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McCain Calls on Larry Craig to Resign; White House May Ask for More Money for War

Aired August 29, 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: To our viewers, you're in THE SITUATION ROOM.
Happening now, members of his party are running away as fast as they can. After police busted Senator Larry Craig in a sex sting in a men's bathroom, John McCain is joining a growing list of Republicans who want him to resign. And others wanted and got him stripped of assignments. That would be Republican leadership acting today.

It could be a White House surprise -- a possible request for more money to fund a war already costing more than $2 billion a week.

Will that price tag go up to $3 billion a week?

And life after Katrina -- hometown stories through the eyes and cameras of the people who live there. This hour, the filmmaker, Spike Lee. You're going to hear some very special stories from children devastated by Hurricane Katrina, partly made possible by Spike Lee.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

Whatever he did or didn't do in that bathroom and afterwards, his fellow Republicans are abandoning him today. John McCain telling CNN before telling any other news outlets he thinks Senator Craig should resign.

That makes McCain one of the first Republicans -- certainly the first presidential candidate -- to say Craig should go and should go away right now.

At least two other Republican lawmakers say the same thing today.

Let's go straight to our Congressional correspondent, Dana Bash.

She's watching all the drama unfold in Craig's home state of Idaho.

Dana is in Boise -- the drumbeat certainly building, Dana, against Larry Craig.

DANA BASH, CNN CORRESPONDENT: You're exactly right.

Not only did Senator McCain tell CNN that Senator Craig should resign, you're also getting a very -- a new, very blunt message that Senator Craig is getting, I should say, from his own Republican leadership back in Washington.

They're essentially making it clear to him that his influence in Washington is waning. And the way they're doing that is by stripping him of position of ranking Republican or top Republican on the committees that he sits on.

I'll read you the statement that the entire Republican leadership in the Senate put out.

It says: "Senator Larry Craig has agreed to comply with the leadership's request that he temporarily step down as the top Republican on the Veterans Affairs Committee, Appropriations Subcommittee on the Interior and Energy and Natural Resources Subcommittee on Public Lands and Forests. This is not a decision we take lightly, but we believe this is the best interests -- in the best interests of the Senate until this situation is resolved by the Ethics Committee."

Now, when you're in Congress, as you know, Wolf, your main role is to take votes on the Senate floor. But for somebody like Senator Craig, who has seniority, it is also to have influence. The way you have influence is be a top Republican, or, if you're a Democrat, the top Democrat on key committees.

Senator Craig no longer has that. And this is a very rare move that his own leadership is making by -- making clear to Senator Craig that his influence is gone. Essentially, I think they're trying to send him a very blunt message.

BLITZER: I think they are.

And what about the people in Idaho, where you are right now, Dana?

What are you picking up there, especially among Republican conservatives?

BASH: You know, it's very interesting. You know, it should be said that Senator Craig, as I mentioned, has been serving this state for decades, not only in Congress before that in the legislature. He is very well known and he is well liked among Republicans.

But at this point, it's hard to find a Republican to come out and say positive things about Senator Craig. The GOP chairman here did say, you know, you should take the senator at his word.

But most Republicans are saying, you know, are sort of taking a more of a wait and see approach. And what they are saying, Wolf, is that what they think is despite any pressure -- potential pressure that comes from within here in Idaho, if, in fact, the senator's fate has been sealed by this incident in the Minneapolis airport, it probably will happen on a national level, that the national Republican Party is going to be the one to force him out, if that does happen.

BLITZER: Thanks very much.

Dana is on the scene for us in Boise, Idaho.

The White House clearly not happy about this situation involving Senator Craig either. Today it put out its first reaction, a spokesman saying -- and I'm quoting now -- "We're disappointed in what's going on. It's a matter for the senator and the Senate Republican leadership to address."

No vote of confidence in Senator Craig from the White House.

A lot more coming up on this story here in THE SITUATION ROOM, and John King's interview with Senator John McCain that's coming up, as well.

Senator McCain saying bluntly Senator Craig should go.

Other news we're following, two years ago today, Hurricane Katrina slammed into New Orleans. The anniversary marked today by memorials, protests and President Bush's fifteenth visit since the storm flooded 80 percent of the city. It's a day of contrasts, pitting presidential promises of renewal against people's frustrations over a city still in shambles.

Our White House correspondent, Suzanne Malveaux is joining us now from New Orleans -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it's the fifteenth visit to the region since Hurricane Katrina hit. And today was really an opportunity for him to try to convince the people here that he is good on his word to bring back this city better than before.

(BEGIN VIDEO TAPE)

MALVEAUX (voice-over): Deeply tarnished by his administration's failures in responding to Hurricane Katrina, President Bush used the two year anniversary to put the focus elsewhere.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: When Hurricane Katrina broke through the levees, it broke a lot of hearts. It destroyed the biddings, but it didn't affect the spirit of a lot of citizens in this community.

MALVEAUX: Mr. Bush tried to paint an encouraging picture of the city's progress...

BUSH: New Orleans, better days are ahead.

MALVEAUX: ...by speaking at a newly opened charter school in the Lower Ninth Ward, offering a moment of silence for the hurricane's victims and the day before exchanging hugs and kisses with Louisiana officials.

But New Orleans' recovery has been a big disappointment for many who live here. Huge sections of the city remain in shambles. Unemployment and crime are rampant while schools and hospitals have been slow to reopen.

While work on the levees continues, they are far from ready for the next big storm. Less than a third of New Orleans residents eager to rebuild have received the federal funding to make it happen.

In the days immediately following Katrina, as these horrendous images emerged, some suggested, like rap star Kanye West, on NBC's Concert for Hurricane Relief, perhaps race played a role in the government's slow response.

KANYE WEST, RAPPER: George Bush doesn't care about black people.

MALVEAUX: Last week, New Orleans Mayor Nagin suggested the slow recovery now and unequal funding for his state was about politics.

MAYOR RAY NAGIN, NEW ORLEANS: We're tied up in between whether this is going to be a red state or a blue state. And you have a Democratic governor and a Republican president. And there's all sorts of tension there and it's slowed things down tremendously.

MALVEAUX: Answering his critics, President Bush highlighted the billions of dollars the federal government has contributed to both states.

BUSH: Of the $114 billion spent so far in resources allocated so far, about 80 percent of the funds have been disbursed or available.

MALVEAUX: The president later visited Bay St. Louis, Mississippi, which was devastated by the storm.

(END VIDEO TAPE)

MALVEAUX: While the president boasts of being close to those who have been impacted by Hurricane Katrina, the president used an odd choice of words today, referring those in New Orleans three times as "the folks in this part of the world" -- Wolf.

BLITZER: Suzanne Malveaux on the scene for us in New Orleans, getting back to her hometown.

Suzanne, thanks very much.

To date, some $60 billion in post-Katrina federal assistance has been committed to the State of Louisiana. According to the Louisiana Recovery Authority, $26 billion -- $26 billion of those funds have gone to rebuild infrastructure, levees, roads and bridges. Twenty-one billion dollars was spent on disaster relief for immediate needs, such as debris removal and emergency response. And $13.5 billion has gone toward national flood insurance policyholders.

Let's check back with Jack Cafferty.

He's got The Cafferty File in New York -- Jack.

CAFFERTY: Wolf, to the members of the United States Senate, Senator Larry Craig's bathroom bust is reason for another investigation, which, of course, is exactly what we need in this country.

Senate Republican leaders have called for an Ethics Committee investigation. The senators complained none of them had been told about the senator's legal issues until yesterday.

Well, join the club. Nobody had. He was trying to keep it all secret.

They also said they'll consider whether additional action is required.

The senator pleaded guilty to a crime in connection with an encounter with an undercover police officer in a public toilet in the Minneapolis airport. The cop said in his report the distinguished senator was attempting to engage in lewd conduct. It's all in the police report and you can read it online.

So why, exactly, is another investigation needed?

If pleading guilty to a crime and then trying to hide it from the citizens of Idaho isn't an ethics violation, what is?

Besides, on a vote to expel Craig from the Senate, if would be fascinating to see how hall these family values types would vote, which is exactly why we'll probably never see it happen -- the vote.

Meanwhile, some Idaho state party officials are now saying privately Craig is ruined. Some social and religious conservatives and right-wing radio hosts are calling for Craig's resignation. Two Republican presidential hopefuls have condemned Craig, as well -- Mitt Romney, whose campaign Craig was a part of until this week, said Craig's behavior is disgusting. And John McCain called the case disgraceful.

So here's the question -- should the United States Senate expel Senator Larry Craig?

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

I will bet you a chicken salad sandwich, Mr. Blitzer, that by the time the Labor Day weekend is past, so will Larry Craig's Senate career. I'll bet he's no longer with us by next Tuesday.

BLITZER: I don't think you have to worry about eating every brick of the Time Warner Center, a prediction you made yesterday. If the people of Idaho were to reelect him, if he were to run next year, what did you say about the Time Warner Center?

CAFFERTY: I said I would eat this building that I work in.

BLITZER: (LAUGHTER).

CAFFERTY: and I will.

BLITZER: I don't think you have to worry about that.

CAFFERTY: OK.

BLITZER: We'll see about the chicken sandwich.

But the bricks, forget about it.

CAFFERTY: All right.

BLITZER: All right, Jack.

Thanks very much.

Up ahead, they're Iranians who were detained by the United States military in Baghdad. Now a furious Iran wants answers. We're going to tell you what happened and about Iran's protest.

Also, funny man Jim Carrey does not want you to laugh. He has a very serious message for you on the Internet about one imprisoned, very courageous woman.

And amid scandals involving sex, it's been a tough summer for Republicans. We're going to take a closer look at how the party is dealing with it all.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It could be a White House surprise. While many Americans want troops out of Iraq, the Bush administration could be readying itself to do something many people don't necessarily want.

Let's go to Brian Todd.

He's watching this story for us.

There's a -- we saw a report earlier suggesting that more money is going to be needed to keep the U.S. troops in Iraq -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Well, that's right, Wolf.

The White House does seem to be getting more confident of an optimistic assessment next month on this counter-offensive and they may be getting ready to put that confidence on the line with Congress.

(BEGIN VIDEO TAPE)

TODD (voice-over): More than $2 billion a week to fund the war in Iraq. And now, sources on Capitol Hill tell CNN they expect the president to ask Congress for more around the time General David Petraeus and Ambassador Ryan Crocker deliver their assessment of the new offensive in mid-September.

"The Washington Post" reports the president could ask for as much as $50 billion more to keep troop levels going through next spring. White House and Pentagon officials will only say this.

GEOFF MORRELL, DEFENSE DEPARTMENT SPOKESMAN: I think we've signaled the Congress that we may, indeed, be coming to them shortly for additional moneys to fight the global war on terror. But I think at this point, in terms of numbers and when that will happen, we're ahead of the game.

TODD: Still, top Democrats are ramping up their no blank check argument.

JOHN EDWARDS, PRESIDENTIAL CANDIDATE: What the Congress should do when they come back next week is make it absolutely clear -- no timetable, no funding.

TODD: But Democrats tried to attach conditions to war funding earlier this summer and lost a veto showdown with the president.

JOHN ULLYOT, FORMER SENATE ARMED SERVICES COMMITTEE SPOKESMAN: What's difficult for the Democrats in that -- in that debate is that fundamentally no one wants to -- of any party -- wants to be in a position, politically, of blocking funding for troops in the field.

(END VIDEO TAPE)

TODD: For that reason, if the president does ask for more money, he'll likely get it. But analysts say there's a cost to Republicans, too. This will give the Democrats more ammunition to talk about an unpopular war heading right into the primary season -- Wolf.

BLITZER: So if that $50 billion "The Washington Post" is reporting is actually on the table, Brian, what does it pay for?

TODD: Well, I talked to one veteran Capitol Hill staffer who has gone through these war budget fights -- many of them. He says what it covers is what he calls the soup to nuts of the operational costs of the war -- everything from fuel and ammunition to more armor for vehicles.

Now, one thing that many people on the Hill and at the Pentagon are clamoring for right now is what they call an MRAP. That's a new mine-resistant vehicle. So that could be on the table.

BLITZER: And it's -- it's a vehicle that would protect U.S. troops a lot more seriously than the current vehicles out there, from those improvised explosive devices.

Brian, thanks very much for that report.

Eight Iranians detained by U.S. forces in Baghdad are released hours later, after Iraqi officials intervene.

Also, a top Shiite cleric in Iraq freezes all armed action by his splintering militia, at least that's the announcement.

What does all this mean for the U.S. military mission in Iraq? And joining us now, Brigadier General Kevin Bergner, U.S. Army.

He's the chief spokesman for the Multi-National Forces in Iraq.

General, first of all, clarify what happened at the Sheraton Hotel yesterday when some U.S. military personnel picked up Iranians there.

What's is the status of those Iranians now?

What happened?

BRIG. GEN. KEVIN BERGNER, MULTI-NATIONAL FORCE-IRAQ: Well, Wolf, what happened was a group of cars transited through one of our entry control points in the Abu-Nuwass (ph) market area, which is right there close to the hotel. And in the process of that, just a standard operating procedure at these checkpoints, an inspection was made and in the process of that, we found weapons in the vehicles. And in this case, no authorization, no documentation that allowed any of these individuals to be armed.

And so our normal operating procedure is we will investigate to fine out what the circumstances were.

In this case, we did end up detaining those individuals that you mentioned. We completed an investigation over the course of the evening and we released those individuals very early this morning.

BLITZER: Are they remaining in Iraq or are they heading back to Iran?

BERGNER: I don't know what their current status is, Wolf, but they are under their own liberty and going about their business.

BLITZER: All right. So they're free and clear. They -- and the weapons that they had, they didn't have any authorization for those weapons.

But you determined it was OK for them to have those weapons?

BERGNER: Well, actually, those weapons we found were actually part of an Iraqi delegation that was accompanying them. And so we learned over the course of our investigation that they were not connected to the Iranians that were with these Iraqis.

BLITZER: Now, the other Iranians that were picked up a few months ago, you're still holding, what, those five or six Iranians?

They're still being held by the U.S. military?

BERGNER: They're still in the custody of the coalition forces. Their case has been reviewed to reassess the security threat that they represent. And in the assessment of that review board, the review board chose to continue to keep them in detention.

I would point out that review board also included Iraqi members, as well.

BLITZER: All right, let's talk a little bit about Muqtada Al Sadr and the statement that was put out by a spokesman for his Mahdi Militia that they are going to suspend -- suspend armed actions, at least for the next few months. This is the anti-American cleric, as a lot of viewers know.

Do you believe this guy?

BERGNER: Well, this is one of those circumstances, Wolf, where actions definitely speak louder than words. And so the real measure of merit here needs to be let's see a change in the facts on the ground.

That's not to say that people in Iraq, to include the Multi- National Force, wouldn't welcome such a move toward more accountability.

But this is a situation that really necessities seeing actions.

BLITZER: Well, good luck to you, General Bergner.

Good luck to everyone over there.

And I'm sure you're going to have a few busy weeks coming up. You're always busy over there.

BERGNER: Thanks, Wolf.

Good to be with you.

BLITZER: Don't laugh -- the comedian, Jim Carrey, wants you to know about a very serious situation. He's posting video on the Internet right now about one woman sitting in prison. We'll tell you what's going on.

And it actually happens in many public bathrooms around the United States and you may not even know about it -- men hoping to have sex with other men. Many people are now only learning about this, after a U.S. senator was busted in a sex sting operation in a men's bathroom at the Minneapolis airport.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is monitoring some stories incoming into THE SITUATION ROOM right now -- Carol, update our viewers.

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, Richard Jewell died today. He's the one time security guard who went from hero to suspect to full exoneration in connection with the 1996 Olympic Park bombing in Atlanta. Jewell spotted the package containing the bomb and made people move away before it went off. His attorney tells CNN that Jewell, who was 44 years old, had been suffering from diabetes and kidney failure since February.

With the frightening pictures of last week's airliner explosion in Japan still fresh on everyone's mind, the U.S. government orders airlines to speed up inspections of all newer Boeing 737s. The passengers on this plane got off just in time. Investigators found the explosion was caused when a bolt in the wing came lose and punctured a fuel tank. Inspections of other 737s revealed similar loose bolts.

It was a sensational story while it lasted, but NASA now says there is no proof that astronauts ever flew while drunk. NASA ordered an in-house review after an independent commission embarrassed the space agency last month by citing stories of astronauts flying after drinking heavily on at least two occasions. Today's report says it never happened. It also suggests drug and alcohol testing for all NASA employees, including astronauts.

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

BLITZER: Thanks, Carol, very much.

Up next, we're going to show you John King's interview with Republican presidential hopeful John McCain. McCain taking a very tough stance on Senator Larry Craig's scandal. He's got some very -- a very tough message for his fellow Republican.

Plus, this scandal has become the butt of a lot of jokes among late night comics. But for Republicans, this is no laughing matter.

Carol is standing by with a closer look at this very rough summer for some in the party.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

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

Happening now, a power shift in Pakistan. The former prime minister, Benazir Bhutto, telling CNN President -- that General Pervez Musharraf has agreed to step down as the country's military chef. Bhutto and President Musharraf have been negotiating a power sharing arrangement. President Musharraf has yet to confirm his intentions. We're watching this important story with serious ramifications for the U.S.

In Afghanistan, Taliban militants released 12 more South Korean hostages held for the past six weeks. South Korean negotiators say they stuck a deal that South Korea would stick to its plan to withdrew 200 non-combat troops from Afghanistan. The militants still hold seven hostages.

And a rebound today on Wall Street. Investors went on a buying spree for beaten down tech stocks, sending the Nasdaq up more than 2 percent on the New York Stock Exchange. The Dow Jones Average roared back, ending the day up 247 points.

I'm Wolf Blitzer.

You're in THE SITUATION ROOM.

So how do you celebrate your birthday?

Republican presidential candidate, Senator John McCain, does it by sitting down with our chief national correspondent, John King, for an interview to talk about his campaign, the war in Iraq, Senator Larry Craig and a lot more.

John is now joining us from Los Angeles.

There was some straight talk for the Straight Talk Express. He dodged some of your questions, but he also was pretty candid when it came to a very sensitive subject -- the future of Senator Larry Craig.

KING: He certainly was, Wolf. He was blunt on a number of the pressing controversies of the moment.

Let me digress for a second to say he's back in Phoenix going to the favorite Mexican restaurant tonight so he will have a birthday celebration beyond our interview. But it came at a very difficult time for John McCain. At this time last year, he was viewed as a favorite for the republican nomination, if not the favorite.

So I began by asking how should people trust him to run the country, why should people trust him to run the country, after he's had such a dismal year running his own campaign.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Because there's ups and downs in every campaign I've ever been in, I made mistakes many times in my political career. And I've always corrected them.

The problem is not that you don't make mistakes but that you correct the mistakes and move forward. That's what we're doing.

I'm very happy with the town hall meetings, money is coming in fine. Support is there. We'll be fine. As soon as people starting focusing on the race we'll win the nomination.

KING: I want to talk more about the specifics in a second but the broad dynamics.

MCCAIN: You know, I'm not going to talk a lot about process. We've answered those questions maybe 500 times. I would be glad to talk about it. I'd just like to point out that I'm happy with the campaign where it is. The enthusiasm is there. Turnout is there.

I understand that the war in Iraq hurt me to some degree politically, but as I've often said, I would much rather lose a campaign than lose a war. I'm not going to go through a whole lot of process questions if you don't mind. KING: I won't have too many.

MCCAIN: Really, I think we've done enough.

KING: Let's talk about a broad dynamic in the campaign. American people want change.

MCCAIN: Sure.

KING: You've had a president for eight years. War is unpopular and people want to turn the page and move on to something else. How does a man who is 71 years old, would be the oldest president to take office, even older than Ronald Reagan, convince the country that you're fit and ready to serve and that someone of your generation and your age is the change they want and need.

MCCAIN: Because the people of this country want experience. They want knowledge and leadership. And I have been involved in that all of my life. I'm the most prepared to take on the transcending challenge of the 21st Century. That is radical Islamic extremism. I need no on the job training. I'm fully prepared to meet that challenge. That is the major challenge and the reason why people will elect me as president of the United States.

KING: When you go back to Washington, as you know, the great debate in the senate will be about Iraq and whether to have another proposal to restrict the funding or set a timeline for troop withdrawal. A very good friend of yours and a good republican colleague John Warner now says the president should make a down payment on withdrawing troops and perhaps 5,000 or so by Christmas. One to show the American people we're not there indefinitely and two, to show the Iraqi government we're not there indefinitely. Is that a good idea, a modest troop withdraw at this time, or bad idea, and would fight it?

MCCAIN: It's a bad idea, a terrible idea. I'll fight it every step of the way. John Warner and I are very close friends. But that sends the signal to al Qaeda and bad people in the region that we're leaving. And that's not our position. Our position is we're going to succeed. And the strategy, present strategy is succeeding. And why anyone would want to go back to the previous strategy frankly doesn't make a lot of sense to me. So we are succeeding. We can win. What I mean by that, is political and military stability that allows us to withdraw American troops over time.

KING: We are speaking on a day in which one of your colleagues is in considerable hot water. He signed a piece of paper, a man who has repeatedly taken an oath and had the laws of the land explained to him. He's in the United States Senate. He signed a piece of paper in which it was made very clear, do not sign this if you are innocent. You are pleading guilty to something. Now he says it was a misunderstanding and he wants to make it go away. Should Larry Craig stay in Idaho and resign his job and let the republican governor send someone to replace him?

MCCAIN: Yes. KING: Do you believe he should not return under any circumstances?

MCCAIN: I believe that he pled guilty and he had the opportunity to plead innocent. I think he should resign.

KING: And suppose he comes back to Washington and says I want to serve?

MCCAIN: That will be a decision that he will make and most importantly the people of the state of Idaho. But my opinion is, that when you plead guilty to a crime, then you shouldn't serve. And that's not a moral stand. That's not a holier than thou, it's just a factual situation. I don't try to judge people, but in this case, it's clear that it was disgraceful.

(END VIDEO CLIP)

KING: Senator McCain quite candid about his colleague Larry Craig, quite candid throughout our conversation, Wolf. We talked about 15 minutes in all and then some more off camera. He was in remarkably high spirits despite the political struggles he finds himself in right now. Quite striking also how chasten he is on the issue of immigration. Remember it was a few weeks back in the senate when John McCain was saying you need comprehensive reform. Do it all at once, including allowing those who came into the country illegally to stay. He said in our interview Wolf, I got the message. He says now as president, or in the senate, no matter what happens to him politically, he understands secure the borders first and then go to the American people to talk about any other additional reforms.

BLITZER: He's got to make a major decision that could effect his political prospects, namely whether or not to accept public funding for his campaign. I know it gets complicated but it has huge ramifications.

KING: It does. Because most of his rivals are not participating in the public system. Meaning they do not get federal matching funds and because of that, they can spend whatever they want in any state and nationally as they campaign for president.

John McCain could desperately use the several million dollars he would get if he accepted federal matching funds. He could use that in the short term but long term he would be overwhelmed by the fundraising abilities and the spending capabilities of Rudy Giuliani, Mitt Romney and others in the republican race. They are raising a little bit more money right now. They want a few more weeks, Wolf, in the McCain campaign before they make that decision. Most of the advisers don't want to do it because they would tie their hands in the long term. But if fundraising doesn't improve over the next several weeks, they may find themselves with no choice.

BLITZER: All right. John, thanks very much, John King doing excellent work as he always does. Thank you.

Larry Craig's arrest puts a spotlight on something many Americans never knew about. Coming up, the secret signals, the hidden sexual fantasies played out in public bathrooms across America.

And later, Jim Carrey isn't joking. We have the latest on his attention getting message about the plight of a Nobel Peace prize winner.

Stay with us. You're in THE SITUATION ROOM

(COMMERCIAL BREAK)

BLITZER: The scandals have turned off voters and become the punch lines of many jokes. We're talking about the airing of dirty laundry involving sex and politicians, touching both political parties but it's causing some increasing problems right now for republicans.

Let's bring back Carol Costello. She's watching the story for us. One senator's personal problems getting a lot of attention right now, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: A lot of attention, Wolf. You know you're hearing prominent republicans calling Senator Craig's behavior disgusting and disgraceful. There's more than one reason for that.

It has become a tough summer for the grand old party. After a day of disbelief over the unusual news conference held by republican senator Larry Craig, it became a night of witty derision. Comedian Jay Leno spent three minutes and 13 seconds poking fun at the conservative law maker.

JAY LENO: It was the hottest day of the year. It was 105 today. People sweating like the men's room attendant when Senator Larry Craig walked in.

COSTELLO: Despite the jokes, at least one influential conservative leader thinks the republicans can get out of this mess.

TONY PERKINS, FAMILY RESEARCH COUNCIL: If you take a snapshot it looks bad. But if you look at the overall panorama of the political landscape there are ups and downs. I think the republicans are in a valley right now. But it doesn't mean they can not get out.

COSTELLO: Right now it's a deep valley. Values voters are also reeling from Florida State Representative Bob Allen who was arrested for soliciting sex for money in a public restroom. He says he's not guilty. Senator David Vitter, who's name turned up on a call girl's phone list, he apologized for, "a very serious sin." And Thomas Ravenel, a South Carolina state treasurer accused of distributing cocaine. He said he's not guilty. The summer of 2007 now seems a long way from the summer of 2000 when a victorious George W. Bush dismissed a philandering Bill Clinton with promises of a more moral road ahead.

BUSH: Our generation has a chance to claim essential values to show we have grown up before we grow old. They had their chance. They have not led, we will. COSTELLO: Although democrats have been caught with their pants down too, like Los Angeles Mayor Anthony Villaraigosa and his extramarital affair and New Jersey Governor Jim McGreevy resigning from office to come out as a gay American, sex scandals seem to affect republicans more because social conservativism (ph) has become part of their brand.

MICHELLE LAXALT, REPUBLICAN STRATEGIST: Here we find ourselves virtually every single time getting whacked because of what is perceived to be a hypocrisy factor. The Republican Party needs to have some very serious introspection and return to the values that started us out and that is individual liberty and a live and let live policy when it comes to people's private lives.

COSTELLO: Republicans say they are still optimistic about winning back Washington in '08. The election is still a long way off and voters tend to have very short memories.

You know, Wolf, maybe Senator Craig will be ousted or resign but the way it has gone this summer, both parties are not going to relax. If and when he's gone, he'll be waiting for the next bomb shell.

BLITZER: Thanks, Carol, thanks very much. There always is.

Sex sting operations like the one that involved Senator Craig happen in men's rooms and other public places all of the time all over the country.

Here's CNN's Dan Lothian.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT: It's not the primary function of public parks, rest rooms and rest areas but for men in search of anonymous same sex partners, they are popular destinations.

PROF. RICHARD TEWKSBURY, UNIVERSITY OF LOUISIANA: There's also the idea that there's sort of a thrill to the hunt, to the excitement of sex in a public place, of doing something that potentially does have negative consequences for you.

LOTHIAN: Websites like this offer a kind of adult travel guide, including rules of the game and secret signals to make a connection in a public restroom, like waiting in a stall in the furthest end of the bathroom and when someone approaches next door, "Move your foot so that you know the other person can see it and slowly start tapping it."

Professor Richard Tewkesbury at the University of Louisville has published several studies on this sub culture. He has documented 9,000 locations across the country where he said this public behavior often referred to as cruising takes place merely because of opportunity and convenience.

TEWKSBURY: There's all kinds of places, many times that most of us walk by or walk into, in our daily lives and never realize our cruising locations.

LOTHIAN: Anonymous gay sex in public areas certainly isn't new. Remember pop singer George Michael almost ten years ago? He was busted for engaging in a lewd act in a park restroom in Beverly Hills.

GEORGE MICHAEL, POP SINGER: I can only apologize. I can try to fathom why I did it.

LOTHIAN: But law enforcement agencies across the country have been cracking down in recent months sometimes using undercover stings to catch men in the act like at restrooms in Atlanta's Hartsfield Jackson International Airport where more than 40 men were picked up for indecent exposure and public sex acts.

MAJ. DARRYL TOLLESON, ATLANTA POLICE: We've arrested college professors, bank presidents, other CEOs. It ranges.

LOTHIAN: Here's another surprise.

TEWKSBURY: Research tells us that for the most part we're talking about men who are involved in some kind of long-term heterosexual relationship, frequently married, frequently with children.

LOTHIAN: Investigators say critics who argue police should be focusing on more serious crimes are missing the point, that this public behavior is illegal.

TOLLESON: We're there to enforce all crime, enforce all laws.

LOTHIAN: And they're finding suspects in the bathroom. Dan Lothian, CNN, Boston.

(END VIDEOTAPE)

BLITZER: Senators John McCain and Norm Coleman are calling for Larry Craig to step down. Jack Cafferty wants to know if you would go even further and comedian Jim Carrey is speaking out a very serious subject. We're going to have details.

Stick around. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The comedian Jim Carrey has made you laugh in a lot of films. Right now he wants your attention though on a subject that's very, very serious. Let's go to the state department correspondent Zain Verjee. She's watching this for us.

Zain, what's his message?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, Jim Carrey basically wants to make one woman a household name in the U.S. For him, it's no joke.

This time, the funny man isn't looking for laughs on the big screen. He's turned serious, right on your computer screen on You Tube. Jim Carrey says she is often compared to Gandhi or Nelson Mandela. She's standing up to vicious rulers in Burma with no violence, only votes. The Burmese military refused to accept her election victory in 1990.

(BEGIN VIDEOTAPE)

JIM CARREY, COMEDIAN: She was locked away by the military regime and has been held for 11 years under house arrest.

VERJEE: She's separated from her children and wasn't allowed to see her dying husband. Carrey said the military's tyranny goes beyond its treatment her.

CARREY: They have also raped thousands of women and recruited more child soldiers than any other country in the world.

VERJEE: She has U.S. heavy weights championing for her cause. Like past and present Secretaries of State Madeline Albright and Condoleezza Rice. Even First Lady Laura Bush is using her clout hosting a round table on Burma last year and calling for her release in a recent Wall Street column.

LAURA BUSH: She's such an example of courage and she really wants to have a nonviolent reconciliation in her country.

VERJEE: She was awarded the Nobel Peace prize in 1991. Jim Carrey says he wants Americans to remember her name and fight for freedom.

CARREY: And let's face it, the name's a little difficult to remember. Here's how I did it. Unsung sounds like unsung as in unsung hero. Aung San Suu Kyi is truly an unsung hero.

(END VIDEOTAPE)

VERJEE: Wolf, the Burmese government says that they keep her under house arrest basically for her own protection.

Wolf.

BLITZER: She's a remarkable woman as all of us know. Thanks very much. Let's hope she's freed soon. Zain Verjee at the State Department.

Tonight CNN brings you a special event on the anniversary of Hurricane Katrina. "Children of the Storm," our special correspondent Soledad O'Brien with the filmmaker Spike Lee. Soledad is in New Orleans. She spoke with Spike Lee earlier, your partner Soledad, in this extraordinary project that we're going to see later tonight. What does Spike Lee hope to achieve by doing what he did?

SOLEDAD O'BRIEN, CNN CORRESPONDENT: You flatter me, because Spike Lee is a famous film maker. We were just trying to hand out cameras to kids and let them tell their story. I'll take the compliment. I'm not sure that Spike would be equally as flattered but I'll tell you this. I think what he hoped to accomplish is the same thing that we hoped to accomplish. He's a teacher. He knew if you can arm people with cameras, they would have the opportunity to tell stories. All of these kids are smart, bright kids who, given the opportunity would be wonderful story tellers and advocates for their own community. Some of them live in New Orleans proper. Others live in the parishes surrounding New Orleans.

It's very interesting to see how this turned out. We were so incredibly pleased. We had a chance to talk with Spike. He's in Rome working. But I asked him what he thought of what's been going on in the last two years as far as progress in the city of New Orleans. Here's what he had to say.

SPIKE LEE, FILMMAKER: I'm very dismayed by the lack of progress by the United States government, and I think that's a shame. I have also been dismayed by many of the candidates that are running to take this guy's place in office, when they talk about issues in their speeches or debates. The gulf coast and what happened, what hasn't happened, never comes up.

O'BRIEN: In the past couple of days, we have, as well you know Wolf, seen some of those presidential candidates come here and that spread the message very directly to the folks who lived here. But Spike's right, a lot of times they sort of ignored what's happening to not only the people in New Orleans but on the gulf coast as a whole. And it troubles not only Spike but people who are here who fear being forgotten by the American people and frankly by Congress. They are very worried that if they're forgotten the money promised will get here on the ground.

Wolf.

BLITZER: You're going to introduce our viewers tonight Soledad to Amanda. Tell us a little bit about this young girl.

O'BRIEN: She's wonderful, 18 years old. Senior in high school when we first meet her dealing with so many things. Her mother died when she was 11 years old. Her grandmother is raising her. In a way she's raising her grandmother. Her grandmother is 67, works at McDonalds and is trying to make ends meet. They're desperately poor. They're home was destroyed. I mean I could go on and on. They don't even have money for the grave stone for Amanda's mother who died when Amanda was 11 and yet you see a plucky girl who's trying to figure out, doing the paperwork for the road home project because her grandmother really can't and who has incredible optimism in the face of all of the difficulty she faces. She's a symbol of a lot of young people here in New Orleans.

BLITZER: Thank you, Soledad, so much for doing this tonight. "Children of the Storm" airs 8:00 p.m. eastern. I think all of our viewers will want to see this on this the second anniversary of Hurricane Katrina. We'll all learn something important from this documentary.

Up ahead, should the U.S. Senate expel Senator Larry Craig? Jack Cafferty and your email right after this. (COMMERCIAL BREAK)

BLITZER: He's been traveling with the president but while Deputy Chief of Staff Karl Rove was away, someone was cooking up a surprise. Check it out. Rove has now found his jaguar decked out with plush eagles, a plush toy elephant and an "I love Obama" sticker. Rove is retiring, by the way, leaving the White House in two days. We have new video coming back to the White House driveway only moments ago. He found his car and began to unwrap it, a prank involving Karl Rove over at the White House.

Let's go to Jack Cafferty with the Cafferty File in New York.

Jack.

JACK CAFFERTY, CNN CORRESPONDENT: The question, should the U.S. Senate expel Senator Larry Craig

Sue writes from Idaho Falls, that's where the good senator is from, "Of course they should but many won't because right, wrong or indifferent, they stand behind their man, no pun intended. Here in Idaho, well the LDS church and Republican Gestapo we'll have running our state will see to it that he stays or someone just like him takes his place. Just because Larry was doing the toilet two-step may mean the obvious to us but to good moral republicans here, it simply means that he has a wide stance. It's pathetic."

Karl in San Francisco, "They'll have to expel him. Craig's deluded himself into thinking he's right and should stay. But he can't. He went over the line, took the easy way out, got found out and now has to pay for his actions. If he didn't do anything wrong, he shouldn't have pled guilty. The record is clear, bye-bye, Larry."

Curtis in Kansas, "Sure, expel him right after you expel family contract, Feinstein, land deal Reed and cold cash Jefferson. After all, ethics are very important to this Congress."

Ed in St. Louis, "I for one would welcome a Senate investigation. I find it endlessly amusing to watch another family value republican who ran two elections gay bashing at every opportunity twisting in the political wind. Besides, I want to see how many times he can't recall."

Vince writes from Scottsdale, Arizona, "Hi, Jack, you're a work of art. What a right to the point comment on all of the Washington politicians that are advocating family values. Keep up the good work."

And Ted in Ontario, "Won't they have to until he finishes rehab. OK. So he hasn't announced it yet, but isn't that the usual process?"

If you didn't see your email here, you can go to CNN.com/CaffertyFile where we post more of them online along with video clips of the Cafferty File.

Wolf. BLITZER: He can't say he has to go to rehab because he insists he didn't do anything wrong even though he pleaded guilty.

CAFFERTY: That's a good point. I didn't think of that. You're right.

BLITZER: So how can he go to rehab unless he now were to say, you know what? I have a problem.

CAFFERTY: You're absolutely right but if I thought of that, I couldn't have read that email. It was a pretty good email.

BLITZER: It was a very good email. Jack, thanks very much.

We're going to be back here in one hour.

Lots more coming up in THE SITUATION ROOM.

Until then, thanks for watching. "LOU DOBBS TONIGHT" starts right now.

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