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Will Spitzer Resign?; Mississippi Votes: Which Dem Will Get the Majority?; How Many Negative Statements Will be Repudiated this Election Season?

Aired March 11, 2008 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: And, to our viewers, you're in THE SITUATION ROOM.
Happening now, Barack Obama and Hillary Clinton tested again. As Mississippi voters emerge, the racial tensions are resurfacing in this Democratic race.

Plus, sex, scandal, and a governor's decision. Will Eliot Spitzer resign? Some fellow Democrats say it's not a matter of if, but when.

And the top U.S. military commander in the Middle East calling it quits. Was he pressured by the Bush administration to step down?

I'm Wolf Blitzer at the CNN Election Center, along with the best political team on television. You're in THE SITUATION ROOM.

We want to welcome our viewers in the United States and around the world.

We're only two hours away right now from the end of the voting in Mississippi. We're standing by to talk primary politics.

But, first, the governor of New York feeling intense pressure right now to resign after that bombshell news linking him to a prostitution ring. A top legislative staffer says aides to Spitzer and the lieutenant governor have been meeting, planning for a possible transition.

The top Republican in the New York State Assembly has given Spitzer a flat ultimatum; step down within two days or face impeachment. Even some of the governor's allies suggest his resignation is inevitable, especially as we learn more about the allegations against the self-proclaimed crime-fighter.

Our justice correspondent, Kelli Arena, has been digging into details. She's getting some of those details.

What are you learning, Kelli?

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Well, Wolf, most officials are really starting to clamp down on this one. They're pretty uptight about the amount of information that's gotten out to the press. But we were able to get a pretty clear picture of how Spitzer ended up where he is. (BEGIN VIDEOTAPE)

GOV. ELIOT SPITZER (D), NEW YORK: We are working through those difficulties.

ARENA: For a guy with as sharp a legal mind as Eliot Spitzer, the allegations against him are mind-boggling. Sources with knowledge of the investigation say to allegedly make payments to the prostitution ring, he started shifting around money among his bank accounts.

That's where he ran into trouble. The suspicious activity raised red flags at the bank, which filed a report with the IRS, which opened an investigation run out of this nondescript Long Island office. The money allegedly ended up in shell accounts set up by the prostitution ring. And if shuffling money is a legal red flag, sending money to shell companies is a five-alarm fire.

SCOTT MICHEL, TAX ATTORNEY: This was done to conceal the true nature of the prostitution operation that was going on. And if somebody transfers money into a fake company account, knowing that that is a fake account, that person can be engaged in a money- laundering conspiracy.

ARENA: Sources say investigators are focused on where Spitzer got the money for the alleged sexual encounters. So far, there's no indication he used anyone's cash but his own. Investigators are also looking into what he may have done to conceal the movement and source of those funds and whether Spitzer engaged in a crime known as structuring.

ROSCOE HOWARD, FORMER U.S. ATTORNEY: The premise of structuring is that you're trying to take a large transaction, make it look like multiple smaller transactions that are unrelated.

ARENA: Sources say Spitzer spent more than $15,000 for several encounters. That may it be chump change for the wealthy governor, but probably hard to hide from his wife.


ARENA: Now, Spitzer has not been charged with any crime. Sources say he hasn't even been formally questioned. But it's expected that the sharp minds on his high-priced legal team will soon meet with prosecutors to discuss any legal liability -- Wolf.

BLITZER: All right, Kelli, thank you.

We're also learning new information about the investigation into the prostitution ring and an IRS connection. Drew Griffin of CNN's Special Investigations Unit is joining us. He is working his sources.

What are you coming up with, Drew?

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: We're learning, Wolf, that the man who is allegedly the ringleader of this prostitution ring -- his name is Mark Brener -- is an enrolled agent with the IRS.

So, as Kelli was talking about, shouldn't Eliot Spitzer have known better? After all, he prosecuted prostitution rings. Here's a guy that knows the laws of the IRS, knows the tax codes, and was running this prostitution ring, according to the U.S. attorney in New York, and possibly should have known better.

An enrolled agent doesn't mean he was an IRS agent. It means that he either is a former agent that now helps taxpayers defend themselves against the IRS or he studied the tax codes and took a test and passed that test, and now is recognized as an agent representing taxpayers of the IRS, a very curious element and down the road, Wolf, may be an indication as to why the IRS was involved in this in the first place and where the information actually came from. But Mark Brener, ringleader, the supposed operator of the Emperors Club, an enrolled agent with the IRS.

BLITZER: All right, we will see what that brings. I suspect we're only learning the tip of the iceberg so far in this case. Drew, thank you.

This scandal could end up creating history in New York State. That's because the Lieutenant Governor, David Paterson, could take over for Spitzer. He would be the first African-American governor of New York and the state's first legally blind governor.

Paterson has an Ivy League degree from Columbia and a Hofstra Law School degree as well. He was a long-term state senator, even becoming the first black Democratic leader in the state Senate. The 53-year-old Paterson lives in Harlem with his family.

Let's get to the Democratic presidential race right now. Barack Obama is hoping to win today's Mississippi primary and put the brakes on Hillary Clinton's renewed momentum. This hour, racial politics, though, are back in the mix, as the Democrats look ahead to the next big battleground, Pennsylvania.

Our Suzanne Malveaux is already there. She's watching the story for us.

Talk a little bit about this latest dust-up, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, it was back in 1984. She was the real first potential vice presidential nominee for the Democrats to get that number-two spot. Now she is a big-time Clinton supporter. She's in the midst of a controversy now between the two campaigns for the bitter issue of whether or not Barack Obama's race makes a difference.


MALVEAUX: The Clinton campaign is facing pointed criticism from the Obama camp today after controversial comments were published in a California publication "The Daily Breeze" by Clinton fund-raiser and financial adviser, and former vice presidential nominee, Geraldine Ferraro. In an interview, Ferraro said, "If Obama was a white man, he would not be in this position. And if was a woman, he would not be in this position. He happens to be very lucky to be who he is. And the country is caught up in the concept."

Obama senior policy adviser Susan Rice immediately called for Hillary Clinton to repudiate Ferraro's remarks. Obama supporter Congresswoman Jan Schakowsky followed up with a conference call with reporters. She said the suggestion that Obama was getting preferential treatment because of his race was out of line.

Later in the day, Senator Clinton was confronted with Ferraro's comments...

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Well, I don't agree with that. And I think it's important that we try to stay focused on the issues that matter to the American people. And both of us have had supporters and staff members who have gone over the line. And we have to rein them in.

MALVEAUX: Obama and his campaign criticized Clinton for not demanding Ferraro leave the campaign altogether. Obama told a Pennsylvania newspaper: "Anybody who understands the history of this country knows they are patently absurd. And I would expect that, the same way those comments don't have a place in my campaign, they shouldn't have a place in Senator Clinton's either."


MALVEAUX: And, Wolf, since this has developed, I have heard from Maggie Williams, the Clinton campaign manager. We have from Bill Burton, a spokesman for the Obama campaign, as they're both trading these accusations, saying that both camps are using race, playing the race card here.

I do think that there's some sincere people who feel those comments by Ferraro were offensive, but also in a larger context, you have to realize there's a heightened sensitivity about what each of these supporters are doing and what they're saying. It was just last week that Obama's national policy adviser, Samantha Power, called Hillary Clinton a monster, and then had to walk away from the Obama campaign -- Wolf.

BLITZER: All right, Suzanne, thanks very much.

Let's go back to Jack. He has got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Barack Obama is expected to do very well in today's Mississippi primary. He swept the other Deep South states by large margins, in part due to his very strong support among African-American voters.

Clinton's campaign says she has little chance to win in Mississippi, already moved on to Pennsylvania, site of the April 22 showdown, on which she's staking her campaign. But there's a long and very welcome six-week respite between Mississippi and Pennsylvania. I can't wait. Obama, fresh off his Wyoming victory and a potential Mississippi win, could head into that period with a widening lead over Clinton in number of states won, pledged delegates and popular vote.

Also working in Obama's favor, two separate prediction exchanges where you can actually bet on who's going to be the nominee. They both now favor Obama over Clinton for the nomination. According to Reuters, both exchanges give Obama about a 75 percent chance of winning, compared to 24 percent for Clinton. These things are historically pretty accurate.

As for Hillary Clinton, her campaign's looking for a big win in Pennsylvania. The demographics there are similar to Ohio. She of course beat Obama in Ohio last week. There's also the hope that the revotes in Florida and Michigan could help her catch up with Obama.

But perhaps one troubling sign for Hillary Clinton came today from feminist Germaine Greer. A well-known name in the feminist movement described Hillary Clinton as cold, bossy and manipulative. Greer questions Clinton's credentials to be the president, suggesting that she only got where she is because she's married to Bill Clinton, not the kind of stuff Clinton wants to hear coming particularly from feminists.

So, here's the question: Will Hillary Clinton or Barack Obama have the momentum going into Pennsylvania six weeks down the road from now?

Go to You can post a comment on my blog there.

BLITZER: You know, she competed with Bill Clinton when they were both at Yale Law School together. Guess who had better grades?

CAFFERTY: She probably did.

BLITZER: She did.

CAFFERTY: But girls always get better grades than the boys.


CAFFERTY: It's one of nature's rules.

BLITZER: Jack, thank you very much.

CAFFERTY: You're most welcome.

BLITZER: Recklessness or something else? One famous New Yorker thinks he knows why Governor Spitzer did whatever he did.


ED KOCH, FORMER MAYOR OF NEW YORK: Yes, it's arrogance. He's a very smart guy, but I think that there is a screw loose.


BLITZER: The former New York City Mayor Ed Koch gives us his opinion on this scandal. You're going to want to hear what he has to say.

Also, if you invest in the stock market -- And who doesn't? -- you're going to hear what happened on Wall Street today. Amid recession fears, there's some good news. But how long will it last?

And people just like you are voting in Mississippi. What's on their minds? We're getting new exit poll results. They're coming in. We will share them with you -- right here in THE SITUATION ROOM.


BLITZER: Many New York Democrats still in a state of shock a day after the Eliot Spitzer sex scandal broke. Now, like all of us, they're waiting to see if the governor will step down.


BLITZER: And joining us now, the former mayor of New York, Ed Koch.

Mr. Mayor, you have praised him in the past. you have written columns defending him. You know him. What happened here?

KOCH: I think there's a screw loose. I believe that his behavior, beginning with his becoming governor, has been irrational. And what he did is to indicate that he doesn't play by the regular rules. That regular rules don't apply. That you can say anything you want, you can insult anybody you want, including the people that you have to work with, whether it's the speaker of the assembly or the majority leader of the senate.

BLITZER: Was it arrogance?

KOCH: Yes, it's arrogance. He's a very smart guy, but I think that there is a screw loose.

BLITZER: So does that mean he needs help at this...

KOCH: Yes, I would say so. And I'm not a doctor. But I would say that he needs help. It is -- what happens when you think, as Charlie Rangel put it brilliantly a long time ago, you think you're the smartest man in the room, and you have contempt for everybody else. And that's what he has conveyed.

BLITZER: Because when he was the attorney general, he prosecuted prostitution rings, high-end prostitution rings in Staten Island. So he knows something about this kind of business.

KOCH: Now, what he did -- I mean, I don't perceive prostitution to be a terrible crime. I don't think it should be a crime at all. But the fact is, he knew what he was doing, and for him to place himself in that position firstly, as it relates to his wife and children, and secondly as it relates to his ability to govern, is an irrational act. And we're witnessing a Greek tragedy.

BLITZER: You know his wife, too. She looked awful standing there alongside him.

KOCH: My heart went out to her, because she aged in a few moments before your very eyes.

BLITZER: When you say she aged, you saw a difference between earlier pictures of her and what we saw yesterday?

KOCH: Yes.

BLITZER: Just a tragic, tragic moment.

KOCH: A tragedy.

BLITZER: So where do we do from here? Can a guy like this continue?

KOCH: Well, firstly, he has very good lawyers. And I don't intend to give him legal advice. I hope whatever happens is for his best future. I personally don't believe he will be able to survive it, and that he ultimately will at some point -- the government will force him, threaten him with indictments, et cetera, and then settle it with a resignation.

They don't normally pursue you when you're a public official and you step down. I don't know what will happen. I doubt that he can survive and remain governor.

BLITZER: Given all of the political enemies he's created over the years when he was the attorney general, and since he's become governor, do you smell a rat here? Some sort of political witch hunt against him that escalated into this?

KOCH: No, "The Times" laid it out. They said they have special investigators looking at bank accounts. And they were looking at his bank accounts and they found flows of money going to shell corporations, and they wondered whether there was money laundering going on.

And that went to the prostitution ring. And they put in wires. And they got his conversation with the pimps and the prostitutes and so forth.

BLITZER: So you don't see a political vendetta out to get this guy, and they got him?

KOCH: He put himself in harm's way, and he was harmed.

BLITZER: And you can only say, and I assume you would say, this is the last guy on earth you thought this would happen to. KOCH: Well, I never thought it would happen to him. He's so smart. But if you look back and you say to yourself, how can a guy who is so smart be so dumb?

BLITZER: Mr. Mayor, thanks for coming in.

KOCH: Thank you.


BLITZER: The point man for any potential U.S. military showdown with Iran, Admiral William Fallon, has suddenly resigned, this after a magazine article suggested the head of the U.S. military's Central Command was at odds with the Bush administration's tough stance on Iran.

Let's go to our senior Pentagon correspondent, Jamie McIntyre -- Jamie, what is this all about?

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Wolf, inevitably, many people are going to believe that Admiral Fallon's departure was forced. And, in fact, Pentagon officials confirm to CNN that many at the White House had issues with Admiral Fallon because he appeared to be out of step with the president.


MCINTYRE: Admiral William "Fox" Fallon's 41-year career and his term as top U.S. commander for Iraq, Afghanistan, and the Middle East was brought to a crashing halt by this profile in April's "Esquire," magazine which portrayed Fallon as brazenly challenging his commander in chief in opposing war with Iran.

"He is that rarest of creatures in the Bush universe, the good cop on Iran," the article asserts, adding, "He might not get away with it for much longer. President Bush is not accustomed to a subordinate who speaks his mind as freely as Fallon does."

Fallon's boss, Defense Secretary Robert Gates, insists there was no pressure from the White House and that he only informed President Bush, who was traveling, after Gates decided to accept Fallon's offer to step aside.

ROBERT GATES, SECRETARY OF DEFENSE: Admiral Fallon reach this difficult decision entirely on his own. I believe it was the right thing to do, even though I do not believe there are, in fact, significant differences between his views and administration policy.

MCINTYRE: Fallon issued a statement from his Central Command headquarters in Tampa, saying in part: "Recent press reports suggesting a disconnect have become a distraction at a critical time. And, although I don't believe there have ever been any differences, the simple perception that there is makes it difficult for me to effectively serve."

While Fallon says the decision to step down is aimed at removing a distraction, it does just the opposite, reinforcing the perception he was pushed aside because he opposed attacking Iran.

GATES: The notion that -- that this decision portends anything in terms of a change in Iran policy is, to quote myself, ridiculous.

MCINTYRE: But Fallon's abrupt resignation is already giving ammunition to the administration's sharpest critics, such as Senate Majority Leader Harry Reid, who said, "I'm concerned the resignation of Admiral Fallon is yet another example that independence and a frank, open airing of experts' views are not welcomed in this administration."

Insiders say what got Fallon into trouble was not his private advice, but public statements that sometimes came off as dismissive of U.S. policy.


MCINTYRE: So, while it may well have been Admiral Fallon's decision to step down, when he called and told Secretary Gates, he got no argument. In fact, Gates told him he thought it was the right thing to do -- Wolf.

BLITZER: Jamie McIntyre, with this important story, thank you.

Under pressure to come clean, from Barack Obama's friend, to Hillary Clinton's tax records, to John McCain's medical records, is it time for the candidates to go public about their pasts?

And his military training flight disappeared more than six decades ago. Now, a year after the young airman's remains were found, they have been identified. And his family will finally get to lay him to rest.

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



BLITZER: We have seen a number of voter trends in this presidential race, but do Mississippi voters see the contest differently? Soledad O'Brien is standing by to give us some fresh information from our brand-new exit polls, numbers just emerging right now.

Plus, former vice presidential nominee Geraldine Ferraro pegs Obama's campaign success, at least in part, to his race. The Obama camp is fuming. You're going to find out what the best political team on television has to say.

And Clinton and Obama are counting delegates in their nip-and- tuck fight to the Democratic nominee. Who will the -- will the popular vote this primary season matter the most? Will the pledged delegate count matter the most?


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

Happening now, about 90 minutes or so and until the polls close in Mississippi, we're getting new exit poll data right now. We're going to be sharing those numbers with you, what to look ahead to the next big battleground.

Also, the uproar over remarks about Barack Obama's success so far and his race. You're going to find out what a former Democratic vice presidential nominee is saying and why it's causing some trouble for Hillary Clinton's campaign.

Plus, the rise and fall of New York Governor Eliot Spitzer and the unfolding sex scandal that many believe could bring him down, possibly at any moment -- all of this coming up, plus the best political team on television.

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

As we said, it's only about an hour-and-a-half until the polls close in Mississippi. Who wins that primary could hinge on what the voters are thinking right now.

We're taking a close look at the exit polls in this battleground state, Mississippi, involving Hillary Clinton and Barack Obama.

Let's turn to CNN's Soledad O'Brien. She's going through the numbers.

What are we picking up, Soledad?

SOLEDAD O'BRIEN, CNN ANCHOR: That's right. Here's what we're getting from the exit polls right now. What matters to voters in Mississippi is actually the same thing, Wolf, that matters to voters across the nation, economy, economy, economy.

You take a look at the numbers, 56 percent, when they asked all Democrats, most important issue was economy. And, then, below that, tying for second place, was Iraq and health care.

Now, when ask you about national economic conditions, 10 percent only say excellent or good. It's a large majority there, 89 percent, who say not so good or poor.

And, finally, when you ask, are you worried about your personal financial situation -- keep in mind, this is the area where Hurricane Katrina hit, not just in New Orleans, so people there are struggling very much -- 78 percent say yes, they are personally worried about their financial situation. Only 20 percent say no.

So, Wolf, what does this mean for the candidates is kind of the $64,000 question. Hillary Clinton has had a lot of success when it comes to the economy as her issue. And if you think that Mississippi has the lowest per capita income of any of the 50 states, this actually could help her a lot -- a breakdown like that.

It's going to be a question of whether the economy will trump race in this particular race, because we're also watching the racial breakdowns at this point. Barack Obama has had much success, as you well know, among black voters in the South.

It will be interesting to see, Wolf, if he can actually keep that momentum going. So we're going to continue to watch this, obviously -- Wolf.

BLITZER: OK, Soledad. Thanks very much.

There are more numbers coming up and she's going to be bringing those numbers to us throughout the night. Soledad O'Brien, thank you.

Let's discuss Mississippi and a lot more with our chief national correspondent, John King, our own Jack Cafferty and our senior political analyst, Gloria Borger. As you know, they are all part of the best political team on television.

I guess everybody's going to be anxious to see what happens in Mississippi, although he's got a huge advantage, at least in the polls going in -- Jack.

CAFFERTY: Well, it's an opportunity because of the six weeks between now and Pennsylvania. He won Wyoming. If he wins tonight in Mississippi, he's got two in a row all of a sudden.

He gets in the news for the same reason that Hillary did when she won Ohio, Texas and Rhode Island. So it's good for the spin for the Obama campaign and gives him, maybe, a little momentum. Thirty-three delegates -- maybe he picks up a couple dozen of those. And so, you know, if he wins, it will be good for him and not so good for her, I would think.

BLITZER: What are you looking for tonight -- Gloria?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: We'll, I'm really looking to see -- given how nasty this race has gotten just lately between these two candidates, I'm really looking to see how the voters feel if their candidate were to lose.

Because, you know, previously we've always heard Democrats say, look, I'd be really thrilled if either of these candidates win. So I want to see if they're still feeling that way or if this race has hardened a little bit in each hand (ph).

CAFFERTY: They're not.


CAFFERTY: I got 2,000 e-mails in the last three hours from people we asked that question.


KING: Many Democrats think a long fight is not a bad fight as long as the candidate gets tougher and stronger. But now, increasingly, to Gloria's point, it's getting more raw, Wolf. People don't like it. Geraldine Ferraro's comments today -- I think we're going to talk about those.

But I'd look for is this. Barack Obama is going to win Mississippi. I think the question is, the margins. How many delegates does he get? What happens to white rural voters? Because, when the contest moves on to Pennsylvania, where Hillary Clinton has drawn another line, saying she needs to win in that state, and then have you Ohio, Kentucky, Indiana and North Carolina -- states where white, lower income, lower scale, lunch bucket Democrats, rural voters -- they will count big in the contest to come.

BORGER: And particularly men.

BLITZER: Blue collar...

KING: Yes. Yes.

BLITZER: ... blue collar voters.

KING: Right.

BLITZER: That's what we used to call them, right?

KING: Yes.


BLITZER: All right. Let's talk a little bit about the super- delegates, because almost any way you do the math -- and no one knows the math better than John -- it looks like the super-delegates will make the final decision because neither candidate is going to get enough pledged or elected delegates to go over the threshold 2,025.

Right now, in total delegates, Obama has 1,591, Hillary Clinton has 1,467. You need 2,025 to win. He's ahead in pledged delegates and in the total delegates -- Jack.

If you look at the popular vote right now, if you include those two controversial contests in Michigan and Florida, she's very slightly ahead. If you don't include those numbers, he's slightly ahead.

If you were a superdelegate, in the end, after all the contests are done and you had to make up your mind what's better for the party, what's better for the country, do you go with who has the most pledged delegates or who has the most popular votes?

CAFFERTY: Well, the first thing you do is you take out Michigan and Florida, because they're --

BLITZER: Well, assuming they do a re-do.

CAFFERTY: Well, but they haven't yet and right now it's not fair to count them, because those elections were not valid. They were told they wouldn't be valid going in. A lot of people didn't vote, knowing they wouldn't be valid. So to put those numbers in as part of the total vote is invalid, also.

The next thing is, when it comes to the super-delegates, if they have the temerity to overturn the pledged delegates, the number of states won and the popular vote -- if one candidate can hold the lead in those three areas --

BLITZER: But what if they split on the popular vote versus the pledged delegates?

BORGER: They split them, yes. What do you do then?

CAFFERTY: Well, you know, what if the moon turns green? I mean it hasn't happened yet.

KING: Heads or tails?

BORGER: Do you know --

CAFFERTY: You asked what they're going to do. I think if one candidate gets to the end of the race, is leading in number of states won, popular vote and pledged delegates, it would take somebody suicidal to suggest that they're...

BORGER: But that may not happen.

CAFFERTY: ...going to overturn those results.


BORGER: But that may not happen. You could have somebody leading in pledged delegates and somebody else leading in the popular vote. And then what you do?

I mean I sort of think of the super-delegates as the House of Lords. And, essentially, you're going to the House of Lords in the Democratic Party and saying I am more electable. And each candidate is going to make a legal brief -- this is why I'm the more electable candidate.

Hillary Clinton will say I can win those big states that are really important. And he's going to say no, I can win those states and I can attract Independent voters.

KING: This is going to come down to -- under such scenarios, Wolf, if nobody breaks out -- it's going to come down to who closes the strongest. If you're going to have a situation where somebody has a small lead in pledged delegates, somebody else has a small lead in the popular vote or they're roughly tied, essentially, after 50 states, it will come down to did somebody win three or four of the last five contests. Do they go to the end of the race? Essentially, if it's a 500- mile race and nobody finishes all 500 miles, has somebody gotten to 499 and surged past in the last week? That person would have a case to make that they have momentum.

BLITZER: Let's talk about Geraldine Ferraro for a moment. And I want to read what the 1984 Democratic vice presidential nominee told a California newspaper: "If Obama was a white man, he would not be in this position. And if he was a woman, he would not be in position. He happens to be very lucky to be who he is and the country is caught up in the concept."

Now just a little while ago, she was asked for clarification on Fox and here's what she said.


GERALDINE FERRARO, FORMER DEMOCRATIC VICE PRESIDENTIAL NOMINEE: I got up and the question was asked so what -- how do -- why do you think Barack Obama is in the place he is today, with all these candidates and all these delegates and all the rest of this stuff?

And I said, in large measure, because he's black. And I said let me, before I go on, let me also say that in 1984 -- and I've said this -- if I've said it once, I've said it 20, 30, 50, 100 times since the '84 campaign. In 1984, if my name were Gerard Ferraro instead of Geraldine Ferraro, I would never have been the nominee for vice president.


BLITZER: You buy it?

CAFFERTY: This is a comment that's beneath contempt from a woman who should have known better. She owes Barack Obama an apology. She used to have more class than that. I've known Geraldine Ferraro for 25 years and she didn't used to conduct herself this way.

It's despicable. And, no, I don't buy any explanation. It was wrong. And Hillary Clinton's campaign should say thank you, but we no longer require your help, your support, please don't raise more money for us, just go away.

BORGER: You know, coming a week after the Samantha Power controversy, where Barack Obama had to get rid of her -- a chief foreign policy adviser for him -- because she called Hillary Clinton a monster, the Obama campaign is now saying, you know, you've got to renounce -- what is it -- renounce...

CAFFERTY: And reject.

BORGER: ...and reject or denounce and reject Gerri Ferraro. Today, Hillary Clinton came out and said that she doesn't agree with the remarks. But so far, nobody has said to Ferraro, stop working for us. KING: This is part of a bigger divide, Wolf, that is the thing that Democrats most worry about hurting the party. You have leading women's groups -- the National Organization of Women, EMILY's List, structural, powerful influential groups in the Democratic Party who have been working for Senator Clinton for a long time who say it's our turn. We have a candidate who could win the presidential election.

You have African-Americans -- many who were not with Barack Obama at the beginning or didn't think he could win at the beginning -- now saying wow, it's our chance. And you have this rawness between these two groups that have traditionally been allies in the Democratic Party. And there are many now worrying that this could get ugly and there could be long-term damage.

BLITZER: And a lot of Democratic Party leaders are fearing the divide and conquer...

KING: Right.

BLITZER: ...that, in the end, it could help the Republicans and John McCain.

All right, stand by, guys. We're going to continue our discussion, including New York's high profile governor -- he's caught up, as everybody knows by now, in a prostitution scandal.

So what's next for Eliot Spitzer? Is his resignation inevitable?

Plus, why Nancy Pelosi thinks Democrats should give up the dream of an Obama/Clinton ticket.

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


BLITZER: Back to the best political team on television.

Jack, can Eliot Spitzer survive? Can he ride out this scandal?

CAFFERTY: I don't think so. And I think he probably would have resigned. He will resign the minute the prosecutors say we won't put you in jail. I think he's playing let's make a deal and the card he has to play in the game is the governorship.

And usually when somebody gets caught in a deal like this, if they're a public official and they agree to go quietly, the prosecutors will back off. But that probably hasn't been done yet. The minute it's done, he's gone.

BORGER: Yes, I completely agree. And if he doesn't resign, the Republicans will try and impeach him in New York State so...

BLITZER: I wonder how the Democrats will respond.

BORGER: Well...

BLITZER: We remember there was an impeachment in Washington, too.

BORGER: ...he doesn't have a lot of friends on the Democratic side.

KING: Right.


CAFFERTY: No, nobody likes this guy.

BORGER: You know, I -- nobody wants this to get to that point but...

KING: This is a when, not an if.

BORGER: Right.

KING: The New York State Democrats want to make gains in their own elections this year -- put the presidential race aside for a minute. They do not need this. They do not want this.

Every message to Eliot Spitzer is do this as soon as you can. They understand the legal dynamics. They agree with what Jack just said -- this is his one negotiating chip, keep -- his get out of jail card, if you will. But they want it done.

There was some talk this afternoon, Wolf, it could come as early as tomorrow. But people are having these conversations and some think the dynamics are changing as Eliot Spitzer meets with his lawyers.

BLITZER: That was a bombshell. But today we had a bombshell, too, Jack. The head of the U.S. military's Central Command, Admiral William Fallon, all of a sudden resigning -- out of the blue, seemingly -- because of an article in "Esquire" magazine.

CAFFERTY: Well, the article creates a perception that Admiral Fallon was a voice in the wilderness when it came to the administration policy regarding Iran, that when he took over CENTCOM, he began quietly to suggest that a military option in Iran was not the way to proceed.

And "Esquire" magazine laid out how this happened. And apparently the Bush White House doesn't like that stuff. Remember General Shinseki?

BLITZER: He was the Army chief of staff...


BORGER: Well...

BLITZER: ...who said it was going to take 400,000 or hundreds of thousands of troops to get the job done in Iraq.


BLITZER: And they said he was wrong.

CAFFERTY: And apparently that's what happened to Admiral Fallon, too.

BORGER: And it's also no coincidence, Wolf, on the timing of this. The article looks really bad. And the vice president is about to go to the Middle East. And you don't want to set the vice president up for the kinds of questions that we would be asking him on that trip, which would be, do you agree with General Fallon, because he would have to say absolutely not.

BLITZER: But I don't understand -- and I covered the Pentagon years ago -- what's wrong with having commanders who disagree with each other and giving their best judgment to the president of the United States?

KING: Well, the president says all the time he loves that in the room. And even his top aides say he loves that in the room. What they don't like in this administration is for that to play out at all publicly.

I met Admiral Fallon's deputy the last time I traveled to Iraq and Kuwait at his office in Kuwait, Wolf. And the thing that sticks in my mind as you watch this happen -- what happened, we'll find all that out as things go on.

But if you could look at the Central Command's area of responsibility, most Americans think Iraq. But it is also Afghanistan. It is also those areas where Osama bin Laden may be hiding, at a time oil prices and all that instability are up. And there's the shipping lanes in the Persian Gulf. It is Iran.

This command oversees the most sensitive, dicey part of the world at the moment, which is why, in addition to people in Congress saying we want to find out what happened here, they're saying, Mr. President, move fast for a replacement.

BLITZER: And, you know, 40 years he spends in the Navy. He devotes his life -- going back to Vietnam.

And this is the way he's supposed to wind up his career, sort of either forced out or forced to resign or whatever happens?


BLITZER: It's just a heartbreaking story in that sense.

CAFFERTY: It's very heartbreaking. And the cruel irony of the Bush White House for the last seven years is a lot of very good people have gone down in flames through no fault of their own and a lot of absolute walking mutants have survived and have been non-touched because of some of the stuff they've done and they probably ought to be in jail. It's like it all defies gravity down there.

BLITZER: All right, guys, we're not going anywhere. Stand by.

Lou Dobbs is joining us right now. He's got a show coming up in a few minutes, at the top of the hour.

Give us a little flavor of what you're working on.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": A little flavor. Well, Senator Barack Obama today decided to take me on, on the issue of illegal immigration, as, you know, Wolf. And so we're going to have that and a few responses and some -- probably a full and frank exchange of views on the broadcast.

We're also going to be talking with Congressman Barney Frank, the head of Ohio's financial services, about what this government is trying to do for millions of homeowners facing the prospect of foreclosure. I think Barney Frank is one of the smartest people in Congress and it's going to be worthwhile to hear his ideas.

And, also, I'll be talking with Senator Cantwell about this idiotic decision on the part of the Bush administration to turn over that tanker aircraft contract for about $40 billion to the folks who manufacture Airbus. By the way, those are the same folks we brought up on charges in the World Trade Organization for illegally subsidizing -- you guessed it -- Airbus.

And we'll be examining the idiocy that is presidential politics, as well, tonight. And we'll examine them one candidate at a time.

BLITZER: And for those who don't know, Airbus is manufactured by a European consortium, is that right, Lou?


BLITZER: All right. European Aerospace and Defense.

BLITZER: All right. You've got a lot going on.

DOBBS: You bet.

BLITZER: We'll be watching you in a few moments. Thanks very much.

DOBBS: Thanks, Wolf.

BLITZER: And for a lot of Democrats, it would be, as they call it, a so-called dream come true -- Clinton and Obama running together. You're going to find out what the House speaker, Nancy Pelosi, is now saying about that. Fans of the dream team ticket might not necessarily like to hear what she's saying.

And will Hillary Clinton or Barack Obama have the momentum going into Pennsylvania? Jack Cafferty has your e-mails right here in THE SITUATION ROOM.


BLITZER: Checking our political ticker, another splash of cold water on the prospect of a so-called Democratic presidential dream ticket. It comes from the House Speaker, Nancy Pelosi. She told a New England TV reporter today that a Clinton/Obama ticket or an Obama/Clinton ticket would be -- and I'm quoting now -- "impossible." Pelosi says the Clinton camp effectively ruled out a joint ticket by suggesting that Republican John McCain would be a better commander-in-chief than Barack Obama.

Remember, for the latest political news any time, check out The ticker is the number one political news blog on the Web. That's also where you can read my latest blog post. I wrote one today. Go ahead and read it --

Let's go back to Jack. He's got "The Cafferty File" -- Jack?

CAFFERTY: The question is: Between Mississippi and Pennsylvania we have six weeks and will Hillary Clinton or Barack Obama have the momentum now going into Pennsylvania?

Bob writes: "Clinton already has the big state momentum, while Obama will have the campaign momentum. The question should be who will have the chops to win it? I'm betting on Obama because Hillary is rapidly becoming the empress who has no clothes. Voters are starting to see that her experience is just so much window dressing."

Mark in North Carolina weighs in, saying: "Considering the media have six weeks to continue to bash and trash Hillary, it will, indeed, say something important if she still has momentum April 22. The fact she's even still in the race, despite the unprecedented negative barrage that her campaign has withstood, indicates she must have a lot of solid support."

Jo Ann in Iowa: "Obama. But why so much emphasis on Pennsylvania? Just because Hillary says it's important. She's pulling your strings."

Kate in Massachusetts: "I'm not convinced Obama lost the momentum. Clinton's wins last week did nothing to help her catch up to Obama. She's too far behind to overtake the lead. All she's doing at this point is delaying the inevitable and splitting the party. How can you claim momentum if you're losing?"

Craig writes: "I truly believe this is Hillary's campaign to lose. Right now, she has the momentum, but she needs to open up. I don't know what her tax returns have to do with anything, but if that's what it takes, then she needs to come clean. She's not making any friends otherwise. Come on Hillary, I believe in you."

And Karl in California: "Obama's momentum has been smooth and steady, and that's why he's ahead in all categories. Hillary's momentum, on the other hand, is like a car with a failing fuel pump -- it goes and it stops and it goes and it stops, depending on whether the current primaries are relevant to her or not. She may take Pennsylvania, but she's out of contention overall."

Do I hear the fat lady starting to warm up -- Wolf.

BLITZER: Six weeks until Pennsylvania after tonight. CAFFERTY: I'm looking forward to the break.

BLITZER: Well, we're going to be working hard.


BLITZER: We never stop working. It's very important.

Jack, see you later. Thanks very much.

A scandal made to order for TV comedians. We're going to show you what they're saying about the New York governor, Eliot Spitzer.

Jeanne Moos is standing by with a Moost Unusual report.

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


BLITZER: Late night TV couldn't have asked for a juicier story than the scandal involving the New York governor, Eliot Spitzer.

CNN's Jeanne Moos takes a Moost Unusual look.



UNIDENTIFIED MALE: Governor Spitzer's shocking prostitution scandal.

MOOS: And within hours, the comedians broke out their Spitzer jokes.

DAVID LETTERMAN, HOST, "LATE SHOW": Do you think it's too soon to be hitting on Mrs. Eliot Spitzer?

MOOS: Some of the laughter was awkward, but it was the hot topic.

JAY LENO, HOST, "THE TONIGHT SHOW": They found the source of all global warming in America -- New York Governor Eliot Spitzer's pants.

LETTERMAN: Did you happen to see the press conference? He had yellow crime scene tape draped around his pants. It was crazy.

MOOS: Those who did see the press conference couldn't help but feel sorry for Spitzer's wife Silda, who was getting advice from newspaper columnists and sympathy from someone who had been there herself -- the wife of former governor "I am a gay American" McGreevey.

DINA MATOS MCGREEVEY, WIFE OF JIM MCGREEVEY: As I watched her, my heart just broke for her, because I know exactly how she's feeling.

MOOS: On "The View," the point of view was mixed -- humor, sympathy and anger over what Spitzer did to his family.

ELIZABETH HASSELBECK, CO-HOST, "THE VIEW": He destroyed their world. He just destroyed their world.

JOY BEHAR, CO-HOST, "THE VIEW": Aren't you sick of men? I mean...

MOOS: But Sherri Sheperd garnered grounds when she went one joke too far, as they discussed New York's legally blind lieutenant governor, who could replace Spitzer.

BARBARA WALTERS, CO-HOST, "THE VIEW": And he's legally blind.

SHERRI SHEPERD, CO-HOST, "THE VIEW": His wife doesn't have to worry; he can't see to cheat.

BEHAR: No, but he can -- he can still pay for it.



MOOS: Disability and infidelity -- a dangerous combination for humor.

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": I hope and pray that the press deals with this tastefully. Now...

MOOS: "The View's" Joy Behar mused about the scandal's dichotomy.

BEHAR: It's sad, but it's funny, too, for some reason.

MOOS: How could it not be funny when New York's governor goes by a new name...

UNIDENTIFIED FEMALE: Well, Client Number Nine...


UNIDENTIFIED FEMALE: Now, Client Number Nine...


LENO: Number Nine? He's the governor. Who are the eight guys in front of him?


MOOS: Number nine has become so ubiquitous...

UNIDENTIFIED MALE: Oh, my god, I totally know this guy. That's Client Number Nine.

MOOS: And a certain song is being labeled by YouTubers as Spitzer's theme song. They're even writing new lyrics. UNIDENTIFIED MALE: But when I kissed a cop down on K. Street one time, she busted me for being love Client Number Nine.

MOOS: These days...


MOOS: ...he's the new number one joke.

Jeanne Moos, CNN, New York.


BLITZER: I'll be back in one hour, 8:00 p.m. Eastern. That's when the polls close in Mississippi. We'll have extensive coverage, 8:00 p.m. Eastern, in one hour, we're here at the CNN Election Center.

You've helped make our politics podcast one of the most popular on iTunes. To get the best political team to go, subscribe at or iTunes.

Thanks very much for joining us. I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.