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Ron Paul's Web Haul; Pakistan's Continued Troubles; Another Oil Crisis?

Aired November 6, 2007 - 17:00   ET


CAFFERTY: Chas in Texas: "Ron Paul is my congressman here in Texas. He should be a hell of a lot more well known than he is. He is a true man of the people, takes no corporate money, is the most accessible politician I've ever heard of. I'm a Democrat, but I'll be voting in the Republican primary so I can vote for Ron Paul."
And David in Mississippi writes: "At this stage of the game, I would vote for Ron Paul, George or Ringo, as long as the Republican Party and Bush are out of the White House." -- Wolf.

BLITZER: I love our e-mailers, Jack.

CAFFERTY: That's great, isn't it?

BLITZER: Thanks very much.

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

Happening now, grave new developments unfolding in Pakistan's state of emergency. The country's courts are now closed, with judges and lawyers virtual prisoners of the president. I'll have an exclusive interview coming up shortly with the chief justice, who's now under house arrest.

Also, a dark horse candidate's stunning Web haul -- we're going to have more on Republican presidential candidate Ron Paul, as he takes in more than $4 million in donations in just 24 hours.

Is the Congressman's campaign on the verge of taking off?

We'll have a report this hour.

And $5 a gallon for gas?

What impact would a full scale oil crisis have on the U.S.?

We're going to show you the remarkable drill showing what could be in store.

I'm Wolf Blitzer.


We're following the breaking news in Pakistan. That country's judicial system is now in lockdown, as President Pervez Musharraf tightens his grip on power. Among the latest developments -- violent new arrests of hundreds of lawyers, some 3,000 of them now jailed and many judges under house arrest. The former prime minister, Benazir Bhutto, is now in the capital, Islamabad, huddling with other opposition leaders. Government security forces have taken up positions around the city and there's a media blackout in effect, with journalists being ordered not to criticize Musharraf.

Our State Department correspondent, Zain Verjee, is now in Islamabad.

She's joining us live -- Zain, what are you seeing, first of all?

Give our viewers an eyewitness account of what is going on.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Wolf, we've been here just a few hours and it's tense.


VERJEE (voice-over): Men in suits and ties clashing with police in the streets. The second day of violent protests in Pakistan. A thousand lawyers surrounded a district court in the northern city of Multan -- both sides pelting each other with stones, police cracking batons to disperse the crowd.

AYESHA TAMMY HAQ, PAKISTANI LAWYER IN HIDING: The lawyers are educated. They're the middle class and they're the educated, professional, middle class of this country. And if you want to look at a secular liberal organization, there you have it. There you have these large people, they're educated and they're being beaten up and dragged off to jail.

VERJEE: Since President Pervez Musharraf declared a state of emergency and suspended the constitution on Saturday, some 3,000 lawyers and thousands more human rights activists have been arrested. Pakistan's ousted chief justice remains under house arrest, but called on lawyers to defy Musharraf's power takeover.

IFTHIKAR MUHAMMED CHAUDARY, PAKISTANI CHIEF JUSTICE (THROUGH TRANSLATOR): Go to every corner of Pakistan and give the message that this is the time to sacrifice.

VERJEE: Political opponents are also urging resistance. Former Prime Minister Benazir Bhutto flew to the capital city to meet with leaders of other parties and work on a joint strategy.

BENAZIR BHUTTO, FORMER PAKISTANI PRIME MINISTER: I don't think we have time and I don't think we should give time. I think we should all come down as strongly as we can for the restoration of democracy.

VERJEE: The media is also bearing the brunt of the crackdown. All of the independent, 24-hour news channels are still off the air.

UNIDENTIFIED MALE: News has become a contraband item.

VERJEE: While the government struggles to maintain protests in the cities, Islamic radicals in the mountains near the Afghan border have seized another town. Soldiers and police surrendered without a fight. It's the third town to fall to the militants.


VERJEE: The U.S. has been disappointed by General Musharraf's actions. But what they want to do now, Wolf, is really focus on a way forward and move toward free and fair elections -- Wolf.

BLITZER: So the mood on the street is very, very tense.

Are people gathering?

Because we had been told yesterday, when we spoke with Benazir Bhutto, the former prime minister -- she's now back in Islamabad, flew in from Karachi. She was going to participate in a massive demonstration on the streets, but I suspect all those people could be arrested as soon as they go out on the streets.

Is that what's happening right now, Zain?

VERJEE: Absolutely. With the bloody crackdown on the lawyers, people know that that's something that could definitely happen. And the government has made it clear that it's going to react very harshly. But, really, on the surface of things, as we walk around and as we talk to people, you really get the sense that they're trying to go about business as usual, really. But underlying all of that, there's this distinct sense of unease and uncertainty and people are just wondering what's going to happen next -- Wolf.

BLITZER: All right, be careful over there, Zain. We'll be back in touch in the next hour.

President Musharraf seized power in a 1999 coup and appointed himself president while remaining the head of the Pakistani Army.

Washington strengthened ties with him after 9/11. Since then, Musharraf has walked a fine line -- cooperating with the U.S. in the war on terror without provoking Islamic groups inside Pakistan. A 2002 referendum gave him five more years in power. And months later, he gave himself the power to fire parliament and the prime minister.

This past March, he suspended the country's top judge, a move he repeated -- repeated over the weekend.

That judge, the chief justice, Ifthikar Muhammed Chaudary, is now under house arrest in Islamabad. He believes, like many others, that Musharraf cracked down on the judicial system because he expected the Pakistani Supreme Court to bar him from seeking another term as president. He was expecting, they say, that he would rule the election of President Musharraf was illegal.

The chief judge, however, was not part of that decision.

In an exclusive interview, with me just a short while ago, I asked the chief judge his assessment of Musharraf.

(BEGIN VIDEO TAPE) BLITZER: Do you believe he is a dictator?

CHAUDARY: Of course.

Who was the person -- who was the person who was not believing in the independence of the judiciary, who was not believing in the norms of the law, who was not believing that a less independent judiciary given independent decisions, who was not allying with judges to work independently?

Then what one can say, that he was actually wanting to dictate and this is only the habit of a dictator.

BLITZER: What should the United States and the rest of the world do now in order to try to help improve the situation in Pakistan?

CHAUDARY: I think this is -- this thing has never happened in a civilized society. Now, we expect that for a civilized society, including these United Nations are concerned, they should pressurize him that he should immediately take back this issue. And as far as the judiciary, who are working on the third number, they should be restored with their full powers.

BLITZER: Should the United States suspend economic and military assistance to Pakistan?

CHAUDARY: I think it would -- I think it is not a subject on which I will speak, because whatever the case may be, I have to look after the interests of my country as my -- as well as my nation, as well. But I can understand that if, for United States, otherwise puts pressure upon the President Musharraf, he will be bound to take back this issue because it has not set a good example for the country, as well as for the other nations.

I may also explain to you, look, we are the partners in the terrorism with the United States.


BLITZER: Chaudary also told me he and his family right now are under house arrest. He's deeply concerned about what's happening in Islamabad right now. He's worried about paramilitary groups outside his home on the streets of Islamabad, deeply concerned about his own security, the security of his family, as well as other judges and lawyers who are now being roughed up by this government.

Musharraf isn't the first hard line leader to put Washington in a rather awkward position.

Let's go to CNN's Brian Todd.

He's picking up this part of the story for us -- what exactly is the administration saying about this crisis, Brian, in Pakistan?

BRIAN TODD, CNN CORRESPONDENT: Well, they're in a real bind here, Wolf, on one hand, saying he's undermining democracy, that he should take off his uniform; but also praising his record against terrorism, preaching democracy rarely a clean proposition for American presidents.


GEORGE BUSH, PRESIDENT OF THE UNITED STATES: Today, America speaks anew to the people of the world.

TODD (voice-over): Inauguration day 2005.

BUSH: All who live in tyranny and hopelessness can know the United States will not ignore your oppression or excuse your oppressors.

TODD: This September -- President Bush backs it up, pressuring Myanmar for its crackdown on dissidents.

BUSH: It's inexcusable that we've got this kind of tyrannical behavior in Asia.

TODD: But this week, a key American ally exhibits similar behavior and the president tones down his rhetoric.

BUSH: We have made it clear that these emergency measures were, you know, would undermine democracy. Having said that, I did remind the prime minister that President Musharraf has been a strong fighter against extremists and radicals.

TODD: The contradiction certainly not invented by George W. Bush.

Donald Rumsfeld once shook hands with Saddam Hussein on behalf of Ronald Reagan -- to counter Iran's growing power in the 1980s. America has embraced the likes of Manuel Noriega, the Shah of Iran, Ferdinand Marcos -- all of whom helped counter the communist threats in their regions -- none of whom ever considered free and fair elections. Partnerships with strongmen -- some say just as necessary now as then.

RICHARD HAAS, COUNCIL ON FOREIGN RELATIONS: We may need Russia's help against Iran or China's help against North Korea or now Pakistan's help against terrorism. And in all these situations, we sometimes have to put democracy promotion on the back burner.

TODD: But some analysts say so-called real politic, while it serves America's immediate interests, also boxes it in.

STEVEN CLEMONS, NEW AMERICA FOUNDATION: It's terribly hypocritical to go into the world and talk democracy as boldly and as robustly as this administration did and then to cozy up to a dictator now like Musharraf. President Bush can no longer go out and give a pro-democracy speech.


TODD: And even if American leaders do that, they'd better be careful what they wish for. Right now, the democratic alternative to Pervez Musharraf in Pakistan is Benazir Bhutto, whose previous time in power was marked by widespread corruption, public dissatisfaction and, as now, instability -- Wolf.

BLITZER: And as bad as it is right now, it could get worse if Islamic fundamentalists, Al Qaeda-oriented or Taliban-oriented activists inside Pakistan were to get in control, especially with a nuclear arsenal at play right now.

Thanks, Brian, very much.

Six members of Afghanistan's parliament are among at least 35 people killed by a suicide bomber in the northeastern part of the country. They were in a delegation visiting a sugar plant as part of an economic aid program. A group of schoolchildren were on hand to meet the dignitaries and at least three of the children were also killed.

Let's go back to Jack Cafferty.

He's got The Cafferty File in New York.

What's happening in Pakistan, in Afghanistan, Iran, Iraq -- as you pointed out last night during our 6:00 p.m. Roundtable, not a pretty picture in the Middle East right now.

CAFFERTY: Almost everywhere you look, there's a problem.

Here's some more good news. 2007 is now the deadliest year for U.S. troops in Iraq since the start of that war almost five years ago. The death of six troops there yesterday means that 855 U.S. soldiers have lost their lives in Iraq this year. That tops 2004, when the yearly death toll reached 849, and, sadly, 2007 still has two months to run -- almost two months.

The higher number of deaths this year comes as the U.S. sent more troops to Iraq to crack down on the insurgents. In the first half of the year, the death toll was high. However, the number of troops killed has declined in recent months.

Nevertheless, since the start of the war in March 2003, 3,858 U.S. troops have lost their lives.

Meanwhile, President Bush is set to ask Congress for almost $200 billion additional for the wars in Iraq and Afghanistan for next year. The Democrats are saying they're going to wait until after Christmas to debate that request, which means that we're going to have to wait a couple more months to see if the Democrats lie down and roll over like the good little lap dogs they have proven to be in the past.

Here's the question -- where is the war in Iraq headed if 2007 has been the deadliest year for U.S. troops so far?

E-mail your thoughts to or go to -- Wolf.

BLITZER: Jack, thank you.

We'll get back to you shortly. Lax security at the border and thousands of illegal immigrants getting through at official entry points. I'll ask the Homeland Security secretary, Michael Chertoff, how this is happening six years after 9/11.

Plus, a big step forward for President Bush's controversial nominee for attorney general.

And televangelist under investigation -- you're going to find out why one Republican senator wants them to hand over their financial records.

Stick around.



BLITZER: Stunning security lapses at U.S. border crossings are now being revealed in a new U.S. government report. It says simply this: "Thousands, perhaps tens of thousands of people who shouldn't be allowed into the United States are slipping in unchallenged."

Joining us from the North Lawn of the White House, the secretary of Homeland Security, Michael Chertoff.

Mr. Secretary, thanks for coming in.

On the agenda today, illegal immigration. But even as you were speaking at this news conference earlier in the day, the General Accounting Office came out with what a lot of us thought was a pretty damming report on what's going on along the borders.

Let me read to you: "At seven of the eight major ports we visited, officers and managers told us that not having sufficient staff contributes to morale problems, fatigue, lack of back up and safety issues when officers inspect travelers, increasing the potential that terrorists, inadmissible travelers and illicit goods could enter the country."

You've been around for, what, more than two years as secretary of Homeland Security.

What's going on?

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: Well, let me tell you, Wolf, of course, this is a study from earlier this year. And precisely because of the concern we have about people coming through the ports of entry, we have deliberately and in a very disciplined way begun to increase the demands we're making to see identification, to search cars. And we're also moving to the Western Hemisphere Travel Initiative, which will give us, for the first time, secure identification that is easily entered into our databases -- which is going to be a big step forward in addressing especially this problem.

BLITZER: How long is that going to take? CHERTOFF: Well, we're onboard to get it done early next year. We've been hearing a lot of squawking, though. Some of the people on the border complain that it's going to be bad for business. They like the old-fashioned way of doing business, where you wave people through without checking. And I've I said we're going to put a stop to that.

So starting on January of next year, no more waving people through; dramatically reducing the types of identification that are acceptable. And then later next year, we're going to put into effect a new, more secure form of identification with a chip, which will be able to read directly off the machine.

BLITZER: Eliot Spitzer, the governor of New York, has got this new formula to give driver's licenses to illegal immigrants in New York State, maybe as many as a million of them.

I spoke with the mayor, Michael Bloomberg, of New York City, the other day. He opposes this initiative.

I know you were with Governor Spitzer when he announced this three-tier formula for driver's licenses.

Are you with him specifically on this proposal he's putting forward?

CHERTOFF: Well, Wolf, here's what I said -- and I'll repeat it again. I'm against giving illegal aliens any kind of driver's license. And I understand I disagree with the governor with that.

On the other hand, the governor did endorse Real I.D., which is a secure form of identification for drivers' licenses for American citizens and lawful residents, and that's a good thing. We do want to move the country to secure identification for those who can prove that they are in the country legally.

BLITZER: So -- but do you specifically oppose giving this third level driver's license to perhaps as many as a million illegal immigrants in New York State?

CHERTOFF: That's correct, Wolf. We do not believe that illegals ought to be getting any kind of license...

BLITZER: So you're with Mayor Bloomberg on this issue?

CHERTOFF: Well, I don't know exactly what the mayor has said. But I've been very clear that we don't endorse giving illegals driver's licenses.

BLITZER: Finally, Mr. Secretary, this whole controversy that's erupted at ICE -- Immigration and Customs Enforcement -- on this Halloween party and this costume -- someone dressing up with dreadlocks and putting on dark paint to make that person look African- American. And then the head of it, Julie Myers, giving that person an award for best costume, most creative. She's since apologized.

But what's going on over there? CHERTOFF: Well, I think what I've asked them to do is to put the individual in question on administrative leave and have an inquiry to determine what this person thought they were doing when they dressed up. I've got zero tolerance for anything that smacks any kind of ethnic discrimination or racism. And even if it's unintentional, we have to be careful with the message we send out, both to people who work in the agency and to the general public -- is that we are colorblind and ethnic blind when it comes to enforcing the law.

BLITZER: Well, what about Myers?

CHERTOFF: Well, I mean she's apologized. I thought it was appropriate for her. I mean, obviously, she got caught by surprise. But she's reached out, both within DHS and to Congress, to make it clear how mortified she is that this went on. And, again, sometimes these costume parties result in, let's say, errors in judgment. But in this case, I think she's moving swiftly to make amends.

BLITZER: But she made a pretty serious error in judgment in tolerating this, wouldn't you say?

CHERTOFF: Again, I -- you know, sometimes people get caught by surprise and they're presented with a circumstance. I know she's mortified by the fact that she encountered this situation. So she's made amends. I think the person whose idea it was to dress up like this, we need to look at what the appropriate discipline is. And I want to take the opportunity to reaffirm the message that we do not tolerate any racism, whether it's intentional or unintentional, in the execution of our duties.

BLITZER: Do you still have confidence in Myers?


BLITZER: You do?


BLITZER: Because some would suggest there's a double standard -- the person who actually did it gets put on suspension, but the person who tolerated it -- the boss -- still gets to keep her job.

CHERTOFF: You know, Wolf, there's a difference between someone who makes a deliberate decision to dress up a certain way and someone else who is caught by surprise in a circumstance. It's the difference, for example, between a reporter, for example, who writes a false story and an editor who gets, you know, caught unawares and it comes out after the fact.

So I think, in this case, we're going to have the appropriate disciplinary people look at the individual who dressed up this way and I think that Julie's done quite a bit to make amends.

BLITZER: All right, I'll leave it there.

Secretary, thanks very much for coming in. CHERTOFF: Great.

BLITZER: And up ahead, a little known Republican presidential candidate suddenly getting lots of attention with a massive cash haul.

Will the donations make voters take another look -- a much closer look at Ron Paul?

We're watching the story.

Plus, bracing for a new oil crisis with gas at $5 a gallon. We're going to show you one very disturbing scenario.

Stick around.



BLITZER: Carol Costello is monitoring some other important stories incoming into THE SITUATION ROOM right now.

Let's check in with Carol.

What's going on -- Carol?


President Bush's choice to be the next attorney general took a key step toward confirmation today. Just hours ago, the Senate Judiciary Committee voted to advance Michael Mukasey's nomination to the full Senate. Two Democrats joined with Republicans on the committee, after Mukasey gave assurances that he would enforce any law Congress might enact against the controversial interrogation technique known as waterboarding.

In Southern Mexico, rescuers are digging through mud and debris, hoping to find survivors after a small village was buried by a landslide. At least 16 people are reported missing. The region has been drenched by heavy rains and widespread flooding in recent weeks.

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

BLITZER: Thank you very much for that, Carol Costello.

The chief operating officer of the National Children's Museum in Washington is arrested on child pornography charges. The suspect, a 49-year-old named Robert Singer of Falls Church, Virginia, was busted as part of a federal sting. He allegedly sent an e-mail with graphic sexual images of minors to an agent posing as someone who made contact at an Internet chat room. The Children's Museum says this is obviously a very serious allegation and they're watching it right now.

We're also watching another important story involving Hillary Clinton's secret documents.


SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I think there's been a lot of misunderstanding. You know, the Archives takes possession and control of presidential records.


BLITZER: The Democratic presidential frontrunner answers the tough questions on one of the issues dogging her on the campaign trail.

Is it enough, though, to satisfy critics?

And Ron Paul's money bomb -- the Republican candidate raises over $4 million in a single day.

But will that translate into media coverage and votes?

Stay with us.




Happening now, Congress says no to the president. The House of Representatives expected to vote to override the president's veto of a water project's bill any minute now. It would be the first veto override of his presidency.

Also, republican presidential candidate Rudy Giuliani now standing by New York's former police chief, even though he could be in some serious legal trouble. Will it taint Giuliani's tough on crime reputation?

And this. They're not your typical striking workers. The people are professional writers. Why they can't come up with more creative signs. Jeanne Moos with have the most unusual look at the picket line. That's coming up in our next hour.

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

Republican presidential candidate Ron Paul raised big bucks and some major eyebrows with a very successful one-day Internet fundraising drive. Amazing, amazing numbers. The impressive numbers, in fact, attracting new attention to a candidate many simply assumed was an extreme long shot.

Carol Costello's here in THE SITUATION ROOM. She's been following the story all day. The big question a lot of people are asking, could he translate these millions of dollars into votes?

CAROL COSTELLO, CNN CORRESPONDENT: That would be the $4.38 million question, Wolf. I mean Ron Paul wows them online, but he can wow them any better offline than Howard Dean did. I talked to the candidate himself and he told me he can't.


RON PAUL, PRESIDENTIAL CANDIDATE: I'm Ron Paul and I'm running for president.

COSTELLO: Meet Ron Paul, winner of the biggest money bomb of this year's republican presidential campaign. That's what his supporters call it. His money bomb. It means his supporters dropped $4,383,000 million in 24 hours. That's $182,500 per hour, $3,042 per second.

PAUL: Thank you for the support. We've always known the message was very powerful, but we didn't know how many people would support it.

COSTELLO: But as supporters call Ron Paul an Internet sensation much like Howard Dean was in 2000. Only better. Paul essentially stays out of the way and lets his online supporters figure out how to raise money. Their Net Roots campaign is sometimes wholesome and sometimes not.

UNIDENTIFIED FEMALE: How do you explain this?

COSTELLO: She and hundreds of thousands of others are hip to Paul because he's anti-war, fiscally conservative and they say principled and honest. They know that despite a decided lack of traditional media coverage. Ron Paul did participate in all of the republican debates, but after they ended, TV anchors ignore him. According to the tracking company, VMS, Ron Paul's name was mentioned just 4,396 times on TV news and cable shows from August of 2006 to August of 2007. Want a comparison? John McCain was mentioned 95,005 times. Not something that is lost on Paul.

PAUL: I thought maybe it might be a little lazy work on their part and it's hard for them to believe that somebody that takes my position would have such a popular following.

COSTELLO: But after Paul's money bomb, things may change. While Paul lags behind McCain and mentions in poll position, he has more money in the bank than Senator McCain.

DAVID ALL, REPUBLICAN FUNDRAISER/SLATECARD.COM: I think people are starting to pay attention, so the big step is, can Ron Paul make the jump from the early adopters to the main stream?

COSTELLO: Paul is already trying to slip into the main stream.

UNIDENTIFIED MALE: But he is honest and you always know where he stands.

COSTELLO: He's running traditional TV ads in New Hampshire and will campaign the old-fashioned way in Iowa and he'll be singing the same tune wherever he goes.

(END VIDEOTAPE) COSTELLO: So, who are his supporters? Well, they're republicans, they're democrats, they're young people, they're independents, they're older people, anybody who craves change and who is disenchanted with the candidates now in the lead.

BLITZER: Got a lot of libertarians in the process, as well. We're going to try to get him here in THE SITUATION ROOM later this week and we'll talk to him. Thanks very much, Carol, for that.

Presidential candidate Senator Hillary Clinton is campaigning in Iowa today and the democratic frontrunner took some time out for an exclusive interview about the CNN Election Express. That's our state of the art bus bringing the campaign to the voters.

Our senior political correspondent Candy Crowley asked Senator Clinton about the release of records from Bill Clinton's administration, which critics accuse the Clintons of delaying.


SEN. HILLARY CLINTON (D), NEW YORK: The archives are moving as fast as they can and both Bill and I have a commitment to that. I think there's been a lot of misunderstanding, you know, the archives takes possession and control of presidential records. They by law actually have to look at every record before it's released. That's not something Bill and I have asked to be done. That's what they must do by law. Bill has gone further than any other president ever and saying speed up the process, put things out. Do it as quickly as possible. But they have to follow the law and he's never, ever said we're not going to put something out. And they're moving as quickly as they can.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: But have you asked him, look, is there some way we can do this? Because we're talking about a quarter of the experience that you're basing your candidacy on. So you can see how people say, fine, let's look at the eight years in the White House. Have you gone to him and say, what can we do?

CLINTON: Well, we have pushed the archives. In fact, he has been much more aggressive in trying to get the archives to get his information out more quickly than any other president. And, you know, we keep being told that the archives have a process. They have to follow the law. They have to read everything. They have to record everything and they're doing it as quickly as they can and I have no reason to doubt that.

CROWLEY: So, nothing you all can do to speed it up?

CLINTON: We have tried and he's done more than any other president and has never withheld any document that has been processed to be ready to be released.


BLITZER: And you can see a lot more of Candy's exclusive interview with Senator Hillary Clinton on the CNN Election Express. That comes up in our next hour, the 6 p.m. eastern hour right here in THE SITUATION ROOM. Stand by for that.

Orange County, California's top cop, a rising star in republican circles. Get this, he's just announced is taking a leave of absence amid a growing scandal over alleged bribes and kickbacks. CNN's Ted Rowlands is joining us with the latest. Ted.

TED ROWLANDS, CNN CORRESPONDENT: Wolf, Mike Carona has been called America's sheriff, but now he finds himself on the other side of the law.


SHERIFF MIKE CARONA, ORANGE CO., CALIFORNIA: Don't sleep, don't eat, because we're coming after you.

ROWLANDS: Propelled into the spotlight by the Samantha Runion case, Orange County Sheriff Mike Carona became known as a tough- talking top cop and to many a hero. Carona was the public face of caring and commitment vowing to capture the kidnapper of 5-year-old Runion, taken from in front of her home and then raped and murdered in 2002. A rising republican star, Carona is often seen with Governor Schwarzenegger. He was even encouraged to run for statewide office by Karl Rove. Now the sheriff, his wife Debra and his alleged mistress also named Debra are accused of using Carona's position to enrich themselves at public's expense, accepting $700,000 in bribes and kickbacks, according to a criminal indictment.

CARONA: I have never misused the office of the Sheriff of Orange County.

ROWLANDS: Facing counts that include conspiracy, fraud, and tampering with a grand jury, the sheriff is defiant.

CARONA: These accusations are false.

ROWLANDS: One of the men expected to testify against Carona is Donald Haidl, a businessman who the indictment says gave the sheriff cash, gifts and trips, including the use of Haidl's yacht and private plane. In return for the favors, prosecutors alleged that Carona made who made Haidl an assistant sheriff, showed Haidl's son Gregory preferential treatment in various run-ins with the law including drugs and sexual assault. Greg Haidl, the son, is now serving six years in prison for sexual assault. Carona, his wife, and his alleged mistress, Debra Hoffman, have all entered not guilty pleas in federal court.

CARONA: I'm going back to work.

ROLWANDS: And despite calls for his resignation, Carona vows to fight the charges against him and plans to keep on being sheriff while he does it.

(END VIDEOTAPE) ROWLANDS: A trial date has been set for December 18th, but it's expected that Carona and the other co-defendants won't actually go to trial until some time next year. Wolf.

BLITZER: Ted Rowlands, thank you very much for that.

The price of oil is hitting new records almost everyday. So what will it mean for the economy, for politics, for global stability, and everyday life in the United States? One bipartisan group of prominent experts has just staged a mock worst-case scenario. We'll show you the unsettling possibilities.

Did the leader of one evangelical mega church use donations from the faithful to build a $23,000 marble toilet? That's among the allegations being investigated right now by a republican congressman. We'll have much more coming up on that story.

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


BLITZER: The price of crude oil hits a new record high topping $97 a barrel and they're widely expecting to reach the $100 mark soon. The threat of a full-scale oil crisis prompting a remarkable drill.

Let's bring in our Pentagon correspondent, Barbara Starr. She's here in THE SITUATION ROOM. Tell us about the purpose of this drill because it's pretty stunning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: It is, Wolf. Essentially it's a war game about how high oil prices can go, what can be done about and it's complete with simulated newscasts bringing Americans the bad news.


UNIDENTIFIED MALE: Oil prices rose to record highs of more than $145 a barrel today.

STARR: It's 2009, Iran is closer to possessing nuclear weapons and furious about new U.S. sanctions. It stopped selling oil to the west. Local uprisings have already cut a major pipeline in central Asia. Gasoline in the U.S. is $5 a gallon. The economy is reeling. Former Treasury Secretary Robert Rubin is the national security adviser in this scenario.

ROBERT RUBIN, OIL CRISIS SCENARIO PARTICIPANT: And the president has asked us to come back to embrace shortly. He's obviously going to have to go out and speak to the country about all of this.

STARR: Retired General John Abizaid, former Head of Central Command, is the chairman of the Joint Chiefs of Staff. He warns if the U.S. goes to war to protect oil supplies, a draft could be ordered.

GEN. JOHN ABIZAID (RET.), OIL CRISIS SCENARIO PARTICIPANT: We essentially have committed most of our military power.

STARR: This, of course, is a simulation, held recently by a bipartisan group of business and former government and military officials. Robbie Diamond rammed the game and notes with oil and gasoline prices already rising in real life, this all seems uncomfortably possible.

ROBBIE DIAMOND, SECURING AMERICA'S FUTURE ENERGY: We started at $95 and, you know, we were concerned it would hit $100 before we actually even did the simulation.

STARR: Former Clinton Press Secretary Mike McCurry was on the panel. He says it all showed how few options there are.

MIKE MCCURRY, OIL CRISIS SCENARIO PARTICIPANT: Look, there's there will be a political cost and my conclusion as part of the scenario, this is a one-term president, whoever the president was, he or she.


STARR: So, what are some of the options the group came up with? Wolf, they talked about things like gasoline rationing, no driving on Sundays, alternative driving days. But of course the question is, are Americans really ready for that and how soon could something like that happen?

BLITZER: We may have no choice.

STARR: That's the conclusion they came to. Mike McCurry said it me that he did not understand how fragile the oil market is and the economy and financial markets until he really sat down and looked at all of this.

BLITZER: All right. Fascinating material. Very worrisome material, Barbara, thanks very much.

As courts in Pakistan remain on lockdown, our I-reporters there are continuing to send us their images, their videos of protest against President Pervez Musharraf's state of emergency. Our Internet reporter, Abbi Tatton, is here joining us.

Abbi, what are these I-reports showing now?

ABBI TATTON, CNN INTERNET REPORTER: Wolf, we have been getting a lot of reports in from students that the campuses around Pakistan, a lot from the Lahore University of Management and Sciences here. Pictures, a lot of it grainy video taken on mobile phone that take us right inside the protest that have been going on that campus yesterday and through the next couple days that they're planning.

I'm going to take you to this video here which is sent in by Ahmet. He was saying yesterday people were shouting go Musharraf, go. This was just a testing the waters protest, he said, for a larger event that is being planned tomorrow. We are getting pictures of the planning that's going on for that one at the university. This from Asan Ali, who said that while yesterday's protest was confined within the campus of the university, tomorrow they're going outside., that's where all these images are coming in online.

BLITZER: They'll keep on coming, I assume. Thanks very much, Abbi, for that. We'll check back with you.

Up ahead, a leading lawmaker shines a spotlight on some of the country's best-known television ministries. You're going to find out why he's ordering an investigation right now.

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


BLITZER: A leading republican senator is investigating the country's best-known television ministries for possible financial misconduct. Let's go to our congressional correspondent Dana Bash. She's watching this story. What is behind the investigation, Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well you know Wolf, Iowa Senator Charles Grassley has practically made a career here out of going after what he suspects is mismanagement at non-profit organizations and today set his sights on mega churches.


PAULA WHITE, TELEVANGELIST: Somebody is getting ready to get up, get up, get up in the name of Jesus.

BASH: Televangelist Paula White reaches millions of faithful from her 22,000-member without walls church, one of the fastest growing churches in the country. She's been dubbed a prosperity preacher.

WHITE: Your family is going to look different. Your financials are going to look different.

BASH: Telling followers the more they give, the more they'll be blessed. Now, Whites' and five other media based ministries are being investigated for alleged financial misconduct by republican Senator Charles Grassley.

SEN. CHARLES GRASSLEY (R), IOWA: I'm just interested in not the personality, not the preaching of these people, I'm only interested in the laws being followed?

BASH: He says he's following up on news reports and complaints to his office from whistleblowers about possible misuse of millions of dollars that go to tax exempt mega churches.

GRASSLEY: Bentleys, Rolls Royce's, corporate jets, $23,000 commodes and a multi-million dollar home. You know, just think about it, $23,000 marble commode. A lot of money going down the toilet, you could say.

BASH: Federal law grants churches tax exempt status and prohibits leaders from using donations to enrich themselves. But the law does not require churches to report how the money is spent.

Grassley wrote the six televangelists asking for detailed information about their expenses, compensation and amenities for executives. Ministries who responded to CNN insist they've done nothing wrong. Creflo Dollar of World Changers Church said, "My life and my ministries have always been an open book and that won't change now." "World Healing Center Church complies with the law that govern church and non-profit organizations and will continue to do so," said Pastor Benny Hinn.

GRASSLEY: My interest as a public official is that we have tax exemption for giving. We want to make sure that is not abused because you as a middle income taxpayer will make up for abuse for anybody else.


BASH: Now, Grassley is careful to say he doesn't know if any laws are being broken, but he does say that current tax law may just need to be changed to require stricter rules and transparency on how donations to churches are spent. Wolf.

BLITZER: Dana, thanks very much for that story.

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

JACK CAFFERTY, CNN CORRESPONDENT: You know, anybody who phones into the government with tips on those churches will get a special prayer handkerchief, blessed.

The question this hour is where is the war in Iraq headed in 2007, if 2007 has been the deadliest year for U.S. troops so far?

Dean, who's in the Marine Corps, writes this, "The war in Iraq will only result in more deaths of my brothers for nothing but higher oil costs and more hatred of the United States spurring more terrorists than when the war began."

James in Ohio, "From the rhetoric of the neocons and liberals, the war is probably headed straight into Iran."

Greg in New York, "This may be the deadliest year in Iraq on record, but this is also the most important year on record due to the success of the troop surge and the lower levels of casualties it has afforded the United States. The spring of 2007 was deadly, but let's focus on our successes made this fall, the troop surge has worked."

Mike writes, "You just don't understand, Jack. If the democrats cut off funding for the war, as you suggest, then they'll pay a huge price at the polls in 2008. The republicans will campaign exclusively on the democrats not supporting the troops and the voters will believe it, despite them wanting the Iraq war to end. The media will fall for it, too. The world will continue as long as Bush is in power."

Carl in Connecticut writes, "This war hasn't been headed anywhere for four and a half years. Once we weren't welcomed with flowers, the administration had no idea what to do next and still doesn't. The only place it is all going now is squarely into the lap of the next president or to hell in a hand basket. Assuming there is a difference."

And Craig in Eden Prairie, Minnesota, "The occupation of Iraq isn't going anywhere. We're a bull in the Pottery Barn and the people there in Iraq long ago moved away from you broke it, you bought it to, please, please just go."


BLITZER: Jack, stand by, you're coming up in the next hour, not only for the Cafferty File, but also for our roundtable.

Also coming up, border security lapses reveal thousands of people getting into the United States illegally through official entry points. You can bet Lou Dobbs has something to say about that. Lou is standing by live to join us.

Also an exclusive interview with democratic presidential candidate Hillary Clinton aboard the CNN Election Express.

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


BLITZER: Welcome back to THE SITUATION ROOM. Lou Dobbs getting ready for his show. It begins in one hour. His new time 7:00 p.m. eastern but we invited him back to talk a little bit right now.

The interview I did with Michael Chertoff, the homeland security secretary, says by the beginning of next year you know all these people streaming through illegally through these official border entry points, you know, that's going to be history. No more starting early next year. What do you think?

LOU DOBBS, CNN ANCHOR: I think that this homeland security secretary, Wolf, should be history himself. We are talking about more than six years after September 11th, 21,000 by their own estimate, we don't know what the real number is. 21,000 real illegal aliens going through the screening process at lawful ports of entries. Our borders, our ports remain wide open. 95 percent of the cargo uninspected, 500,000 to 1 million illegal aliens streaming across our borders and this administration has the temerity to talk about a global war on terror when it isn't even securing these borders. Come on, give me a break. You know, I hope that this election in 2008 produces a leader and an administration who actually care about the American people, national borders, the safety and the security and the wellbeing of the American people. Because this administration has acted with arrogance and indifference to each of those qualities for which, frankly, they've been absolutely irresponsible.

BLITZER: And very briefly, Lou y know you're talking about these letters that are going out from the Bush administration to people whose homes may be in danger because of the mortgage crisis. What is going on?

DOBBS: You know, Wolf, I'm an independent populist. We talk each night and examine carefully these issues. I believe in the people and this absurd administration. This Congress, this democratic Congress, you know, we're talking about tens and tens of billions of dollars in help for major money center banks, but we're talking to letters of homeowners and two million of them this year. This is an outrage and the American people, this congress and this president need to act.