER: All right, well, he's got a serious challenge ahead of him.

Thank you, Mary, for that.

By the way, Mitt Romney's political roots were cultivated in Michigan, where his father, George Romney, had a long career in both business and government. George Romney's job as the head of American Motors Corporation earned him a cover story in "Time" magazine back in 1959.

He was elected Michigan's governor back in 1962.

George Romney was considered a strong contender for the White House in 1968, but he dashed his hopes of winning the Republican nomination when he turned against the Vietnam War after visiting the country. Here's the quotation that essentially tanked George Romney's chances. It occurred on August 31, 1967: "When I came back from Vietnam, I had just the greatest brainwashing that anybody can get when you go over to Vietnam, not only by the generals, but also by the diplomatic corps over there. I no longer believe that it was necessary for us to get involved in South Vietnam to stop communist aggression."

George Romney back then.

Let's go to Jack Cafferty in New York.

He's got "The Cafferty File" -- a lot of us of a certain age, shall we say, remember that, the 1960s.

I know you do -- Jack.

JACK CAFFERTY, CNN CORRESPONDENT: You're reading my mind. Yes, there are a few of us on this program that remember that quite well. And I'm even older than you are.

I'll bet you didn't know this -- illegal aliens can now get credit cards in this country. The "Wall Street Journal" reports the Bank of America has quietly begun offering credit cards to people without Social Security numbers.

As long as customers have had a checking account with the bank for three months without an over draft, it doesn't matter if they have a Social Security number or a credit history. The credit cards have a higher than usual interest rate and an up front fee.

Bank of America tested this program last year at five locations. They expanded it to 51 branches just last week.

In the last few years, banks have been offering checking accounts and sometimes mortgages to illegal aliens, but they weren't able to get major credit cards, until now. Bank of America defends the program, saying it complies with federal banking and anti-terrorism laws, and that it's reaching the needs of an untapped group of clients.

Critics say the bank is offering this program to people who are breaking the law.

Here's the question -- should illegal aliens be able to get credit cards?

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

BLITZER: Jack, thank you for that.

Up ahead, growing talk of a U.S. war against if Iran.

We're going to show you what Israel's role might be, a role some fear, in the next Middle East conflict. Also, a former top CIA official now indicted in the probe that's already sent a former congressman to prison. We're going to have the latest on this. Our John Roberts standing by.

And snow and ice pounding parts of the Midwest right now, making travel dangerous, if not impossible.

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

(COMMERCIAL BREAK)

BLITZER: The Bush administration says the North Korean nuclear deal should be a signal to Iran and other nuclear wannabes. But critics say it's the wrong signal.

Let's go to our White House correspondent, Suzanne Malveaux.

She's watching the story for us -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, the White House is certainly embracing this deal considering that North Korea was called by President Bush a member of the axis of evil -- Iran and Iraq being the other two. Things not going so well there.

This is really considered a success story. But it is far from certain whether or not this agreement is going to hold. And it is also far from certain whether or not this brand of diplomacy will work for Iran.

(BEGIN VIDEO TAPE)

MALVEAUX (voice-over): It's a done deal. But the question is whether it will stick.

CONDOLEEZZA RICE, U.S. SECRETARY OF STATE: In the next 60 days, we expect North Korea to shut down and seal the Yongbyon nuclear facility for the purpose of abandonment.

MALVEAUX: Yes, right. That's the view of the administration's own former ambassador to the U.N. John Bolton, who says North Korea cheated on a similar deal under President Clinton, so why should they be trusted to keep this one?

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE U.N.: They put one over on the United States in the 1994 agreed framework. They followed their same game plan. And I'm afraid they've done it again.

MALVEAUX: The old Reagan slogan, "trust but verify," has been the administration's mantra. Officials involved in the six party talks are all trying to lower expectations in case North Korea ends up cheating again.

MOHAMMED ELBARADEI, IAEA CHIEF: This is a first part of a process.

RICE: This is a good beginning to that effort. TONY SNOW, WHITE HOUSE PRESS SECRETARY: It's the first step toward implementing that agreement.

MALVEAUX: An agreement the White House says vindicates the president's policy of refusing to talk to the defiant regime one-on- one, instead, putting the economic and political squeeze on North Korea by working with its neighbors.

It's a model the Bush administration says it believes will work with Iran to force its regime to give up its nuclear program.

RICE: Why shouldn't it be seen as a message to Iran that the international community is able to bring together its resources and that the strong diplomacy has finally achieved results?

MALVEAUX: But critics say the message is just the opposite -- that North Korea's pursuit of nuclear weapons for the past 15 years has paid off and defiance from other regimes may do the same.

BOLTON: It will say to countries like Iran and other would-be proliferators, if you just have enough patience, if you just have enough persistence, you'll wear the United States down.

(END VIDEO TAPE)

MALVEAUX: Now, Wolf, the White House also brings up the point here that North Korea is not automatically going to get these rewards. They're going to have to pass a series of inspections and tests to actually get those economic goodies -- Wolf.

BLITZER: What makes the White House, Suzanne, believe that this strategy will work when the Iranian president, Mahmoud Ahmadinejad, has so far been totally defiant?

MALVEAUX: The hope of the administration here is that ultimately that the Iranian people, the elite, as well as the young people, are really going to get frustrated and fed up, fed up with the economic situation in that country, with the political isolation, and that they will ultimately turn on Ahmadinejad, looking for different leadership, and to force him to shot down that nuclear program -- Wolf.

BLITZER: All right, that's the hope. Let's see what happens.

Suzanne, thanks.

So could Iran's nuclear program lead to a war?

While President Bush downplays speculation about an American strike, would Israel fire the first shot?

Let's bring in CNN's Tom Foreman.

He's here in THE SITUATION ROOM with a scary scenario -- Tom, what have you got?

TOM FOREMAN, CNN CORRESPONDENT: Well, Wolf, as you know, Israel is a very small country over here, about the size of New Jersey. And, for Israelis, they're in the middle of a very rough neighborhood.

But the Israelis have a big stick in all of this. They're believed to have nuclear weapons. Now that's something that much of the world believes Iran would also like to have.

The question is how far will Israel go to stop that from happening?

(BEGIN VIDEO TAPE)

FOREMAN (voice-over): Iran is presumed by the West to be developing nuclear weapons. This does not pose a direct threat to the United States, since Iran's missiles cannot reach that far. But America's long time ally, Israel, is well within range of Iran's most powerful missiles.

JOHN PIKE, GLOBALSECURITY.ORG:

FOREMAN: The Shahab-3, which is currently operational, has a range of 2,000 kilometers. It can get to Israel.

FOREMAN: The Israeli government has said in the past that Israel would not tolerate a nuclear Iran. And in 1981, the Israelis bombed a reactor in Iraq over similar concerns.

But would they strike Iran now and how hard?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: It doesn't necessarily mean that Israel would use nuclear weapons against Iran. Maybe conventional strikes. But if they feel that it's inevitable that they're going to be attacked and knowing that things get out of control and that's why wars do start, quite often, that they would take preemptive action.

FOREMAN: And that's where it gets very tricky for other nations. If Israel were to strike Iran, Iran would strike back -- at Israel and perhaps Israel's friends, including America.

COL. SAM GARDINER, U.S. AIR FORCE (RET.): They'd have a significant retaliation capability. They could go after us in Afghanistan. They could even do terrorist attacks on U.S. facilities. There could be a very high price to pay for the use of a military option.

(END VIDEO TAPE)

FOREMAN: The Israeli embassy doesn't want to talk about the hypotheticals in this. They keep talking about economic sanctions, things like that.

But if Israel did launch an attack on Iran, here's what they would go for first. There are 21 missile sites all around there, some of which could reach all the way to Israel and these are the nuclear related sites all around the country, believed to be where research and development is going on to develop nukes.

Both sets of sites would be very high on the Israelis' list of targets.

And, Wolf, right now, one of the important things to bear in mind in all of this is what's in between. Israel is over here, Iran is over here. In the middle, 140,000 U.S. troops right there in Iraq.

BLITZER: And in recent days, we did hear the prime minister of Israel, Ehud Olmert, say pretty ominously that Israel is not going to stand by and let Iran become a nuclear power. All very, very worrisome developments given the context of what's going on right now.

Thanks very much for that.

Tom Foreman reporting.

And still to come here, six U.S. helicopters down in Iraq in recent weeks.

Are insurgents now using new technology to challenge America's air supremacy in Iraq?

We're going to get the latest from Baghdad.

Plus, millions of people in the Midwest right now are feeling the impact of deadly winter weather. The system is moving east. We're going to show you who's next in line for this winter blast.

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

(COMMERCIAL BREAK)

BLITZER: As you can see, traffic a mess out there. Traffic cameras all over the country recording the snow and ice that are making travel difficult and dangerous across much of the Midwest today.

Millions of people already being impacted and millions more right in the system's path, including those of us right here in Washington.

Let's go straight to our meteorologist, Jacqui Jeras.

She's joining us live from the CNN Severe Weather Center with more.

What can we expect -- Jacqui?

JACQUI JERAS, CNN METEOROLOGIST: More of it, Wolf.

In fact, conditions are going to get worse before they get better for many. And not only do we have the snow and the ice, we also have severe weather across the Southeast, with the threat of tornadoes in red here and severe thunderstorms with hail and damaging winds in the yellow.

On the north side of the storm, we've been seeing some freezing rain along the Ohio River. That shifted a little farther north right now, from Springfield over toward Indianapolis. Muncie, Illinois has had 11 inches of snow. We've got snow drifts up to six feet high now because the wind is blowing so strong. Very nasty conditions right now in Cleveland. That's moving into D.C. We're looking at freezing rain, likely mixing conditions. And that will move into the northeastern corridor as we head through tonight and into tomorrow.

Snowfall accumulations well over a half an inch for many. And in the dark purple areas in the Northeast, we're talking about one to two feet in the next 48 hours -- Wolf.

BLITZER: All right, we'll stay on top of this.

It's not pretty.

Thank you very much, Jacqui.

New Orleans is still recovering from Hurricane Katrina. It was slammed now by a powerful storm early this morning that knocked over FEMA trailers and destroyed dozens of buildings. The storm, which likely was a tornado, killed at least one person and injured 30.

Our Internet reporter, Abbi Tatton, is looking into the damage -- Abbi.

ABBI TATTON, CNN CORRESPONDENT: Wolf, it as damage recorded and sent in to CNN by Dana Atchinson.

Look at these pictures here sent into I-Report.

These are -- this is the area of Carrollton in New Orleans. A 40-foot hole ripped out of the second floor of this building. This is a school. The second floor used by a charter high school currently looking for other space there.

Similarly, nearby, you can see a whole side of a house ripped off. This is from Mark Gostol (ph), who sent -- who uploaded these pictures onto the Internet. A car destroyed also there. And you can see the debris in the streets as he wondered around.

Mark tells us, he says it wasn't hard finding the areas that were hard hit because there were so many people out in the streets helping each other, as they had done during Katrina.

We checked in with another blog that we looked at during Katrina. This is Metroblog in New Orleans. They have pictures there. During Katrina, they had lots of updates about the storm. Now, pictures after the cleanup, after these heavy storms hitting overnight there in New Orleans -- Wolf.

BLITZER: Thank you for that, Abbi.

Coming up, the former number three official over at the Central Intelligence Agency swept up in a new corruption probe. We're going to have details of the indictment that's rocking the spy agency right now. And we'll also talk to American helicopter pilots in Iraq. We're going to show you how they're dealing with the insurgents increasingly targeting them.

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

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM, where new pictures and information are arriving all the time.

Happening now, the chairman of the joint chiefs of staff apparently at odds with the White House over whether the Iranian government is arming Shiite groups in Iraq. General Peter Pace saying armor piercing explosives clearly come from Iran, but adding it's not clear if the Iranian leadership is involved or even know about it.

Also, six U.S. helicopters downed in Iraq in recent weeks, fueling fears the insurgents may be using new technology. We're going to talk to some of those chopper pilots about what may be a growing threat.

And lawyers for Lewis "Scooter" Libby now say he will not testify in his own defense. Neither will his old boss, the vice president, Dick Cheney. They also say they'll rest their case tomorrow, moving the trial into its critical final phases.

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

The former number three official over at the CIA is being swept up in a corruption probe and now facing some very, very serious charges.

Let's go straight to our senior national correspondent, John Roberts. He's covering this story from New York -- John.

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT: Hey, Wolf.

It was a very bad day for Dusty Foggo. He is the former executive director of the CIA.

He was indicted by a grand jury in San Diego today, along with his long-time associate and friend, Brent Wilkes. Both of them have been charged with fraud and conspiracy.

(BEGIN VIDEOTAPE)

ROBERTS (voice over): The charges stem from the awarding of a contract to provide water and first-aid supplies to CIA operatives in Iraq and Afghanistan. The business went to a company connected to Brent Wilkes, a childhood friend and long-time poker buddy of Foggo.

The indictment alleges that Foggo used his senior position at the CIA to steer contracts to Wilkes. The deal shielded and the money laundered through shell companies and strawmen. In exchange, prosecutors say, Foggo benefited richly. CAROL LAM, U.S. ATTORNEY: He was accepting from Wilkes, among other things, overseas family vacations by private jet, expensive meals, and the promise of future employment as an executive at Wilkes' company.

ROBERTS: Both men deny any wrongdoing, but Foggo's relationship with Wilkes has made him a target in the tangled web of corruption and influence-peddling that put former congressman Duke Cunningham in prison for eight years. Wilkes was also indicted today on charges of conspiracy to bribe Cunningham in return for lucrative government contracts.

Foggo resigned last May as the number three man at the spy agency as the investigation into his dealings unfolded. The FBI and the CIA's Office of Inspector General took the extraordinary step of searching both Foggo's office at CIA headquarters and his home in Vienna, Virginia. Agencies seized everything from bank records to Cuban cigars.

At the same time, the FBI was investigating poker parties that Foggo attended at the Watergate and Westin Grand hotels in Washington. The events were hosted by Wilkes and investigators want to know if Wilkes was providing limousines and prostitutes for Cunningham and possibly other members of Congress. Today's indictments, though, appear unrelated to that particular part of the case.

(END VIDEOTAPE)

ROBERTS: While today's indictments expand the ongoing legal investigation into Duke Cunningham's dealings, the entire matter appears to have fallen off the radar screen in Congress. Last spring, as the election year was heating up, Democrats were pushing for a wider probe of the Cunningham affair, wanting to put pressure on the Republicans. But since they won the election, Wolf, we haven't heard a peep from them about it.

BLITZER: What are Foggo's attorneys, John, saying about these alleged kickbacks in the form of deals, vacations? What are they saying?

ROBERTS: Well, his former attorney, who is now deceased, told us a while ago that they often took vacations together, as good friends would, that very often Wilkes paid for the expense of the vacation itself, but Dusty Foggo would pay for the meals. But according to the indictment, at least one of those vacations, a trip to Hawaii that they took together, was worth well over $30,000, which Wolf, in anybody's book would add up to a lot of meals.

BLITZER: Well, certainly. Yes, you could eat a lot for $30,000.

All right, John, thanks for that.

John Roberts reporting.

Let's go to Iraq now. We've seen some shocking pictures lately as insurgents start to take a heavy toll among U.S. helicopters and their crews.

Is the U.S. military losing a crucial edge over the battlefield?

CNN's Arwa Damon is in Baghdad -- Arwa.

ARWA DAMON, CNN CORRESPONDENT: Wolf, the insurgents here are constantly developing new tactics to attack American forces. These new attacks on U.S. helicopters are concerning, but it is still safer to fly than it is to use the roads.

(BEGIN VIDEOTAPE)

DAMON (voice over): Against an increasingly sophisticated insurgency on the ground, the U.S. military's biggest advantage is in the air. From troop transport to dropping bombs, America's aircraft keep its troops safe. But since January 20th, six choppers crashed, most of them brought down by enemy gunfire.

This insurgent video shows what the U.S. military now believes was most likely a missile knocking a Marine Sea Knight out of the sky on February 7th. A group called the Islamic State of Iraq claimed responsibility.

Regardless, the possibility of new tactics and techniques is not lost on the troops that fly these birds.

C.W.O. WILLIAM WILLIAMS, U.S. ARMY: The enemy is ever-evolving and changing, and we are evolving and changing to meet that threat on a daily basis. I assure you, we look at it very seriously, and we look at it in great detail.

DAMON: Chief Warrant Officer Williams and his crew are part of the 25th Combat Aviation Brigade. They operate in central Iraq. Often their missions take them through the Sunni insurgent heartland.

UNIDENTIFIED MALE: Thirty seconds. Go! Go! Go!

DAMON: Here, doing some last-minute training before they drop Iraqi and U.S. forces just outside of Buhritz, an insurgent stronghold.

STAFF. SGT. DANIEL PINA, U.S. ARMY: In terms of the choppers going down, I mean, I'm not going to lie and say that, you know, it doesn't make things a little bit more comfortable.

DAMON: The crews not only take care of themselves, but they carry the responsibility of the lives in the back of the aircraft.

(on camera): The troops here are gearing up for an air assault mission, but the U.S. military uses its Black Hawk helicopters for a number of purposes -- to transport passengers, it can take up to 11, plus four crew members, and equipment, and also transport casualties off the battlefield.

LT. DUSTIN HEALEY, U.S. ARMY: Every day we go out there and we take it very seriously. And we just want to keep those guys out of harm's way as much as we can. So, anything we can do to help moving them from one place to another and keeping them off the roads.

DAMON (voice over): Because on the roads the playing field are more level.

There are thousands of flights today. Despite the recent attacks, America still retains air supremacy. But if the insurgents have obtained the technology to more easily shoot down choppers, that would drastically alter the battlefield.

(END VIDEOTAPE)

DAMON: There has been an ongoing effort to target U.S. helicopters ever since the Americans arrived in Iraq. Now, with six helicopters down in just about three weeks, the Americans are acknowledging that the insurgency is becoming even more effective -- Wolf.

BLITZER: Thank you.

Arwa's covering the story for us on the ground in Iraq.

Up ahead, my interview with Democratic presidential candidate Senator Chris Dodd. I'm going to ask him why he doesn't believe the White House when it says there are no plans for military action against Iran.

And Jack Cafferty wants to know, should illegal immigrants be able to get credit cards? Jack with "The Cafferty File" when we come back.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

There's tough rhetoric from the Bush administration, signaling a possible move against Iran. Does it sound like the signals being sent before the war in Iraq?

A key Democrat is getting that deja vu feeling all over again. He's making it part of his campaign for president.

Joining us now from Capitol Hill, Connecticut senator and Democratic presidential candidate, Chris Dodd.

Senator, thanks very much for coming in.

SEN. CHRIS DODD (D), CONNECTICUT: Thanks, Wolf.

BLITZER: Do you think it's -- the administration is trying to do now -- set the stage for what it did then, go to war against Iran?

DODD: Well, you know, fool me once, your fault, fool me twice, my fault. When I saw Saturday night unnamed sources are putting out information that the highest levels in Iran were orchestrating the use of these devices that were doing great damage to our men and women in uniform over there, I get a little skeptical about that kind of information, particularly when General Pace says today there's no information whatsoever that this is being orchestrated at the highest levels in Iran.

That sort of drumbeat, putting out information to start to build the case, we've been down that road in the past. We learned just last week from the inspector general at the Pentagon that Doug Feith and others there were cooking the books, making up this stuff to create a case for that resolution that was adopted five years ago.

So I'm not the only one a little skeptical about this. No, I hear the administration, but you can't forgive me -- you can't blame me, rather, for being a little uneasy when I hear these drumbeats about Iran.

BLITZER: Here's the president speaking to C-SPAN yesterday, basically saying you and other Democrats are certainly playing politics right now.

Listen to the president.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I guess my reaction to all the noise about, you know, "He wants to go to war" is -- first of all, I don't understand the tactics. And I guess I would say it's political. And on the other hand, I hope that the members of Congress, particularly in the opposition party, understand the great danger of Iran having a nuclear weapon.

(END VIDEO CLIP)

BLITZER: I suspect you agree with the second part of his statement, but you don't agree with the first part?

DODD: Well, who's the unnamed sources on Saturday night putting out information that had to be denied by some of the highest-ranking generals on Tuesday morning? I mean, there's something going on here.

Why are those -- who's putting out that information saying that this is a decision made at the highest authorities in Iran? I saw those -- those devices back in 2004, three years ago, at a full briefing in Baghdad by our military people. This is not news.

We knew they were coming in from Iran. That's a serious problem.

BLITZER: What was news, Senator, was when these briefers in Baghdad -- and our Michael Ware was on the scene when they came out and they said, these devices, these very sophisticated explosive devices, have killed 170 American troops over the past couple years in Iraq.

That's a lot of dead Americans, if, in fact, the Iranian government is responsible for that. That's huge.

DODD: Well, I agree, if that's the case. But General Pace said this morning they have no evidence whatsoever. It's coming from the highest ranks of the Iranian government.

That's the point here. We all knew about these problems coming in.

They're serious. They're doing great damage to our troops. We ought to do everything we can to stop it. But the suggestion this is all being orchestrated by the highest levels in Iran, there's no evidence of that, Wolf. That's my concern with this.

BLITZER: These briefers, we're told, were U.S. military personnel, somebody from defense intelligence, as well as a senior U.S. military officer. These weren't exactly political appointees, though, briefing reporters, these are parts of the U.S. military.

DODD: We're not making the distinction here. This is a serious problem. These devices are causing us great harm. The question is whether or not this is being orchestrated at the highest levels.

Now, clearly, look, the president wants to shift the argument, if he can. He's not listened to Congress, he's not listened to the American people. He didn't listen to Baker and Hamilton.

He's going his own way to escalate the war on the ground in Iraq. We know that today with the surge of troops in Baghdad.

That's a major problem. There are those of us up here who think we ought to be heading in a different direction. We ought to be talking about redeploying those troops out of these densely-populated urban areas, let them do the training, let them do the border security, let them deal with counterinsurgency efforts, but let's move in a different direction.

This policy is failing. We're asked to be a referee in a civil war to which there is no military solution. The escalation of this militarily is doing us great damage.

BLITZER: So you've said you want to use the power of the purse and stop the funding.

DODD: Well, my view is, look, at this point here, I wish the president would change his mind on this. That's not going to happen, apparently. So he's not going to change his mind, then Congress has to act.

So I would, one, argue for or author legislation that would reduce funding to allow for the redeployment of forces to put some pressure on the administration to change its policies, and do it in a way that would allow adequate time for these troops to be repositioned within Iraq and take them out of Iraq, to redirect funding to support efforts in Afghanistan, the veterans' benefits, to rebuild our military. But clearly, if the president doesn't act, then Congress has got to act responsibly.

And if that's the only thing we can do, by reducing the funding to create a change there, then I'm for it. BLITZER: One of your Democratic rivals for the presidential nomination, Senator Hillary Clinton, says she -- she refuses to say she made a mistake when she voted for the resolution authorizing the war in Iraq. She also won't apologize.

You've acknowledged you made a mistake, you've apologized. Do you have a problem with her refusing to say what you and Senator Edwards and others who voted for the resolution have said?

DODD: No. Listen, first off, Senator Clinton's got her own -- she's explained what she feels is the right course of action to follow.

And it's interesting to talk about what happened five years ago, and it's important. I don't minimize it. But most people, Wolf, want to talk about where we go from here, how do we get a change in this policy that is costing us so dearly in human life, our Treasury, and also our reputation around the world.

So while it's an interesting discussion and one certainly we ought to have, I think most people want to know where we're going from here. And I think Hillary Clinton has some good ideas on how to do that. That's where the focus of the debate ought to be.

BLITZER: And you're moving forward now with legislation to effectively do what, as far as allegations that the U.S. engaged in torturing terror detainees? What are you -- what are you trying to accomplish?

DODD: Well, Wolf, I think we made a major mistake last fall on the 60th anniversary of the Nuremberg verdicts, that we went off and basically eliminated habeas corpus in dealing with these -- these detainees. We also decided we're no longer going to live by the Geneva Convention on major issues here. And again, to allow evidence accumulated through torture and coercion to be used in these cases.

I think that was a major step back. At Nuremberg, we said we're different, we believe in the rule of law. And when I watch my government, my Congress walk away from these principles, I get very worried about it.

So I've offered legislation today with Bob Menendez and Pat Leahy and Russ Feingold that says we're going to restore habeas corpus, we're going to live up to the Geneva Conventions, and we're not going to allow evidence that we acquired through torture. That's to protect our troops.

When you walk away from the Geneva Convention, you put every American serviceman and woman, they're in jeopardy if they're captured by the enemy. We have to build those relationships around the world, we need to restore habeas corpus.

That's who we are as a people. That's what makes us different. I hope my colleagues will support that.

BLITZER: All right. Senator Dodd, thanks very much for coming in.

DODD: Thanks, Wolf.

BLITZER: All right.

Senator Chris Dodd. He's running for the White House.

Lou Dobbs getting ready for his show that begins right at the top of the hour. He's standing by to give us a preview -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Thank you, Wolf.

Coming up at the top of the hour, we'll be reporting on an incredible decision by Bank of America. They have decided to make illegal aliens a primary market, offering credit cards to illegal aliens, all part of a plan to expand their business.

Are they breaking the law and are they telling the truth?

We'll have a special report.

And it's estimated there are more than 22 million drug users in this country, and only one in 10 are seeking treatment. We'll have a special report on war within and the toll that drug abuse is taking within this country.

And it's (INAUDIBLE) this time. Now some states are trying to sell off their lottery operations. Those states make a short-term profit, of course, but will those deals benefit taxpayers who actually own that property?

We'll have that report.

And I'll be talking with a gentleman who says that I'm wrong and that I'm a neo-populist.

And as you know, Wolf, that's just not true. I'm an independent populist.

We hope you'll be with us for that.

Wolf, back to you.

BLITZER: I don't even know what a neo-populist is, but I'll be watching your show to find out.

DOBBS: You've got it, partner.

BLITZER: Thanks very much, Lou, for that.

DOBBS: It's the future, partner. It's the future.

BLITZER: Coming up in our 7:00 p.m. Eastern hour right here in THE SITUATION ROOM, he's the latest Republican to announce he's running for president, but can former Massachusetts governor Mitt Romney convince conservatives he's one of them? We're going to show you what some say is his uphill battle and the uphill battle he may face with a critical GOP bloc.

And still ahead this hour, details of a landmark study showing who might benefit from smoking marijuana.

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

(COMMERCIAL BREAK)

BLITZER: Let's check in with Jack Cafferty. He's in New York -- Jack.

CAFFERTY: Wolf, it speaks volumes we're even asking this question, but we are. Should illegal aliens be able to get credit cards? Bank of America giving credit cards to people without Social Security cards now.

Roger in Atlanta writes, "I'm all for it. Credit card lending, like pawn shops and payday loans, is predatory lending. Anything that makes their criminal business less lucrative and more problematic is fine with me."

D.L. in California, "Wrong question again. Should credit card companies be held liable for debts incurred by giving credit cards to illegal immigrants?"

Joanne in Bakersfield, "Why not? We give them everything else. But at least this would ensure that some of the money they're sending to Mexico would stay in the United States."

Tom in Florida, "You can't have the modern day American dream without having debt up to your elbows. Viva America!"

Kevin in Phillips, Wisconsin, "Well, let's see, some want them to have driver's licenses. They already get free hospitalization, something most of us don't. Soon the privilege of voting here."

"Yes, I suppose a credit card won't hurt. That way they can run up a tremendous debt load, then take off back home, only to leave us citizens here to pick up the tab that they leave behind."

And Richard in Nashville, Tennessee, "Of course they should be allowed a credit card. How about Mexican Express?"

If you didn't see your e-mail here, you can go to CNN.com/caffertyfile, where you can read more of them online.

It's like the "Twilight Zone" around here -- Wolf.

BLITZER: You know, getting credit cards -- everybody needs a credit card though, right, Jack?

CAFFERTY: But aren't you supposed to be -- like have a Social Security card and be a legal citizen? I mean, if they're here illegally and you're giving them credit cards, isn't there a debate there about whether you're breaking the law?

BLITZER: You know what? They're not just getting credit cards, they're getting a whole lot of other stuff as well.

CAFFERTY: A lot of stuff that you and I and our fellow citizens have to pay through the nose for.

BLITZER: It's part of the sign of the times. Let's see what happens on that front, Jack.

Thanks very much.

Up next, the Homeland Security secretary urging Congress to act before another 9/11. We're going to have details of what he wants lawmakers to do.

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

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of the "Hot Shots" coming in from our friends over at The Associated Press, pictures likely to be in your hometown newspapers tomorrow.

In Gaza, members of the Palestinian Fatah movement march in the street during a military training session.

In Louisiana, a woman is consoled after her house was leveled by a possible tornado.

In Russia, two men ice fish at the Gulf of Finland.

And in Boston, Charlie, a tortoise, is fed by a zookeeper. Take a look at that.

Some of this hour's "Hot Shots," pictures often worth a thousand words.

Let's go to Brianna Keilar for another look at some other important stories making news.

(NEWSBREAK)

BLITZER: Let's go to Lou in New York.

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