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THE SITUATION ROOM

Is White House Getting Ready to Talk to Iran?; Interview With Mike Gravel

Aired April 30, 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: Happening now, new warnings of terror attacks on the rise. The Bush administration blaming insurgents in Iraq and the government in Iran for fueling the danger.
Is the White House ready to talk to Iran anyway?

Plus, the largely unknown scene stealer of the first presidential debate. I'll ask Democrat Mike Gravel about his provocative performance and why he didn't hesitate to challenge his far more famous rivals.

And the woman who has Washington on edge -- the alleged D.C. madam appearing in court today and warning more of her clients' names may soon become public.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

We begin with startling new statistics about terrorism around the world. The State Department due to hold a briefing this hour on its brand new report. It finds the number of people killed in what the U.S. government defines at terror attacks, that number rose a whopping 40 percent last year.

Our Brian Todd has more on this grim new snapshot of the war on terror -- Brian, update our viewers on what we are hearing about this increase and the reasons behind it.

BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, the report, as you mentioned, will be released any minute now. It does have some startling figures. According to the Associated Press, the State Department is reporting tonight that terrorist attacks increased about 25 percent last year and killed more than 20,000 people, most of them in Iraq. So Iraq apparently is the reason for the big increase in the number of attacks and the number of deaths.

The A.P. says the report will cite "a dangerous strategic shift in tactics illustrated by a chemical weapons attack in Sadr City in November."

The report is from the National Counter-Terrorism Center. And, as in previous years, according to the A.P. it reportedly identifies Iran as the most active state sponsor of terror, this time accusing Tehran of helping to destabilize Iraq. Iranian officials, as you know, Wolf, have consistently denied aiding the Iraqi insurgents -- Wolf.

BLITZER: All right, we'll stand by for this report as it emerges this hour. We'll update our viewers with more information.

Brian, thank you.

And while the U.S. government does consider Iran a sponsor of terror, in the eyes of the Bush administration that is a serious, serious charge. Still, the president of the United States is leaving the door open to a new, high level encounter with the government in Tehran.

Let's go to our White House correspondent, Ed Henry -- Ed, the president spoke about Condoleezza Rice. She's heading off to Sharm- El-Sheikh for a regional conference. The Iranian foreign minister will be there and they may actually have a face-to-face encounter.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf. Potentially, a huge development. The president opening that door, as you said, today. This would be one of the first real bits of bilateral talks between the U.S. and Iran since the hostage crisis of 1979.

Now, the president opened that door today in reference to this regional conference. He noted that Secretary Rice could end up talking with her counterpart from Iran in Egypt. The administration, of course, the significance here, has repeatedly refused direct talks with Iran. It has not wanted to directly engage them. And that's undoubtedly why the president tried ever so slightly to downplay this possibility.

(BEGIN VIDEO CLIP)

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Should the foreign minister of Iran bump into Condi Rice, Condi won't be rude. She's not a rude person. I'm sure she will be polite. But she'll also be firm in reminding this representative of the Iranian government that there's a better way forward for the Iranian people than isolation.

(END VIDEO CLIP)

HENRY: And U.S. officials also making crystal clear that these will not be lengthy negotiations or anything like that, that Secretary Rice would make it very clear to Iranian officials, as well, that they would have to suspend uranium enrichment before there's more substantive talks, that this would just be small talks, even if they happen.

Now, important to note, very, very rare for these kinds of talks between the U.S. and Iran. After 9/11, of course, there were some brief talks about dealing with Afghanistan and, also, early in the Bush administration, Secretary Powell sat next the his Iranian counterpart at a similar conference.

But this is very, very rare -- Wolf.

BLITZER: This is almost unprecedented given the history of U.S.- Iran relations.

It's interesting, though, Ed, yesterday when I spoke to the secretary of state and asked her about a possible meeting with her Iranian counterpart, she said if that happens, she's not ruling out, but she would only discuss regional issues, what's happening in Iraq and what Iran can do to ease that security crisis in Iraq.

She ruled out any discussions on uranium or the nuclear weapons dispute, saying that's an issue that will be discussed with -- with other outside parties, including the United Nations and the Europeans.

But today, the president said if they do have this encounter, they would, in fact -- she would raise the issue of Iran's alleged nuclear weapons program.

So there seemed to be a little disconnect between what the secretary of state said yesterday and what the president is saying today.

HENRY: Perhaps a little bit of dissonance. What U.S. officials are trying to point out is that as Secretary Rice noted yesterday, you're absolutely right, this is a regional conference dealing with the stability of Iraq. And the message -- the most important message from Secretary Rice to her Iranian counterpart would be stop meddling with Iran in terms of pushing weapons into Iraq.

But then, if they raise the nuclear issue, what she would say is suspend your uranium enrichment program and then have the U.N. and other bodies deal with it. They don't want to deal with that one-on- one -- Wolf.

BLITZER: Ed Henry at the White House.

We'll stay in touch with you.

Also today, President Bush is renewing and defending his plan to veto a war funding bill that includes a timetable for withdrawal from Iraq. But Mr. Bush also sounded a little bit more conciliatory toward Democrats as he looks ahead to what happens after his veto.

(BEGIN VIDEO CLIP)

BUSH: I look forward to working with members of both parties to get a bill that doesn't set artificial timetables and doesn't micromanage and gets the money to our troops. I believe that there's a lot of Democrats that understand that we need to get the money to troops, as soon as possible.

(END VIDEO CLIP)

BLITZER: All right, let's go to Dana Bash.

She's up on Capitol Hill. We heard what the president has to say.

What about the Democrats -- Dana?

What are they saying today?

DANA BASH, CNN CORRESPONDENT: Well, you know, I happened to be on the phone, Wolf, with a House Democratic leadership aide when the president was speaking this afternoon, who actually took note on the fact that it seemed as though the president was giving a more conciliatory tone in his presentation today of the debate back and forth between Democrats and the White House.

But just about an hour later, the Senate majority leader, Harry Reid, went to the Senate floor and slammed the president for refusing to sign into law the Democrats' plan, which, of course, would start bringing U.S. troops home from Iraq.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: We ask that he finally summon what I believe is the courage to admit he makes mistakes, has made mistakes here and take the steps that we propose to begin to heal the grave wounds that have been caused by this war. This bill gives him a path forward. We ask him to follow it.

(END VIDEO CLIP)

BASH: Now, this bill is still physically here on Capitol Hill. We have some new information about how Democrats plan to send it off to the White House. We're told that the House speaker, Nancy Pelosi, will have a ceremony before the cameras tomorrow afternoon, where she will be able to give one last pitch for the Democrats' plan, before they send it to the White House for the president's inevitable veto -- Wolf.

BLITZER: Lots of posturing on both ends of Pennsylvania Avenue.

But what are you hearing when all the dust settles, Dana, about a possible compromise?

BASH: Well, what we're hearing from both sides here on Capitol Hill, Republicans and Democrats, is that benchmarks for Iraqis to meet is the most likely point of consensus, point of compromise. But the open question is what the consequences would be in any legislation for Iraqis and also for U.S. policy in Iraq if the Iraqis failed to meet those specific deadlines or benchmarks, so to speak.

Now, that is going to be the debate, Wolf, going on up and down Pennsylvania Avenue for the next several weeks.

We understand -- CNN is told that one senior Republican is floating the idea of putting in a remark for U.S. troops to come home if the Iraqis don't meet those benchmarks, but giving the president a waiver in order to say no, that's not going to happen.

That's just one idea. There are meetings going on all day long, as we speak, between Republicans and Democrats alike on this -- Wolf.

BLITZER: And the backdrop, unfortunately, in Iraq, a lot more deaths -- U.S. troops dying, a lot of Iraqis killed in terrorist attacks today. That's hovering over all of this, as well.

BASH: Absolutely.

BLITZER: We're going to have a full report from Iraq coming up.

Thanks, Dana, for that.

Let's go to Jack Cafferty.

He's joining us from New York with The Cafferty File -- hi, Jack.

JACK CAFFERTY, CNN CORRESPONDENT: Wolf, apparently things are going so well in Iraq these days, that the parliament there is planning to take two months off this summer. Needless to say, that's not sitting too well with a lot of people. On a recent visit to Iraq, Defense Secretary Robert Gates told the Panama, Nouri Al-Maliki, that lawmakers should not take July and August off until they pass key measures, including laws on de-Baathification, local elections and oil sharing.

Republican Senator John Warner said a two month break would "send a very bad signal to the world that they don't have the resolve that matches the resolve of the brave troops that are fighting in the battle today."

And he's right.

Fourteen U.S. troops died in Iraq in the last three days. That brings the death toll for the month of April to 104, one of the bloodiest months of the war. Three thousand, three hundred fifty-one American combat deaths since the start of the war.

We're being played for fools here. Our young people fight and die in your country every day so supposedly you can have freedom and a representative democracy one day.

And you show your gratitude by taking two months off?

Yet President Bush insists staying in this godforsaken place is a good idea.

Well, you know what?

It's way past time to tell Al-Maliki and his lads we're out of here. You figure it out.

Here's the question -- should the Iraqi parliament take a two month summer vacation?

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

BLITZER: Thanks, Jack, for that.

Jack Cafferty in New York.

Coming up, he was the life of the party in the Democrats' first debate, speaking his mind, taking on his more famous rivals. Coming up next, the former U.S. senator and Democratic presidential hopeful Mike Gravel. He'll join us right here in THE SITUATION ROOM.

Plus, he's one of the most outspoken members of Congress and now John Murtha actually using what's called the "I word" -- impeachment -- as a potential option. We're going to tell you precisely what the congressman is saying.

And thanks to Arnold Schwarzenegger, California is becoming a major player once again in presidential politics. We're going to go live to the Golden State to find out why.

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

(COMMERCIAL BREAK)

BLITZER: You may never have heard of Mike Gravel, let alone know that he's a presidential candidate. But more people are aware of the former senator now than they were earlier last week. That's because Gravel frequently upstaged fellow Democrats during the first 2008 presidential debate.

Listen to some of the zingers Gravel aimed at his far better known rivals.

(BEGIN VIDEO CLIP FROM DEMOCRATIC PRESIDENTIAL DEBATE, COURTESY MSNBC)

MIKE GRAVEL (D), PRESIDENTIAL CANDIDATE: And I've got to tell you, after standing up with them, some of these people frighten me. They frighten me.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP FROM DEMOCRATIC PRESIDENTIAL DEBATE, COURTESY MSNBC)

GRAVEL: Well, I'm the senior statesman on here and I was beginning to feel like a potted plant standing over here.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP FROM DEMOCRATIC PRESIDENTIAL DEBATE, COURTESY MSNBC)

GRAVEL: Who the hell are we going to nuke?

SEN. BARACK OBAMA (D), ILLINOIS: Senator...

GRAVEL: Tell me, Barack. Barack, who's...

OBAMA: I'm not planning to nuke any...

GRAVEL: ... who are you wanting to nuke?

OBAMA: I'm not planning to nuke anybody right now, Mike. I promise you.

GRAVEL: Good.

(END VIDEO CLIP)

BLITZER: And joining us now, the man who made those comments, former Democratic Senator Mike Gravel. He's a Democratic presidential candidate.

Senator, thanks for coming into THE SITUATION ROOM.

GRAVEL: Thank you for having me, Wolf.

BLITZER: Are you surprised by the reaction to some of those sound bites from the other night?

GRAVEL: Yes. In fact, it was like a juggernaut of reaction coming at us -- very pleasant, I must say, because I was an unknown to a lot of people.

Now, back in '71 and '72, I was not an unknown, because Nixon was chasing me up the ladder to the Supreme Court.

BLITZER: I'm old enough to remember it.

GRAVEL: Yes.

But -- but, no, it was -- it's a pleasant surprise. People are reacting. We're raising more money. People are coming into the campaign. I personally feel I can win. But the key is, is to tell the people the truth. We've got a country that's got problems. And the tipping point could be '08.

BLITZER: All right, let's get into some of the specifics.

GRAVEL: OK.

BLITZER: Here's another clip of what you said last Thursday night. I want to play it and then I want you to get -- get some explanation.

(BEGIN VIDEO CLIP FROM DEMOCRATIC PRESIDENTIAL DEBATE, COURTESY MSNBC)

GRAVEL: We have no important enemies.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP FROM DEMOCRATIC PRESIDENTIAL DEBATE, COURTESY MSNBC)

GRAVEL: Who are we afraid of? Who are you afraid of, Brian?

I'm not.

(END VIDEO CLIP)

BLITZER: All right, I heard that. A lot of our viewers out there heard that. There are enemies the United States has -- al Qaeda. They hate us. That's an enemy.

GRAVEL: We make our enemies. That's the unfortunate part of it. If you as a person, you don't have enemies. You may have people that dislike you. But -- but if you go hate them, they're going to be your enemies. If you do things to them, they're going to be your enemies.

And so we have to approach world affairs as Americans equal to everybody else and treat them equally. And you'll find that we're not going to have as many enemies as we think we have.

BLITZER: But Osama bin Laden...

GRAVEL: He's a nut case and -- and if he could get snuffed out, no big deal. I won't miss him.

BLITZER: You'd be in favor of killing him?

GRAVEL: This is -- understand, understand -- this is power.

BLITZER: I want to read to you what George Tenet, the former CIA director, writes in his new book. He says: "I am convinced that this is where Osama bin Laden and his operatives desperately want to go. They understand that bombings by cars, trucks, trains and planes will get them some headlines, to be sure. But if they manage to set off a mushroom cloud, they will make history."

And he adds this: "I do know one thing in my gut -- al Qaeda is here and waiting."

That's a chilling -- chilling statement that they are patiently waiting, potentially, to unleash some sort of nuclear device in our country.

GRAVEL: It's my guess, also, that that's accurate and it's frightening.

And are we doing the right things to provide that that not happen?

I don't think so.

BLITZER: What -- what should we be doing?

GRAVEL: Well, we're -- our defense right now is set piece war -- putting people in the field. The whole terrorism issue can be addressed with intelligence and that's where the CIA doesn't do a good enough job. Covert intelligence and a global police action. War -- the minute they started a war, you're opening up the Pandora's box. Terrorism has been with us since the beginning of civilization. It'll be there a long time after we're gone. There's different types of terrorism. But al Qaeda is a serious situation and we have to treat it seriously. And I don't think all the devices that we're doing are doing that.

BLITZER: Do you agree with your fellow Democratic candidate, Dennis Kucinich, that it's time to impeach the vice president of the United States?

GRAVEL: No, I don't. I don't. I think that we -- first off, it's not going anywhere.

BLITZER: His impeachment articles?

GRAVEL: It's not going anywhere. You know, Pelosi is in charge of the House. Conyers, I've met with. I have my own take on certain strategies that should be done and I'll be releasing that in a month, a piece of legislation.

I think that they're not good strategists right at the moment.

BLITZER: If Hillary Clinton, who is the frontrunner right now in all of the polls, gets the Democratic presidential nomination, could you support her?

GRAVEL: I've stated, the first thing, right at the Democratic winter meeting, that I do not feel -- and I don't want to address the support or not support -- I do not feel that a person who voted for the war -- because that was a judgment call -- is qualified to be president of the United States.

Fifty million Americans made an opposite decision. Fifty million Americans made -- had better judgment than Hillary did. That doesn't make her a bad person. It's just that she doesn't have a judgment, in my mind, to be president.

BLITZER: Because John Edwards, when he was in the Senate, voted for that resolution, as well. So did Joe Biden and Chris Dodd and...

GRAVEL: Well, this sort of cleans up the -- cleans up the...

BLITZER: Well, Barack Obama was not in the Senate, but he did oppose it.

GRAVEL: That -- fine. Fine. And -- but, you know, Barack Obama may have some other holes some place.

BLITZER: I'm trying to find out, because you're still a long shot to be -- to get the presidential nomination.

GRAVEL: Oh, yes. That's right.

BLITZER: You're not very well known right now. If one of these other frontrunners gets the nomination, will you support them? GRAVEL: I will be the nominee and, Wolf, you're helping that happen right now.

BLITZER: Because you're on television?

GRAVEL: Correct.

BLITZER: And explain the no -- the statement that you made right at the beginning of this interview when you said "they frighten me."

GRAVEL: Oh, and, hey, very, very serious. Very serious. They have all made statements that, with respect to Iran, everything is on the table.

BLITZER: No options are...

GRAVEL: That's code...

BLITZER: ... off the table?

GRAVEL: That's code for nukes. Now, thank god, Sy Hersh and some intelligence officer had the moral conscience to feed him the information to expose the plans of possibly nuking Iran.

Now, their -- they're going for nuclear devices because they're afraid of us and they know that the only defense you can have is to get nukes. That's how the whole club started.

Why do we have nuclear devices?

For defense. And it's wrong. We've got so many, we could nuke everybody in the world several times. One -- one Trident submarine can hold the entire world hostage.

BLITZER: So you -- you're afraid of all these Democratic candidates, is that what you're saying?

GRAVEL: Well, I'm afraid that they're not using good judgment because there's nobody to nuke.

Even -- even if al Qaeda dropped a nuclear device in a suitcase somewheres, where are you going to go nuke? Are you going to nuke half of Pakistan?

You know, this is what people don't realize. When you're talking about -- and we've started. This administration, in part, the last administration, we started an arms race in space. We've started -- we're beginning an arms race with China and Russia right now.

Putin is right -- what in god's name are we putting devices in Czech and in Poland?

BLITZER: A missile defense system?

GRAVEL: Well, and we're saying it's because of Iran. My god, we could have a submarine in the Persian Gulf and destroy all of Iran. So this -- these -- it's a race. And Putin, they feel insecure.

BLITZER: So if you're president of the United States, what do you do? You'll...

GRAVEL: They'll be out.

BLITZER: You destroy all U.S. nukes?

GRAVEL: No, no. No, no. No, no. I am not foolish. No. We'd bring it down. We'd try to give example to the rest of the world that the world has to get off of nukes. But we could -- we could cut our nuke arsenal in half, unilaterally, and it wouldn't affect one bit our capability to defend ourselves.

BLITZER: Former Senator Mike Gravel, who wants to be president of the United States.

Thanks for coming in.

GRAVEL: Wolf, thank you for having me.

Sincerely so.

BLITZER: Six candidates now plan to attend the next big Democratic presidential debate. That's the one sponsored by CNN and WMUR TV in New Hampshire and the "New Hampshire Union Leader" on June 3rd in Manchester, New Hampshire. John Edwards, Joe Biden, Bill Richardson, Chris Dodd, Dennis Kucinich, Mike Gravel -- they have all accepted our invitation. We're still waiting for a response from Hillary Clinton and Barack Obama.

The Republican debate -- all of the Republican candidates will attend that debate in New Hampshire. That's on June 5th.

Coming up, the firestorm over former CIA Director George Tenet's new book.

Why is the White House staying relatively quiet?

I'll ask Paul Begala and J.C. Watts. They're standing by for today's Strategy Session.

Up next, though, is it getting easier and easier for a thief to steal your identity?

We'll get the situation online.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring stories incoming into THE SITUATION ROOM right now -- Carol, what have you got?

CAROL COSTELLO, CNN CORRESPONDENT: A couple of things, Wolf. President Bush is standing by his man. Today, the president said World Bank President Paul Wolfowitz "ought to stay." Of course, the president was talking about those calls for Wolfowitz to resign amid a controversy concerning his girlfriend.

At issue, Wolfowitz giving his girlfriend a hefty pay raise and a promotion. Today, Wolfowitz said he's the subject of a smear campaign.

Jon Corzine leaves the hospital with mending bones and a heavy heart. The New Jersey governor was released from the hospital today, some three weeks after a car crash. Corzine says he feels blessed and he asked for forgiveness, apparently admitting he was not wearing his seatbelt at the time of the crash.

And health news regarding another politician, South Dakota's Democratic Senator Tim Johnson. Today, his office says he was discharged from rehab from a Washington hospital this past Friday. A statement says he is spending time with family at home. Just over four months ago, the senator suffered a brain hemorrhage.

That's a look at the headlines right now -- Wolf.

BLITZER: Carol, thanks very much.

Coming up next, she's the woman that has at least some of Washington on edge. The alleged D.C. madam appearing in court today.

But will she name names from her extensive client list?

Plus, a top Democrat using the so-called "I word." We're going to tell you what Congressman John Murtha's actually saying about impeachment.

Stick around. You're in THE SITUATION ROOM.

(BEGIN VIDEO CLIP)

REP. JOHN MURTHA (D), PENNSYLVANIA: I can't hear you.

QUESTION: I (UNINTELLIGIBLE).

MURTHA: OK.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Happening now, Iraq exploding with death. As this month draws to a close, it's shaping up to be one of the deadliest since the war began. We're standing by to take a closer look.

Also, hundreds of millions of dollars wasted in Iraq -- a new report takes a realistic look at money intended to do good in Iraq and shows some efforts have gone very, very wrong. And after being found guilty, five Britons have been jailed for life. They're accused of plotting al Qaeda-inspired bomb attacks across Britain.

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

Add at least one more name to the list. The number of people critical of President Bush may be many, but those actually talking about removing him from office relatively few. And, yet, their number appears -- appears -- to be growing.

Joining us now, our congressional correspondent Andrea Koppel. She's on the Hill.

There is this word called impeachment, and it's generating lots of commotion, especially today, Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: That's right, Wolf.

Pennsylvania Democrat John Murtha sure knows how to grab the headlines. And he did just that again over the weekend. But they weren't the kind of headlines that Democratic leaders want.

(BEGIN VIDEO CLIP)

KOPPEL (voice-over): For the second time in a week, Democrats were using the I-word.

(BEGIN VIDEO CLIP, "FACE THE NATION")

BOB SCHIEFFER, HOST: Are you seriously talking about contemplating an impeachment of this president, Congressman?

REP. JOHN MURTHA (D), PENNSYLVANIA: Bob, what I'm saying, there's four ways to influence a president.

SCHIEFFER: And that's one of them?

MURTHA: And one of them's impeachment.

(END VIDEO CLIP)

KOPPEL: Only days earlier, Ohio Democrat Dennis Kucinich, who is also running for president, held a news conference and called for the impeachment of the vice president.

REP. DENNIS KUCINICH (D-OH), PRESIDENTIAL CANDIDATE: Because, if we were to start with the president, and pursue articles of impeachment, Mr. Cheney would then become president.

KOPPEL: Other Democrats were quick to dismiss such a move out of hand.

REP. JANE HARMAN (D), CALIFORNIA: I think very few people in Congress are talking about impeachment. KOPPEL: But the timing of any talk of impeachment muddies the message for Democratic leaders, eager to keep the focus on their veto showdown with President Bush over the Iraq funding bill, which calls for troops to be out of Iraq by this time next year.

Just listen to the third-ranking House Republican.

REP. ADAM PUTNAM (R), FLORIDA:I am shocked that John Murtha would put himself as an ally of Kucinich on this impeachment idea. It's time that we stop playing to the far left base of -- that the Democratic majority is speaking to.

KOPPEL: For Murtha, a top lieutenant of Speaker Nancy Pelosi, this isn't the first time he's drawn attention to himself at a politically sensitive moment.

In February, on the eve of the House vote opposing the president's plan to send more troops to Iraq, Murtha gave an interview to an anti-war group, threatening to place conditions on war funding.

(END VIDEOTAPE)

KOPPEL: Now, that interview gave Republicans a fresh round of ammunition, and allowed them to attack Democrats for their alleged -- quote -- "slow-bleed strategy" to cut off funds for U.S. troops.

Now, Democratic leaders later privately admitted that Murtha's comments cost them more than just a few Republican votes -- Wolf.

BLITZER: Is it all -- at all realistic that the impeachment move in the House is really going to get off the ground?

KOPPEL: Not really. And, certainly, we have heard the House speaker, Nancy Pelosi, herself say that it's not on the table -- Wolf.

BLITZER: Andrea on the Hill for us, thank you.

Other stories we're following here in Washington: Deborah Jeane Palfrey suggests that, one way or another, someone should pay. Palfrey is the so-called Washington, D.C., madam. And she faces charges for allegedly running a prostitution ring. She needs money and help to defend herself. So, she's partly relying on records that could ruin reputations and expose some dark secrets.

Our Jim Acosta is joining us. Jim has been following this story.

She was in court today. What did we learn, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Well, we didn't learn a whole lot. And I think people were wondering if there were going to be some more shoes dropping this afternoon.

Washington was all ears this morning, Wolf. But we didn't hear any new names from alleged D.C. madam Deborah Palfrey. She appeared in court this morning to request government funds for her defense against charges she ran a prostitution ring in the D.C. area. Palfrey claims it was a legal escort service. And, unless prosecutors drop their case, she is threatening to release reams of phone records that can embarrass what she describes as high-level officials in this town.

Last Friday, a top secretary of state official, Randall Tobias, for personal reasons, after confirming to ABC News that, while he was one of Palfrey's clients, he had only received massages from her service. Palfrey says that she wishes that revelation had surfaced earlier, because, she says, it would have helped her case.

(BEGIN VIDEO CLIP)

DEBORAH JEANE PALFREY, FORMER ESCORT SERVICE OWNER: I am very dismayed, however, by Mr. Tobias' refusal to come forward until now with this extremely valuable exculpatory evidence.

Had he done so earlier, along with the many, many others who have used my company's services throughout the years, I most likely would not be in my current predicament.

(END VIDEO CLIP)

ACOSTA: And the judge in this case denied Palfrey's request for government funds for her defense, but said she could have the services of a public defender. No word yet when Palfrey will be back in court -- Wolf.

BLITZER: What is the president of the United States saying about Randall Tobias, the former deputy secretary over at the State Department?

ACOSTA: Well, on his first day back from another bout from cancer, White House Press Secretary Tony Snow was asked about this at the morning gaggle, an off -- an on-the-record session with reporters there in the press room. And he said that the president was concerned about this, that he is saddened by Tobias' decision to resign, but he feels it is the right decision, considering the circumstances -- Wolf.

BLITZER: Jim Acosta for us here in Washington -- thanks, Jim.

When the former USAID chief Randall Tobias abruptly resigned on Friday, after being linked to the alleged D.C. madam scandal, the government quickly scrubbed his official biography from the Web.

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

What else are we learning about Tobias' high-profile career?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, online records show that Tobias was a longtime contributor to George Bush and to the Republican Party.

After a career at AT&T and then as chairman and CEO of the pharmaceutical company Eli Lilly, Tobias was nominated by the president in 2003 to be global AIDS coordinator, a role that carried the rank of ambassador and answered to the secretary of state.

He subsequently became administrator of the U.S. Agency for International Development. A December poll of USAID employees by the American Foreign Service Association shows he wasn't popular. Less than a third of employees thought he was doing a good job in that position, less than a third of employees polled.

The USAID Web site shows the current administrator as blank -- Wolf.

BLITZER: Abbi, thank you for that.

Coming up: Arnold Schwarzenegger and California's political clout. We are going to show you the ways the governor is helping to pump up his state's influence.

And I will ask the Republican Party chairman, Mel Martinez, about the GOP's supposedly uphill battle to hold on to the White House. Will the war in Iraq be the deciding factor?

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

(COMMERCIAL BREAK)

BLITZER: California has always had a good deal of political clout, but never quite on par with its massive size and huge population. But, as the 2008 presidential election season begins, that is changing, in large part because of a governor who knows something about muscle.

Our senior political analyst, Bill Schneider, is in Los Angeles.

We're seeing a different campaign unfolding in California this time around, Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: You bet. Just look what's happening here in California this week.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): For decades, California has been unhappy.

DARRY SRAGOW, DEMOCRATIC STRATEGIST: It's infuriated us for a long time that we don't get to have a bigger say in who our choice is for president.

SCHNEIDER: Now the state's moved its primary up. And, look, six Democrats showed up to address the California Democratic Convention. Ten candidates plan to show up at the first Republican debate on Thursday at the Reagan Library.

California has been called a political ATM machine. Candidates raise money here, but they don't spend it here. Democrats will need the right message for California. SRAGOW: We're the people who want change. We're the ones who are very dissatisfied. This state has never been a Bush state, not even close to a Bush state.

SCHNEIDER: Change?

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: California, if you want a new kind of politics, it's time to turn the page.

SCHNEIDER: But Bill Clinton carried California twice.

SRAGOW: There's a real fondness for -- for the Clintons in California, longstanding.

SCHNEIDER: On the Republican side, you would expect the governor to have a lot of influence.

SRAGOW: He's Arnold Schwarzenegger. I mean, he's the governor to begin with. But he's Arnold Schwarzenegger. He's bigger than life, whether you like him or don't like him.

SCHNEIDER: Schwarzenegger calls himself post-partisan, but only registered Republicans can vote in next year's Republican primary.

ALLAN HOFFENBLUM, REPUBLICAN STRATEGIST: It's up to the individual parties to determine whether they want independents to vote in their primary. Democrats said yes. Republicans said no.

SCHNEIDER: Moreover, the Republican presidential primary has different rules.

HOFFENBLUM: It's winner-take-all by congressional district, 53 congressional districts. Whoever gets the most votes gets three delegates.

SCHNEIDER: So, California's Republican primary is essentially 53 separate primaries, some in conservative farm districts, others in sleek coastal resorts.

(END VIDEOTAPE)

SCHNEIDER: In a state as diverse as California, that means a lot of Republicans could come out of the primary as winners -- Wolf.

BLITZER: California, we're going to be watching it very closely with you, Bill. Thank you.

A nonpartisan cause for celebration here in Washington today -- the White House press secretary, Tony Snow, is back at war, after five weeks off to undergo treatment for a recurrence of cancer. Reporters greeted Snow with applause. And the usually composed spokesman struggled to keep his emotions in check as he spoke of his gratitude.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: The support I have received from you and from my colleagues at the White House and people around the country have been an enormous source of strength. You can't -- there's no way to quantify it, but you feel it. You feel it in your heart.

And, in many ways, that may be the most important organ for recovery, to have the kind of spirit, and to realize that, in my case, I'm unbelievably lucky and unbelievably blessed. And I'm really happy to be back.

(END VIDEO CLIP)

BLITZER: Snow says doctors found some small cancers in the lining of his abdomen. He's scheduled to begin chemotherapy on Friday, and hopes to throw the cancer into remission and turn it into a chronic disease. We wish him, of course, only, only the best. And we're happy he's back on the job.

So, how closely is your bank guarding your personal financial information? Identity theft might be as easy as digging through the garbage.

Let's go to our Internet reporter, Jacki Schechner.

Jack, banks are being -- are they being as careful as they should be with our privacy?

JACKI SCHECHNER, CNN INTERNET REPORTER: They might not be.

What you are watching is a YouTube video that was taken of people digging through the trash outside of branches of Chase Bank in Manhattan, several different branches. And what they found were documents that had some sensitive information, names, addresses, Social Security numbers. These documents not shredded, just tossed in the trash and left curbside.

Now, this video was taken by a local chapter in Manhattan of the Service Employees International Union. And they posted it online just recently. They have an ongoing -- really, an ongoing beef with J.P. Morgan Chase, locally, with the contractors that the bank chooses to use for security. And, nationally, there problem is with their banking practices in general.

Now, they admitted to me today that identity theft is not their primary concern. But they figured a video like this might draw people's attention to their larger issues with J.P. Morgan Chase. And they're probably right.

We spoke to the bank today. And they say that they actually have policies in place that, at branches, you need to put documents into lock boxes. Those are then shredded. They are going to reaffirm their policies. But they say, Wolf, they really wish that the union had brought this video to them first, as opposed to just putting it online.

BLITZER: Jacki, thank you for that.

Up next in our "Strategy Session": Has the anti-war Democrat John Murtha taken the lead on the Democrats' next push?

(BEGIN VIDEO CLIP)

MURTHA: There's four ways to influence a president. One is public polls. Second is an election, which just happened. And Democrats were elected to take over. Third is impeachment. And fourth -- fourth in line is -- is the power of the purse.

(END VIDEO CLIP)

BLITZER: Is Murtha in line with his own party's leadership?

Tough words also coming in by George Tenet for the White House -- and the White House refusing to swing back all that hard. Is that good politics? We will talk about that. That's coming up with James Carville and J.C. Watts in our "Strategy Session."

We will be right back.

(COMMERCIAL BREAK)

BLITZER: In today's "Strategy Session": more talk of a presidential impeachment -- Democratic Congressman John Murtha joining the list of those at least talking about that. We're going to discuss that. But we're also going to discuss the new George Tenet book.

Joining us, our CNN political analysts -- James Carville is a Democratic strategist. J.C. Watts is a former Republican congressman from Oklahoma.

Listen to this little clip from George Tenet, who is out now promoting his new book. Listen to this.

(BEGIN VIDEO CLIP, "60 MINUTES")

GEORGE TENET, FORMER CIA DIRECTOR: People were inundated with data and operations, and they missed it. We're not trying to control information. We're not trying to intentionally withhold. Human beings made mistakes.

(END VIDEO CLIP)

BLITZER: He was on "60 Minutes." And he was talking about the failures to anticipate Osama bin Laden and al Qaeda leading up to 9/11.

What do you think about this whole uproar over George Tenet's allegations, charges that he's leveling?

JAMES CARVILLE, CNN POLITICAL ANALYST: Well, I mean, first of all, is, he's just put another guy -- from Tony Blair, to Colin Powell, to Dick Cheney, to Don Rumsfeld, to Condoleezza Rice, everybody that has touched this administration one way or another has been diminished, some a lot more than others.

And I think part of the thing -- at least give Tenet credit. He feels terrible about what he did. He feels terrible about what happened. Most of these people don't even express any remorse for it. So, I give him some credit for being out there, saying, I feel bad.

The CIA told the president on August 6 that bin Laden was determined to strike the United States. He went to Condoleezza Rice's office to say, please, we have got to do something. They said the entire system was blinking red the entire summer of 2001, and they couldn't get anybody's attention.

So, I mean, you are right. Tenet has been really hurt by this. He's been diminished. But at least he feels bad about it, which is better than other people.

BLITZER: J.C., what do you think?

J.C. WATTS, CNN POLITICAL ANALYST: Well, I think the operative words that George mentioned was: We made mistakes.

And I think members of the administration, they have said they made mistakes. But, based on the data they had to make the decisions that they had to make, they made the decision to pull the trigger. I don't think George Tenet -- I don't think he questions that. I don't think anybody questions that in the administration.

He said there was not enough discussion about whether or not to go to war. I think there was plenty of discussion whether or not to go to war. I think it was a lack of discussion -- discussion on post- toppling of Saddam Hussein. Should we have more troops?

(CROSSTALK)

BLITZER: He says -- he says that -- that was the case also.

(CROSSTALK)

BLITZER: But he -- but he also insists that there was not enough discussion. In fact, he says he didn't know of any meetings about the imminent threat from Saddam Hussein, that he represented what -- what he calls an imminent threat.

WATTS: Well, but, you know, I also heard over the last couple of days that he and Condi Rice, that they were not communicating. Maybe there were meetings.

You know, Wolf, it's going to be a lot of he said/she said. I understand, you know, George Tenet is a decent guy. And I am not questioning that. But, when things -- when books like this come out under these type of circumstances, when a Republican or a Democrat leave an administration, these books look self-serving.

BLITZER: He's got -- the criticism he's facing is that he is someone who had the ear of the president...

CARVILLE: Right.

BLITZER: ... almost every single day. CARVILLE: Right.

BLITZER: He briefed the president of the United States in the morning on overnight developments almost every day. So, you can talk to the president. You have spoken to presidents. You know, you have the ear of the president.

CARVILLE: Right. Right.

BLITZER: ... you can say whatever you want.

CARVILLE: It's a valid criticism.

I mean, he says -- if you told -- I mean, but they told the president. They went and they gave him the memo on August 6. And he says, well, you have covered your rear end. Now leave me alone. I'm on vacation.

They went by to see the national security adviser to the president. I think, and probably in Tenet's mind, they said every system was blinking red. The guy was in Texas the entire month of August, when they were telling him that this was coming. I mean, people had -- almost knew this, said almost to a certainty, we're getting ready to get hit.

Had people been on alert, had things -- had people been placed on alert, maybe they could have done something.

And, by the way, Tenet's book is just a validation of the hundreds of books that came out. This administration wanted to invade Iraq before anything had to do with 9/11, or Saddam Hussein...

(CROSSTALK)

CARVILLE: ... or weapons of mass destruction, any of that.

Every book that has come out, from Paul O'Neill, all the way through George Tenet, of people who were there, who served in the administration, all have the same story.

Maybe, if 30 people say you have something stuck between your teeth, you probably got something stuck between your teeth.

(CROSSTALK)

WATTS: There were -- you know, there were mistakes made. And I think it's even fair to say they missed it on August 6.

(CROSSTALK)

WATTS: But, James, we can also say, we missed it in 1993. We missed it in 1995, 1998, 2000. I mean, there's many instances that we can say we missed it, that we missed it. Republicans and Democrats both can say they missed it.

(CROSSTALK) CARVILLE: Right.

J.C., nobody sent 150,000 people into a war, and we're still stuck there going into the fifth year.

WATTS: But why do we keep...

(CROSSTALK)

CARVILLE: I mean, this is not -- it's one thing to say -- it's one thing to say somebody made a mistake.

This is not just a mistake. This is the most colossal disaster maybe, some people think, in U.S. history.

(CROSSTALK)

CARVILLE: But, certainly, it's one of the most colossal disasters we have ever had. This is not a mistake. This is a disaster. Some things are a mistake. Some things are disaster. This war is a disaster.

(CROSSTALK)

BLITZER: Go ahead.

WATTS: But, James, maybe we wouldn't have had to send 150,000 people into war had we dealt with it in 1992...

CARVILLE: We didn't. We didn't have to.

(CROSSTALK)

WATTS: .... had we dealt with it in 1995, had we dealt with it in 199...

CARVILLE: J.C...

WATTS: We have had many instances to raise our conscience level that, hey, something is wrong out there. And we kept kicking that can down the street, kicking it down the street, and not dealing with it.

(CROSSTALK)

CARVILLE: We never had to invade Iraq. It's not a mistake. It's a disaster. There's a difference between the two.

(CROSSTALK)

WATTS: And there's a difference of opinion, obviously.

BLITZER: A quick question on Murtha using the impeachment word yesterday -- what do you think?

CARVILLE: You know, I know Colonel Murtha, been knowing him since 1986. And he's a highly decorated Marine from Vietnam, was a Marine officer.

He spends more time at Walter Reed than any five congressmen put together. He feels very intently about this. He's not going to have a lot of votes. He doesn't have a lot of support within the Democratic Party, but he's not going to let this go. He's a tenacious guy. He's a Johnstown, Pennsylvania, guy.

And I know him. And I know him pretty well. And I see him fairly often. He believes that we have done all we can do over there. He's desperately trying to get this president's attention. Now...

(CROSSTALK)

BLITZER: Let me let -- 10 seconds for J.C. to wrap it up.

(CROSSTALK)

WATTS: Well, you know, I -- Wolf, I think John mentioned that, in terms of things that Congress can do to a president to kind of, you know, block him.

I think impeachment, he said, was one of those things. I don't think he meant that we want to impeach the president. I think it's crazy for the Democrats to be talking about impeachment at this time.

(CROSSTALK)

WATTS: It walks on their message. And, Republicans, we're happy. Keep talking about impeachment.

BLITZER: All right. I remember that word with Bill Clinton, impeachment.

(LAUGHTER)

(CROSSTALK)

BLITZER: All right, guys, thanks very much, James Carville and J.C. Watts.

Still to come: When the going gets rough, should the Iraqi parliament be going on a two-month summer break? Jack Cafferty with your e-mail, that is coming up.

And, amid the war budget battle, the military says it does not have enough money to buy something that saves the lives of many U.S. troops. It helps protect U.S. forces in Iraq from that country's number-one killer. We will explain what's going on.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Let's go back to Jack in New York for "The Cafferty File" -- Jack. JACK CAFFERTY, CNN ANCHOR: The question is: Should the Iraqi parliament take two months off for a summer vacation? They want to shutter down July and August. Too hot there.

Brian in San Diego: "From day one, the Bush administration's Iraq interest hinged on standing up a subservient government extremely loyal and grateful to the United States. Didn't happen. Shortly, a strongman or theocracy will sweep in and literally exterminate the Iraqi parliament. So, it matters not when they take a break."

Renee writes: "Jack, my husband is deployed. The Iraqi parliament wants two months off? Does that mean our troops will also get two months off to come home, be with their families? They have got a lot of nerve. Our loved ones are over there giving their all. For the Iraqi government to take time off is a slap in the face."

Thomas in Surfside, Florida: "Jack your propensity for outrage simply overwhelms me at times."

Such big words.

"Being a member of the Iraqi parliament happens to be one of the most dangerous jobs on the planet. Quite a few of them have paid for the privilege of serving it with their lives and the lives of their families. Our own House and Senate do their best to avoid Washington in the summertime. Lighten up, Jack. You take more time off than the entire CNN anchor staff combined."

(LAUGHTER)

CAFFERTY: It just seems that way, Thomas.

Larry in Texas: "If I were any Iraqi, I would take a long vacation. We went in, destroyed their country for corporate profits, and you wonder why they're not grateful. You can't be serious. The same buffoons that planned this abortion of a war also helped get Maliki elected. Why do you now expect him to be any less incompetent than the people that engineered his rise to power?"

Dallas in North Carolina: "Jack, only if our troops take the rest of the civil war off."

And Phil in Washington, D.C.: "Who do they think they are, France? Get off your butts and create a country" -- Wolf.

BLITZER: Thank you, Jack, for that.

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