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THE SITUATION ROOM

Interview With Max Cleland; Halliburton Moving to Middle East?

Aired March 12, 2007 - 17:00   ET

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


WOLF BLITZER, HOST: And to our viewers, you're in THE SITUATION ROOM.
Happening now, unseen wounds -- there's a stunning new study just coming out. It shows many combat veterans returning from Iraq with mental illness, even as the Army fires its top doctor, the latest casualty in the controversy over medical care. I'll speak about all of this with former U.S. Senator Max Cleland, himself badly wounded in an earlier war.

Is Dick Cheney's old company about to move its billions in profits, it's no bid contracts and its tax dollars to the Middle East?

Why members of Congress, at least some of them right now are furious.

And a senator turned actor considering a new role. That would be presidential candidate.

Could Fred Thompson win a standing overturn from Republican conservatives?

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

A big Texas oil services company about to pack up and move its headquarters to the Middle East -- not just any oil company. It's Halliburton, once headed by the vice president, Dick Cheney.

It's now headed to Dubai with billions in profits, some from no- bid deals with the Pentagon in Iraq.

Let's go to CNN's Brian Todd.

He's watching this story unfold. This is a developing story -- Brian.

Tell our viewers what we've learned.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the announcement has some Democrats in Congress outraged and at least two of them are delving into this deal.

(BEGIN VIDEO TAPE) TODD (voice-over): American taxpayers are spending billions of dollars for Halliburton to provide logistics for the military in Iraq. Now, is the company once headed by Dick Cheney, trying to avoid U.S. taxes by moving its headquarters and current CEO to Dubai?

That's what the chairman of the House Government Reform Committee is asking.

Henry Waxman has been looking into Halliburton's dealings since the war began.

REP. HARRY WAXMAN (D), CALIFORNIA: We are looking very carefully at this move and what it may mean for national security, for American taxpayers, for dealing with countries where we have a ban on trade. And I've asked my investigative staff to find out the answers to these questions -- what it's going to mean with this move of Halliburton to Dubai.

TODD: Waxman may hold hearings into Halliburton's move and Democratic Senator Patrick Leahy, who calls it an insult to U.S. soldiers and taxpayers, will likely address it in a hearing next week.

We asked an industry analyst about the tax question.

TOM WALLIN, ENERGY INTELLIGENCE: There's little or no tax for operating in Dubai. Also, there's a very light regulatory regime for business. So it's probably going to be beneficial from a tax perspective.

But, you know, the fact is that Halliburton is going to remain a U.S.-registered company and it is going to continue to have significant operations in the U.S. So it's not going to be able to completely avoid its -- its tax obligations by doing this.

TODD: But Waxman's concerns also branch into national security.

WAXMAN: They're so intimately involved in the logistics with our military. They know everything about our military and where they're positioned and all of that.

What does it mean if they become a Dubai corporation, a foreign corporation?

(END VIDEO TAPE)

TODD: We got an e-mail from a Halliburton spokeswoman just a moment ago saying Halliburton is and will remain a U.S. corporation incorporated in Delaware, with its principal executive office in Houston, Texas. "As such," the spokeswoman goes on, "we anticipate absolutely no tax benefits from this decision. Halliburton has said previously it is making this move to help its growing business in the Middle East" -- Wolf.

BLITZER: All right, Brian.

You'll stay on top of this story for us. Brian Todd reporting.

Some are wondering why Halliburton would actually make this move. Dubai is booming -- booming right now. Private sector investment accounts for 43 percent of its gross domestic product and the United Arab Emirates captured 60 percent of the region's foreign direct investment. Dubai part of the United Arab Emirates.

The shock waves are spreading in the military health care scandal. The Army's top doctor, Lieutenant General Kevin Kiley, today announced his immediate retirement. But a senior Pentagon official says Kiley was actually fired.

Kiley previously commanded the Walter Reed Army Medical Center here in Washington and becomes the third person dismissed over the substandard conditions there.

Now, there's another shock concerning returning war veterans from Iraq. A new study says almost one third of them -- one third of them are suffering from mental illnesses or psychosocial disorders.

Let's get some details from our senior Pentagon correspondent, Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Wolf, the good news in this study, to the extent that there is good news, is that mental health problems are being detected early.

The bad news is there are quite a few problems to be detected.

(BEGIN VIDEO TAPE)

MCINTYRE (voice-over): Calling the wars in Iraq and Afghanistan the most sustained combat operations since Vietnam, the study concludes the conflicts have produced an epidemic of mental illness -- the kind that can sometimes kill.

Take the case of Jason Cooper, profiled by CNN last year. The young soldier hanged himself after returning from combat. His mother says he was never the same.

TERRI JONES, JASON COOPER'S MOTHER: Soldiers are in distress. They're taught to be tough. They're taught to go into combat. And when the tears come, they're not taught how to survive that.

MCINTYRE: The primary factor, say the study's authors, U.S. troops are subjected to multiple tours of high intensity guerrilla warfare and face the constant threat of death or dismemberment from improvised bombs.

According to a review of more than 100,000 veterans of Iraq or Afghanistan who were seen at V.A. hospitals between 2001 and 2005, it's taking a heavy toll. One quarter, 25 percent, have been diagnosed with some form of mental disorder. Include psychosocial problems such as domestic violence and the percentage jumps to almost one third. Not surprisingly, younger troops, 18 to 24 year olds, who often draw the deadliest front line duty, are the most at risk.

Post-Traumatic Stress Disorder is the biggest problem, diagnosed in 13 percent of returning veterans; followed by anxiety; problems adjusting; depression; and substance abuse. More than half of the 100,000 suffered two or more problems.

(END VIDEO TAPE)

MCINTYRE: And, Wolf, the biggest difference between what's happening now and what happened during the Vietnam War is what's become the signature wound of the Iraq and Afghanistan Wars, so-called traumatic brain injury. These are concussions caused often by just the blast of a bomb and they can cause serious mental problems along with physical injury -- Wolf.

BLITZER: And we're going to be speaking tomorrow about this with Bob Woodruff of ABC News.

He'll be here in THE SITUATION ROOM.

Also, Jamie, coming up later this hour, I'll speak about it with former Senator and former Veterans Administration Chief Max Cleland. As all of our viewers know, he was badly wounded himself during the war in Vietnam.

Let's go to Jack Cafferty for The Cafferty File -- these numbers that Jamie just reported, Jack, almost a third of these veterans coming home from the war in Iraq are suffering some sort of mental -- mental problems, mental illness because of the trauma of serving over there.

This is pretty scary stuff.

JACK CAFFERTY, CNN CORRESPONDENT: Well, not just the trauma of serving over there, but the fact that many of them were, you know, on extended deployments. They had to go back for two and three tours of duty over there. I mean there's only -- there's a limit, I would guess -- I'm no mental health expert -- to the amount of combat you subject somebody to before they begin to suffer irreversible adverse effects from it.

And the extended tours of duty dictated by the shortage of combat ready troops to go to Iraq and Afghanistan has got to be a contributing factor. I don't know if we'll ever see a study on that, but I'd be interested in what those numbers would show.

Wolf, the first federal trial on a local government's efforts to crack down on illegal immigration began today. The city of Hazleton, Pennsylvania is defending a law that it passed last summer -- The Illegal Immigration Relief Act. It calls for fines on landlords who rent to illegal aliens and to deny business permits to companies that hire them.

The ACLU and Hispanic groups sued Hazleton, saying that their measure is unconstitutional, that it should be left up to the federal government.

Hazleton officials say that illegal aliens have committed at least 47 crimes since last spring in their town, putting a severe strain on the police department's overtime budget. A lawyer for the city of Hazleton says the town has always welcomed immigrants throughout its history, but after the year 2000, something changed and it began seeing more and more criminals.

The trial's outcome is significant. Dozens of cities and towns across the country have followed Hazleton's lead, passing laws that do everything from punishing companies that employ illegals to making English the official language.

Many of these laws were passed out of a sense of frustration that the federal government has done virtually nothing to secure our borders nor enforce the existing laws against illegal immigration.

So here's our question -- should local governments have jurisdiction when it comes to illegal aliens?

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

We'll read some of your answers a little bit later in the broadcast -- Wolf.

BLITZER: Thank you, Jack.

Thanks for that.

Up ahead, Senator and decorated war veteran Max Cleland -- I'll get his prescription for what ails America's military hospitals.

Former Senator Max Cleland is about to join us live.

Plus, President Bush's nemesis shadows him on his Latin American tour.

Is Hugo Chavez stealing all the headlines?

And take a look at this surveillance video. They're the talk of New York City and the nation -- how two elderly women attacked by a mugger are inspiring everyone with their courage. This is amazing and -- amazing video. You're going to want to see this. Carol Costello is working this story for us right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: They're accused of ties to the September 11th attacks. Now, top terror suspects held at the Guantanamo Bay Detention Facility have had some secret hearings. We're only learning about them now.

Let's go live to our Pentagon correspondent, Barbara Starr, for details -- Barbara.

BARBARA STARR, PENTAGON CORRESPONDENT: Wolf, all of this happened over the weekend. These three top al Qaeda suspects connected, it is believed, of course, to the 9/11 attacks, have now had what is believed to be their first legal proceeding at Guantanamo Bay, Cuba -- closed door hearings to determine if they are, indeed, enemy combatants.

These are three of the 14 top detainees that had long been held in what is referred to as CIA prisons outside the U.S. They were sent to Guantanamo Bay last year by President Bush. Three of the top operatives -- Khalid Sheikh Mohammed, the suspected 9/11 mastermind, or, at least, one of the masterminds; Ramzi Bin Al-Shibh, another key 9/11 planner and believed to be an al Qaeda money man; and Abu Faraz Al-Libbi, yet another key al Qaeda planner.

You know, Defense Secretary Robert Gates has been talking about Guantanamo Bay and just a couple of days ago talked about why he would like to shut the facility down but thinks it's going to be very tough to do that.

(BEGIN VIDEO CLIP)

ROBERT GATES, SECRETARY OF DEFENSE: The problem is that we have a certain number of the detainees there who often, by their own confession, are people who, if released, would come back to attack the United States. There are others that we would like to turn back to their home countries, but their home countries don't want them.

(END VIDEO CLIP)

STARR: These closed door hearings, Wolf, were held without the press -- without the news media in attendance, as they have been at previous hearings. These men were not even allowed to have their attorneys present because of concerns that they would divulging classified information.

These panels that were held to determine if they're enemy combatants now do pave the way for President Bush to eventually order -- if he decides to -- that all three of these men stand trial before military commissions for their alleged involvement in the 9/11 attacks and al Qaeda -- Wolf.

BLITZER: All right, Barbara, thank you for that.

Let's get back to our top story.

A new medical study shows an alarming epidemic of mental illness among returning combat veterans from Iraq and Afghanistan.

Max Cleland is a former Democratic Senator from Georgia. Before that, he headed the Veterans Administration.

A veteran himself, he lost both legs and an arm in Vietnam.

Senator, thanks very much for coming in.

MAX CLELAND (D), FORMER U.S. SENATOR: Thank you.

BLITZER: What do you make of this study?

Very alarming numbers, maybe as many as a third of the veterans coming home from service in Iraq and Afghanistan are suffering from some sort of mental problem.

You've been there. You understand what's going on. Give us your thoughts.

CLELAND: This is what happens in war. I mean this is war. This is the price of war. You can't send young Americans to a place like Iraq and Afghanistan -- especially over a period of four years we keep sending them back and back and back -- and expect them to come home and just fit right in.

I mean they bring that trauma with them and that trauma stays with them most of the time, the rest of their lives.

That is why it is so important to intervene quickly with PTSD counseling and particularly those in the holding pattern at Walter Reed, those thousand there. They are suffering emotionally as well as dealing with their physical wounds.

So they're going to go on to the Veterans Administration. And the Veterans Administration is not prepared to deal with them, either.

So we have to have a wholesale, systematic approach here that works for the massive amount of emotional casualties that are coming back from this war.

BLITZER: Just explain, Senator, what PTSD counseling is.

CLELAND: Well, Post-Traumatic Stress Disorder, PTSD -- or, better yet, post-war trauma -- you go to a war, you bring it home. Duh. I mean, you know, that's what the Walter Reed is set up to deal with, but they're overwhelmed.

That's what the Veterans Administration is set up to deal with, but they're overwhelmed.

BLITZER: But a lot of the times this -- these are invisible, these problems.

CLELAND: Oh, yes.

BLITZER: These guys come back...

CLELAND: Oh, yes.

BLITZER: ... and they seem to be, you know, healthy and normal but what these studies are showing is that there's some invisible strains there that they're returning home with.

CLELAND: Yes. The deepest wounds of war -- having lost both legs and my right arm, I'll tell you, and struggling with PTSD myself, I can tell you the deepest wounds and scars of war are internal. They're psychological. They're mental and emotional. it's what you carry to your grave. So the fact that when we send young Americans abroad to war, we ought to understand that we'd better plan for these casualties when they come back. And that's exactly what did not happen in terms of the Iraq War.

BLITZER: And you've gone through -- like so many other veterans -- major depression. This is something that people should anticipate these veterans coming home from Iraq and Afghanistan right now.

CLELAND: And if you don't intervene with the emotional aftermath of the war up front and early, it can slide down a precipitous path to hell. In many ways, PTSD can turn into alcoholism, drug addiction, depression, suicide.

I mean you -- that's why it is so important. If you figure, say, 30, 33 percent of the Iraq veterans or Afghan veterans coming home suffer with this emotional aspect of the trauma of war, that's over 300,000 people out there, male and female, all ranks, all walks of life.

We have a major challenge in this country to get on top of this. That's why it's so important to fix Walter Reed. That's why guys like Jack Murtha are willing to put as much money into this thing as possible and others who are calling in the Congress for improvements, serious improvements in the whole system of how we care for our injured.

I will say this, that, you know, Colin Powell's remark to the president, "Mr. President, do you understand the consequences of like invading Iraq and if you break it, you own it?" -- well, if we break young people in war, we own them for the rest of their lives.

And that's why it's important to fix Walter Reed and eventually square away the Veterans Administration.

BLITZER: And you've been very critical of the administration's policies in Iraq.

I want you to listen to what the vice president said earlier today because he is once again insisting that if your advice and the advice of other Democrats, other critics of the president's strategy are implemented, al Qaeda wins.

Listen to the vice president.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: When members speak not of victory, but of time limits, deadlines or other arbitrary measures, they're telling the enemy simply to watch the clock and wait us out.

(END VIDEO CLIP)

BLITZER: Senator, if you could sit down with the vice president and have a direct one-on-one meeting with him, what would you say to him?

CLELAND: Where the hell were you in the Vietnam War?

If you had have gone to Vietnam like the rest of us, maybe you would have learned something about war. You can't keep troops on the ground forever. They've got to have a mission. They've got to have a purpose. You can't keep sending them back and back and back with no mission and no purpose.

As a matter of fact, the real enemy is al Qaeda. It's al Qaeda -- stupid. It's not in Iraq. That's why we have to withdraw the ground forces there, settle Iraq with a diplomatic solution and go after al Qaeda.

That's what we should have been doing for the last four years.

Instead, this administration and this vice president and this president wants to send more troops to Iraq. Unbelievable.

BLITZER: And what would you say to the president?

CLELAND: You screwed up royally when you said, four years ago, major combat over, mission accomplished, bring 'em on. That means you should have gone to Vietnam and learned that you don't challenge guerrillas that way, people who want to blow themselves us just to take you out.

That's exactly what we've got going on in Iraq. That's what we've got going on in Afghanistan. We're in deep trouble and we're not even chasing the enemy. We're just bogged down in Baghdad with no hope of getting out under this administration.

BLITZER: And, finally, your Democratic colleagues here in Washington, they seem to be divided over what to do next, some really pushing hard for a cutoff of funding, others saying you can't do that.

What advice do you have for them?

CLELAND: Keep on pushing, because the right thing to do is to withdraw the ground forces from Iraq and settle this thing about the stability of Iraq and the future of Iraq by diplomatic means. Then you focus your American military on going after al Qaeda. Go after them in Afghanistan. Go after them in northwestern Pakistan. Go after them where they are.

They're morphing into 60 different nations around the globe. That's why it's so erroneous, strategically, to be bogged down in Baghdad now, after four years.

We -- you know, we won World War II quicker than we've -- we're dealing with this situation here. We're in a deep mess and it's time to get out of it.

BLITZER: Senator Cleland, thanks for coming in.

CLELAND: Thank you. BLITZER: The Veterans Administration has just sent us this statement.

Let me read it to you: "V.A. and the administration are firmly committed to providing veterans with the world class care they deserve. V.A. has a nearly $3 billion budget for mental health services alone and the agency is the country's largest provider of mental health care."

The statement goes on to say: "We have taken and will continue to take steps to make certain our veterans receive comprehensive, accessible and compassionate care for their mental health concerns."

That statement we just got from the Department of Veterans Affairs.

Coming up, he plays the no-nonsense D.A. on TV's "Law and Order."

But could Fred Thompson's next real life role be commander-in- chief?

What he's telling us about a possible White House run.

And fire and smoke fill the air in rural Texas. A gas line explosion sends emergency crews racing to the scene. We'll have the latest on the accident and what authorities think may have caused it.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Let's check back with Carol for a closer look at some other important stories making news -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Yes, an update for you now. Emergency crew trying to control an intense fiery gas line accident in north Texas. Flames shot several hundred feet into the air after a back hoe operator working on one gas line hit another, rupturing it. Several fires burning in the area about 30 miles west of Fort Worth. Authorities are still trying to make sure all the workers there are accounted for.

It looks like the launch of Iran's first nuclear power plant could be delayed. The Russian company building the plant says the launch may be pushed back from September because Iran has not fully paid its $25 million monthly construction bills.

But Russian news media reports suggest the Kremlin is getting impatient with Iran's defiance of U.N. Security Council sanctions over its nuclear program.

And checking the bottom line on the markets today, concerns about the housing market could not keep Wall Street down. And that's the good thing. The Dow finished up 42 points, to close at 12,318. The Nasdaq jumped more than 14 points and the S&P 500 added more than 3 points, to close at 1,406. Back to you -- Wolf.

BLITZER: All right, Carol, thanks for that.

And still to come here in THE SITUATION ROOM, while President Bush tours Latin America, Venezuela's Hugo Chavez is on his trail on his case. The anti-American sentiment in the Americas -- that's coming up.

And which is more shocking -- an elderly woman's courage or the pictures of a mugger punching her out?

Stick around. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, President Bush getting a modest ratings boost. Our new poll by Opinion Research Corporation shows his approval numbers up 3 percentage points from January, to 37 percent. But 56 percent still are not happy with the job he is doing.

Outspoken Iraq War critic Senator Chuck Hagel says he's not running for president, at least not yet. The Nebraska Republican is delaying a formal decision until later. He adds that he's "leaving his options open."

And authorities in Anaheim, California suspect arson caused a scorching wildfire. They say a stolen car was set ablaze and ignited nearby brush. More than 2,000 acres have gone up in smoke. The blaze is now about 80 percent contained.

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

President Bush is not feeling a lot of love in Latin America. At every step of the way, he's being stalked by a dogged pursuer -- his regional rival, Venezuela's President Hugo Chavez.

Let's turn to our State Department correspondent, Zain Verjee -- Zain.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, it's a battle of ideas and egos, all for the hearts and minds of Latin America.

(BEGIN VIDEO TAPE)

VERJEE (voice-over): President Bush had stiff competition -- Hugo Chavez. The Venezuelan leader is roaring through Latin America, a counter-tour to the president's trip. He's trashing President Bush, shouting: "Gringo, go home!" and grabbing the headlines.

DAN RESTREPO, CENTER FOR AMERICAN PROGRESS: Chavez is a showman. He's won in the sense that he's injected himself into this story.

VERJEE: The Bush administration isn't taking the bait. It's focused on the message.

TOM CASEY, STATE DEPARTMENT SPOKESMAN: The important thing for us is that the president move forward, have a good -- have a good trip and be able to work on our positive agenda for the hemisphere.

VERJEE: Chavez calls the U.S. capitalist agenda the road to hell and he's courting socialist leaders in the region to counter Bush's influence. While President Bush was talking trade and aide with close ally, Colombian President Alvaro Uribe Velez, Chavez was cozying up to U.S. foe Daniel Ortega in Nicaragua. As President Bush flew to Guatemala, another jab by Chavez. Chavez popped up in Bolivia with leftist leader Evo Morales, giving flood victims 10 times more aid than the U.S., and wearing the wreath of cocoa leaves, which Bush says fuels the drug trade.

Experts say one-upsmanship won't win the battle of ideas in Latin America.

UNIDENTIFIED MALE: The long-term consequences really depend on what the president does when he comes home.

(END VIDEOTAPE)

VERJEE: President Bush, Wolf, is very unpopular in Latin America, so the U.S. is hoping by a trip like this, the U.S. can help improve its image -- Wolf.

BLITZER: Why is he so unpopular?

VERJEE: Well, mainly over Iraq. That's one reason. The other reason is that many Latin-Americans have felt that the U.S. treats their region with indifference. And it's not really been a high priority, so they're a little bit resentful of that -- Wolf.

BLITZER: All right, Zain. Thank you for that.

Zain Verjee reporting from the State Department.

From the firing of eight federal prosecutors, to illegal snooping by the FBI, the attorney general of the United States, Alberto Gonzales, is now feeling the heat.

Let's get specifics from our justice correspondent, Kelli Arena -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Wolf, the calls are getting louder with calls for the attorney general's resignation. The bottom-line allegation here, that the Justice Department has become too political to actually meet out any justice.

(BEGIN VIDEOTAPE)

ARENA (voice over): Some senior Democrats say justice would be better served if Alberto Gonzales resigned as attorney general.

SEN. JOSEPH BIDEN (D), DELAWARE: He's got some real problems here. There's very little credibility in the Justice Department right now.

ARENA: The rumblings of discontent go all the way back to memos crafted while Gonzales was White House counsel. Memos that some say condone torture. Then, controversies over civil liberties, from secret wiretaps to charges of abuse under the Patriot Act.

But it's the allegation that Gonzales fired eight U.S. attorneys for not doing the administration's bidding that has the Democratic leadership all riled up. Gonzales has repeatedly denied political motivations.

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: I want to reassure the American people that we in no way have made decisions to politicize these offices.

ARENA: His supporters say it wouldn't be possible anyway.

RICHARD CULLEN, FMR. U.S. ATTORNEY: Every single U.S. Attorney's Office is run and manned by career professionals who do not care one wit who is in power in the White House.

ARENA: Still, many Democrats aren't buying it. They see a pattern of political behavior under Gonzales and his predecessor, John Ashcroft, citing a study that shows U.S. attorneys have been targeting Democrats more than Republicans.

The study shows that between 2001 and 2006, 79 percent of investigations or indictments of public officials were directed against Democrats. Just 18 percent against Republicans.

JOHN CRAGAN, STUDY CO-AUTHOR: Our research can't prove motive. You know, our research doesn't get inside of Attorney General Gonzales' head. But the statistics point out that it's pretty likely that this was intentional.

(END VIDEOTAPE)

ARENA: Now, intentional or not, Democrats are looking for payback and Gonzales' head. Now, Gonzales has said that he will one day return to Texas, but there's no indication he's packing bags just yet -- Wolf.

BLITZER: All right. Thanks for that.

Kelli Arena reporting.

Still ahead, Fred Thompson's played a president in the movies. Our Mary Snow is standing by to take a close look at the possibility he'll run for office in real life.

Also, we're going to have the story of the health scare that put President Bush's father in the hospital.

All that coming up.

You're in THE SITUATION ROOM. (COMMERCIAL BREAK)

BLITZER: In New York City, tips are literally pouring in to the police department about the mugger who beat up two elderly women. One of those attacks was actually caught on videotape. You can see it behind me.

In this attack, the victim was 101 years old. The other attack, the victim was 85 years old. They're inspiring everyone with their courage.

Let's go to CNN's Carol Costello. She's in New York following this horrific story -- Carol.

CAROL COSTELLO, CNN CORRESPONDENT: All those tips pouring in to the police department, and still no monster in custody. Police just can't track this guy down, even though he was caught on tape and riding a pink bicycle.

(BEGIN VIDEOTAPE)

COSTELLO (voice over): Rose Morat, a spry 101 years old, is one amazing lady, fighting off a mugger one day, becoming the talk of the nation the next. On "The View" it was clear, Ms. Morat is America's latest lesson in courage.

ROSIE O'DONNELL, "THE VIEW": Rose, if you're watching this, we love and adore you. We want you to come and be a co-host.

Would you, Rose?

COSTELLO: Morat, now a minor star, is avoiding the media while millions marvel at her moxy. Take a look at the surveillance tape. Morat was on her way to church when a young man attacked her, punching her in the face, stealing her purse.

ROSE MORAT, ATTACKED BY MUGGER: I'm 101 years old. How are you going to run after a mugger?

COSTELLO: Instead, she reached for her purse, and the mugger knocked her off her walker.

MORAT: I got a little angry, you know. And I said, "Oh, that so and so. I hope you get caught."

COSTELLO: She was not the only victim that day. Police say the same man attacked 85-year-old Solange Elezee, who has Parkinson's Disease, as she came home from the grocery store. The mugger followed her to her apartment door.

SOLANGE ELEZEE, ATTACKED BY MUGGER: I'm closing my door, and he pushed me, closed the door, began to beat me on my face, give me -- oh. And then he say, "I'll get you."

COSTELLO: He got away with $45 and Elezee's wedding ring, one she'd worn for 60 years. It's the kind of thuggery that lights up the phones at the police station. The commissioner alone has received more than 1,000 calls.

HELEN MARSHALL, QUEENS BOROUGH PRESIDENT: Every person that talks to me stops me and says, "Marshall, I wish I could get my hands on that guy. Pick on me. I'm his size." You know, that kind of thing. People are very outraged about it.

COSTELLO: So, take another look. If you know him, call New York City police.

(END VIDEOTAPE)

COSTELLO: Tough to see exactly what he looks like, even though he was caught on tape.

By the way, Rose suffered a fractured cheekbone, Solange a split lip. Both were checked out in the hospital, and, Wolf, both are at home tonight and they're doing fine.

BLITZER: I suspect people in New York are literally outraged over this videotape, this story, knowing New Yorkers as I do.

COSTELLO: Yes, they do. They want to do many different things to the suspect.

BLITZER: Well, let's hope he's caught very soon. Thanks very much, Carol, for that.

Still ahead, welcome to Hazleton, Pennsylvania. Unless you're an illegal immigrant. It's one of several local jurisdictions cracking down on illegal immigration. Jack Cafferty wants to know if you think that's a good idea. He'll be back with your e-mail.

And a health scare for the first President Bush. We'll have an update for you on what happened.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Welcome back.

The race for the White House taking some twists and turns. CNN's new poll by the Opinion Research Corporation shows former New York City mayor Rudy Giuliani leading Senator John McCain among registered Republicans. Former House speaker Newt Gingrich and Mitt Romney are both tied behind them.

There's one Republican who's not an official contender yet, but that could change. Buzz is growing about a former U.S. senator, "Law & Order's" Fred Thompson.

Let's turn to CNN's Mary Snow. She's watching this story for us from New York -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, Wolf, he could be the wildcard candidate. Fred Thompson says he's considering running in '08. Some Republicans say his mix of Hollywood and Washington could prove powerful.

(BEGIN VIDEOTAPE)

SNOW (voice over): Fred Thompson looks comfortable in the Oval Office.

FRED THOMPSON, ACTOR, "LAST BEST CHANCE": Watch this. I don't want us sitting on our butts if something's about to happen.

UNIDENTIFIED MALE, "LAST BEST CHANCE": Absolutely, sir.

THOMPSON: Anything else I should know?

SNOW: But this is just fiction. Or is it?

SCOTT REED, REPUBLICAN STRATEGIST: And there's a lot of tongues wagging today.

SNOW: Republican strategists say conservatives are particularly interested in Thompson's possible presidential run. So is conservative talk radio's Rush Limbaugh.

RUSH LIMBAUGH, RADIO TALK SHOW HOST: He is thought to be authoritative, a lot of presence, so forth and so on. So it gets -- it gets more and more interesting out there.

SNOW: Thompson, a former Senate from Tennessee who made a name for himself in the 1970s as the co-counsel for the Senate committee investigating Watergate, says voters may be looking for another option in the Republican field, currently dominated by Senator John McCain, Rudy Giuliani and Mitt Romney.

THOMPSON: I think they're looking for maybe something a little different in politics nowadays. I think there's a lot of cynicism out there, unfortunately.

SNOW: Some Republican strategists see Thompson's conservatism as the main draw. He's against abortion, opposes same-sex marriage and gun control, and supports President Bush's increasing troops in Iraq, even supports a pardon for Scooter Libby.

REED: Well, there's a feeling right now that there's a void, that there's something missing in the race. And Fred Thompson could fill that void, because he has these amazing communicating skills. Almost Reaganesque.

SNOW: And just like Ronald Reagan, Thompson has made a name for himself in acting on TV shows such as "Law & Order".

THOMPSON: In this job, never give anybody the benefit of the doubt.

SNOW: And films such as "Die Hard 2".

BRUCE WILLIS, ACTOR, "DIE HARD 2": Do things just get better or worse? SNOW: Strategists say his name recognition, coupled with the fact he's been visibly out of Washington, could work to his benefit.

(END VIDEOTAPE)

SNOW: But working against the former senator, his bank account. Strategists say the longer he waits to announce his candidacy, the harder it may be to raise the millions of dollars he'll need to compete with candidates already tapping Republican donors -- Wolf.

BLITZER: Does he have any money raised yet in terms of political contributions?

SNOW: Really not. So he'll be starting from scratch, and that is going to be putting him in a tough spot.

BLITZER: He's competing with the millions and millions that the other guys already have. But I suspect if he throws his hat in the ring, the money will come, at least a lot of money.

Mary, thanks very much for that.

(NEWSBREAK)

BLITZER: George H.W. Bush's chief of staff says the former president of the United States is back to 100 percent after being rushed to the hospital yesterday. The 82-year-old fainted while playing golf in Palm Springs, California, yesterday. It was 93 degrees, the heat at that time.

His chief of staff tells CNN he was treated for dehydration and was discharged this morning. He's expected to make a previously scheduled speech in Los Angeles tonight.

We wish him only the best, of course.

Up next, stunning new information about the communications breakdown in the aftermath of the deadly tornadoes that clobbered the city of Enterprise, Alabama. Carol Costello has that story. That's coming up.

And then, should local governments have jurisdiction over illegal immigration? Jack Cafferty with your e-mail.

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

(COMMERCIAL BREAK)

BLITZER: Still daylight here in Washington, D.C.

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

In Pakistan, lawyers throw stones during an anti-government rally, boycotting court proceeding against the country's top judge. In Boston's Faneuil Hall marketplace, a circus performer walks on a tightrope.

In Guatemala, President Bush carries a box of produce during a visit to a packing station.

And in Madrid, a model wears a creation made out of rolls -- rolls, during the international bakery, pastry and related industry showed.

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

Carol Costello is joining us now for another closer look at some other important stories.

(NEWSBREAK)

BLITZER: Let's check in with Jack Cafferty to see what he's got in "The Cafferty File."

Hi, Jack.

JACK CAFFERTY, CNN ANCHOR: A landmark case going on in Hazleton, Pennsylvania.

The question this hour is: Should local governments have jurisdiction over illegal aliens?

Dave in Indiana writes, "Local governments should be guided by state statutes concerning driver's licensing and voter registration. Aliens who use illegal-obtained IDs to operate in the U.S. are violating state laws and could be held legally accountable in a more consistent and comprehensive manner from a state-driven legal framework."

Alan in Minnesota, "I'm in favor of coming down hard on those who hire illegals. They know full well what they're doing and they don't care, because they know there's little chance they'll face any sanction. To be truly effective, though, it would have to be a federal effort and best done under the done under the RICO guidelines. A little asset forfeiture, and the next guy definitely would think twice."

Jeff in Carmel, New York, "Absolutely not. We need to agree on a national basis. An immigrant can't be legal in one town and be illegal in another."

Rick in Arizona, "As a retired police officer from Arizona, I know the damage and criminal activity, economic chaos, and vehicle accidents and injuries that are caused by illegal aliens. Already, police officers have the ability and duty to hold illegals for immigration authorities when they are arrested for crimes. But day after day, these criminals are released back into the community."

George in Pottsville, Pennsylvania, "Local government is the best way to handle illegal immigration. Mayor Lou Barletta of Hazleton, PA., has shown the rest of the country how to lead the way in taking care of this cancer."

"My ancestors came here legally with a third grade education. They learned how to speak the language and they became proud U.S. citizens. There was no 'Press 2 for Greek' when my grandfathers came to the United States."

Linda in Texas, "I can't understand how the ACLU can file a lawsuit against a city trying to protect its legal citizens. Why isn't the ACLU filing suit against the Bush administration for not protecting U.S. citizens? Every day we get closer to becoming one big third world country."

And we've got time. I'll do one more.

Sara in Florida, "Local governments should have control over illegal immigrants. This would give local residents the opportunity to push pressure on their elected officials to deal with the problem and not allow elected officials to hide in Washington and do nothing."

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

And Wolf, I suspect my friend Lou Dobbs will have more to say on this trial in Hazleton, PA., coming up in the next hour.

BLITZER: He's got the mayor of Hazleton will be one of his guests. We'll be watching.

Thanks very much for that, Jack. We'll see you back here in one hour.

Let's go to Lou in New York.

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